[Senate Hearing 108-772]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-772

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 4754/S. 2809

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, 
  AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR 
           ENDING SEPTEMBER 30, 2005, AND FOR OTHER PURPOSES

                               __________

                        Department of Commerce
                         Department of Justice
                          Department of State
                       Nondepartmental Witnesses

                               __________

         Printed for the use of the Committee on Appropriations


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

                               __________

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                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
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
                              Scott Gudes
                          Katherine Hennessey
                             Dennis Balkham
                           Jill Shapiro Long
                            Shannon O'Keefe
                            Jessica Roberts
                         Lila Helms (Minority)
                        Kate Eltrich (Minority)
                        Chad Schulken (Minority)


                            C O N T E N T S

                              ----------                              

                         Tuesday, March 2, 2004

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

                        Tuesday, March 23, 2004

Department of Justice: Federal Bureau of Investigation...........    53

                        Thursday, March 25, 2004

Department of State: Office of the Secretary.....................   119
Nondepartmental Witnesses........................................   167

 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                         TUESDAY, MARCH 2, 2004

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

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. DONALD L. EVANS, SECRETARY


                            OPENING REMARKS


    Senator Gregg. We will begin the hearing of the Commerce, 
Justice and State Subcommittee of the Appropriations Committee. 
We are honored today to have with us the Secretary of Commerce, 
Secretary Don Evans. I don't have an opening statement. Do you 
have an opening statement?
    Senator Hollings. No, Mr. Chairman.
    Senator Gregg. We will proceed right to Secretary Evans. 
Make whatever statement you wish, Mr. Secretary, and we will 
proceed to questions.
    Senator Leahy. Are there going to be no statements?
    Senator Gregg. I would rather get to the testimony, if you 
don't mind.
    Senator Leahy. I appreciate that. I would ask consent to 
put a statement in the record and I will use some of it in my 
questions.
    Senator Gregg. Absolutely. We will have plenty of time for 
questions and you can work it in there.
    Senator Leahy. Thank you.
    [The statement follows:]

             Prepared Statement of Senator Patrick J. Leahy

    Mr. Secretary, we thank you for coming to testify before this 
subcommittee today. It is good to see you again. You have an especially 
difficult job at the moment, and none of us envy you for it.
    Whether they have lost their jobs, or worry about losing their 
jobs, or feel frozen in place, so many American workers and their 
families have been hurting for the last three years, and they are still 
hurting in what has been called this ``jobless recovery.'' Job cuts 
have disrupted millions of households, and the effects have rippled 
through our entire economy.
    We have lost nearly three million manufacturing jobs in the past 
three years, and the economic outlook is less than encouraging. In 
fact, more than 2,400 employers reported laying off 50 or more workers 
in January, the third highest number of so-called mass layoffs since 
the government began tracking them a decade ago. Overall, the number of 
manufacturing jobs in the United States is now at its lowest level 
since 1950.
    At the same time our manufacturing numbers are tumbling, our trade 
deficit is spiraling. The Department recently announced that the U.S. 
trade deficit reached a record $489 billion in 2003. While the trade 
report shows strong domestic consumption, it also highlights serious 
problems with our economy's productivity--particularly our lack of 
employment growth.
    Back in September, the Commerce Department announced a broad 
proposal to help the nation's ailing manufacturers. Among other 
elements of that plan, the department proposed creating a new assistant 
secretary of commerce for manufacturing, forming an unfair-trade-
practices team to track and confront unfair foreign competition, and 
supporting the Manufacturing Extension Partnership (MEP) program.
    I join many manufacturing and trade experts in being puzzled by 
that announcement. The Commerce Department already has hundreds of 
employees tasked with tracking unfair labor practices. And it seems 
that the creation of a new assistant secretary for manufacturing really 
may just be boiling down to changing the name and expanding the reach 
of the existing assistant secretary for trade development. On top of 
that, no one has yet been named to fill this new position.
    And then there's the matter of the Manufacturing Extension 
Partnership Program, which offers technical assistance to manufacturing 
firms to improve their performance in production techniques, marketing 
and exports. It does not help the Administration's credibility to cite 
the value of this program and to pledge resources for it, but then to 
repeatedly fail to actually support the MEP program--both in the 
President's budget requests and in the White House's final negotiations 
on this year's appropriations bill.
    You have repeatedly asked that MEP receive around $13 million each 
year, but Congress has deemed it important enough to provide more than 
$106 million. It is disingenuous now for the Administration to say you 
support the MEP program by requesting a mere $39 million this year. And 
while I appreciate your announcement that MEP would be eligible to 
compete for up to $45.4 million in fiscal year 2005 economic adjustment 
assistance, this effort will not provide the funds our MEP centers need 
to continue operations and services to small manufacturers, especially 
after July 1, when the majority of centers face contract renewal under 
the drastically reduced fiscal year 2004 funding.
    I am also concerned about a plan to identify federal rules that 
they believe impede competitiveness in the domestic manufacturing 
sector. Given the Administration's record to date, it is no wonder that 
so many workers are concerned that this is just another Administration 
attempt to roll back health and safety standards that are designed to 
keep American workers safe. Many see this as a backhanded and backdoor 
attack on hardworking, dedicated workers. And I see their point.
    The Administration's lack of follow-through and attention to the 
hemorrhaging of manufacturing jobs amounts to what could charitably be 
called a disconnect between rhetoric and reality. And after so much of 
this, the Administration's credibility becomes a real problem and a 
real issue with the Congress and with the American people.
    Mr. Secretary, that brings us to the Trifecta of controversial 
sections of President Bush's recently released annual ``Economic Report 
of the President.''
    First, it suggested that the movement of U.S. jobs overseas--
commonly referred to as offshoring--is beneficial to consumers. The 
President asserts that American customers will benefits from lower 
costs of the products and services they buy because of cheaper labor 
costs overseas. And the President's top economist said that the 
migration of service jobs overseas ``is just a new way of doing 
international trade.''
    That comment was tossed off with a flippancy that seems to take no 
account of the real pain American families are suffering as more and 
more companies close their U.S. facilities and send their work 
overseas, throwing hardworking Americans onto the unemployment lines.
    Second, the Report predicts that non-farm payroll employment will 
average 132.7 million in 2004, reflecting a 2.6 million increase in 
jobs over its estimated average of 130.1 million in 2003. A joint 
analysis released by the Economic Policy Institute and the Center on 
Budget and Policy Priorities shows that to achieve the 2004 estimate, 
an average of 460,000 jobs a month would need to be created from 
February through December of 2004. In other words, about five million 
jobs will need to be created between now and the end of the year to hit 
that projection.
    Finally, and perhaps most unbelievably, the Report questions 
whether fast-food restaurants should continue to be counted as part of 
the service sector or should be reclassified as manufacturers. 
Specifically, the report asks: ``When a fast-food restaurant sells a 
hamburger, for example, is it providing a `service' or is it combining 
inputs to `manufacture' a product?''
    Two decades ago, another administration wanted to start calling 
ketchup a vegetable for the purposes of the school lunch program. 
Redefining ketchup as a vegetable did nothing for the nutrition of our 
kids, and redefining every Taco Bell as a manufacturing factory would 
do nothing for American workers and real American manufacturers. If 
that is this Administration's idea of thinking outside the bun, then 
this Administration has a lot more thinking to do.
    Mr. Secretary, for the past three years we have heard many 
predictions and forecasts from the Administration that have not been 
anywhere close to reality. We were told that the President's tax cuts 
would stimulate the economy--and instead the economy has weakened and 
tax receipts are at some of their lowest levels ever. We were told that 
there would be 3.4 million more jobs in 2003 than there were in 2000--
and instead the economy ended up losing 1.7 million jobs over that 
period. We were told that budget surpluses would continue on for as far 
as the eye could see--and instead we have gone from a record $239 
billion surplus under President Clinton to a record $521 billion 
deficit under President Bush, and if the President's budget were 
actually enacted, it's those deficits that would proliferate as far as 
the eye can see. And we were told that the Iraq mission would be swift 
and easy--and instead it has dragged on with no end in sight and with 
costs that are so astronomical that the President did not even dare put 
the numbers in his budget.
    These are difficult times for American manufacturers and American 
workers, and the job of answering to them for this Administration's 
policies is a tough one. I hope you take a serious look at the 
questions we pose because there are millions of American workers out 
there counting on you.
    Thank you very much, Mr. Chairman. I ask consent that my full 
statement and written questions be submitted for the record.

    Secretary Evans. Thank you, Mr. Chairman. I have a brief 
opening statement and I will ask for my written remarks to be 
submitted for the record please, sir.
    Senator Gregg. Absolutely.
    Secretary Evans. Mr. Chairman, Senator Hollings, members of 
the subcommittee, it is a pleasure to have this opportunity to 
testify in support of the President's budget request for the 
Department of Commerce for fiscal year 2005.
    Before I do that, let me just take a moment to thank 
Senator Hollings, who is retiring, for his service to this 
country for many, many years, in this body since 1966. I 
can't----
    Senator Hollings. I want you to retire with me.
    Secretary Evans. I have another plan.
    And that just goes to show you that we don't agree on 
absolutely everything, but we agree on a lot and one thing we 
absolutely agree on is your love for America----
    Senator Hollings. Thank you, sir.
    Secretary Evans [continuing]. And your service to America, 
your integrity that you served this body with for so many 
years, and I just wanted to take a moment to say thank you on 
behalf of all Americans.
    I want to say thank you to your wife, as well, because as 
somebody that has just been in public service in Washington for 
3 years, it is very clear to me that it is not just a sacrifice 
of those serving here. It is a sacrifice for the entire family, 
and for Peatsy and your entire family, I thank you.
    Senator Hollings. That is mighty generous. Thank you, sir.
    Secretary Evans. Yes, you bet. We appreciate and have 
benefitted from Senator Hollings' focus on so many areas of the 
Commerce Department. You know, a lot of people said he put the 
``O'' in NOAA, which is absolutely the truth.
    The central mission of the Department of Commerce is to 
promote American jobs and values by creating the conditions for 
long-term economic growth. To fulfill this essential charge, we 
are requesting a budget of $5.8 billion. This budget reflects 
the President's commitment to advancing our Nation's economic 
and homeland security.
    To help American industry and workers meet unprecedented 
global challenges, we are reorganizing the International Trade 
Administration. I want to thank Chairman Gregg and members of 
this committee for their assistance in moving this process 
forward. We are creating a new Manufacturing and Services 
Office, to be headed by an assistant secretary. This official 
will be charged with ensuring that these critical sectors get a 
full hearing when policies are formulated. We are establishing 
an Office of Investigations and Compliance to monitor 
enforcement of trade agreements, and we are also creating an 
Unfair Trade Practices Task Force.
    For the Census Bureau, we are requesting an increase of 
$217 million to reengineer the decennial census and improve 
other data collection.
    For the Bureau of Economic Analysis, we are requesting an 
increase of $15 million for the improvements of GDP data and 
other economic indicators.
    The NIST budget includes $31 million to equip and operate a 
new advanced measurement laboratory and $25 million for 
continued renovation of the NIST laboratories in Boulder, 
Colorado.
    At this time, we are requesting level funding for the 
Manufacturing Extension Partnership. To leverage current 
funding and help small manufacturing firms, we are directing 
EDA to focus economic adjustment grants on areas experiencing 
job losses in the manufacturing sector. MEP centers serving 
these communities can compete for these grants. In the next 
fiscal year, MEP centers will be eligible to compete for up to 
$45.4 million of the EDA grants. We are also looking at 
establishing partnerships with other Federal programs and 
agencies to maintain and strengthen this national manufacturing 
network.
    In fiscal year 2005, the administration proposes giving the 
Patent and Trademark Office full access to its fees. An 
increase of over $310 million will allow the hiring of 
additional examiners and faster processing of applications.
    Our NOAA budget includes an increase of $56 million for 
next-generation weather satellites, $34 million to complete the 
third fisheries vessel, and $24 million to better assess 
climate change.
    Also included in this budget is funding to enhance the 
safety of Department personnel and visitors. Mr. Chairman, new 
challenges to our Nation's security necessitate new responses.
    We have had to make some difficult choices. This includes 
discontinuing funding for the Advanced Technology Program, the 
Technology Opportunity Program, and for the Public 
Telecommunications Facilities Program. I am sure that there are 
members of this committee and other Members of Congress who 
would like to make other funding decisions. Please know that I 
respect those views and I look forward to working with all of 
you through the budget process.

                           PREPARED STATEMENT

    Mr. Chairman, I want to thank you and the members of this 
committee for your continued support of Commerce programs and 
initiatives. I welcome your comments and will be pleased to 
answer any questions that you may have.
    Senator Gregg. Thank you, Mr. Secretary.
    [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 2005 budget request. In the fiscal 
year 2005 President's Budget, the Department of Commerce request of 
$5.8 billion reflects its continuing commitment to creating conditions 
for economic growth and opportunity by strengthening American 
manufacturing and, promoting innovation, entrepreneurship, 
competitiveness, and stewardship. America's manufactures provide our 
nation and our people good jobs, a better quality of life and 
inventions that have established our national identity. To that end, 
the Department has partnered with U.S. businesses to maintain a 
prosperous, productive America. We have a record of innovation in 
manufacturing, transportation, communications, and measurement that has 
helped sustain U.S. leadership of the international marketplace.
    Consistent with the President's Management Agenda, for fiscal year 
2005, the Department presents a performance integrated budget based 
upon the Department's Strategic Plan. The plans goals fully reflect the 
Department's mission and vision and its commitment to promoting 
``American Jobs and American Values.''

Goal 1: Provide the information and tools to maximize U.S. 
        competitiveness and enable economic growth for American 
        industries, workers and consumers
    Economic growth is a central theme for the fiscal year 2005 
President's Budget and to the missions of the Department of Commerce's 
bureaus. To enhance the competitiveness of U.S. businesses in the 
global economy, the President's 2005 Budget focuses the International 
Trade Administration (ITA) on promoting U.S. exports, fighting unfair 
foreign trade barriers, and negotiating and implementing multilateral 
and bilateral trade agreements. ITA has created a new unit called 
Manufacturing and Services, focusing on the domestic and international 
aspects of U.S. industrial competitiveness; working with U.S. industry 
to evaluate the needs of American manufacturers; assessing the economic 
impact of new and existing government rules and regulations on U.S. 
manufacturers; and representing and advocating for the interests of the 
U.S. manufacturing and services sectors.
    For fiscal year 2005, ITA has three new initiatives. ITA requests 
an increase of $4.5 million for the Administration's Capital Security 
Cost Sharing Program (CSCSP) to cover the State Department's capital 
security costs associated with building new embassy compounds. CSCSP is 
scheduled to begin in fiscal year 2005 and continue through fiscal year 
2018 and all agencies represented in embassies will be charged on a 
worldwide per capita basis. ITA requests an increase of $0.5 million 
for the Activity-Based Cost Accounting and Management System to allow 
for more precise management and planning of resources as well as a 
better understanding of ITA's performance and commitment to priority 
activities. ITA has begun implementing this system with existing 
resources and requires these funds to complete the project. ITA also 
requests an increase of $0.2 million for the Free Trade Agreement 
Secretariats to enable ITA to meet a requirement under the Singapore 
and Chile Free Trade Agreements.
    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. The President's 2005 Budget requests an increase of $3 million 
for MBDA to conduct an annual survey of minority owned business 
enterprises (SMOBE). The SMOBE will provide more timely, frequent and 
comprehensive statistical data about the minority business universe 
than the current 5-year SMOBE. The President's 2005 Budget also 
requests an increase of $2.1 million for the Business Development 
Centers and Minority Business Opportunity Committees programs to 
improve opportunities for minority businesses in areas with the highest 
minority business density. Finally, the President's 2005 Budget 
requests an increase of $0.5 million for MBDA to establish trade 
activities in response to the President's and the Secretary of 
Commerce's initiative on trade promotion for U.S. minority businesses 
with Asian Americans and Pacific Islanders. This activity will increase 
the access of minority business enterprises to global markets.
    The President's 2005 Budget request for Economic Development 
Administration (EDA) will help accelerate the Nation's economic growth 
by promoting a favorable business environment to attract private 
capital investments and higher-skill, higher-wage jobs. The President's 
2005 Budget requests an increase of $5 million for EDA to assist areas 
that demonstrate a high level of economic distress from long-term 
economic deterioration or that are suffering from sudden and severe 
dislocation to their economies.
    The Bureau of Economic Analysis (BEA) seeks to strengthen the 
understanding of the United States economy and its competitive 
position. BEA accomplishes this task by providing accurate economic 
accounts data in a timely and cost-effective manner, and by supplying 
the Nation's key economic statistics, including Gross Domestic Product 
(GDP). The President's 2005 Budget requests an increase of $15 million 
for BEA over fiscal year 2004 for two initiatives. The first initiative 
will continue to generate more timely economic data, meet U.S. 
international obligations in complying with international standards for 
reporting statistics, and acquire real-time data to improve the quality 
of BEA measures. The second initiative will produce up-to-date annual 
estimates on business investment spending and employment and 
compensation data by industry.
    The President's 2005 Budget requests an increase for the Bureau of 
the Census of $217 million over fiscal year 2004. These additional 
funds will be used in the Bureau's multi-year effort to reengineer the 
Decennial Census by implementing the American Community Survey, 
modernizing its geographic database information, and developing plans 
for the Decennial Census in 2010 using only a short form. Census also 
plans initiatives to improve the quality and timeliness of trade 
statistics, to improve the measurement of services by expanding the 
number of industries covered, to develop a stronger presence in 
electronic government services by allowing businesses to file survey 
information electronically, and to strengthen its measurement of 
migration within the United States.
    As part of our ongoing efforts to improve the review and 
enforcement of export license conditions, the President's 2005 Budget 
is requesting funding for the Bureau of Industry and Security (BIS) to 
develop a comprehensive export license condition, compliance and 
enforcement program. This program will enhance the enforcement of 
license conditions by working with exporters to ensure that they have 
in place appropriate export management systems and devoting dedicated 
resources to detect and prosecute violations of license conditions. The 
President's 2005 Budget is also requesting funding for BIS to establish 
an Office of Technology Evaluation that will enable the Department to 
implement and maintain a more effective system of dual-use export 
controls that better protects U.S. national and economic security. The 
new Office's duties will include identifying new technologies for 
potential inclusion on the Commerce Control List and the comprehensive 
review of items already on the list to ensure that items are 
appropriately controlled for the protection of U.S. national security.

Goal 2: Foster science and technological leadership by protecting 
        intellectual property, enhancing technical standards, and 
        advancing measurement science
    Important priorities for the National Institute of Standards and 
Technology (NIST) in fiscal year 2005 are to upgrade facilities and 
laboratories, to protect critical research data from degradation, and 
to maintain employee safety and security. The President's 2005 Budget 
provides increased funding to NIST laboratories for continuing 
construction projects and high priority research areas. The request 
includes $31 million to equip and operate the Advanced Measurement 
Laboratory and $25 million for continued renovations of NIST's Boulder, 
Colorado facilities. Consistent with the Administration's continuing 
emphasis on shifting resources to reflect changing needs, the fiscal 
year 2005 budget proposes to terminate the Advanced Technology Program 
and to commit stable funding for the Manufacturing Extension 
Partnership.
    The President's 2005 Budget request for the U.S. Patent and 
Trademark Office (PTO) will support the third year of the PTO strategic 
plan to keep pace with workload growth and to enhance the quality of 
products and services. In fiscal year 2005, the Administration proposes 
giving PTO full access to its fees. An increase of $310.9 million will 
allow the PTO to improve processing capacity by hiring additional 
patent examiners, deliver an operational electronic patent application 
processing system, continue moving to an electronic trademark 
operation, expand quality reviews to all stages of patent and trademark 
examination, and cover the full accrual of retirement costs for its 
employees.
    The President's 2005 Budget increase request of $7.1 million for 
the National Telecommunications and Information Administration (NTIA) 
will provide the resources necessary to improve dramatically the 
overall capabilities of NTIA to research, manage and represent 
internationally the government's and industry's spectrum usage. These 
funds will increase the efficiency of radio spectrum usage through a 
paperless system, explore alternative incentive systems, meet 
increasing demand for Federal wireless systems; improve our Nation's 
preparation for and representation of U.S. interests at International 
spectrum usage conferences; and upgrade NTIA's lab facilities used to 
support this important work. The fiscal year 2005 Budget continues the 
proposal to terminate the Public Telecommunications Facilities, 
Planning and Construction and Technology Opportunity Program grants.

Goal 3: Observe, protect and manage the earth's resources to promote 
        environmental stewardship
    This budget supports the core activities of the National Oceanic 
and Atmospheric Administration (NOAA), including fisheries and ocean 
programs, climate research activities, and weather forecasting 
capabilities, as well as the satellite infrastructure necessary to 
support these functions. In addition, the request continues to focus on 
maintenance and safety issues associated with NOAA facilities, vessels, 
and aircraft.
    The 2005 Budget makes investments in critical fisheries and ocean 
programs. The Department continues to work to improve the management 
and economic sustainability of the Nation's marine fisheries with a 
continued focus on fisheries science and stock assessments. To this 
end, the Budget invests $34 million to complete NOAA's third fisheries 
survey vessel. This vessel will meet international standards for 
research surveys and will substantially improve the quality of NOAA 
fisheries research. Additional investments are requested this year to 
maintain safe and efficient maritime commerce through enhanced 
electronic navigational charts and improved collection of data on 
coastal water levels.
    This budget continues the Administration's focus on climate 
research and devotes $23.7 million of new funding to expand climate 
observing capabilities. This funding will allow NOAA to help fill 
critical knowledge gaps identified in the recently released Climate 
Change Science Program Strategic Plan, including research on aerosols, 
oceans and the natural carbon cycle. NOAA's funding is one component of 
a government-wide initiative which will provide $103 million over two 
years to accelerate climate observations. The Administration will 
continue to work with the international community to develop a 
comprehensive, global earth observation system.
    Continuing to seek improvements in weather forecasting, the 
Administration requests funding to expand air quality forecasts 
nationwide. This program will help mitigate the estimated 40,000 deaths 
and $147 billion spent treating air pollution-related illnesses by 
providing advance warning of poor air quality. Also included are 
investments in improved long-range weather forecasting, as well as 
continued improvement of NOAA's NEXRAD radar system, replacement of the 
communications gateway through which all weather-related data flows to 
local weather forecasters, and modernization of the cooperative 
observer network.
    To support NOAA's weather and climate programs, the Administration 
requests an additional $56 million for the continued development of 
next-generation geosynchronous and polar-orbiting satellite programs. 
To support current and future satellite operations, the Administration 
requests funds to occupy and operate NOAA's new satellite operations 
facility. This budget also includes investments to maintain and repair 
current NOAA facilities, for operations and maintenance of the OSCAR 
DYSON, NOAA's first new fisheries research vessel, and for the 
HI'IALAKAI, a vessel acquired from the Coast Guard for research in the 
Hawaiian Islands.

Management Integration Goal: Achieve organizational and management 
        excellence
    The Administration places a high priority on the protection of our 
employees and guests. The Herbert C. Hoover Building (HCHB) is in close 
proximity to multiple high-profile locations in downtown Washington 
D.C., but lacks adequate protection against an explosive blast in the 
vicinity. This request proposes a blast mitigation project for the 
facility. The upgrades will reduce the degree of injury due to glass 
fragments and, in the event of a chemical/biological/radiological 
attack, will significantly reduce the air infiltration of toxic 
substances. This will provide the employees with precious minutes to 
escape the building or to enable them to ``shelter-in-place,'' if 
required. The funding request for the Security Management Application 
will provide for the development and integration of a new corporate 
management application system to enhance the Department's personnel 
security management capabilities.
    The Department is also requesting an increase in resources for the 
Inspector General's Office of Investigation to provide adequate 
coverage for all Commerce activities. This increase will allow the 
Office to strategically deploy its investigative resources, thereby 
enhancing its ability to detect and prevent fraud. The projected $11 
billion cost for the 2010 Census necessitates the OIG to increase its 
level of oversight to improve planning and lower risks, particularly in 
the areas of statistics and systems evaluations.
    The Department of Commerce has a rich history, and after traveling 
the country meeting with both the Commerce employees and the customers 
we serve I am confident it will have a rich future. I look forward to 
working with the committee to ensure that together we are providing the 
best services possible.

    Senator Gregg. Again, we thank you for taking time to come. 
It was very nice of you to acknowledge Senator Hollings' great 
service to this country, which we have done on a number of 
occasions in this committee. It is totally appropriate, 
especially relative to the Commerce Department, where he has 
played an extraordinary role. What is it, 33 years?
    Senator Hollings. I've been on the subcommittee since 1971
    Senator Gregg. And chairman or ranking member of this 
subcommittee, I think, for 27 years or something like that.
    Senator Hollings. Yes, sir.

                        NOAA'S N-PRIME SATELLITE

    Senator Gregg. Nothing has happened at the Commerce 
Department that Senator Hollings hasn't been involved in. One 
of the things that he can take a lot of credit for and which we 
think is appropriate is a strong NOAA program. We congratulate 
the Department for its efforts in this area but we are 
concerned about the funding levels in a number of accounts 
there. Overall, this committee is totally committed to the NOAA 
efforts and we will have some issues with our House members on 
that, but we enjoy that little tussle every year and we usually 
do pretty well in it.
    I did have a question about the satellite program. I 
understand one of the critical satellites was dropped on the 
floor.
    What is the status of that? Is it the N Prime?
    Secretary Evans. Yes, N Prime, that is correct.
    Senator Gregg. And who is liable for what appears to have 
been some negligence possibly?
    Secretary Evans. Mr. Chairman, we don't have that complete 
report yet. We are in the process of working with Lockheed 
Martin, and NASA and NOAA are working together to look very 
carefully at the issues of cause and liability as well as what 
it is going to take to make sure we have the service needed to 
deliver the weather forecasts to this country in the out-years.
    We are close, they tell me, to having a final report that 
we will deliver to Congress, but we are not there yet.
    Senator Gregg. If we conclude that the cause was outside of 
NOAA and NASA but it was the responsibility of a private 
contractor, that the damage occurred as a result of their 
potential negligence, and I don't know whether it was 
negligence or not----
    Secretary Evans. Right.
    Senator Gregg [continuing]. But potential negligence. When 
you drop a satellite on the floor, it does seem to lead to that 
concern. Are we going to pursue legal remedies to get recovery 
of, what is it, about $400 million?
    Secretary Evans. I am certain that we will, Mr. Chairman. I 
am absolutely certain that we will. We have our lawyers looking 
at this very carefully and that is our conclusion. I am sure we 
will be pursuing the total recovery of the loss as well as, at 
the same time, we need to make sure we are putting a plan 
together to cover the gap that this might be creating as it 
relates to satellite coverage during the period that N Prime 
was scheduled to be launched.

           INTERNATIONAL TRADE ADMINISTRATION REORGANIZATION

    Senator Gregg. You spent a lot of time on ITA's 
reorganization. Could you tell us the status of that and how it 
is going?
    Secretary Evans. Well, Mr. Chairman, it is going well, and 
we have spent a lot of time on it. I appreciate the support of 
this committee. We have been very focused on the manufacturing 
sector of this economy, spent 1\1/2\ years on travel around 
America, across America, talking to manufacturers all across 
America, listening to their concerns, their challenges, 
something I know a fair amount about since I spent 30 years of 
my life in the manufacturing sector of this economy. So I am 
very familiar with many of the challenges that they deal with 
on a day-to-day basis.

                        DOC MANUFACTURING REPORT

    We have made significant progress. We presented to the 
country a manufacturing report in January. It laid out over 50 
recommendations that we feel will help create an environment 
for our manufacturers to continue to succeed in the global 
economy. That is the goal. We need to continue to improve the 
conditions so it is easier for American manufacturers to 
succeed in this ever-changing economy.
    One of the central pieces of it is to establish a new 
Office of Manufacturing Services that will have an assistant 
secretary that is a Senate-confirmed position, of course. We 
hope to have a name up to the Senate within the next few weeks. 
We certainly have a candidate that we are very focused on.
    But we are not resting there. I mean, it is time to move on 
with the many recommendations that are a part of this report. 
One of the areas where we are going to spend a lot of energy, a 
lot of resources, and a lot of focus, is in the area of 
enforcement, not only when it comes to enforcing other trade 
agreements around the world, but just focusing on making sure 
that the countries are focused on enforcing their own laws. We 
are doing that through market access and compliance. We have 
beefed up the resources there.
    We beefed up the resources in the Import Administration 
within the International Trade Administration. We have done 
that. We have established what we call an Unfair Trade 
Practices Task Force. This is a task force that will be focused 
on being a proactive task force. In fact, part of their 
responsibility will be monitoring 30 products that are coming 
in from China, just monitoring those products and making sure 
they are in compliance with our trade laws.
    So I would say we have made great progress. You don't put a 
report out that is not the end, that is the start. That is the 
beginning. I have traveled across America, continue to do that, 
letting all manufacturers know that they have one place they 
can go to express their concerns. They can provide their 
challenges. So we look forward to working with the 
manufacturing sector of our economy. We will continue to do so.
    I think one last thing I would say, Mr. Chairman, is, as I 
say, there are 50 recommendations, over 50, so there are lots 
of recommendations, but I will be responsible for a working 
group, an interagency working group, where we will bring all of 
the agencies together to stay focused on the manufacturing 
sector. This will ensure that we have ongoing communications 
across agencies and across departments, because, obviously, 
many of the agencies and departments within the administration 
have responsibilities that relate to creating an environment 
for manufacturers to succeed.
    And so we are going to make sure that there is very active 
communication among the agencies as well as setting up a 
President's Manufacturing Council, Advisory Council, which will 
be individuals from the private sector, small, medium, and 
large manufacturers will have a seat at the table so that we 
can hear their views and hear their concerns as we continue to 
consider policy in this administration in this town.
    So we are making good progress. Thank you again for your 
support, but we have a lot more work to do. We know that.
    Senator Gregg. Thank you, Mr. Secretary.
    Senator Hollings?

           ASSISTANT SECRETARY FOR MANUFACTURING AND SERVICES

    Senator Hollings. I thank the distinguished Secretary and 
our chairman for their kind comments. It has been a privilege 
to work with both of you.
    With respect to manufacturing, when is this office of the 
manufacturing services, the gentleman or lady to be appointed? 
It was announced months ago.
    Secretary Evans. It was. It was, Senator, but this is a 
Senate-confirmed position and we really didn't have the 
authority to move forward on it until you passed the 2004 
budget. The authorization is within that budget. The budget 
passed. We have been moving aggressively. We have an individual 
that we have selected. Now we are just going through the 
process and I believe that we will have that name to the Senate 
within the next couple of weeks.
    But in the meantime, Grant Aldonas, who is the Under 
Secretary of International Trade, it is his responsibility to 
make sure we are moving forward on these recommendations that 
are within the report within the Import Administration. We are 
moving forward with monitoring products coming in from China 
with the Market Access and Compliance Office. We are moving 
forward on putting a task force together to make sure that 
other countries are enforcing their laws.
    So we are not slowing down. We are not waiting for the 
confirmation of one individual. We have a report that has over 
50 recommendations in it and I expect our Department to 
deliver.

                             AMERICAN JOBS

    Senator Hollings. Do you think the Department should be 
leading efforts to export jobs, for the elimination of American 
jobs specifically, for sending jobs to, let us say, China?
    Secretary Evans. I think we ought to lead for creating jobs 
in America. I want everybody----
    Senator Hollings. You and I agree on that, and that is why 
I was wondering about reading articles on Under Secretary 
Juster or Juster--how do you pronounce that?
    Secretary Evans. Juster.
    Senator Hollings. Juster. He has these innovation forums at 
the Ronald Reagan Building and last year with the United 
States-India Business Council and otherwise coming right on 
down all year long to December. I refer specifically to an 
article in the New York Times, December 10, and let me read 
just a couple of lines.

    ``After the opening speeches, the 50 or so American 
executives gathered at the Hotel Pennsylvania in Manhattan were 
invited to divide up. Those interested in investing in China, 
putting an operation there and hiring Chinese workers were to 
go across the hall to the Penntop North Conference Room. Those 
who wanted help in exporting to China were to stay seated in 
Penntop South. Half or more went across the hall.''

    It was stated that across the hall, most of the speakers 
were Chinese promoting what Shen Liguo, Vice Governor of 
Heilongjiang Province in Northeastern China, described as, 
quote, ``Northeast China's beautiful prospects.'' Quote, ``We 
are going to absorb a lot of foreign investment to bring about 
development in this area.'' A big blue banner over the thing 
says, ``Go global.'' The Commerce Department was described by 
the Chinese as a sponsor and its representative, Mr. Spencer 
Ross, acted as moderator.
    Now, there you go. You folks are working to get rid of the 
jobs and we here in the Congress are doing our best to hold on 
to the jobs. What is your comment about this?
    Secretary Evans. Sure, Senator. I think, in fact, I know 
and I am very clear, that it is the responsibility of the 
Commercial Service, the Export Assistance Centers that we have 
across America, and the Foreign Commercial Service Offices that 
we have around the world to promote the export of American-made 
goods and products and services and that is----
    Senator Hollings. I agree with you on that. That is on 
exports of goods. But how about exports of jobs? You just said 
we are trying to maintain jobs and create them in the United 
States.
    Secretary Evans. Right. I want everybody to hire American 
workers. I want foreign companies to hire American workers. I 
want small, medium, and large companies to hire American 
workers. I want to continue to create an environment in America 
where everybody wants to hire our workers and buy our products 
and----
    Senator Hollings. The Under Secretary Juster and Spencer 
Ross and all, are they carrying out the policy of the 
Department of Commerce?
    Secretary Evans. Yes, sir, indeed, I believe that they are. 
They are continuing----
    Senator Hollings. Well, the policy is, then, to export the 
jobs, because I am just reading here where that is what they 
are doing.
    Secretary Evans. Well, I would take issue with the article, 
Senator. I would say that we were there promoting the export of 
our goods and our products and our services. If there are 
people that want to export equipment to China from the United 
States, we want to be supportive of that. We have to be there 
to explain to them how it is that you go through customs and 
the procedures necessary to export equipment and goods and 
services around the world.
    Senator Hollings. Well, the Commerce Department often 
sends, and I am quoting, its representatives to events like 
this one at the Hotel Pennsylvania last month, but it dulls 
their pro-export message by delivering it at conferences 
dominated by the Chinese delegations urging American companies 
to invest in China, not export.
    Secretary Evans. Well, if they----
    Senator Hollings. You have been in the business 30 years. 
If you went to an oil conference to try and export your oil and 
all of a sudden foreign delegations were taking over the 
majority of the activities and the speakers and everything 
else, we are going to import the oil and put you out of 
business down in Texas, after 30 years' experience, you would 
do something about it, wouldn't you?
    Secretary Evans. Well, I would be there encouraging them to 
buy a Caterpillar engine and take it with them to drill the 
well. I would be there encouraging them to purchase equipment 
from the United States to use wherever they might be going. And 
so we are there in the capacity of American capital, and 
American capital does invest in other parts of the world. As we 
continue to work with the world, I want to encourage these 
American companies to take American equipment with them when 
they go, and that means more jobs here in America.
    Senator Hollings. Mr. Secretary, just one other question 
and I will yield because I have got other questions relative 
to----
    Senator Gregg. We can go around again. No, go ahead for 
your second question.

                  MANUFACTURING EXTENSION PARTNERSHIP

    Senator Hollings. It is the National Institute of Standards 
and Technology. We reduced this some $177 million. 
Specifically, we just practically eliminate the Advanced 
Technology Program and the Manufacturing Extension Partnership 
Program. You just close out the MEP with only a recommended 
appropriation of $39.1 million. Just year before last, we had 
it up to $107 million. The Advanced Technology Program, there 
is no question that we have had 200 new technologies 
commercialized as three-quarters of the ATP programs are 
awarded to small businesses, and I could go down the success 
story because it has won the Council on Competitiveness Award.
    It was really fashioned with caveats by myself, but Senator 
Danforth wanted to make sure it wasn't a pork program and just 
giving out awards. So the application has to be vetted by the 
National Academy of Engineering. After it is found to be a 
unique kind of technology, then you have to bring 50 percent of 
the financing and then on a competitive basis over at the 
Department itself stand in line for that particular award.
    I have been on the Appropriations Subcommittee here for 
quite a while and we never have given out any pork projects. I 
don't have--if I have one in South Carolina, I don't know about 
it, but I do know about its success because the Council on 
Competitiveness and Young from Hewlett Packard and all have 
come and attested.
    But now you just red-line it and we are talking about 
getting jobs and helping manufacturing and we are going to 
appoint an Office of Manufacturing Services, and yet we are 
eliminating the services.
    Secretary Evans. Well, Mr. Chairman, Senator, I would say 
to you that these are programs that have delivered an important 
service through the years. I would also say to you that we are 
at war and there are very tough choices that have to be made 
and priorities that have to be set. I would say to you that 
these have been two good programs that have been of good 
service, but given the current environment of making tough 
choices in the middle of a war, they are just not two that made 
the list for us.
    Senator Hollings. You believe both should be eliminated?
    Secretary Evans. No, I didn't say that, because----
    Senator Hollings. But you are eliminating them. Are you 
supporting the budget or not?
    Secretary Evans. No. What we are supporting is to fund MEP 
at the same level that it was funded in the current budget. We 
are supporting funding MEP in the year 2005 at the same $39.2 
million that is in the 2004 budget.
    And also, Mr. Chairman, what I would say to you is we are 
looking for ways, as I mentioned earlier, to work across 
administration lines to make sure that all of the resources 
that are available to manufacturing are being delivered or they 
are aware of them. We will spend in the 2005 budget about $132 
billion on research and development. We said that one of the 
areas that have additional funding possibly available to MEP 
programs is in the Economic Development Administration. There 
are some $45 million there that Manufacturing Extension 
Partnership Centers can compete for with others that might be 
competing for the same funds in an area of our country that is 
distressed because it has been hit hard by the downturn of 
manufacturing in that particular community.
    Senator Hollings. Since you mentioned it, the $45 million 
of the EDA, $40 of that $45 million has already been committed 
and now EDA is distressed. You have got high unemployment and 
everything else like that. Over here, there is a highly 
technological program in the development of manufacturing and 
what you have done, having them compete for the same monies, it 
is like tying two cats by the tails and throwing them over the 
clothesline and saying, claw each other and see who can get the 
money, but that is about the way we are on that. Thank you.
    Senator Gregg. Senator Stevens? Traditionally, we recognize 
the chairman of the full committee whenever he arrives, and it 
was my error not to recognize you earlier. I should have 
recognized you before I recognized myself if I want to keep my 
job.
    Senator Stevens. Mr. Secretary, they do this all the time. 
It is all right.
    I am happy to be here with you, Mr. Secretary. I have got 
just three questions I would like to ask. I would like to just 
submit some technical ones to you, if I may.
    Secretary Evans. Sure.
    Senator Stevens. The first is personal. Are you going to 
come up and go fishing with me this year?
    Secretary Evans. You are trying to get me on the record, 
aren't you?
    I sure hope to.

                     ASSISTANCE TO ALASKA FISHERMEN

    Senator Stevens. In 2002, we put some amendments on the 
Trade Promotion Act that would assist the Alaska salmon 
fishermen who had been really harmed by the importation of farm 
salmon, particularly from Chile. It provided that for 5 years, 
there would be a $15 million item to assist these people to 
transition to other forms of employment, to develop other 
economic opportunities in their areas.
    So far, there has only been a portion of the first $15 
million made available. Could you comment on that or tell me 
you will look into it and see what is happening? It should have 
been $15 million a year, and there are some growing 
opportunities now in tourism in particular and in small 
business development along the coastline that they might be 
able to move into if they had the kind of assistance that EDA 
could provide through that $15 million.
    Secretary Evans. Yes, I know how important those areas are. 
We are supporting those areas, Mr. Chairman, and we obviously 
will continue to support them. I am familiar with the $15 
million commitment. I know that it is not all in there yet. I 
will tell you that I will look into it further to see what it 
is we can do to make sure that we fund that at that level.
    Senator Stevens. I hope you will, because with half the 
coastline of the United States, some of those villages and 
communities are located literally hundreds of miles from other 
communities. But we have found now with the advent of 
telecommunications and with the Internet capability, they can 
start businesses like answering the telephones for some motel 
chain. You would be surprised what is there if they have the 
funding to transition into sort of modern global commerce. So I 
think that $15 million is well spent if we can find some way to 
put the money up. I would hope you would help us find it.

                      CRAB RATIONALIZATION PROGRAM

    Second, I met with the Administrator of NOAA concerning the 
crab rationalization plan recently. I think Bill Hogarth is 
doing a marvelous job for you. This is a program that was 
enacted this year and we are trying to make certain that the 
regulations and actions that are necessary to implement this 
crab program are in effect by the crab fishery, which will take 
place in early 2005. This is a crab fishery that has had the 
highest death rate of any industrial activity in the country 
for a period of years.
    We have enacted a program which will take the race for that 
crab out of the system and allocate firm amounts of crab to a 
boat owner so he or she may harvest the crab when the weather 
is good. But if the regulations aren't in effect come January, 
they will be back racing for the crab again and lose more 
boats. We lost one this January, a very sad loss.
    I would hope that you would help us find a way to implement 
this by the end of this year. Are you familiar with the 
program, Mr. Secretary?
    Secretary Evans. I am, Senator. I am very familiar with it. 
I know Bill Hogarth, as you said, is very focused on the issue. 
He is working with the North Pacific Fishery Management Council 
to implement the regulations. I haven't had anybody tell me 
that we won't be able to be in full compliance of our charge of 
having those regulations in place by the end of the year, so we 
are hopeful that we are able to accomplish that.

                        OCEANS POLICY COMMISSION

    Senator Stevens. Thank you. Last, Senator Hollings and I 
have been involved with carrying out the policies of the 
Stratton Commission that was a commission from the 1960s, 
really. We have now a new Oceans Policy Commission expected to 
release its report either this month or no later than next 
month. I wonder, are you keeping pace with them? Will you be 
able to appear before us and give us some recommendations based 
on that report for possible action this year?
    Secretary Evans. I sure would be delighted to do that, 
Senator, if I am invited up to do that. We have been working 
very close with Admiral Watkins and Robert Ballard and others 
on the Commission. It is my understanding that the draft of the 
report will be out within the next few weeks and then there 
will be a chance for individuals to comment, give information 
back to the committee.
    I would say to you our best guess is we probably will have 
a completed report by mid-summer, and so I am looking forward 
to the report and I salute you and Senator Hollings both for 
really being instrumental in providing the framework for this 
Commission. I think it is going to be a very valuable resource 
for us to review and understand what there is to explore in the 
oceans. But I am hopeful that we will have this report 
presented to Congress, to the President, in its final form, by 
mid-summer.
    Senator Stevens. My good friend from South Carolina is 
going to pursue other activities after this year, and since we 
have been partners in this for so long, I would hope we would 
have a chance to review it here in this committee and to make 
some recommendations to Congress to implement that report while 
he is still here.
    The Stratton Commission has been, as I said, our guiding 
light, but we are going to have a new series of recommendations 
that I think should be implemented as rapidly as possible and I 
am hopeful this committee, Mr. Chairman, will see fit to have a 
hearing as soon as we can after that final report is presented 
to us by you and the President.
    Secretary Evans. Thank you, Senator.
    Senator Stevens. Thank you very much, my friend. Thank you, 
Mr. Chairman.
    Senator Gregg. We will certainly do exactly that. It is a 
very important issue.
    Senator Leahy?
    Senator Leahy. Thank you, Mr. Chairman.

                               PATRIOTISM

    Mr. Secretary, when you began your remarks here this 
morning, you commended Senator Hollings' patriotism, and I 
think every one of us would agree with that. We should also 
commend yours. I know in your case coming into Government also 
involved your personal friendship with the President. It is not 
an easy task. Whether we agree or disagree with policies you 
might carry out, I don't think there is anybody, Republican or 
Democrat, who disagrees with your own sense of patriotism and 
your own commitment to this country.
    Secretary Evans. Thank you, Senator. Thank you very much.

                              U.S. ECONOMY

    Senator Leahy. What I worry about, we have families that 
are hurting. They see a jobless recovery, 3 million 
manufacturing jobs lost in the past 3 years. Our manufacturing 
jobs in the United States are now at the lowest level since 
1950 and I am worried about that, whether it is in my State or 
yours or any other State. This is such a major part of the 
economic engine of this country and probably one of the reasons 
why our trade deficit is so high. Our trade deficit was almost 
half-a-trillion dollars in 2003, $489 billion to be exact. 
These things bother me.
    I look at the Commerce Department's proposal to help the 
Nation's ailing manufacturers, the proposal of a new Assistant 
Secretary of Commerce for Manufacturing, as we have talked 
about, supporting the MEP program that you and Senator Hollings 
just talked about. I am not sure how a new assistant secretary 
does anything. You already have hundreds of people doing this 
at Commerce, and they are supposed to be doing that job to 
begin with.
    Senator Hollings said on MEP, which I think is a very, very 
good program, it has gotten strong bipartisan support. The 
President's budget doesn't really match the rhetoric. The 
reality doesn't match the rhetoric. The money is not in there. 
I was here with the final negotiations on the appropriations 
bill, where the rubber really reaches the road, and the White 
House was not pushing for the extra money on MEP. We are not 
going to have the money for our centers to continue operations 
and service our small manufacturers. And those small 
manufacturers are in every one of our States. So that is a 
bother.

                      PRESIDENT'S ECONOMIC REPORT

    I look at sort of the trifecta of sections in the recently 
released Economic Report of the President. First, it suggests 
that the movement of U.S. jobs overseas, commonly referred to 
as offshoring, is beneficial to consumers. The President's top 
economist said this migration is just ``a new way of doing 
international trade.'' Well, that is kind of a flippant way for 
somebody to speak who has a job.
    If you know you have 2 months left on your job because you 
have to train somebody to do the same work in India or 
Indonesia, you don't think this is a great, new way of doing 
jobs. If you worked hard going through school, you have learned 
the trade and suddenly it is leaving. The administration's 
rhetoric is not going to do very much if you want to send your 
kids to school.
    The report also predicts that non-farm payroll employment 
will average 132.7 million workers in 2004. That would be a 2.6 
million increase in jobs over the estimate in 2003. But then 
you have an analysis from the Economic Policy Institute and the 
Center for Budget and Policy Priorities that says that you 
would have to create something like 460,000 jobs a month to do 
this. You would have to have 5 million jobs between now and the 
end of the year added.
    That is not going to happen unless you do the other thing 
in the report, and that is the question they raised, whether 
fast food restaurants should continue to be counted as part of 
the service sector or part of the manufacturing sector. They 
say specifically, ``When a fast food restaurant sells a 
hamburger, for example, is it providing a service or is it 
combining inputs to manufacture a product?''
    I remember about 20 years ago, and Senator Hollings, you 
were here, and Senator Stevens and Senator Inouye were too, I 
had taken a bunch of reports back to Vermont with me to read 
them over the weekend at my farmhouse. I also serve on the 
Agriculture Committee. And I am reading something in there and 
I remember calling one of the lawyers on the committee. I said, 
``Am I reading this right?'' They hadn't seen it. They read it 
and they called me back and said, you are absolutely right. The 
administration is reclassifying catsup as a vegetable. I do 
have a 5-year-old grandson who probably believes it is. He 
loves it.
    I mean, the only way you are going to get some of these 
jobs, as I see it, is to do the catsup as a vegetable thing, to 
say if you work at Taco Bell, you really have a manufacturing 
job.
    These are just some thoughts of mine. I have a number of 
questions I will submit for the record.
    Mr. Secretary, I see good news and bad news in my own State 
as some areas were able to get jobs, but I just see so many 
manufacturing jobs fleeing. I see it in South Carolina, in 
Alaska, and in Hawaii, Wisconsin and everywhere else. I don't 
think just reclassifying some of these things is going to do 
it, just my thought.

                         FOCUS ON CREATING JOBS

    Secretary Evans. Senator, thank you for those comments and 
observations. Let me just begin by saying I think at the very 
center of America, the very center of the American experience 
is a job, because that is where people go to get a paycheck to 
put a roof over their family's head, to feed their children, to 
educate their children, to provide health care for their 
children.
    I spent 30 years of my life in the private sector doing 
everything I could to create jobs. I measured the success of 
our company by are we creating jobs in our community? The most 
painful thing, the most painful thing I have ever done in my 
life is tell somebody they didn't have a job, which I did. The 
best thing, the most enjoyable thing I ever did in my life was 
telling somebody they had a job.
    So I agree with you, when you put your focus on jobs and 
how important it is to create the environment for creating more 
jobs in America, because there is nothing more painful than 
somebody not having work to be able to provide for their 
families. That is where a lot of our focus should be, is on 
those individuals that are in transition from one job to 
another.
    And in the economy that we are going into as we move into 
the 21st century, as we work more closely in the world in a 
growing global economy, it is going to be an ever-changing 
economy. We are going to be creating new industries in this 
country, as we have been for years. We are going to be creating 
new jobs in this country, as we have been for years. But we are 
also going to be losing them along the way, as we have been for 
years.
    As we move into the 21st century, we are going to see this 
rapidly-changing economy. Individuals that enter it today, 
instead of just having maybe four or five different jobs in 
their lifetime, they may have four or five different careers 
and----
    Senator Leahy. But Mr. Secretary, what are the kind of jobs 
we are going to create? I mean, I look at MEP, which is 
something that helps so many of our small businesses create 
jobs around this country. But that is being cut. I mean, where 
are these jobs going to be? We told kids over the past few 
years to get your math skills, get your work skills and all 
because we are going into this service area of computers and so 
on and that is the place to go. They did it, and now they are 
training people to do their jobs in Asia or in India.
    I understand some things change, but what are we doing? We 
have got a half-a-trillion dollar trade deficit. Doesn't this 
ring alarm bells that we are not creating jobs, we are just 
importing everything?
    Secretary Evans. Well, Senator, first of all, where are the 
jobs going to be created? As you mentioned, manufacturing jobs 
have been declining in this country and in this world for the 
last 40 years because of the higher productivity in the 
manufacturing sector of the global economy.
    Today only 11 percent of the jobs in this country are 
manufacturing-specific jobs. So almost 90 percent of the jobs 
in America today, where people are going to get a paycheck, to 
feed their children, to put a roof over their family's head, 
are jobs that are outside of the manufacturing sector of our 
economy, and we are going to continue to create new industries 
and new jobs.
    I have traveled all across America the last couple of 
years. I was in Portland, Oregon last week at Portland 
Community College, and I heard story after story after story of 
individuals that were there in their 30's or 35 and changing, 
moving from one career to another, learning new skills, having 
the task to meet the ever-growing demand of jobs in America.
    So it is education and job training. We have 1,100 
community colleges across the country, 11 million people in 
those community colleges developing these new skills and new 
talents that will meet the demands in these ever-new industries 
that we are creating in this country every year. It has been 
going on for years.
    In specific areas, you are obviously going to see a lot in 
the biotechnology area, in the whole technology area, in health 
care and services. You are going to see tremendous growth there 
in the years ahead.
    And so this is an economy that since its beginning has 
always shown a remarkable ability to create new industries and 
new jobs. You go back to 1900. About 70 percent of the jobs 
were in the agriculture community. Now, 2 percent. So it is 
just the economy, because it is so dynamic and because we allow 
the free markets to work----

                             TRADE DEFICIT

    Senator Leahy. Mr. Chairman, if I might, Mr. Secretary, and 
my time is up, I know, but half-a-trillion dollars in 1 year in 
trade deficit, we are still not doing something right.
    Secretary Evans. Well----
    Senator Leahy. My time is up. You may want to respond to 
that for the record.
    Secretary Evans. I will just respond real quick. I think it 
is the others in the world who are not doing something right in 
that their economies are not growing as they should be. And as 
we travel the world, we tell other countries, you need to 
implement the kind of policies, economic policies, fiscal 
policies, monetary policies, regulatory policies that provide 
the environment for growth in your own countries and so you can 
create more jobs and that will benefit American workers and 
American businesses. We need more global economic growth. We 
can't be the only engine of growth in the world.
    Senator Gregg. Senator Kohl?
    Senator Kohl. Thank you very much, Mr. Chairman and 
Secretary Evans.

                  MANUFACTURING EXTENSION PARTNERSHIP

    I know the purpose of these hearings is to bring 
information to the table and hopefully to educate from one side 
to the other, from you to us and from us to you so that good 
things can happen. They are, as you know and I am sure you 
agree, not intended for just one side or the other to mouth 
previously held positions and both sides leave having learned 
nothing. That is the purpose of our hearings. We listen to each 
other and we hopefully learn and grow.
    It is in connection with that that I would like to come 
back at least once, perhaps finally at this hearing, to the MEP 
program. As you know, the MEP program is Manufacturing 
Extension Partnerships, a program which helps small and medium-
size manufacturing firms around the country to streamline their 
operations, shorten production time, lower costs to enable them 
to better compete here and around the world, and as a result, 
increase their employment.
    And, as you know, and I don't say this in any way less than 
complimentary fashion, in your best judgment, that program 
deserves to be cut. It is not fully funded. It is fully funded 
as of last year, but it is not fully funded as to where it was 
2 and 3 and 4 years ago. So to say it is fully funded is not 
accurate. It is a program which your Department has made a 
decision deserves to be cut.
    To say that it can compete for other funds elsewhere is to 
rather obfuscate the fact that it is a program which does not 
deserve, in your Department's judgment, does not deserve to be 
funded at its level of 2 years ago and 3 years ago and 4 years 
ago. It deserves to be cut by almost two-thirds, and then go 
out and compete for funds and probably not be very successful 
because the competition is really, really tough among many, 
many different well-qualified operations to compete for a 
limited amount of funding, and they are not going to get fully 
funded relative to where they were 2 and 3 and 4 years ago.
    But it really is a good program, Secretary Evans. You know, 
during this last break, I visited at least two programs around 
Wisconsin, MEP programs, and heard from many, many others, and 
I visited one program with James Haney, who is the President of 
the Wisconsin Manufacturers and Commerce Organization. It is 
Wisconsin's preeminent organization of its kind. They have 
4,300 members representing business around the State. It is 
really a good organization. It politically happens to be an 
organization which is totally supportive of Republicans in 
terms of political, but they are really not that. They try and 
be and they are an effective bipartisan organization.
    So I visited the Bernston International Company in Madison, 
Wisconsin, the manufacturing operation with him, and he wrote 
back to me. He said, ``Senator Kohl, it was a pleasure to tour 
Bernston International with you last week in Madison. This 
company is just one example of many MEP successes that I have 
personally witnessed in Wisconsin. I completely agree with you 
that MEP is one of the best Government investments around and 
it should be fully supported at the State and at the Federal 
level.''
    He goes on to conclude that, ``We need to prioritize our 
economic development initiatives and judiciously place taxpayer 
dollars in those investments that provide the best return for 
our State and our country and there are many programs that 
should not make this cut. However, MEP is one Government 
investment that ranks at the top when evaluated against 
criteria of national need, effectiveness, and results. We 
should not shortchange or undercut this excellent program.''
    ``I understand the Senate Commerce, Justice, and State 
Appropriations Subcommittee will be reviewing the manufacturing 
support program this week. Please urge the Secretary to do what 
he can to restore MEP funding at the level of $106 million,'' 
where it was. This is from a longtime, experienced, highly 
respected businessman in Wisconsin.
    Tell us why you have concluded that MEP does not deserve to 
be funded at its previous level. Thirty-nine-point-six million 
dollars, which is its new level of funding, for a national 
program in terms of Federal support is virtually an 
evisceration. This is not for one State, this is for all 50 
States, $39.6 million. It is not hard to imagine that this is a 
small, small level of support.
    Our opinion is it is for a really good program and there 
are thousands of businesses around the country that would 
attest to it. So one last time, explain to us why does this 
program deserve to be significantly minimized in terms of its 
direct Federal support?

                             BUDGET CHOICES

    Secretary Evans. Senator, again, it is about tough choices. 
I agree with you in that it has served many small and medium 
manufacturers well over its period of existence. It will 
continue to serve many small and medium-size manufacturers well 
at a reduced level.
    I would say to you that while we have made the decision, 
the tough decision of saying we need to, because of the tough 
times that we are in and the priorities that must be set within 
our own Department, we are doing all we can to make sure that 
if there are other funding sources available to Manufacturing 
Extension Partnership Centers, we want to make sure they are 
conscious of those opportunities.
    I would just go back to my other remark, that we are 
spending about $132 billion on research and development. We are 
spending $20 billion on economic development. Within these two 
large pools of money, maybe there are opportunities for 
Manufacturing Extension Partnerships to compete. We have 
identified some already that I have referred to. We are talking 
to the Department of Defense. We are encouraged by some of the 
discussions that are going on there because of their interest 
in making sure that small manufacturers are participating in 
their programs. We don't have anything definitive yet. We are 
just talking to them.
    We are doing the same thing with Homeland Security. 
Homeland Security has about, as I understand it, $800 million 
for research and development kinds of programs. Maybe there is 
opportunity there, so we are talking to them.
    We are trying to look across Government to see where there 
may be additional funding that these centers can compete for. I 
know the challenges these manufacturers face because I was in 
that business. I know that industry. I know the kind of 
challenges they deal with every day.
    So again, I continue to acknowledge that I think the 
program has functioned well, but it is time for tough choices 
and this is one of those very difficult choices that we made 
and acknowledge that doesn't mean we are all going to agree 
with our two choices. I respect, obviously, your view on it, 
but we felt like this was one of those tough choices where we 
were going to--and saying fully funded, I would agree, it is 
what I meant to imply was funding in 2005 at the same level 
that Congress approved for 2004, which is, and I acknowledge, 
below the funding of previous years.

                            SUPPORT FOR MEP

    Senator Kohl. All right. One of the companies I visited was 
the Risota Tool Company of Chippewa Falls, Wisconsin, and we 
toured the company, talked to the owners of the company and 
people who work there. MEP had been in and they had done a lot 
of scheduling and efficiency improvements and profit 
improvements in the company. Those people who worked there were 
totally complimentary, totally supportive of what MEP had done 
and they felt that MEP had contributed significantly to the 
company's ability to continue to exist, employ, and compete. 
There are dozens and dozens of companies around Wisconsin that 
will attest to the same thing and I am certain that this is 
true around the country.
    Now, as I said at the outset, we all hope that these 
hearings serve to educate one another or else they have no 
purpose, and so I am finally suggesting to you that you take 
one last look. It is policy we are talking about, that is the 
most important thing, but it is also political. Everything we 
do here has a political aspect to it. Although not the most 
important, it is part of what we do here in Washington.
    I can assure you that in my State, and this goes back to 
when you were in the State several months ago touring the 
State, you visited Harley-Davidson, you remember that----
    Secretary Evans. You bet.
    Senator Kohl. I saw it on C-SPAN. And, of course, people at 
Harley-Davidson, many of them were very concerned and upset 
about their jobs. One individual stood up at that meeting that 
you had with the workers there and asked about MEP. I don't 
know why or whether they did it out of their own knowledge or 
someone prompted them, I don't know, but talked about MEP and 
how important MEP was. James Haney, who is the President of 
Wisconsin Manufacturers, talks about MEP.
    It would be very, very well received in Wisconsin, which is 
an important State in November, but it has nothing to do with 
policy--I mean with politics. Policy is the most important 
thing we do. I recognize that and I am sure you do, too. People 
in Wisconsin are really concerned about the loss of 
manufacturing jobs and are looking for every shred of help they 
can get at the Federal level to assure them that we are doing 
everything in their power to help them maintain jobs at the 
manufacturing level in Wisconsin and MEP is a recognized and 
accepted part of that effort in our State.
    So I am asking you as well as Chairman Gregg, as we go 
through and figure out our funding levels for this year, and, 
of course, Senator Hollings, who I know is supportive of MEP, 
that we give it another look to see whether or not there is 
something in the interest of our country that we can do with a 
program which is small in terms of its funding, but very 
important in terms of what it does accomplish in many States 
throughout our great country.
    And with that, I am finished.
    Secretary Evans. Thank you, Senator.
    Senator Kohl. Thank you.
    Senator Gregg. Your counsel is taken very seriously, 
Senator, and we will certainly be addressing it. The opinion 
has been expressed, obviously, by the committee. But as the 
Secretary said, he had to set priorities in his budget. We will 
maybe adjust and tweak those priorities a bit and send him back 
a budget he will be very comfortable with but will certainly 
address some of the concerns of the committee.
    Senator Inouye?

                   CLIMATE CHANGE RESEARCH INITIATIVE

    Senator Inouye. Thank you very much, Mr. Chairman.
    I would like to discuss two matters with you, Mr. 
Secretary. In 2001, the President of the United States launched 
the U.S. Climate Change Research Initiative and that was hailed 
by the people in the Pacific for obvious reasons. Climate is 
part of our way of life. More than ever, it is pleasant and 
beautiful, but there are times when it can be devastating.
    So the matter of climate change is very essential to our 
way of life, and I note that in this budget the President has 
suggested $24.7 million. But in analyzing this, we somehow feel 
that to make this up, there were cuts of $11 million from the 
same program. I would like to submit a few questions with that 
in mind, sir.

                            TOURISM INDUSTRY

    The other question I have, sir, is the tourism industry. 
Today, I think it employs about 1 million. It brings in about 
$83 billion. It has been declining, and especially since 9/11 
it has gone further down. But the World Trade and Tourism 
Council just predicted that 2004 may be the year for tourism to 
start going up, provided Government took the initiative to be 
proactive and put out a hand to bring them in.
    My questions would be, what is Government doing, or what 
can Government do, or what can we do to increase this industry, 
because it is a good, clean, potentially productive industry. 
That is all I have, Mr. Chairman. Thank you very much.
    Senator Gregg. Thank you very much, Senator.
    Senator Inouye. May I submit the questions?

                         GLOBAL CLIMATE CHANGE

    Secretary Evans. I would like to respond. First of all, let 
me just touch on global climate change real quick, if you don't 
mind. When I arrived here a little over 3 years ago, that was 
an issue that the President was very focused on, as was our 
Department, and we started to try and understand the scope of 
the global climate change commitment from Government, which is 
significant.
    First, I was told that on global climate change we spend 
about $800 million a year. And then we found some other money 
that really is focused on global climate change and it took us 
up to about $1.6 billion a year. And then as you looked around 
some more, you found some others that would, you know. The end 
of the story is that we commit about $4.5 billion a year to 
global climate change in this country, more than everybody else 
combined, global climate change science and research and 
technology.
    We put together an organizational structure to oversee that 
$4.5 billion. Within the Department of Commerce is the 
responsibility of the oversight of the science portion of 
global climate change, which is about $1.8 billion across the 
Government. We have put out a report for the science community 
to review and consider. We did that last year a couple of 
times. We just recently put out a final report that focuses on 
the science side, the science research side of global climate 
change, which got some favorable comments, from the National 
Research Council.
    In June in Japan, we are going to bring together the global 
community. This will be for the third time, but it continues to 
expand. We will have the global community there to sign an 
accord, a framework that focuses on a global monitoring system, 
a global observation system for the climate so that we can 
develop the kind of data, kind of information we need in this 
world to understand the world, this Mother Earth that we all 
live on, but also make sure globally we are collecting the data 
to make good policy decisions.
    So just know that we are very focused on that very 
important issue, not only for the good people of the islands of 
Hawaii, but the entire world, and I feel the world coming 
together to say, you know what? That is a good idea. We ought 
to have a global observation and monitoring system. The reason 
we know so much about El Nino and La Nina is because we happen 
to have an observation system out there so we measure out 
there. So why don't we measure the world and understand what is 
going on in the world. So that is my basic thoughts on global 
climate change.
    Your second question was on----
    Senator Inouye. Tourism.

                                TOURISM

    Secretary Evans. Tourism. We had hoped that we were going 
to receive $50 million in the budget to promote tourism in 
America. We have put together a Tourism Council that is focused 
on promoting America around the world. As it turned out in the 
2004 budget, there was only $6 million allocated for that 
account, for that program, and so what we have made the 
determination that we will do, working with the Tourism 
Council, is to focus a pilot program on Great Britain and 
commit those $6 million to Great Britain and look at the 
results of that program, and based on the results of that 
program, we will make a determination as to what to ask for in 
subsequent budgets.
    But you are right. It is a vital part of our economy. 
Eighteen million people, when you count the entire travel and 
tourism industry, have a job there, and so it is a critical 
part of our economy and we will continue to do all we can to 
promote it. Thank you, Senator.
    Senator Inouye. Thank you very much.

                              PTO INCREASE

    Senator Gregg. Mr. Secretary, there is a 25 percent 
increase here for the Patent and Trademark Office, which is 
basically taking all the patent fees and putting them into the 
Patent and Trademark Office, which is a legitimate 
philosophical position. In light of the Patent and Trademark 
Office's track record, which is to say at the least spotty, do 
you think they can absorb that type of an increase?
    Secretary Evans. Well, Mr. Chairman, I hope they can 
because I think it is critical to manufacturing in this 
country. What we certainly are learning in this ever-changing 
economy that we are moving into is that the manufacturing 
sector is growing or becoming less mechanical and more driven 
by biotechnology and electrical kinds of issues. It is much 
more complicated. It is much more complex. Patents just simply 
take longer, take more resources, take more hours, take more 
time to review and then make a judgment on.
    It is our determination, as we look at this important area 
that if we don't hire additional examiners--in fact, in our 
plan right now, we talk about hiring an additional 900 
examiners. That is on top of about 3,600 examiners. But if we 
don't hire at that kind of level, which I agree, a 25 percent 
increase is a significant increase, but we see the prospects of 
the pendency continuing to climb. It was a little over 20 weeks 
in 2003. We estimate in 2004 it is going to be 21 weeks. We see 
it continuing to climb but for a plan that will indeed give us 
the examiners, and the training of the examiners that are 
needed in this ever-changing economy.
    So we believe we can absorb them. I have asked that same 
question. I realize that is a big management challenge, but I 
also understand how critical the Patent and Trademark Office is 
to this economy. As rapidly as it is changing and as it 
continues to move in highly technical areas and highly 
complicated areas that require examiners with skills in 
electronics and biotechnology and all the rest. It is a 
challenge, but it is an area we focused on very hard.
    Senator Gregg. Well, I think it is a challenge. It has been 
this committee's experience that when we have put a lot of 
money into a Department to hire a large amount of expert staff, 
for example, we did it with the SEC, we did it with the FBI, we 
did it with the State Department, we have found that it has 
created real problems. We have ended up with some breakdowns in 
the hiring practices. We have ended up either not hiring up as 
quickly as we wanted or hiring up with real problems, like the 
Border Patrol.
    I have serious reservations about putting this much money, 
this quickly, into the Patent and Trademark Office. I readily 
acknowledge your premise, which is that there is a serious 
problem there, that we are not getting the patents approved 
fast enough. I think the problem is expertise and management, 
systems management. We would be interested in further 
information on how you really do plan to find 900 new people 
who have the expertise to do this job in one year's cycle. I 
think it is----
    Secretary Evans. A good question.
    [The information follows:]

                  PTO's Hiring Plan for 900 New Staff

    On a percentage basis, the USPTO has increased its staff by 
even more in the recent past. Hiring 900 examiners in fiscal 
year 2005 represents an increase of about 25 percent over end 
of fiscal year 2004 staff levels. In prior years, the Office 
has successfully hired similar numbers: In 1998, they hired 728 
examiners, an increase of about 34 percent over the previous 
end-of-year staff; in 1999, they hired 799 examiners, an 
increase of about 31 percent over the previous end-of-year 
staff; and in 2002, they hired 769 examiners, an increase of 25 
percent over the previous end-of-year staff.
    The USPTO maintains an automated job application database 
to facilitate the hiring of patent examiners. The database 
currently contains about 3,700 applications. We have a 
strategic recruitment plan in place to build awareness of 
examiner job opportunities through a variety of print media 
that target high-demand technologies, and planned participation 
in about 60 recruiting events this fiscal year that are 
dedicated to engineering and science disciplines.
    The agency has had a special hiring unit in place for 
several years that is dedicated exclusively to bringing in 
patent examiners. In years when the agency had high-volume 
hiring, the unit has brought on board an average of 37 
examiners per bi-week (962 per year), with the ability to 
process and train up to 60 examiners per bi-week (1,500 per 
year).

                  MANUFACTURING EXTENSION PARTNERSHIP

    Senator Gregg. Senator Hollings?
    Senator Hollings. On that particular point, that dovetails 
with the observation of the distinguished Secretary relative to 
Senator Kohl's concern about the Manufacturing Extension 
Partnership. Specifically, the Secretary says there are hard 
choices. Respectfully, I think it is a very easy choice, not a 
hard choice at all. You want jobs, I want jobs, we all want 
jobs, and that Patent Office, $310 million, let us just say 
$210 million, give the $100 million to MEP and we would be back 
up to snuff with the Manufacturers Extension Partnership small 
business services.
    Senator Gregg. You only need $67 million.
    Senator Hollings. Don't start cutting me. Wait until we get 
to conference.

                             BUDGET CHOICES

    The Office of Manufacturing and Services, heck, we are 
going to get us a big super-duper secretary of services and we 
cut down the services, and when we get to a real service, as 
pointed out and emphasized by Senator Kohl, you say hard 
choice. That is not a hard choice, that is an easy choice. Give 
the money where it is producing jobs.
    Now, I don't accuse you, Mr. Secretary, but I have been 
through a dozen Secretaries. Now, Census is a honey pot that 
doesn't need as much funding as you propose because you are 
ramping up 7 to 6 years ahead of time the 2010 census. So we 
can take $100 million of that and restore MEP, an easy choice. 
I could go through this budget and really get the things.
    I really am disturbed, and you mentioned technology. The 
Advanced Technology Program, that is one where all that high 
tech is really there and vetted by the National Academy of 
Engineering, and decisions are made on a competitive basis and 
they have to bring 50 percent of the money.
    Let me get to the point given our limited time here, 
because we are going to have a rollcall, you and I both agree 
that our job is to create, not to export jobs. Export products, 
but create jobs. Would you object to a provision under this 
particular appropriation that no monies be expended to 
encourage or expedite the export of jobs? You wouldn't object 
to that provision in the budget?

                           EXPORTING OF JOBS

    Secretary Evans. I am not for the exporting of jobs----
    Senator Hollings. That is what I mean. So you are not doing 
it, so it wouldn't have any effect, then.
    Secretary Evans. Right.
    Senator Hollings. And that would include the pay of these 
staff cheerleaders that go to these Chinese conferences. We 
don't want to pay those fellows, Ross and all the rest, the 
assistant secretaries who run around to these Chinese 
conferences in New York and elsewhere promoting the export of 
jobs. I am sure you and I agree on that.
    Secretary Evans. Well, they are promoting the export of 
goods and services from America and equipment.
    Senator Hollings. Good, and you and I agree on that. They 
ought to do that, but not the export of jobs.
    Secretary Evans. No. It would be exporting the goods and 
services from America.
    Senator Hollings. That is right, and so we don't want to 
pay them to export jobs.
    Secretary Evans. Just the export of goods and services and 
products from America.
    Senator Hollings. And we don't want to pay them to export 
jobs.
    Secretary Evans. We want to pay them to export Caterpillar 
engines and John Deere tractors and----
    Senator Hollings. A 30-year outstanding business success 
and you keep saying export goods and services, which we all 
agree on. I am questioning on whether or not we can agree on 
the export of jobs.
    Secretary Evans. No. We should not. We are not supporting 
the export of jobs.

                             OCEAN PROGRAMS

    Senator Hollings. Now, with respect to the oceans program 
that Senator Stevens, our distinguished chairman, emphasizes we 
are going to have to get into those issues because we have an 
outstanding commission appointed by President Bush and they are 
reporting henceforth here, like you say, around mid-summer.
    Secretary, under the leadership of Chairman Gregg, we have 
been developing, and it has been a struggle in this 
Appropriations Subcommittee, in that we put in, generally 
speaking, about $15 million for seven-tenths of the Earth's 
surface, namely the oceans, and $15 billion for Mars and moons. 
We know way more about the surface of the Moon than we know 
about the surface of the Earth.
    And yet the Ocean Exploration Initiative, the Ocean Health 
Initiative, the Coastal Estuarine Land Acquisition Program, the 
Coastal Observation Initiative, NOAA's infrastructure for the 
multiple lawsuits and all, you terminate or cut the funding. 
You cut NOAA as we are going into a wonderful venture and 
really find out, like you say, about the weather and the 
climate all the way around the world.
    I have been down to McMurdo Station in the South Pole. That 
is where the beginning of the hole in the ozone layer is. You 
can look up and see it. All of these initiatives are through 
NOAA, but their budget is being cut $308 million just as we are 
going to hear from the Watkins Commission. Please comment on 
that.
    Secretary Evans. Senator, what I would say to you is I 
think we all share the same view that we are looking forward to 
the report that comes from the commission. I think it will 
provide a very important and valuable framework for us in 
determining what the priorities should be and what the funding 
level should be. I think these are some of the finest 
scientists and leaders we have in our country that are focused 
on this invaluable resource of the Earth and it will give us 
good guidance and some important guidelines as to what 
priorities should be and what funding levels should be in NOAA 
or as it relates to the oceans.
    You mentioned this is not a large sum of money, but when we 
showed up here 3 years ago, there was, I understand, zero 
dollars for ocean exploration. This last year, there was $25 
million that included a one-time center in the Smithsonian. But 
now this year in our budget, I think there is $11.7 million for 
ocean exploration.
    I realize, I take your point, this is a small amount of 
money, but what I would say to you, when we showed up, it was 
zero and now it is $12 million. But I think it is a wise thing 
to wait for the Ocean Commission report and look at that and 
see what kind of priorities this country should place on 
funding levels for NOAA.
    Senator Hollings. We want to work together to be able to 
implement that commission's recommendations next year. Thank 
you, Mr. Chairman.
    Senator Gregg. Senator Kohl, do you have anything further?
    Senator Kohl. No.
    Senator Gregg. Senator Inouye?
    Senator Inouye. No, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Gregg. Mr. Secretary, we certainly thank you for 
your time. You have been very generous with it this morning.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Judd Gregg

                         NOAA SPACE INITIATIVES

    Question. Mr. Secretary, since our hearing, you've had a chance to 
review the N Prime situation in further detail. First, could you 
explain/document how the N Prime satellite was damaged and the impact 
on NOAA's satellite program? Second, would you provide an update on 
what the Department is doing to recover losses and get the program back 
on schedule.
    Answer. The NOAA-N Prime spacecraft fell from a turnover cart on 
September 6, 2003 at the Lockheed Martin Sunnyvale, California plant as 
technicians rotated the satellite from vertical to horizontal to 
perform an alignment operation on one of the instruments onboard. The 
root cause of the accident was that the satellite was not properly 
secured to the turnover cart. The accident caused significant damage to 
the satellite structure and varying degrees of damage to the 
instruments, including three provided by International partners. 
Fortunately, many flight components were not on the satellite at the 
time of the accident. Spares are available for most of the spacecraft 
components and three of the five U.S. instruments. Two instruments will 
need to be repaired.
    The impact to NOAA's Polar-orbiting satellite program is currently 
under review. NOAA has formed an interagency team with its partners at 
NASA and the Department of Defense to develop and recommend recovery 
options that will ensure NOAA's responsibility to provide continuous 
global environmental measurements given the NOAA-N Prime accident. The 
Under Secretary of Commerce for Oceans and Atmosphere will make a final 
recommendation to me regarding the way forward from the NOAA-N Prime 
accident. I will render a final decision in the Spring 2004. The 
Department of Commerce and NOAA will brief Congress at that time.
    The Department of Commerce, NOAA and NASA legal staff are 
investigating the government's options for recovering losses from 
Lockheed Martin.
    Question. Mr. Secretary, the President's budget calls for major new 
space initiative to return to the moon and explore Mars. But, it is 
NOAA in your Department, not NASA, that is responsible for exploration 
here at home. Yet, the Budget proposes to cut or terminate ocean 
research, ocean exploration, undersea research and such programs here 
on our planet. Why such uneven treatment, Mr. Secretary? Why do NOAA's 
oceanic and ecosystem programs fare so badly in this budget?
    Answer. The Administration recognizes the importance of both space 
and ocean exploration. Given the tight fiscal environment, the 
Administration is required to develop priorities and make difficult 
choices. The fiscal year 2005 President's budget reflects these 
priorities. The Administration does place value in exploring the oceans 
and is continuing support for the ocean exploration program at a level 
of $11.2 million. We will continue to work hard to ensure the success 
of the ocean exploration program, and we thank the Congress for its 
continued interest in this area.
    Question. Mr. Secretary, as I look at your budget, it appears that 
the Commerce Department decided to cut NOAA and use the savings--over 
$300 million--to fund other bureaus like the Census Bureau, ESA and 
International Trade Administration. Many have argued that as a natural 
resource and science agency NOAA will never flourish inside the 
Commerce Department. Doesn't your 2005 budget support their arguments?
    Answer. The $300 million net reduction to NOAA's request reflects 
the elimination of one-time projects and programs added by Congress to 
the fiscal year 2004 request. The fiscal year 2005 budget request is 
supportive of NOAA's mission. The budget maintains current services and 
provides over $146.9 million in new program increases.

     ADVANCED TECHNOLOGY PROGRAM AND HOMELAND SECURITY TECHNOLOGIES

    Question. Mr. Secretary, the fiscal year 2004 Conferees agreed that 
a focused competition on homeland security technologies should be held 
out of ATP's funding provided for new awards. Will the Department of 
Commerce support ATP's involvement in this type of R&D? Can you provide 
detail for the Committee on the design and implementation of this 
competition?
    Answer. The fiscal year 2004 solicitation process for ATP 
applications is currently being undertaken. It is expected that a 
significant number of the enabling technologies ATP will fund this year 
will have homeland security applications. In the recent seven-city ATP 
``Proposers Conferences'' that are designed to attract potential 
applicants, the Director of the Program conveyed Congressional interest 
in funding homeland security technologies.
    After the fiscal year 2004 Omnibus Appropriations Bill became law 
on January 23, 2004, the 2004 competition was initiated on February 11, 
2004, with a Federal Register announcement stating the availability of 
funds in the amount of $60.7 million for new ATP awards.
    Given the compressed fiscal year 2004 budget calendar, ATP was 
unable to run an entirely separate competition that focused solely on 
homeland security technologies in addition to its general solicitation. 
Notwithstanding, ATP takes its obligation to follow the intent of 
Congress seriously, especially with regard to homeland security. ATP 
expects to receive a number of applications and fund a number of new 
awards for homeland security technologies. NIST has also offered to 
provide assistance and expertise to the Department of Homeland Security 
in conducting their own competitions that fund homeland security 
research.

                NIST/MANUFACTURING EXTENSION PARTNERSHIP

    Question. Mr. Secretary, in the Administration's manufacturing 
report there is a recommendation to ``support a newly coordinated 
manufacturing extension partnership.'' What is meant by ``newly 
coordinated''? Your budget doesn't support this, does it?
    Answer. One of the recommendations in the DOC Manufacturing Report 
is to ``Support a Newly Coordinated MEP and Create a National Network 
of Centers of Manufacturing Excellence'' by: coordinating MEP fully 
with other Commerce Department programs that are helping manufacturers 
to be more competitive and expand markets; focusing all MEP centers on 
effectiveness and cost efficiency; exploring the concept of receiving 
funding from private sector entities; encouraging applicants to 
identify areas of sector-specific expertise that could qualify them as 
a ``center of excellence''; and encouraging co-location with 
universities, community colleges, and ITA assistance centers to foster 
cooperation, knowledge transfer, greater efficiency, and manufacturing 
exports.
    All of these efforts comprise the ``newly coordinated'' MEP. The 
fiscal year 2005 budget request supports this effort.
    Question. Mr. Secretary, there has been some discussion that MEP 
might be reduced to the network of regional centers. Are you aware that 
this past January another State decided that the New Hampshire MEP 
would close down due to lack of funding? Who made the decision? Can you 
inform the Committee what the process is for closing centers?
    Answer. Three years ago, the New Hampshire (NH) Center was 
experiencing management problems so the NH Board removed the director, 
reconstituted the board, and brought in the Maine-based MEP Management 
Services Incorporated (MSI) as managing agent.
    Since NH received about $420,000 in Federal cost share annually and 
only received about $150,000 from the state three years ago, the excess 
Maine cost share was used to cover the NH center.
    The Maine MSI's excellent management team was able to bring the NH 
performance up and NH is now the highest performing MSI center.
    However, the NH center had approximately $300,000 in debt which the 
Maine MSI assumed as managing agent. The Maine MSI managed to reduce 
this debt down to $180,000. But as fiduciary agents, the Maine MSI and 
the NH board are responsible for the remaining debt. In light of the 
reductions to MEP funding in the fiscal year 2004 Consolidated 
Appropriations Act, the Maine MSI decided that, even in a best case 
scenario, they would not have enough cash flow to manage the NH debt.
    The Maine MSI will still provide a minimal level of service by 
keeping one NH staffer and assigning other staff from Massachusetts and 
Maine to serve NH companies.

                       INFRASTRUCTURE PROTECTION

    Question. Mr. Secretary, you have the sole responsibility to issue 
Federal Information Processing Standards which are standards developed 
by NIST and used by federal agencies and the commercial sector to 
protect their computer systems. As the Nation's infrastructure is 
increasingly linked by the internet, its vulnerabilities are being 
subjected to daily attacks. Given this fact, is the Nation, and in 
particular the Department of Commerce, investing enough resources to 
protect our computer systems and networks? Does this portfolio of 
investment contain enough forward looking R&D to allow us to be 
proactive and not reactive to these threats?
    Answer. Information security is one of the most critical issues 
facing industry and government. The Department of Commerce and 
especially NIST, takes very seriously our responsibilities to 
strengthen information security in the Federal government and the 
Nation as legislatively mandated in the Federal Information Security 
Management Act (FISMA) of 2002 and other legislation.
    As a Nation, we have made progress in securing our legacy systems, 
but ``bad guys'' continue to find new ways around or through our 
defenses. While we focus on current implementations, new technology 
developments in IT systems and in other disciplines that increasingly 
rely on IT systems are coming on-line at an accelerating pace. Thus, in 
cyber security, we continue to be challenged.
    That is why the President's fiscal year 2005 budget request 
includes a proposed increase of $6 million for NIST to address key 
National needs in cyber security. With this proposed increase to NIST's 
base funding of approximately $10.9 million, NIST will be able to more 
effectively work with industry and government agencies to accelerate 
solutions to critical cyber security issues, including the development 
of security and critical infrastructure application protocols; 
expanding the NIST Cryptographic Toolkit to include developing 
technologies, such as limited power, small-sized computing 
environments, fixing insecure wireless security standards; and 
producing metrics to build secure networks and systems from 
individually understood components.

                              PTFP GRANTS

    Question. Mr. Secretary, can you tell us why the PTFP Construction 
account and the Information Infrastructure Grants are no longer needed 
and why the funding request is shifted to the Public Broadcasting 
budget? Since CPB funds cannot be used for repairs, where will rural 
stations turn for assistance?
    Answer. The Information Infrastructure Grant program was created as 
an awareness program to promote the widespread use and availability of 
telecommunications and information technology in the non-profit and 
public sector. The Department believes that this mission has been 
fulfilled and recommends redirecting the funds to new priorities.
    With the assistance of Federal funds appropriated to PTFP, the 
Corporation for Public Broadcasting (CPB), and the Rural Utilities 
Service (RUS), 90 percent of the Nation's public television stations 
will be broadcasting in digital by the end of the year. As we near the 
end of the digital transition, the Administration proposes to continue 
funding the digital conversion of public television during fiscal year 
2005 through funds already appropriated to CPB.
    PTFP also does not pay for equipment repairs or other operating 
costs. PTFP, however, does pay for the replacement and installation of 
replacement equipment in circumstances of urgent need. We understand 
that these expenses could be supported through the equipment programs 
now in place at CPB and RUS.

                 LONG-TERM PLAN FOR SPECTRUM MANAGEMENT

    Question. Can you tell us what your overall long-term game plan is 
for spectrum management and how you will work with the FCC in this 
endeavor? What are your priorities and what are the most significant 
impacts on the commercial industry?
    Answer. On May 29, 2003, the President established the ``Spectrum 
Policy Initiative'' to develop and implement a U.S. spectrum policy for 
the 21st century. The Secretary of Commerce was directed to chair the 
initiative. The initiative involves an interagency task force to 
develop recommendations for improving spectrum management policies and 
procedures for the Federal Government, as well as an examination of 
ways to improve spectrum management for state, local, and private 
sector spectrum use. A report containing recommendations will be 
provided to the President in early summer.
    The National Telecommunications and Information Administration 
(NTIA) within the Department of Commerce is the President's principal 
advisor on telecommunications and carries out the function of providing 
spectrum to the Federal agencies. NTIA works directly with the FCC 
regarding spectrum allocation and spectrum policy development and 
implementation. In addition, the NTIA and FCC have agreed via a 
memorandum of understanding to meet twice a year at the Chairman and 
Assistant Secretary level and monthly at the Bureau level to discuss 
plans and spectrum management issues.
    Our major priorities include: (a) foster economic growth; (b) 
ensure our National and homeland security; (c) maintain U.S. global 
leadership in communications technology development and services; and 
(d) satisfy other vital U.S. needs in areas such as public safety, 
scientific research, Federal transportation infrastructure, and law 
enforcement.
    In the fiscal year 2005 budget, the President requested funding for 
NTIA for the development of incentives to increase efficient use of 
spectrum; the continuance of a prior year initiative to make the 
spectrum management process more efficient and effective through the 
application of information technology; the expansion of our 
International radio-communication outreach program; and development of 
the necessary analytical engineering tools and methods that will 
improve spectrum efficiency.
    The Administration has strongly supported the creation of a 
``spectrum relocation fund,'' which would have a significant impact on 
the commercial industry by substantially speeding the opening of 
spectrum to commercial use. Passage by the House of H.R. 1320, the 
Commercial Spectrum Enhancement Act, without amendment, would 
significantly improve spectrum management for both Government spectrum 
users and for commercial wireless users. The relocation fund 
legislation strikes a proper balance in three key policy objectives. 
First, the Bill fully funds Government spectrum relocation, providing 
certainty essential to Federal users including the Department of 
Defense. Second, the legislation will result in timelines that are 
workable for Government incumbents and commercial wireless users. 
Third, the legislation provides certainty and accountability in 
developing and adhering to relocation cost estimates and relocation 
timetables.
    Failure to enact this legislation this year could have an adverse 
impact on the timing of the Third Generation (3G) wireless auction and 
the deployment of new 3G wireless services. Industry and the Government 
are in strong agreement that the reimbursement fund mechanism would 
streamline the relocation of Government agencies. The President's 
budget for fiscal years 2003, 2004 and 2005 contained a legislative 
proposal to create a spectrum relocation fund for Federal agencies 
required to relocate their communications systems to allow the spectrum 
to be auctioned by the Federal Communications Commission (FCC) for 
private sector uses. H.R. 1320 passed the House 408-10 on June 11, 
2003. At the time, the Administration issued a Statement of 
Administration Position strongly supporting the bill as passed by the 
House.

             ITA REORGANIZATION AND COLLABORATION WITH USTR

    Question. Mr. Secretary, at the hearing you gave us an overview of 
how the ITA reorganization is progressing. Will you now provide a more 
comprehensive status of this complex reorganization? Also, can you 
offer some insight on how the Commerce Department will leverage this 
new office in cooperation with the United States Trade Representative 
to protect U.S. interest?
    Answer. The Reprogramming was sent to the House and Senate 
Appropriations Committees on May 7th. In addition, the Department 
Organization Orders necessary to formally make the changes need to be 
signed by the Secretary. Once the orders are signed, the staff will be 
formally moved and the management processes (accounting, personnel and 
other logistics) will be completed.
    Our reorganization will provide increased attention to the 
problems, both domestic and international, facing the manufacturing 
sector through the creation of an Assistant Secretary for Manufacturing 
and Services. We will consolidate and strengthen our export promotion 
functions under the Assistant Secretary for Trade Promotion (and 
Director General of the U.S. and Foreign Commercial Service) and 
improve the operations of our Import Administration.
    The Department of Commerce will continue to work closely with the 
U.S. Trade Representative in fulfilling the requirements of U.S. law, 
assisting exporters in overcoming foreign trade barriers and ensuring 
foreign countries comply with their commitments to the United States.

                          IRAQ RECONSTRUCTION

    Question. Mr. Secretary, I would like to commend the dedication of 
the Senior Commercial Officers around the world. They are doing an 
outstanding job. With reference to the emerging need and increased 
workload in the Middle East, specifically related to Iraq 
reconstruction, can you tell us where Iraq is within the priorities of 
the Foreign Commercial Service? What is FCS's basis for the resource 
allocation for the various locations around the world? Do you have a 
plan to increase the FCS presence in the areas serving as gateways into 
Iraq? When the government is turned over to the Iraqi provisional 
government on July 1, what is the plan for the FCS presence?
    Answer. ITA has conceived and developed several initiatives to 
facilitate and assist U.S. business interest in Iraq.
    Our Middle East-based Iraq Reconstruction Regional Initiative is a 
joint effort by Commercial Services posts in Egypt, Jordan, Kuwait, 
Saudi Arabia, Turkey and the UAE to assist interested U.S. companies by 
highlighting and supporting a series of specific events and activities 
such as conferences, seminars and training programs, webcasts, virtual 
(video) trade missions and videoconferences.
    As part of this initiative, we have undertaken an extensive series 
of activities, a schedule of which is attached. As a further complement 
to these activities, we plan to open a Middle East Business Information 
Center, which will showcase private sector development and serve as a 
one-stop shop for U.S. companies seeking opportunities in the region.
    Similarly, the Central and Eastern Europe Regional Initiative seeks 
to provide our Central and Eastern European Coalition allies with the 
necessary information required for their companies to compete for Iraq 
Reconstruction contracts on a level playing field. This initiative is a 
one time commitment to provide a delegation of experts to disseminate 
information and answer questions from the local business communities in 
Poland, Hungary, Czech Republic, Romania, Albania, Bulgaria, Slovakia 
and Ukraine.
    Commerce is also gearing up with a U.S.-based Iraq Reconstruction 
Project Team. This initiative builds on our successful ``sector team'' 
approach to assemble a small, highly focused group of sector 
specialists from around the country, each focused on a specific 
priority development sector in Iraq. Each sector specialist will be 
responsible for developing contacts with Iraq experts, handling 
questions from interested companies, and disseminating information on 
their particular sector.
    Since the end of official hostilities, we have had commercial 
service officers in Iraq assisting the Coalition Provisional Authority 
with private sector development and Iraq reconstruction efforts. We now 
are in the process of establishing a Commercial Service (CS) operation 
in Baghdad in the new Embassy scheduled to open by July 1, 2004. CS 
Baghdad will be staffed by 2 commercial officers and 8 Foreign Service 
nationals. CS has begun hiring staff for the new Baghdad operation and 
has assigned a seasoned officer to arrive in Baghdad in advance of the 
July 1 opening.
    The CS overseas resource allocation model takes into consideration 
Administration priorities, as well as market potential and cost/benefit 
analysis. Historically, the U.S. and Foreign Commercial Service has 
responded to national crisis with all available resources. We are using 
existing resources for this effort.

IRAQ RECONSTRUCTION REGIONAL INITIATIVE (IRRI) LIST OF TRADE PROMOTION 
                            EVENTS (BY DATE)

January 2004
    January 13-15--Iraqi Ministry of Trade training by the Government 
of Jordan on the Company Registration System. COMPLETED.
    January 5--Live Web Broadcast through the World Trade Center (WTC) 
in Ankara, Turkey. COMPLETED.
    January 6-8--Iraq Reconstruction Seminars in Ankara (Jan. 6), Izmir 
(Jan. 7) and Istanbul (Jan. 8). COMPLETED.
    January 11-13--``Outreach 2004 Exhibition'', Amman, Jordan on Iraq 
Reconstruction. Recruit an Iraqi delegation to attend the event. FCS 
Turkey to send Turkish delegation. COMPLETED.
    January 19-23--``Rebuild Iraq'', Exhibition in Kuwait City. Bring 
Iraqi delegation. CS Kuwait to host Iraqi Reconstruction Council 
Meeting. COMPLETED.
    January 18-22--``Arab Health Exhibition'', Dubai, U.A.E. Joint 
United States/United Kingdom initiative to bring an Iraqi delegation. 
CS Baghdad staff to provide CPA/CS Baghdad briefing. COMPLETED.
    January--Proposed Ar'ar Border opening press event in Saudi Arabia. 
U.S. Embassy Saudi Arabia to highlight beneficial aspects of the 
opening for future Saudi-Iraqi business relations. POSTPONED UNTIL CPA/
GC HAND-OVER OF SOVEREIGNTY 6/30/2004.
February 2004
    February--Preparation of Arabic language quick reference sheet on 
``Doing Business in Iraq''. COMPLETED.
    February 17--CS Kuwait and CS Riyadh supported and accompanied 
delegation from the American Business Council of Kuwait to Basra and Um 
Qasr for business meetings and briefings by the Basra Chamber of 
Commerce and CPA South. COMPLETED.
    February 17-20--Assistant Secretary Lash visits Baghdad to meet CPA 
officials, U.S. and Iraqi companies to discuss reconstruction and 
investment. COMPLETED.
March 2004
    March--Iraq Central Organizations for Standards and Quality Control 
(COSQC) delegation to Saudi Arabia for training in establishing 
industry standards, organized by NIST. POSTPONED DUE TO NIST FUNDING 
ISSUE.
    March 20--A/S Lash meets Iraqi and U.S. business groups in Abu 
Dhabi and Dubai regarding Iraqi Reconstruction and Investment. 
COMPLETED.
    March 21-22--``Iraq-Arab Alliance Conference for Reconstruction, 
Trade and Investment in Iraq'' to be held in Bahrain. Conference and 
exhibition focused on Iraq Reconstruction opportunities with 
participation from throughout the Gulf region. COMPLETED.
April 2004
    April 5-8--Conference and exhibition organized by Iraqi American 
Chamber of Commerce and Industry entitled ``DBX: Destination Baghdad 
Expo'' at Baghdad International Fairgrounds. POSTPONED.
    April 10--Iraq Conference by the Council of Saudi Chambers of 
Commerce & Industry in Riyadh. FCS to present business opportunities 
through Saudi-U.S. business relationships. USAID/CPA contractor and USG 
officials to participate as speakers.
    April 4--Iraq Reconstruction seminar at the American Turkish 
Council's Annual Conference, Washington, D.C. COMPLETED.
    April 18-19--Oil and Gas Conference in Basra actively supported by 
CS Kuwait. POSTPONED.
    April 20--Dubai--Conference on Subcontracting Opportunities in Iraq 
with high level DOC and PMO participation. COMPLETED.
    April 25--Amman--Conference on Subcontracting Opportunities in Iraq 
with high level DOC and PMO participation. COMPLETED.
    April 29--Istanbul--Conference on Subcontracting Opportunities in 
Iraq with high level DOC and PMO participation. COMPLETED.
June 2004
    June 2-3--International Investment Conference in Basra, actively 
supported by CS Kuwait. POSTPONED.
    June 6-7--Conference on Iraq's Oil and Gas Industry in Abu Dhabi.
``Doing Business in Iraq'' Outreach Seminars
    Assistant Secretary Lash--February 24, Cleveland, OH; February 25, 
Kansas City, MO; March 23, Detroit, MI; March 24, Minneapolis, MN; 
March 25, New Orleans, LA; and May 6, Houston, TX.
    Senior Advisor on Iraq, Sue Hamrock--March 9, Los Angeles, CA; 
March 10, San Diego, CA; March 18, Boston, MA; March 19, New York, NY; 
April 13, Chicago, IL; and April 14, San Francisco, CA.
          2010 decennial census and american community survey
    Question. Mr. Secretary, this is an extraordinary request for funds 
with six years to go until the census. Could you give us a status 
overview of the preparation for the 2010 census and how the requested 
funds will be used?
    Answer. Things are going very well, thanks to the support of the 
Administration and Congress in these efforts. With these early 
investments in the 2010 census, we are well on our way to achieving our 
goals to improve the relevance and timeliness of census long-form-type 
data, reducing operational risk, improving the accuracy of census 
coverage, and containing costs over the 2010 decennial cycle.
    In the fourth quarter of fiscal year 2004, the American Community 
Survey (ACS) will expand to a sample of 250,000 addresses each month 
spread across every county in the United States and Puerto Rico. Fiscal 
year 2005 will be the first full year of data collection at this sample 
size. The successful implementation of the ACS serves as the 
replacement of the long-form component of the decennial census, 
providing the United States not only more timely data, but also the 
added efficiencies of administering a short-form only decennial census.
    The MAF (Master Address File)/TIGER (geographic reference file) 
Enhancements Project is on schedule to be completed for all counties in 
the United States, Puerto Rico, and island areas by fiscal year 2008.
    Key mailout, field, and special purpose studies have been completed 
in developing a short-form census for 2010. Additional tests and 
development efforts are on track for conducting a dress rehearsal 
census in fiscal year 2008.
    Specifically:

American Community Survey
    Ongoing support for the ACS will allow the Census Bureau to publish 
detailed social and economic data every year for all places with a 
population of 65,000 or more beginning in fiscal year 2006.
    The increased budget is for the annualization of the program that 
will have begun in the fourth quarter of fiscal year 2004. The largest 
cost drivers are questionnaire mailing and collection, following up on 
nonresponses, information technology and data processing/dissemination 
activities.
    After three years of data collection and every year thereafter, 
accumulated data can be used to make such annual estimates for all 
places of size 20,000 or more.
    After five years of data collection and every year thereafter, 
accumulated data can be used to make annual estimates for all places 
and tracts comparable in content and reliability to decennial long-form 
data.

MAF/TIGER Enhancements Project (MTEP)
    By the end of fiscal year 2004, approximately 26 percent of the 
counties in the Master Address File (MAF) and geographic database 
(TIGER) will be brought into alignment with global positioning system 
(GPS) coordinates.
    In fiscal year 2005, improvements will be completed for an 
additional 700 counties. By the end of fiscal year 2005, this work will 
have been completed for nearly half of all counties in the United 
States, Puerto Rico, and the island areas.
    The MAF/TIGER enhancements project is on schedule to be completed 
for all counties in the United States, Puerto Rico, and the island 
areas by the end of fiscal year 2008.
    Work will continue on converting our MAF/TIGER processing 
environment to one based on commercial, off-the-shelf software. This 
effort began in fiscal year 2003 and is planned to be completed in 
fiscal year 2006.

Short-Form Only 2010 Census
    The development and testing of a dramatically revised process for 
conducting the short form Census is key to the strategy for cost 
containment for the 2010 census. We will complete 2004 Census Test 
evaluations by the third quarter of fiscal year 2005 and use the 
results to inform/revise planning, testing, and development for the 
rest of the decade.
    We will begin conducting the National Content Survey and the 2005 
National Census Test in the fourth quarter of fiscal year 2005 and 
complete evaluations in the third quarter of fiscal year 2006.
    We will begin preparations, and conduct early operations, for the 
2006 Census Test in fiscal year 2005.
    We will begin planning for the 2006 Overseas Test in fiscal year 
2004 and prepare for the test during fiscal year 2005.
    We will continue other long-term planning, testing, and development 
for the 2008 Dress Rehearsal and 2010 Census.
    Question. Mr. Secretary, in addition, as this is the first time you 
are implementing the American Community Survey, can you tell us how you 
expect the implementation to go?
    Answer. After almost a decade of research and testing, the American 
Community Survey (ACS) will begin Nationwide data collection in the 
fourth quarter of fiscal year 2004, at a sample size of 3 million 
addresses per year. We feel confident this program will be successful 
given the experience of the staff overseeing the project in 
headquarters, the processing center, the three telephone centers, and 
the 12 regional offices. The testing on the ACS from 1996 to the 
present supports our confidence. The ACS has exceeded our quality goals 
each year. We anticipate continuing this success into full 
implementation.
    There are three major challenges we anticipate and are monitoring 
closely:
  --Full implementation of the ACS requires a significant increase in 
        sample size (from 800,000 to 3 million annually) and requires a 
        significant increase in the overall ACS staff. The one-time 
        classroom training and on the job observation will fully tax 
        the regional office staff working on the ACS program during 
        October through December. However, the experience of the 
        regional office staff will ensure that the staff is well 
        trained and ready to conduct the ACS successfully.
  --The American Community Survey is expanding into Puerto Rico as part 
        of full implementation. We have limited experience in 
        collecting survey data in Puerto Rico. Our Boston Regional 
        Office will manage the personal visit data collection in Puerto 
        Rico. We are working together to hire and train an adequate 
        staff in October 2004 to ensure the data collection is a 
        success.
  --Lastly, although the American Community Survey tested data 
        collection of persons living in group quarters (prisons, 
        college dormitories, nursing homes, etc.) in 1999 and 2001, the 
        National level implementation of group quarters data collection 
        is a major challenge. This operation will require separate 
        training for the regional office field staff and close 
        monitoring to ensure the quality of the data meet the ACS 
        standards.
    While the start-up challenges are significant, the U.S. Census 
Bureau places high priority on the American Community Survey and we are 
confident the program will continue to be successful.

                      FUNDING FOR CENSUS PROGRAMS

    Question. Mr. Secretary, I am concerned about budget reductions in 
the areas of Economic Census, Census of Governments and the Intercensal 
Demographic Estimates. Can you explain how you plan to provide the same 
level of service the government has come to count on?
    Answer. The fiscal year 2005 Congressional request for the 
Intercensal Demographic Estimates is an increase of $1.2 million to 
improve the measurement of migration across U.S. borders. It is 
imperative to accurately assess the size, characteristics, and impact 
of International migration, as it is a critical factor in our 
population growth.
    Reduced funding levels for other programs reflect the cyclical 
nature of these programs. For example, 2005 is the final year of the 
2002 Economic Census Cycle and the first year of the 2007 Economic 
Census. If fully funded, the Census Bureau will carry out all 
activities scheduled for fiscal year 2005 as originally planned. As the 
census programs transition from one phase of the cycle to another, 
activities in fiscal year 2005 are different in nature from fiscal year 
2004. Given the differences in the nature and scope of the planned 
activities for fiscal year 2005, the Census Bureau can, at the 
requested funding level, continue to provide the high level of service 
our customers and stakeholders have come to expect.

                    PTO FUNDING AND REDUCED PENDANCY

    Question. Mr. Secretary, during the hearing we discussed the 
significant increases for PTO in your budget submission. In past years, 
the correlation between funding increases on the one hand and reduced 
patent pendancy and higher patent quality on the other has not been 
demonstrated. Will you provide a more detailed explanation on how such 
a large budget increase in fiscal year 2005 will help achieve these 
goals? Can the PTO actually execute such a large increase in one year?
    Answer. Although the USPTO has received significant budget 
increases, over the past 10 years patent applications filed, patent 
examiners and enacted budget--in constant dollars--have increased at 
about the same rate (applications at 81 percent and budget and patent 
examiners at about 90 percent). The primary reason for pendency 
increases over this period is that the Office has been confronted by an 
overwhelming shift in technology from the traditional chemical and 
mechanical applications to the significantly more complex applications 
in the computer, biotechnology and telecommunications areas. Ten to 15 
years ago only 11-12 percent of the USPTO's work was in the complex 
technologies; today almost 35 percent is. On the average, examiners 
have 18 hours to handle an application in the traditional chemical and 
mechanical areas as opposed to 31 hours in the high tech/emerging 
areas. This shift in technology and the corresponding increase in time 
needed translates to a need of over 600 examiners, before even 
addressing the high annual growth rates in applications received. A 
number of policy changes and International obligations have also 
shifted significant amounts of work to areas that do not reduce 
pendency. For example, from 1993 to 2003 filings pursuant to the Patent 
Cooperation Treaty increased by over 300 percent, from 13,310 to 
44,282. Examiners must be given production credit for resolving these 
cases even though they grant no property rights. Since passage of the 
American Inventors Protection Act in 2000, examiners have been assigned 
classification duties related to pre-grant publication, a task that 
absorbed 36 examiner-FTEs in fiscal year 2003 but did not contribute to 
pendency reduction.
    In the recent past, many have urged the USPTO to stop trying to 
``hire its way out of this problem.'' While the agency continues to 
work on ways to improve efficiency, there is simply no substitution for 
the human mind for making determinations of patentability. As a result, 
the Strategic Plan anticipates continued examiner hiring as a critical 
element of achieving targeted pendency improvements. It also proposes a 
number of efficiency gains, including taking advantage of searches of 
identical or similar applications submitted to other competent patent 
offices and introducing market competition for some of the tasks facing 
the Office. The Strategic Plan initiatives to use non-examiner 
resources to perform search and classification functions will enable 
the agency to focus more examiner attention on making patentability 
decisions and will contribute to pendency improvements.
    The USPTO's fiscal year 2005 budget request includes an increase of 
$311 million over the fiscal year 2004 enacted level. Of this $311 
million, $38 million is for adjustments to base (pay raises and other 
inflationary costs), and another $38 million would be transferred to 
the Office of Personnel Management for post-retirement benefits of 
USPTO employees. The remaining $233 million increase would be dedicated 
to implementing Strategic Plan by fully funding delayed initiatives, 
and continuing to fund those that were implemented at a reduced level, 
as follows:
  --$19 million would enable the USPTO to continue its high priority 
        focus on quality initiatives and fully fund training to address 
        the new electronic workplace. With primarily base resources, 
        the USPTO has made positive progress in implementing key 
        programs to improve quality, such as certification of patent 
        examiners before promotion to grade 13, continuing legal 
        education for all patent professionals, and an expanded, in-
        depth review of the work product of one-third of all senior 
        patent professionals.
  --$39 million would be used to continue e-Government initiatives, 
        including availability of automated systems and recovery in the 
        event of catastrophic disaster. This funding is critical 
        because IT has brought to the examiner's fingertips 
        capabilities not realized 15 years ago, such as:
    --Increased reliance on non-patent literature for prior art 
            searches: Automation funding has provided access for 
            examiners to the hundreds of non-patent literature 
            databases that are needed to perform a quality search.
    --Internet searching: In some technologies, Internet searching is a 
            mandatory primary search requirement.
    --Complexity of applications: Patent applications now include 
            subject matter that requires IT solutions simply to examine 
            them; for example, the newer technologies such as 
            biotechnology applications with complex sequences, and 
            proteins claimed by three dimensional spatial coordinates. 
            Some applications come in on CDs with the equivalent of 
            millions of pages of data.
    --Also included in this amount, and consistent with the fee bill 
            passed by the House, are funds to test the concept of 
            competitive sourcing for prior-art searches by conducting a 
            limited scope proof of concept during fiscal year 2005. The 
            USPTO is analyzing the amendments in the fee bill to 
            determine their implication on operations.
  --$61 million would address, among other things, patent application 
        inventories and workload by hiring 900 new patent examiners. 
        This represents 650 new positions, compared to new positions of 
        67 in fiscal year 2003 and a planned zero increase in fiscal 
        year 2004. Funds also would be allocated to new Trademark 
        examining attorney hires and changes needed to implement the 
        Strategic Plan initiatives of multi-track and accelerated 
        examination, and post-grant review in patents.
  --$106 million would be used to address workload increases by 
        aligning funding needed for activities impacted by the growing 
        examination workloads and the volume of application and search 
        data. Included in this amount is $65 million for patent 
        workload increases in initial examination review, pre-grant 
        publication, patent publication, commercial data bases and 
        examiner search support, and information technology support 
        throughout examination; $35 million for IT upgrades, staff for 
        responding to an increased number of customer assistance and 
        issue resolution incidents, increase and enhancement of mass 
        storage and infrastructure platforms; and $6 million for 
        administrative support, such as mail center and warehousing, 
        and related workload and human resources processing costs

                         TAKING PTO OFF BUDGET

    Question. Mr. Secretary, there is currently legislation moving 
through the House that would take PTO ``off budget''. Can you tell me 
what your position is on this legislation? Can you tell me some reasons 
why this might or might not be good for PTO?
    Answer. The fee revisions and related provisions included in the 
USPTO fee bill (H.R. 1561) were originally introduced at the request of 
the Administration and did not include a proposal to take the USPTO 
off-budget. When the off-budget language was added by amendment in 
subcommittee markup, the Administration indicated in a letter signed by 
Theodore W. Kassinger, General Counsel, on June 12, 2003, to the full 
Judiciary Committee that it could not support the bill as amended 
because, in part, it would have removed the USPTO from the 
appropriations process. The Administration has not yet developed a 
formal position on H.R. 1561, the ``United States Patent and Trademark 
Fee Modernization Act of 2004,'' as passed by the House (on a 379-28 
vote on March 3, 2004) and reported favorably by the Senate Judiciary 
Committee on April 29, 2004.

                       BIS MISSION AND ACTIVITIES

    Question. Mr. Secretary, it seems BIS has an expansive mission for 
a small agency. Can you explain how BIS plans to prioritize it many 
missions and how you plan to apply these few resources to accomplish 
that goal? Also, can you share with us how BIS works with other 
agencies outside of Commerce and any jurisdictional issues that affect 
your operations?
    Answer. The mission of the Bureau of Industry and Security (BIS) is 
to advance U.S. National security, foreign policy, and economic 
interests. BIS's activities include regulating the export of sensitive 
goods and technologies in an effective and efficient manner; enforcing 
export control, antiboycott, and public safety laws; cooperating with 
and assisting other countries on export control and strategic trade 
issues; assisting U.S. industry to comply with International arms 
control agreements; and monitoring the viability of the U.S. defense 
industrial base.
    To assist the Bureau in fulfilling these critical missions, BIS 
published its Guiding Principles in October 2002. These Principles 
represent the philosophy of BIS in approaching its activities and 
fulfilling its responsibilities. A copy of these Principles is 
attached.
    BIS focuses its activities and resources on eight key areas:
  --Export control policy and regulation.--BIS ensures that controls on 
        exports and reexports of U.S.-origin items meet U.S. National 
        security objectives without unnecessarily burdening U.S. 
        industry.
  --Export licensing.--BIS is continually streamlining and updating its 
        processes to increase capacity and better serve exporters.
  --Enforcement.--BIS vigorously enforces U.S. export control, 
        antiboycott, and public safety laws, while working to improve 
        exporter and end-user compliance with export license 
        conditions.
  --Multilateral regimes.--BIS plays a major role in the development, 
        interpretation, and refining of control lists and operational 
        guidelines for the four major nonproliferation regimes--the 
        Nuclear Suppliers Group, the Australia Group, the Missile 
        Technology Control Regime, and the Wassenaar Arrangement.
  --International Cooperation.--In coordination with other federal 
        agencies, BIS participates in a number of International 
        cooperation and enforcement programs to enhance compliance with 
        and enforcement of U.S. export controls worldwide. BIS also 
        assists in the development of effective indigenous 
        infrastructures for export controls in other countries.
  --Treaty Compliance.--BIS assists U.S. industry in compliance with 
        the Chemical Weapons Convention and will assist industry in 
        compliance with the Additional Protocol to the United States-
        IAEA nuclear safeguards agreement.
  --U.S. defense industrial base.--BIS monitors and supports the U.S. 
        defense industrial and technological base through advocacy for 
        U.S. firms competing for foreign defense contracts. BIS also 
        exercises its authority under the Defense Priorities and 
        Allocations System to require preferential acceptance and 
        performance of certain contracts supporting the U.S. military.
  --Outreach.--BIS keeps United States and foreign firms informed of 
        U.S. export control regulations through an aggressive program 
        of seminars, meetings, and other outreach activities.
    To accomplish its mission, BIS works cooperatively with other parts 
of the U.S. Government including the National Security Council, the 
Department of State, the Department of Defense, the Department of 
Energy, the Department of Homeland Security, and the Intelligence 
Community. In many cases, BIS circulates license applications to other 
agencies for review prior to a decision. In addition, BIS manages an 
extensive license application escalation process that enables senior 
U.S. Government officials to consider particularly sensitive 
applications before a final decision is made.
    Most items on the Commerce Control List (CCL) are derived from the 
control lists of the multilateral regimes. BIS works closely with other 
U.S. Government agencies to strengthen these regimes and improve treaty 
compliance. BIS also works with the Departments of State, Defense, and 
other agencies to ensure that the CCL adequately captures all dual-use 
items that potentially could be used to harm the National security of 
the United States, and to clarify the allocation of commodity 
jurisdiction between the Department of Commerce and the Department of 
State, which has responsibility for licensing defense articles.
    In addition, BIS participates in a number of International 
cooperation and enforcement programs in coordination with other federal 
agencies. BIS leverages its capabilities by forming strong working 
relationships with other law enforcement agencies, including the 
Federal Bureau of Investigation (FBI), the Bureau of Immigration and 
Customs Enforcement (ICE), and the military law enforcement groups. BIS 
also has productive and cooperative relationships with the Central 
Intelligence Agency and the National Security Agency.
    These cooperative efforts with U.S. industry and other agencies in 
the U.S. Government have enabled BIS to achieve significant success in 
accomplishing our important mission. Our efforts are guided by the 
principle that protecting security and promoting trade are mutually 
reinforcing objectives. Indeed, legitimate trade is based on the 
foundation of sound security. We look forward to building on this 
success as we address new challenges in the years ahead.

                                 ______
                                 
               Questions Submitted by Senator Ted Stevens

                     ASSISTANCE TO ALASKA FISHERMEN

    Question. Does the department intend to provide full funding of the 
$15 million in economic development assistance each of the five years 
to these fishermen?
    Answer. The Department of Commerce is very concerned about Alaska's 
fishing-dependent communities and is committed to ensuring that these 
communities are economically prosperous and remain viable communities 
with a strong economy.

             CRAB RATIONALIZATION PROGRAM AND OCEAN POLICY

    Question. Do you perceive any problems with meeting the 
implementation date of January 1, 2005 for Bering Sea crab 
rationalization?
    Answer. Congressional language in the fiscal year 2004 Omnibus Act 
(Public Law 108-199) requires Secretary of Commerce approval of a crab 
rationalization program by January 1, 2005. NOAA is committed to 
meeting this deadline, and it is one of NOAA's top priorities. NOAA 
Fisheries is working with the North Pacific Fishery Management Council, 
the State of Alaska, and interested constituency groups to design an 
expedited process that would lead to Secretarial approval by the 
prescribed date.
    Question. Is the Department of Commerce prepared to receive and 
consider the findings of the Commission on Ocean Policy?
    Answer. The Administration is prepared to receive the report and 
looks forward to considering the Commission's findings. The report of 
the U.S. Commission on Ocean Policy (USCOP) certainly has significant 
ramifications for the Department of Commerce, especially for the 
National Oceanic and Atmospheric Administration (NOAA). The Commission 
released its draft report on April 20, 2004. Following a 44-day public 
and gubernatorial review, the Commission will amend the draft report as 
necessary and release its final report, probably sometime in the early-
to-mid summer. The President then has 90 days to review the report and 
provide a report to Congress. The interagency effort being led by the 
Council on Environmental Quality (CEQ) in the Executive Office of the 
President is now reviewing the draft report and developing timely and 
appropriate responses to the recommendations. The Department will 
consider the findings of the Commission as part of the interagency 
effort being led by the Council on Environmental Quality (CEQ) in the 
Executive Office of the President. This interagency approach will 
ensure an integrated response consistent with the Oceans Act of 2000, 
which requires the President to provide a unified response to Congress. 
NOAA has been assisting CEQ in preparing for this review.

                              NOAA FUNDING

    Question. Mr. Secretary, do you believe the significant reductions 
in NOAA's budget and specifically in fisheries and ocean research will 
allow for the necessary management of our Nation's marine resources?
    Answer. The NOAA budget requests a total of $3,380.8 million in 
discretionary budget authority, a net decrease of $309.5 million, or 
8.4 percent below the fiscal year 2004 enacted level. While this is a 
reduction from the fiscal year 2004 enacted level, the fiscal year 2005 
NOAA budget ensures that we continue to sustain healthy marine 
habitats, ocean research, robust ecosystems, and coastal environments, 
and address safety and environmental compliance issues impacting NOAA.
    The reductions requested within the fiscal year 2005 budget request 
are included in order to support high priority increases for the NOAA 
Fisheries Program within a constrained budget environment. For example, 
the fiscal year 2005 budget request includes an increase of $6.0 
million for a total of $20.9 million for fisheries stock assessments 
and surveys, $1.0 million for protected resources stock assessments, an 
increase of $1.2 million for a total of $5.2 million for socio-economic 
data collection and analysis, an increase of $0.5 million for a total 
of $2.0 million for research to understand and predict the effects of 
climate change on major marine and coastal ecosystems in the Bering Sea 
and Gulf of Alaska, $1.0 million to scientifically determine the 
population status of humpback and bowhead whales, and $1.0 million for 
fisheries oceanography which will analyze data to determine basin-wide 
changes in atmospheric and oceanic circulation and their effect on 
marine populations.
    The NOAA budget request provides funds to enhance our scientific 
understanding of the oceans and atmosphere. NOAA conducts research and 
gathers data about the global oceans, atmosphere, space and solar 
activities, and applies this knowledge to science and services. 
Specifically, the National Ocean Service (NOS) fiscal year 2005 budget 
request will promote a wide range of research activities to create the 
strong science foundation required to sustain use of our coastal 
systems. Overall, the fiscal year 2005 request for NOS is $394.3 
million. Specifically, the NOS fiscal year 2005 budget requests an 
increase of $6.5 million (above the current program level) for a total 
of $47.9 million to continue conducting Harmful Algal Bloom and 
Pfiesteria research as mandated by the Harmful Algal Bloom and Hypoxia 
Research and Control Act (HABHRCA). In addition, the fiscal year 2005 
NOS budget includes increases for navigation services, White Water to 
Blue Water.

                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                           ITA REORGANIZATION

    Question. Mr. Secretary, Congress approved the restructuring of the 
International Trade Administration (ITA) as part of the fiscal year 
2004 Consolidated Appropriations Act. I understand that this 
reorganization is now underway and that the Department will establish 
an Assistant Secretary for Manufacturing and Services. I am pleased 
that the Department of Commerce is renewing its focus on domestic 
manufacturing. An essential part of manufacturing is our ability to 
produce and obtain basic raw materials, such as refined metals, and 
semi-fabricated raw materials, such as copper and steel mill products 
and castings, at reasonable prices and in adequate quantities. I am 
concerned that under the reorganization the Metals Division is being 
eliminated. How does the Department plan to cover this important 
industrial sector?
    Answer. We fully recognize the importance of the metal sector to 
our manufacturing base. While we are planning to streamline management 
layers, we plan to provide full coverage of the metals sector as we 
have prior to the reorganization.
    Question. How does the Department plan to address the raw material 
sector issues?
    Answer. We will address these important issues as they arise and in 
the same manner as we have done in the past. Since the reorganization 
provides us a mandate to address many domestic issues of importance to 
manufacturing, we believe our support of the raw materials sector will 
be enhanced.
    Question. Will adequate staff and funding be allocated to this 
activity?
    Answer. We believe that we will be able to cover this sector on a 
basis comparable to our current level of support.

                   PARTICIPATION IN COMMODITY PRICES

    Question. Mr. Secretary, most raw materials are priced on 
International commodity exchanges and all are subject to International 
supply and demand factors. Our domestic metal industry is global in the 
classic sense. Organizations such as the International Copper Study 
Group have made significant progress in improving market transparency 
and statistics. A stated objective of the reorganization is to focus on 
domestic competitive issues. Will the Department of Commerce continue 
to participate in International commodity or raw material 
organizations?
    Answer. Yes. We intend to continue our active participation in the 
International Copper Study Group, as well as the UNCTAD negotiations on 
commodities, APEC Nonferrous Dialogue, OECD Steel Committee and other 
forums as appropriate.
    Question. Will the Department continue to address International 
issues directly affecting the materials industry?
    Answer. Yes. We will continue to cover these issues as in the past.
    Question. Under the ITA reorganization, what unit will cover these 
issues?
    Answer. The reorganization will not change unit responsibilities. 
ITA's Import Administration will continue to cover dumping and 
countervailing duty issues, our Market Access and Compliance Unit will 
cover trade negotiations and our new Manufacturing and Services Unit 
will cover various International and domestic trade and competitive 
issues.
    Question. Is this unit adequately funded and staffed? What would 
those staffing and funding levels be for fiscal year 2004 and fiscal 
year 2005?
    Answer. We are currently in the process of allocating resources. 
Staffing and funding levels will not be reduced as a result of the 
reorganization.
    Question. Finally, Mr. Secretary, the raw material industry must 
address sustainable development and environmental issues on a domestic 
and International scale in order to be competitive in world markets. 
The Department of Commerce has hosted conferences to assist industry in 
meeting these challenges. Would the Department continue such efforts 
after the reorganization?
    Answer. The Department of Commerce will remain actively involved in 
sustainable development and environmental issues, domestically as well 
as internationally. These issues are relevant to the competitiveness of 
practically all sectors in the U.S. industry.
    Question. What unit within the Department would be involved in 
these activities?
    Answer. The Department's activities in these area will involve the 
resources of several offices in the International Trade 
Administration's (ITA) manufacturing and services units. These would 
include, for example, ITA's offices dealing with energy, chemicals, 
metals and materials, and environmental technologies industries. In 
addition, the Department's National Oceanic and Atmospheric 
Administration (NOAA) will continue its active involvement in 
environmental issues and work closely with ITA.

                                 ______
                                 
         Questions Submitted by Senator Ben Nighthorse Campbell

                        NOAA/NIST BOULDER CAMPUS

    Question. I understand that NOAA has proposed to construct a fence 
around the NOAA/NIST facilities on South Broadway in Boulder. I have 
heard from a number of residents in Boulder that are opposed to the 
fence because it would (a) be an eyesore; (b) bicycle and foot traffic 
which currently crosses the campus would be restricted; and (c) the 
area surrounding the facilities is home to a wide variety of wildlife. 
The impacts of a fence on the wildlife habitat has not been addressed.
    What exactly is the nature of the security risk at this campus, 
what security measures are currently in place, and what additional 
security gain can be achieved with this fence given the assessed 
threats? Has DOC thoroughly examined other security measures short of a 
fence? Has DOC consulted with the City of Boulder and local law 
enforcement authorities on other alternatives?
    Is the entire site considered a high level security risk (Level 4) 
requiring all buildings and facilities to be enclosed by a fence? If 
not, why is the fence being proposed around buildings and facilities 
that do not possess this level of risk?
    Has DOC already decided that this fence is necessary? If so, who 
made this decision and what was the process by which it was made? Was a 
cost-benefit analysis conducted? How much will the fence cost, what 
funds are identified to pay for it, and what is the construction/
installation timeline?
    Are other federal facilities across the country required to install 
fences? If not, why not? What is DOC's legal position regarding the 
City of Boulder's easement across the site? Can this easement be 
superceded by the fence? How will the fence provide the security 
envisioned if the City of Boulder refuses to allow the fence on its 
easement?
    Answer. A task team, headed by the Department of Commerce's Office 
of Security, met in August 2003 to assess the security risk at the 
Boulder Labs facility. That task team concluded that:
  --The security risk will be mitigated with effective perimeter 
        security.
  --The most effective and cost-efficient perimeter security 
        countermeasure based on industry averages is the installation 
        of a fence around the main facilities.
  --A Boulder site task force should lead the design and coordination 
        of the perimeter security solution.
    A Boulder site task force was established under the leadership of 
the National Institute for Standards and Technology (NIST) Boulder Lab 
Director, Zelda Bailey. That task force continues to develop possible 
designs and options for the perimeter security solution. No final 
decision regarding the design of the perimeter security solution has 
been made. A creative design should effectively address the elements of 
the security risk--criticality, vulnerability and threat--while also 
preserving valuable attributes such as easements, protected areas, bike 
paths and open areas. The final design will likely combine several 
security options to provide a measured response to the security risk.
    In a meeting on February 26, 2004, between officials of the City of 
Boulder and the Department of Commerce, it was agreed that a 
representative from the City would be added to the task force, to 
ensure that local interests are considered. We are confident that we 
will be able to develop a final solution that will address the 
interests of both the City of Boulder and the Department of Commerce in 
providing a safe and secure working environment for our employees.

                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings

              PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

    Question. Secretary Evans, the Public Telecommunications Facilities 
Program, which is a longstanding part of the public television funding 
picture, plays a critical role in public television's federally 
mandated digital conversion. PTFP is a relatively small investment that 
is paying tremendous dividends by unleashing millions of dollars in new 
services and products. Despite this, the President's fiscal year 2005 
budget proposal terminates this critical program. What was the 
Department's request to OMB with regard to this program?
    Answer. The Department's request to OMB eliminated funding for PTFP 
and proposed to continue funding of the digital conversion of public 
television through funding already available from the Corporation for 
Public Broadcasting.
    Question. Secretary Evans, there is no doubt that we are in fiscal 
crisis at the moment--we face a deficit and we are at war. However, a 
strong Nation depends on strong infrastructure. PTFP is critical to the 
well being of our public broadcasting infrastructure--the only 
broadcast medium that reaches virtually every household in the United 
States.
    We discussed at length during the hearing the loss of jobs and the 
exporting of critical manufacturing jobs in particular to other 
Nations. You stated that those workers can be trained in new areas and 
for new industries. One proven entity in the area of education, 
including adult education, is public television.
    Why is the Administration cutting a program like PTFP that is so 
vital to the daily work of public television, especially at a time when 
public television's role in adult education and workforce skills has 
never been more vital?
    Answer. The Administration appreciates public television's 
contribution to education, especially adult education. The 
Administration believes, however, that during this period of steady 
economic growth, public broadcasting's equipment needs can be met more 
efficiently through the funding already available through the 
Corporation for Public Broadcasting.

                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                        CLIMATE CHANGE PROGRAMS

    Question. The President launched his U.S. Climate Change Research 
Initiative in June of 2001 to improve the integration of science with 
policy and management decisions. The President's budget claims that 
$23.7 million in new funds will be devoted to climate research in order 
to expand climate observing capabilities. However, the budget also 
calls for more than $11 million in cuts to the existing climate and 
global change programs that currently provide these very climate 
observing capabilities.
    I would appreciate receiving a breakdown of the reductions and 
increases of all climate specific programs within the National Oceanic 
and Atmospheric Administration (NOAA). Does the budget request actually 
call for $23.7 million in new funding, or will this ``increased 
funding'' come at the expense of programs?
    Answer. The $23.7 million increase for climate research relative to 
the fiscal year 2005 base funding in the Climate Change Research 
Initiative activities has been reallocated from lower priority 
activities. It is being partially offset by reductions that were taken 
from to Climate and Global Change, NOAA's National Environmental, Data, 
and Information Service (NESDIS) Environmental Data Systems 
Modernization program, and other internal programs, which includes $1 
million from the baseline observatories as well as reductions from the 
weather-climate connection.
    Funding has been directed towards activities that will contribute 
to reducing scientific uncertainty in three key areas identified in the 
Climate Change Science Strategic Plan: (1) aerosols-climate 
interaction; (2) ocean climate observations; and (3) carbon sources and 
sinks.

                   OAR CLIMATE PROGRAM BUDGET SUMMARY
                        [In millions of dollars]
------------------------------------------------------------------------
                     Budget Summary                            Total
------------------------------------------------------------------------
Laboratories & Joint Institutes.........................            +623
Climate & Global Change.................................          -9,152
Climate Obs. & Services:
    Other Programs......................................          -1,870
    CCRI................................................         +23,735
NESDIS-EDSM.............................................          -2,191
                                                         ---------------
      Total.............................................          11,145
------------------------------------------------------------------------

    Question. I would also appreciate receiving a geographically 
specific breakdown of the research and observation projects in the 
President's fiscal year 2005 climate budget for the Pacific Ocean.
    Answer. Tropical Atmosphere Ocean (TAO) array: $2.6 million funded 
through NOAA Research. The array provides real-time data from moored 
ocean buoys for improved detection, understanding and prediction of El 
Nino and La Nina. The Japan Marine Science and Technology Center, in 
Yolsutia, Japan, operates the western TRITON portion of the array. NOAA 
Research's Pacific Marine Environmental Laboratory in Seattle operates 
the eastern TAO portion of the array.
    Pacific Regional Integrated Sciences and Assessment (RISA) Program: 
about $0.15 million funded through the NOAA Research Climate & Global 
Change and Climate Observations & Services budget lines. The program 
assists fisheries, agriculture, and tourism in enhancing resilience in 
the face of climate-related extreme events, such as droughts, floods, 
and hurricanes. The Pacific RISA is operated out of the East-West 
Center in Honolulu, HI.
    Mauna Loa and Samoa Baseline Observatories: $2.0 million funded 
through the NOAA Research Climate Observations & Services budget line. 
The baseline observatories provide valuable time series data on various 
atmospheric and solar radiation measurements that are critical to 
NOAA's monitoring of climate. The observatories, though located in the 
South Pacific, are operated by NOAA Research's Climate Monitoring and 
Diagnostics Laboratory in Boulder.
    North Pacific Climate Regimes and Ecosystem Productivity: $2.0 
million funded through the National Marine Fisheries Service. A growing 
component of NOAA's climate program, this Climate and Ecosystems 
project seeks to link NOAA climate information with NOAA models, 
observations and new ecosystem indicators, resulting in better resource 
management by NOAA. These efforts will include projections of the 
status of living marine resources under future climate scenarios. This 
project is operated out of the NOAA/NMFS Alaska Fisheries Science 
Center in Seattle.
    University of Hawaii Sea Level Center (UHSLC): about $0.5 million 
funded through the NOAA Research Climate Observations & Services budget 
line. The Center is operated out of the University of Hawaii/NOAA Joint 
Institute for Marine and Atmospheric Research (JIMAR) within the School 
of Ocean and Earth Science and Technology (SOEST). The UHSLC operates 
37 tide gauge stations in the global sea level network and collaborates 
with host countries in the operation of 7 more stations. The 
measurements are used for the evaluation of numerical models (e.g., 
those in operation at the National Centers for Environmental Prediction 
(NCEP), joint analyses with satellite altimeter datasets, the 
calibration of altimeter data, the production of oceanographic products 
through the World Meteorological Organization Sea Level Program in the 
Pacific (SLP-Pac) program, and research on inter-annual to decadal 
climate fluctuations.
    Question. Is the Commerce Department researching the economic 
impacts of climate change on Pacific island and Pacific Rim Nations? Do 
you believe that the research effort commensurate with the economic 
stakes of climate change in the Pacific region?
    Answer. The Department of Commerce is working to better understand 
the economic impacts of climate change and helping to manage climate 
risks for the Pacific Islands. The following are some examples of the 
Department's efforts. In a recent press release, VADM Conrad C. 
Lautenbacher, Under Secretary for Oceans and Atmosphere and NOAA 
Administrator recognized the dependence of Pacific island economies on 
accurate climate information. He stated that, ``Understanding and 
effectively responding to changes in climate are critical elements of 
planning and economic development in Hawaii and other Pacific Islands. 
Their economies are dependent on climate-sensitive sectors like 
agriculture, tourism and fisheries, and the region is home to some of 
the world's most valuable marine resources such as coral reefs.''
    The press release highlights a new program that begins development 
of climate services for the Pacific Islands. NOAA's Office of Global 
Programs recently awarded a three-year grant of $535,487 to the East-
West Center in Honolulu, Hawaii, an educational and research 
organization, for a project entitled ``Managing Climate Risks in the 
Pacific: A Pacific Islands Regional Integrated Sciences and Assessment 
(Pacific RISA) Program.''
    The Pacific RISA program assists key economic sectors (e.g. 
fisheries, agriculture, and tourism) in enhancing their resilience in 
the face of climate-related extreme events such as droughts, floods, 
and hurricanes. The project represents a significant step towards the 
creation of a new program of climate information services designed to 
meet the needs of decision makers and policy officials in the American 
Flag Pacific Islands (Hawaii, American Samoa, Guam, Commonwealth of the 
Northern Mariana Islands) and the United States-Affiliated Pacific 
Islands of the Federated States of Micronesia, the Republic of the 
Marshall Islands and the Republic of Palau.
    NOAA's Coastal Services Center is complementing the work of the 
Pacific RISA with a climate assessment outreach and education program.
    NOAA has also supported studies of the socio-economic impacts of El 
Nino events in the Pacific through the work of the Pacific ENSO 
Applications Center and related socio-economic research funded through 
NOAA's Office of Global Programs.
    Through these types of research efforts, NOAA's expansion and 
development of climate services in the Pacific Islands is working to 
address the rising economic stakes of climate change in the Pacific 
region.

               INTERNATIONAL TRAVEL TO THE UNITED STATES

    Question. International travel to the United States is a vital 
component of our Nation's economy. International visitors account for 
one million jobs and $83 billion in spending annually. Visitation 
levels have declined by some twenty percent during the past two years. 
U.S. market share of global travel had already been declining since 
1998 and was only exacerbated by the September 11, 2001, terrorist 
attacks. Since September 11, many necessary changes have been made to 
make U.S. ports of entry safe and secure, but little or no measures 
have been taken to reach out to legitimate International travelers.
    Although the World Travel and Tourism Council recently predicted 
that tourism to the United States will rise in 2004, the Council warned 
that relying on excellent products and service alone will not be 
sufficient to guarantee the future growth of tourism to the United 
States. To remain competitive, the Council recommended that we be 
proactive and work with government authorities to ensure that our 
tourism industry is protected and nurtured.
    What steps are being taken by your department to reach out to 
International travelers and work with government authorities to 
encourage travel to the United States? What do you believe the federal 
role should be in promoting travel to the United States?
    Answer. The Department is launching a $6 million promotional 
campaign in the United Kingdom, our largest overseas market to increase 
market share. We are working with the Department of Homeland Security 
and the Department of State to encourage the development of visa 
policies and travel security systems that facilitate travel while 
providing for the safety of the traveler and security for our Nation. I 
believe that the role of the federal government is three fold: (1) to 
assist in ensuring competitiveness in this sector; (2) to measure the 
industry through collection and dissemination of statistical data on 
the volume, flow and characteristics of travelers, through assessments 
on the economic benefits and impact of travel and tourism industries on 
the U.S. economy, and through production of the balance of trade in 
travel and tourism; and (3) to advocate for the United States' tourism 
interests in International service sector trade agreements and 
represent the U.S. tourism policy positions in International tourism 
development and intergovernmental fora.
    Question. The Visa Waiver Program allows International travelers to 
visit the United States for up to 90 days without going through the 
time consuming and often costly process of obtaining a nonimmigrant 
visitor visa. There are currently 27 countries in the program. Current 
rules require that by October, 2004, International visitors entering 
the United States on the Visa Waiver Program possess a machine-readable 
passport. In addition, all Visa Waiver countries must certify that the 
new passports they are issuing contain biometric identifiers, to help 
ensure that the person seeking entry into the United States is the same 
person documented in the passport.
    There is great concern in the visitor industry that only a few of 
the 27 Visa Waiver countries will be able to meet the October, 2004, 
deadline, and that this will result in major disruptions in inbound 
travel to the United States from key markets in Europe and Asia.
    Do you have any suggestions on how we can encourage foreign 
countries to expend the resources necessary to produce passports in 
compliance with U.S. requirements for the Visa Waiver Program?
    Answer. The issue, I believe, is not a lack of willingness by Visa 
Waiver Program countries to comply by the October, 2004 deadline, but 
their ability to do so. Legislated requirements specify that the 
biometric passport identifiers must meet International Civil Aviation 
Association standards. These standards were not established until May 
of 2003. Therefore, technologies are not yet fully developed. The 
United States will also not issue passports that meet these standards 
by the current deadline.
    Sixty-five percent of our overseas visitors come from Visa Waiver 
Program (VWP) countries. All but two VWP countries have indicated to 
the Department of State that they will not be able to meet the 
deadline. If nothing is done to alter the situation, the Department of 
State estimates that there will be approximately five million 
additional visa applicants, of which they have the capacity to process 
only six percent, which may create substantial disruptions in travel to 
the United States. Economic losses across sectors could be substantial, 
and our relationships with our allies could be damaged.
    A legislative remedy is the only option to postpone this deadline. 
Should a legislative postponement be approved, the Department of 
Homeland Security and the Department of State could provide for safety 
and security in keeping with the intent of the legislation through 
existing biometric systems to ensure that travel documents and visitors 
match. During this period, the United States could work with other 
Nations to establish agreement on interoperable systems to produce and 
read passports with biometric identifiers.

                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

                  MANUFACTURING EXTENSION PARTNERSHIP

    Question. With last week's announcement that MEP will be eligible 
to apply for EDA funds, I am greatly concerned that we are nearly half 
way through the fiscal year and it is still unclear how the program 
will be funded and re-competed. Will there be funds set aside for MEP 
Centers to compete for? Will each MEP Center be responsible for 
applying for these funds? How will this help ``leverage'' the limited 
funds available to MEP in fiscal year 2004?
    Answer. EDA is ready, willing and able to assist eligible MEP 
Centers with resources as NIST develops its plans for the MEP going 
forward. Secretary Evans has directed EDA to focus its remaining fiscal 
year 2004 Economic Adjustment program funds on manufacturing-related 
communities and initiatives. EDA will welcome MEP Centers to apply for 
EDA funds. These EDA funds will augment funds provided to the MEP from 
NIST and will be focused on highest performing Centers. These funds 
will be administered in accordance with EDA's competitive grant program 
guidelines. In addition, EDA staff is prepared to work with MEPs in 
developing EDA applications in order to make the process as streamlined 
as possible.
    Question. Given the immediate need for MEP services, what other 
mechanisms would the Administration consider to increase MEP funding in 
fiscal year 2004 and 2005, so small manufacturers can continue to 
receive the assistance they so desperately need?
    Answer. We are doing all we can to make sure that the MEP centers 
are fully aware of any funding opportunities that may exist across the 
Federal government. We have identified some possible sources already 
and are in discussions with others to determine if there are additional 
opportunities for MEP centers to compete for available funding from 
other Federal programs that support U.S. manufacturing. Also, MEP has 
considered foundation-type funding which is typically raised as 
principal to be kept intact, while the earnings from the principal are 
used to capitalize activities. For MEP to develop a steady stream of 
funding of any significance to substitute for some of the Federal 
funding, the foundation would need to be capitalized at $400 to $500 
million. Otherwise, the capital would be rapidly depleted and the 
foundation would need to be in a continuous fundraising mode. However, 
the actual level of funding that could be generated would depend in 
large part on the support of Administration officials, Congress, and 
industry leaders. This is particularly true given these tight economic 
times during which it will be even more difficult to garner significant 
contributions.
    Question. Why ``improve'' MEP and cut its budget when we clearly 
see its effectiveness in building stronger companies that retain high-
skill, high-pay American workers and repay our relatively small federal 
investment with a healthier tax base?
    Answer. Budget constraints have forced the Administration to make 
some tough budget decisions this year. The fiscal year 2005 budget 
request reflects the Administration's policy and funding priorities to 
address the Nation's most pressing needs. Support for MEP is maintained 
at the fiscal year 2004 enacted level.
    Question. The manufacturing strategy, budget documents, and 
comments by Commerce officials suggest ITA and other federal agencies 
can take over functions of MEP. Do you really think that Trade experts 
can discuss, sell, and deliver the technical engineering services that 
MEP provides to manufacturers?
    Answer. It makes sense for all bureaus in the Department engaged in 
improving our Nation's manufacturing to work together. The MEP and ITA 
programs are complementary, and MEP and ITA staff are working together 
to increase coordination. This coordination will link the technical and 
business staff employed by the MEP centers located around the country 
with ITA trade promotion specialists who are working with ITA on behalf 
of the future Assistant Secretary for Manufacturing and Services.
    ITA has experts with in-depth knowledge of and connections with 
various sectors of industry including the automotive, textiles and 
apparel, energy, aerospace, machinery, metals, and microelectronics, 
industries.
    The direct teaming of MEP field agents with the ITA sector experts 
will make the program a more effective National resource to help small 
manufacturers compete and succeed in the global marketplace.
    MEP and EDA are also exploring mutual opportunities to coordinate 
their support of small manufacturers through the local economic 
development infrastructure.
    Question. In the manufacturing strategy, you suggest that savings 
can be found by enhanced partnering. Yet OMB's PART analysis gives MEP 
high marks for collaboration. Tell me how you plan to get significant 
savings from synergies they have already accomplished.
    Answer. The principal purpose of effective partnering is to better 
serve America's manufacturers and provide them with the wide range of 
assistance that the Federal government can provide through its many 
assistance and support activities. Although the MEP is performing well 
it still had room for improvements. Efforts are being made to expand on 
existing partnerships and enhance the benefit to MEP participants.
    Question. How will you ensure that small manufacturers will 
continue to receive the services they need when your ``improvements'' 
will actually cut the availability of MEP services?
    Answer. The MEP program will continue to serve as many 
manufacturers as possible and will continue to explore every avenue 
possible to find new and innovative ways to maximize whatever level of 
Federal investment is made in this program. Improving the effectiveness 
and efficiency of the MEP National manufacturing network is the primary 
goal. In addition to the MEP program, NIST laboratories also support 
manufacturers both large and small by providing the measurements and 
standards needed to improve quality, productivity, and reduce 
manufacturing costs. The NIST Advanced Technology Program (ATP) has 
provided cost-sharing support of improved manufacturing in many U.S. 
industries. NIST laboratories provide calibration standards that ensure 
quality of manufactured products and improve efficiencies. The NIST 
fiscal year 2005 budget proposal includes a request for budget 
increases to support advances in manufacturing. The work proposed in 
the fiscal year 2005 budget initiative will help overcome technical 
barriers facing U.S. industry that will enable it to thrive in nano-
manufacturing, particularly in the key areas of electronics and 
semiconductor manufacturing, and advanced medical technologies. It will 
also promote access to global markets by ensuring that the measurements 
and standards that U.S. manufacturers rely upon are internationally 
accepted.
    Question. Has the Department of Commerce done any studies to 
determine what impact re-competing the entire MEP network would have on 
its ability to serve small manufacturers?
    Answer. The series of manufacturing round tables conducted over the 
past year, while not specifically focusing on the MEP, gave the 
Administration a real sense of what manufacturers want and need. There 
has not been a formal study of the possible impact of a re-competition, 
but such a competition is expected to result in excellent service to 
small manufacturers in the region served by the selected centers.
    Question. One of the strengths of MEP is its partnership with state 
governments and local service providers. Have the state agencies and 
other partners been informed of your re-competition plans and will they 
continue to provide roughly a third of the funding support to the MEP 
system?
    Answer. Additionally, the MEP Director has had preliminary 
discussions with the Centers about the impacts of the funding level. 
Those Centers with agreements that are expiring have been informed that 
their renewals will be on a month-to-month basis. Until the individual 
Centers give us specific information, it is hard to determine which 
states will continue to provide a third of the funding support to the 
MEP system.
    Question. Do you really want to hamstring this program by pushing 
each and every Center to spend its time developing a proposal during a 
time of urgent need for this type of hands-on assistance for our small 
manufacturers?
    Answer. For fiscal year 2004, MEP is exploring the options for 
providing some funding to all Centers in the network through the end of 
the fiscal year.
    Question. Many groups, such as Harvard's Kennedy School, the 
National Academy of Public Administration, NAM and National business 
publications commend the program for its effectiveness and efficiency. 
Doesn't it make better sense to re-compete only those Centers that do 
not meet minimum performance standards? Why should we consider re-
competition for a system that is not broken?
    Answer. The vast majority of MEP centers perform admirably, so only 
isolating those few relatively poorer performers recognizes no 
significant cost savings. Each of those few, poorer performers have 
been addressing their weaknesses.

                       NATIONAL SEA GRANT PROGRAM

    Question. In the President's request for the National Sea Grant 
Program, how much of the funding would be allocated to new programs? If 
we set a goal of bringing all the programs up to $1.2 million in base 
funding a year in $250,000 increments over the next several fiscal 
years, how much additional funding would be needed in fiscal year 2005 
and which Sea Grant programs would receive funds to increase their base 
level?
    Answer. The fiscal year 2005 President's Budget request includes 
$57.5 million for Sea Grant, this amount does not include any funding 
for new programs. The National Sea Grant program currently funds 30 
established college and institutional programs and 4 developing 
institutional programs. Of these 34 programs, 19 currently have a base 
funding level of less than $1,200,000. The Sea Grant Program 
authorization requires that amounts appropriated over the fiscal year 
2003 level be allocated by merit and competition. To bring these 19 
programs up to $1.2 million in base funding in $250,000 increments over 
the next five years would cost a total of $7,723,000 and would require 
additional funding in the amount of $3,759,000 in fiscal year 2005, the 
first year:

------------------------------------------------------------------------
                          Year                                Amount
------------------------------------------------------------------------
1st Year................................................      $3,759,000
2nd Year................................................       2,041,000
3rd Year................................................       1,000,000
4th Year................................................         723,000
5th Year................................................         200,000
------------------------------------------------------------------------

    The 19 Sea Grant colleges, institutions, and developing 
institutions that currently have a base funding level of less than 
$1,200,000 would receive the additional funds. These programs are: 
Connecticut, Delaware, Georgia, Illinois/Indiana, Maine, Michigan, 
Minnesota, Mississippi/Alabama, New Hampshire, New Jersey, Ohio, Puerto 
Rico, South Carolina, California (University of S. California), 
Massachusetts (Woods Hole Oceanographic Institution), Vermont, 
Pennsylvania, Guam, and Western Pacific.

                                 ______
                                 
                Questions Submitted by Senator Herb Kohl

                     MEP FUNDING AND RECOMPETITION

    Question. Mr. Secretary, in addition to the drastic cuts to the MEP 
program, it appears only $29.6 million or 75 percent of the funding is 
going directly to grants to help small and medium sized manufacturers. 
The remaining $10 million is going to administration. When the MEP 
centers were funded at $106.5 million, $90 million or 85 percent of the 
funding was directed to MEP programs.
    It appears that there is a loss of efficiency coinciding with cuts: 
When the program was funded at $106.5 million, administrative costs 
were $16.5 million, as opposed to $10 million in administrative costs 
for a $39.6 million program. Can you provide me a breakdown on where 
the requested funding will be directed?
    Answer. By the end of fiscal year 2004, MEP staff will be reduced 
by 24 positions, from 51 to 27 while maintaining its function of 
overseeing the National manufacturing network. In addition, NIST 
institutional support activities previously supported by MEP will also 
be reduced, including an institutional support staff reduction of an 
additional 24 positions by the end of fiscal year 2004 (from 38 to 14). 
These staff reductions are expected to be accomplished through a 
combination of resignations, Voluntary Early Retirement Authority 
(VERA), buyouts, and Reduction-In Force (RIF). Remaining MEP staff will 
focus on center operations and center support. Center operations will 
focus on stewardship issues, such as panel and annual reviews, cost 
share approvals, and other compliance-related issues. This unit will 
also conduct a more limited level of program data collection and 
program evaluation. Staff conducting center support will focus on 
essential system-level functions, National accounts, partnership 
development, and a minimal manufacturing research component. All 
product development, marketing support, and most IT support will be 
discontinued. Manufacturing research, center and client impact 
evaluation, corporate university training of the system, and National 
sales are all being significantly scaled back.
    Question. In my state of Wisconsin, we lost 13,000 manufacturing 
jobs last year and, just last week, two more Milwaukee companies 
announced plans to send jobs overseas. We must fund initiatives that 
yield tangible results now, programs that help small- and medium-sized 
manufacturing firms, boosting productivity and increasing 
competitiveness as these firms face increasing pressure from global 
markets. We need to fund programs like MEP. Through MEP efforts, more 
than 35,000 manufacturing jobs were created or retained during the last 
fiscal year. MEP was recently selected by Harvard's Institute of 
Government Innovation as one of the Nation's ``most creative, forward 
thinking, results-driven government program.'' MEP has also just been 
named one of the 100 best resources for small businesses under the 
category of Operations by the BIZBEST 100 publication.
    MEP has worked, and worked well due to its decentralized but well 
coordinated networks. Offices are conveniently located such that 
business owners can take advantage of services without drastically 
increasing precious time away from their business. The local nature of 
the offices allows for flexibility and an ability to respond quickly to 
changing needs in different communities.
    I understand the Commerce Department is about to launch a major 
recompetition of the entire MEP program at a time when this program is 
sorely needed. I am concerned that a national recompete could bring 
serious harm to this critical program. In the interest of saving time, 
energy, and scarce resources, is it necessary that the recompete occur 
across all 400 MEP offices? Why not just focus on those centers that 
have not lived up to expectations? Should a nationwide recompete go 
forward, is it expected that MEP will continue to have a physical 
presence in all 50 states?
    Answer. Maintaining the National manufacturing network is a 
priority. Just as the 21st Century manufacturing needs are continuing 
to evolve, a recompetition of the network will allow MEP to effectively 
meet those new challenges with whatever funding levels Congress 
provides. Understanding the possible effect of a recompetition upon the 
Centers, for fiscal year 2004, MEP is exploring options for providing 
funding to all Centers in the network through the end of the fiscal 
year.

                        JOB LOSSES IN WISCONSIN

    Question. Most of the job losses in my state have been experienced 
in small- and medium-sized enterprises. Nationally, small- and medium-
sized manufacturers account for 68 percent of all manufacturing jobs. 
These firms are the best source for manufacturing job creation--and 
these are good jobs--and these firms are far less likely to outsource 
jobs. I have heard from many constituents who are concerned that the 
Administration is focusing its efforts on large firms, leaving small- 
and medium-sized firms behind.
    There is a tension here between small and medium-sized 
manufacturers and large manufacturers. For example, there are well-
respected critics of the ``Manufacturing in America'' report who say 
that this plan does not substantially make a difference for small and 
medium-sized firms. Do you agree that you have had to balance the 
interests of these two groups as you pursue initiatives to respond to 
the crisis facing our manufacturing sector?
    Answer. From the very beginning of the Manufacturing Initiative 
through today, the Department of Commerce has kept the interests of 
small- and medium-sized manufacturers (SMMs) foremost in developing 
policy recommendations for the challenges confronting U.S. 
manufacturing.
    As you may be aware, as an initial step, we organized roundtable 
outreach meetings to hear directly from U.S. manufacturers and 
manufacturing workers. The manufacturers attending these open meetings 
represented a broad mix of small- and medium-sized manufacturers, as 
well as minority-owned and women-owned enterprises. During these two-
hour meetings, we had in-depth conversations with many such 
manufacturers and workers about their particular challenges and issues 
as distinct from larger manufacturers. In addition, as we developed the 
list of panelists for these roundtables, we took great care to balance 
the panel members by size of companies and manufacturing sectors. A 
majority of the panels were formed by SMMs.
    The views of SMMs are strongly represented in the ``Manufacturing 
in America'' report we developed. Chapter Two of this report is 
representative of the detailed input we received from SMMs as well as 
larger companies. The discussion of issues is representative of the 
diversity in sectors, size of companies and regions.
    The recommendations that we put forward in Chapter Three of our 
report continue this commitment. For example, we are creating an 
advocate for U.S. manufacturers in the Department of Commerce who can 
ensure that the voices of SMMs are reflected in USG policy-making. 
Moreover, we created a Manufacturing Council on April 4, 2004, which 
will be representative of small-, medium- and large-manufacturers. The 
Chairman and Vice Chairman have been selected, appointed, and 
announced. We anticipate completing selection and appointment of the 
members the week of May 24, 2004, or shortly thereafter. We expect to 
hold the inaugural meeting of the Council by the end of June. We hope 
this important body representing the interests of manufacturers 
institutionally in U.S. policy-making will enjoy longevity and maintain 
an established voice particularly for SMMs. Many other recommendations 
in the report are also of particular benefit to SMMs. For example, tax 
relief will be particularly helpful for our SMMs that operate as S-
corporations and partnerships. Also, the establishment of Association 
Health Plans will afford small manufacturers greater leverage in 
negotiating the cost of health insurance with providers.
    Two programs of particular benefit to SMMs are the Small Business 
Innovation Research (SBIR) and the Small Business Technology Transfer 
(SBTT). We call attention to these programs and recommend that SBIR and 
SBTT place a higher priority on manufacturing R&D topics that would 
greatly leverage innovation in SMMs. We also focus on the MEP program 
and recommend ways in which that program can deliver greater benefits 
to SMMs by strengthening partnerships with other government programs.
    An owner of a small manufacturing company told us at our Milwaukee, 
Wisconsin roundtable that he, like other SMMs, does not have the 
resources to hire the lawyers to bring forward a dumping/countervailing 
duty case. Pursuant to the manufacturing initiative, we have created at 
the Department of Commerce an Unfair Trade Practices Task Force within 
the Import Administration. This team will take on the burden of 
proactively seeking out and addressing unfair trade practices. To help 
SMMs identify potential customers, we are also developing a Global 
Supply Chain Initiative. Through this initiative, we will help SMMs 
expand their reach and identify new customers they may not otherwise be 
aware of.
    As you can see, we focused significantly on the needs of small- and 
medium-sized manufacturers and will continue to bring resources to bear 
on their needs and challenges. I look forward to continuing this 
dialogue with you on such an important matter.

                NEW ASSISTANT SECRETARY OF MANUFACTURING

    Question. While I have praised the Administration's efforts to 
organize a President's Manufacturing Council and appoint a new 
Assistant Secretary of Manufacturing, I am concerned that is taking so 
long to get these efforts off the ground. These initiatives were 
announced last September and I understand your staff has said not to 
expect anything before June--at the earliest. My constituents are 
understandably skeptical.
    Given the problems already facing the new Assistant Secretary of 
Manufacturing and the expected lag time, are there plans to place MEP 
under the jurisdiction of the Assistant Secretary of Manufacturing?
    Answer. There are synergies between ITA and MEP that we should use 
to provide better support to MEP's private sector clients. MEP and ITA 
staff are already working together to increase coordination. For 
example, our sectoral experts in the new Manufacturing and Services 
unit will benefit from enhanced coordination with NIST's technical 
experts. Similarly, our Commercial Service staff across the United 
States can help in marketing MEP's programs to the business community, 
particularly small and medium-sized business.

                PATENT AND TRADE COMPLAINTS AND BACKLOG

    Question. I have had complaints from constituents about the backlog 
of manufacturers' complaints in both the Patent Office and the 
International Trade Administration concerning both patents and trade 
violations. We have heard stories from constituents regarding American 
manufactured products that have been copied, sometimes down to a 
stamped company emblem, and then produced overseas, undercutting the 
price of the original American producer. What is the Department doing 
to respond to these complaints? How soon can we expect reductions in 
the current backlog?
    Answer. The USPTO supports ITA in providing expert advice on trade 
dispute matters. Trade disputes are principally handled within ITA 
itself. The USPTO also responds proactively to trade issues through 
support of bilateral efforts undertaken by ITA, USTR, Customs, USDOJ, 
State and other agencies involved in IPR matters. We also provide 
support to training programs, which are intended to support foreign 
government's efforts to achieve WTO compliance. Through our 
participation in the National Intellectual Property Law Enforcement 
Coordination Council, we provide guidance on law enforcement matters 
involving intellectual property issues, including encouraging enhanced 
criminal enforcement. In certain instances, piracy and counterfeiting 
issues are attributable in part to delays and procedures by foreign 
patent and trademark offices themselves. Through office-to-office 
discussions as well as meetings in multilateral fora, such as the World 
Intellectual Property Organization, APEC/Intellectual Property Experts 
Group, and the United Nations Economic Commission for Europe, the USPTO 
encourages additional compliance with International standards.

                                 ______
                                 
             Questions Submitted by Senator Robert C. Byrd

                 EMERGENCY STEEL GUARANTEE LOAN PROGRAM

    Question. President Bush's fiscal year 2005 budget proposes to 
rescind $35 million from the Emergency Steel Guarantee Loan Program. 
This rescission will effectively kill the program, despite the fact 
that Congress has extended the program for two more years, through 
December 31, 2005. In recent testimony before the Senate Budget 
Committee, OMB Director Bolten stated that the Department of Commerce 
was ``not planning to pursue rescissions from the steel loan guarantee 
fund.'' How does the Department reconcile this statement with the 
proposed rescission contained in the President's fiscal year 2005 
budget? How does the President reconcile this statement with its 
numerous prior pledges to support the U.S. steel industry?
    Answer. The Administration has supported a number of initiatives 
that have strengthened the steel industry, and will continue to do so. 
The statement of Director Bolten, to which you refer was made with 
regard to a rescission contained in the fiscal year 2004 omnibus 
appropriations bill. For fiscal year 2005, the Administration has 
proposed to fund the Emergency Steel Loan Guarantee Program (ESLGP) at 
a level of $17 million. Enactment of the Administration's proposal 
would provide sufficient money in the ESLGP's account to accommodate 
current and anticipated demand while also permitting funds to be 
utilized for other priorities. Nevertheless, we remain concerned 
regarding the effectiveness of the ESLGP. There has been a very low 
level of utilization of the program; during its existence, only three 
loans have closed with the benefit of a guarantee, and one of those has 
defaulted.

         WTO RULING ON CONTINUED DUMPING AND SUBSIDY OFFSET ACT

    Question. Congress included language in the fiscal year 2004 
omnibus appropriations bill, which directs the Administration to 
negotiate a solution to the World Trade Organization's (WTO) ruling 
against the Continued Dumping and Subsidy Offset Act. When will the 
United States present its negotiating position on this matter to the 
WTO? In report language accompanying the fiscal year 2004 omnibus 
appropriations bill, Congress directed the Administration to report to 
the Senate Appropriations Committee every 60 days on the progress of 
these negotiations. Given the Congressional directive to negotiate a 
solution to this matter, what is the Administration doing to initiate 
these negotiations? Can you confirm that the first update will be 
provided to the Appropriations Committee 60 days from enactment of the 
omnibus appropriations bill, which would be on or about March 23, 2004?
    Answer. The Administration has defended the Continued Dumping and 
Subsidy Offset Act of 2000 (CDSOA) throughout a long WTO dispute 
settlement process. The Administration has raised this issue in the 
context of the WTO's ongoing Doha Round of multilateral trade 
negotiations. Within WTO Rules Negotiations Group, we have raised the 
issue of WTO member's authority to distribute Anti-Dumping and 
Countervailing Duties. Consultations with the Congress on these and 
other trade negotiations are led by the Office of the U.S. Trade 
Representative and are ongoing.
    As required in Senate Report language, the Department of Commerce 
and the Office of the U.S. Trade Representative are consulting for the 
purpose of ensuring proper implementation of the requirements of U.S. 
law regarding negotiations over the distribution of antidumping and 
countervailing duties. The Administration intends to comply with all 
such requirements, including reporting requirements. The Administration 
will complete these consultations as soon as possible and will continue 
to work to advance Congressional objectives in the Doha Round 
negotiations.

                  SECTION 201 DUTIES AND STEEL IMPORTS

    Question. It is my understanding that the U.S. Commerce Department 
is considering whether to adopt a policy that would deduct import 
duties imposed under Section 201-203 of the Trade Act of 1974 
(``Section 201 duties'') from the U.S. price that is calculated in 
determining the margin of dumping in U.S. antidumping cases.
    This is an important issue that is critical to the future of many 
U.S. companies and workers who rely on the effective enforcement of the 
U.S. trade laws. Several of my constituents and other interested 
parties submitted comments to the U.S. Commerce Department in support 
of this deduction of 201 duties last year. I understand that Commerce 
currently has a large number of administrative reviews pending in which 
this issue has been raised.
    Is there any additional information that would assist the 
Department in deciding to endorse this policy of deducting 201 duties 
in antidumping duty cases? What will be the first case in which the 
Department will deduct 201 duties when calculating an antidumping duty 
margin?
    Answer. On April 6, Import Administration announced its decision 
not to treat safeguard tariffs (201 duties) as a cost in the dumping 
margin calculations.
    The issue was raised in several cases, including the ongoing 
administrative review of the antidumping duty order on stainless steel 
wire rod from South Korea. In this case, the U.S. importer, whose price 
to an unaffiliated U.S. buyer was used to calculate export price, was 
required to pay 201 duties. The petitioner argued that these tariffs 
constituted a cost that should be deducted from the U.S. price.
    In September 2003, the Department published a Federal Register 
notice requesting public comment on the treatment of 201 duties (and 
the related issue of whether to deduct countervailing duties) in the 
antidumping duty calculations. The Department received extensive 
comments from a variety of parties, including domestic producers, U.S. 
importers, U.S. consumers, and foreign producers.
    After fully and carefully reviewing the legal and policy questions 
involved in this issue, the Department concluded that the U.S. 
antidumping law does not intend for the deduction of safeguard tariffs 
from U.S. prices in calculating dumping margins.
    Although the law clearly requires the deduction of normal import 
duties for dumping calculations, the Department believes that safeguard 
tariffs cannot be considered import duties. These tariffs are imposed 
only under special circumstances for the express purpose of providing 
relief from serious injury due to increased imports. Deducting 
safeguard tariffs from the export price in calculating dumping margins 
would effectively increase the safeguard remedy; in some cases 
providing a double remedy. Further, it would create a situation where 
fairly traded imports could become liable for antidumping duties simply 
due to the imposition of safeguard tariffs.
    The Department's decision on this issue is articulated in our 
Notice of Final Results of Administrative Review/Decision Memorandum, 
which may be found on Import Administration's website: 
www.ia.ita.doc.gov.
    Question. On December 4, 2003, the White House Office of 
Communications issued ``The President's Determination on Steel,'' which 
stated that President Bush ``is committed to America's steel workers 
and to the health of our steel industry.'' It also stated that, 
``[s]teel import licensing, established when the safeguard measures 
were imposed, will continue to provide WTO-consistent data collection 
and monitoring of steel imports. This will enable the Administration to 
quickly respond to future import surges that could unfairly damage the 
industry.''
    The President's Proclamation of the same date similarly stated that 
``the licensing and monitoring of imports of certain steel products 
remains in effect and shall not terminate until the earlier of March 
21, 2005, or such time as the Secretary of Commerce establishes a 
replacement program.''
    Secretary Evans, you made several comments to the media on December 
4, 2003, regarding your commitment to the U.S. steel import monitoring 
and licensing system and indicated that it would be expanded to include 
steel products that were not subject to 201 tariffs and quotas. I want 
to be certain that you remain fully committed to this effort. Could you 
please advise me as to whether the Commerce Department has a plan to 
expedite the adoption of these expanded regulations? Could you also 
please advise me as to when the Commerce Department intends to request 
public comment with respect to its new import monitoring and licensing 
system? When would you estimate that it will be up and running? What 
assurances can you provide that the system will be operational by that 
date?
    Answer. The Commerce Department is continuing to monitor closely 
the imports of those steel products for which the President implemented 
import relief pursuant to Section 201, as well as general market 
conditions. As a result, accurate information regarding such imports is 
being made available to the public on an expedited basis. We have been 
meeting with representatives of the steel industry and other 
stakeholders to get their input on improvements to the current system. 
The Administration is continuing to evaluate possible modifications to 
the current system and will ensure that it remains an effective 
monitoring tool.
    Question. The U.S. Commerce Department currently does not pursue 
trade remedies under our countervailing duty law against non-market 
economies like China even though: (1) the U.S. negotiated subsidy 
disciplines with China as part of its accession to the WTO; (2) the 
United States has worked to see that China participates in the ongoing 
OECD steel subsidy negotiations; and (3) USTR reports various 
agricultural industries are experiencing ongoing export subsidies by 
China. Can you tell me whether the Commerce Department is reexamining 
this issue? If not, why not?
    Answer. Commerce does not currently apply the CVD law to non-market 
economies, and this practice has been upheld in the courts in 
Georgetown Steel Corp. v. United States. In that case, the court 
affirmed Commerce's view of NME's as devoid of the kinds of market 
benchmarks necessary to identify a subsidy. Congress enacted 
substantial amendments to the CVD law in 1988 and 1994 without 
disturbing Commerce's practice in this area.
    The Department recognizes that the reasoning underlying the 
Georgetown decision may not apply to China today to the extent that it 
did 20 years ago. However, applying the CVD law to non-market economies 
would raise complex issues of policy and methodology that the 
Department has not fully considered, including implications for 
antidumping policy and practice. Any such shift away from 20 years of 
trade practice should therefore only be implemented after careful 
consideration and review.

                           U.S. DUMPING LAWS

    Question. Concerns exist about the adequacy of existing practices 
in administering the U.S. antidumping duty law against imports from 
NMEs, but particularly China. With the extraordinary trade deficit that 
the United States is running with China, can you provide details of 
what changes in the administration of the U.S. dumping law are being 
considered for NME cases and when the agency will be implementing such 
changes?
    Answer. The Department will be giving priority attention to issues 
related to trade with China, which has been the object of a significant 
number of trade complaints. In fact, during the last three years, we 
have initiated more antidumping investigations and issued more 
antidumping duty orders against products from China than any other 
country, more than twice as many as the next leading country. In 2003, 
more than 50 percent of all new antidumping orders put in place were 
against China (8 of 15 total orders).
    The Department will soon establish an office that will focus on 
cases involving Chinese imports, further cultivating the expertise 
necessary to address the unique problems encountered in that market.
    We have developed practices that allow us to more rigorously 
examine requests for new shipper reviews before initiation, and to 
continue to scrutinize eligibility for the reviews after initiation. As 
a result of these practices, in 2003, we declined to initiate 
approximately one-third of all new shipper requests, and we rescinded 
the initiation of several new shipper reviews. We have also increased 
our scrutiny of fraud and circumvention issues in the context of new 
shipper reviews. In addition, we are working closely with U.S. Customs 
and Border Protection to ensure that adequate financial security is 
provided in connection with merchandise imported during new shipper 
reviews and that--if our initiation of a new shipper review is 
ultimately rescinded--we will be able to require in appropriate cases 
that interest be assessed on merchandise imported during the review.
    Single DAS for AD/CVD Operations: By placing all antidumping and 
countervailing duty case work under a single Deputy Assistant Secretary 
for Operations, we will facilitate case specialization.
    Unfair Trade Practices Team: A new Unfair Trade Practices team will 
report to the DAS for Antidumping/Countervailing Duty Policy & 
Negotiations. This new unit will strengthen the Department's ability to 
advance U.S. trade policies and negotiations and address the root 
causes of unfair trade.
    Efforts to Address Possible Fraudulent Activity: We have been 
developing more expertise within the Department on how to uncover 
potentially fraudulent activities, and through the Bilateral Task Force 
with the Bureau of Customs and Border Protection and the Bureau of 
Immigration and Customs Enforcement, we are developing new procedures 
for sharing information that will help us identify problems earlier and 
deal with them more effectively. For example, we now regularly request 
samples of actual entry documentation from Customs to compare with the 
documentation submitted by the foreign respondent or obtained at 
verification to ensure that the same documentation is provided to both 
agencies. We also conduct independent research into the foreign 
respondent's ownership, as well as the U.S. importer's ownership, to 
determine whether the information about affiliations is accurately 
reported in the questionnaire responses.

                          SUBCOMMITTEE RECESS

    Senator Gregg. This subcommittee will convene next Tuesday, 
to hear from the Attorney General. We are recessed.
    [Whereupon, at 11:19 a.m., Tuesday, March 2, 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 2005

                              ----------                              


                        TUESDAY, MARCH 23, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:28 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg and Kohl.

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

STATEMENT OF ROBERT S. MUELLER, III, DIRECTOR

                 OPENING REMARKS OF SENATOR JUDD GREGG

    Senator Gregg. We will begin the hearing. It is my 
understanding that, unfortunately, Senator Hollings had a close 
friend pass away and so he is not going to be able to be in 
attendance today. No other members are planning to be here.
    This hearing will have two panels. The first will involve 
the Federal Bureau of Investigation (FBI) Director and the 
second will include the Inspector General of the Department of 
Justice and also two members of the GAO who have spent a 
considerable amount of time working on issues that are related 
to national security and counterterrorism and the Bureau 
specifically.
    We very much appreciate your coming here today, Director, 
and we congratulate you for the effort you have made and the 
successes you have had. America has not been attacked since 9/
11, almost 2 years, and that is an impressive record. In part, 
a lot of it is due to the efforts of the FBI's counterterrorism 
capabilities and your focus on this issue. Having arrived a 
week before 9/11, you had a lot on your plate very quickly and 
you have certainly tried to address it in a very aggressive 
way.
    The FBI has always been a law enforcement agency, a 
reaction agency by definition, one which sees a crime and then 
solves it. Yet, the role of the FBI has changed fundamentally. 
Instead of being a reactionary agency, it is now a preemptive 
agency which has to anticipate an event, find out when the 
event and who the perpetrators of the event might be, and stop 
the event before it occurs, which is extremely difficult. It 
involves counterterrorism and counterintelligence at a level 
that has never been exercised before domestically, maybe during 
World War II, but certainly not at this level.
    So there has been a huge adjustment for the FBI and we all 
recognize that. This committee has tried to be of assistance as 
the FBI has gone through the adjustment in changing the 
culture, changing the structure, changing the technology, and 
we want to continue to be of assistance.
    But we do have concerns, which I know you are familiar 
with, and today's hearing is going to address the areas where 
those concerns take priority. The first is the issue of the FBI 
adjusting from being a police agency, a reactive agency, to 
being a proactive intelligence agency and the change of the 
culture, whether or not the manpower adjustments have 
resulted--have accomplished what you thought. It is a concern 
of this committee that there are still too many people who are 
only temporarily assigned to counterterrorism who come out of 
different divisions of the FBI and the numbers that you hope to 
meet haven't yet been fulfilled in the area of getting the 
Counterterrorism Division up and running.
    The second area is the issue of technology, very serious 
issues which we recognize with the operational aspects, 
especially bringing online Trilogy. It is $200 million over 
budget right now. Unfortunately, the hardware and the software 
do not appear to have been made operable. We are also concerned 
about the delay, whether there is a plan for the future and 
enterprise architecture that works, and also, obviously, the 
cost.
    Trilogy is one area. Another area is the IAFIS 
interrelationship with the IDENT program at the Department of 
Homeland Security and the question of how people coming into 
the country are identified and whether the database that we 
paid for can be adequately used by people coming into the 
country.
    And the third major area is this issue of communications 
between different agencies which have responsibility for 
counterterrorism, the relationship with Homeland Security, the 
relationship with CIA, the relationship with the Defense 
Department. The setting up of these various cross-agency 
initiatives and how they are working and where they can be 
improved is a major concern and has been for many years, long 
before 9/11, ironically, of this committee.
    I would, just for the sake of refreshing people's 
recollection, and I am sorry Senator Hollings isn't here 
because he has been on this committee now for over 30 years and 
he has overseen this agency, the Bureau, for over 30 years and 
played a major role in trying to get the issue of how we 
address the Justice Department question of terrorism and 
fighting terrorism up and coming long before 9/11. This 
committee was the initial energizer for trying to get an 
orchestrated approach toward fighting terrorism in the Justice 
Department. We were resisted, regrettably, by the prior 
administration in that effort when we tried to set up the 
National Domestic Preparedness Office (NDPO) and a number of 
other initiatives.
    But the bottom line which we always were stressing was lack 
of communication between various agencies and the inability of 
people who have concerns, the first responders, to get the 
information they need quickly. We continue to be concerned 
about that.
    With that as a background, Director, your statement will be 
made part of the record. I would be happy to get your input and 
then we can go on to questions.
    Mr. Mueller. Thank you, Mr. Chairman. I know you asked for 
it and you will get a brief statement. I do want to start 
before giving my opening remarks, I do want to thank you for 
your leadership in this committee, for the leadership of 
Senator Hollings and for the strong support that you have 
accorded the FBI, certainly during my tenure and even before 
that time.
    I will tell you that the funding that you have committed to 
the Bureau has been critical to our mission and to our efforts 
to transform the FBI in the wake of September 11. As you have 
indicated, our mission has changed dramatically since September 
11 and our budget figures reflect this change.
    As you, I believe, have requested, I am going to focus on 
three areas in my short remarks. I want to talk for a moment 
about training, second, about management, and third, about 
information technology.

                                TRAINING

    Turning first to the training, for us to go through a 
period of transformation such as we have and to continue to go 
through that transformation, we need relevant and timely and 
effective training. Since the terrorist attacks of September 
11, the new agents' curriculum has been completely revised. 
Counterterrorism and counterintelligence training is now woven 
into every facet of our new agents' training. Indeed, an 
additional week of training has been added in order to 
accommodate the expanded curriculum.
    Our counterterrorism modules now include financial 
investigative techniques, source development strategies, 
terrorist groups and domestic terrorism. We have also developed 
a number of practical problems that have greatly enhanced our 
counterterrorism training. For example, we have developed a 
white collar practical set of problems focusing on terrorist 
fundraising. This enables new agent trainees to experience one 
of the areas, means, and techniques of identifying and 
dismantling terrorist networks before they can strike.
    Of course, we also include practical problems where the 
trainees must respond to terrorist events, such as an anthrax 
attack or an attack involving a substance such as cyanide. In 
the past, our practical exercises have focused primarily on 
criminal applications, such as bank robberies and kidnappings, 
and while these remain an important part of our program, we 
have refocused our training efforts to address our number one 
priority of protecting the United States against a terrorist 
attack.
    We also have expanded our legal instruction to include 
application of the PATRIOT Act, the Attorney General 
guidelines, the Foreign Intelligence Surveillance Act law, as 
well as the impact of the Fourth and Fifth Amendments, 
particularly in the context of overseas investigations.
    As well, we now provide cultural diversity training, 
including a block of instruction on Middle Eastern culture and 
values to our new agents.
    Working with our partners in the intelligence community, we 
have developed a curriculum to provide relevant training for 
our analysts. In fiscal year 2003, the FBI's new College of 
Analytical Studies provided training to 880 analysts during 89 
analytical training sessions, a substantial increase from the 
193 analysts and 10 courses provided in fiscal year 2002.
    And last, in the past year, working with the Kellogg School 
of Management at Northwestern University, we educated our 
executive staff on the FBI's intelligence mission, and to date, 
approximately 250 FBI executives and senior managers have 
received management training at the Kellogg School.

                               MANAGEMENT

    Let me turn to the second piece, and that is the questions 
and concerns you have about the ability of the FBI to adapt to 
change. The FBI has always risen to the challenge and adjusted 
to meet the intelligence and law enforcement needs of the 
American people. From organized crime to civil rights, from the 
savings and loan crisis to espionage, from the war on drugs to 
the war on terror, the men and women of the FBI have 
demonstrated the strength, demonstrated the flexibility, and 
demonstrated the enthusiasm to get the job done.
    The September 11 terrorist attacks further defined the need 
for the FBI to remain flexible, agile, and mobile in the face 
of the threats to the homeland. As a result, we refocused our 
mission and shifted priorities. We realigned our workforce to 
address our new priorities. We restructured management 
responsibilities at headquarters. And we developed projects to 
re-engineer our internal business practices and processes.
    Mr. Chairman, the FBI's commitment to hard work, integrity, 
and dedication to protecting the United States is precisely the 
attribute a workforce needs to embrace and implement the 
transformation demanded of it. This is especially true in 
today's FBI, where crimes as diverse as terrorism, corporate 
fraud, identity theft, human trafficking, trafficking in 
illegal weapons, and money laundering reach across global 
boundaries.

                         INFORMATION TECHNOLOGY

    Last, let me return for a moment to the challenge of 
information technology. As this subcommittee is well aware, 
providing appropriate training and workforce flexibility is 
only part of the solution. Today, more than ever, the FBI's 
successes rely upon having integrated information technology 
systems. This past year, we improved our data warehousing 
technology to dramatically reduce stovepiping and cut down on 
man-hours that used to be devoted to manual searches.
    As an example, during the Super Bowl earlier this year, 
data warehousing tools were used to conduct over 65,000 queries 
in 3 days. In the past, an analyst would have worked 3 months 
to accomplish this task. We have made strides in information 
technology, but as I am sure we will discuss, we have a ways to 
go.
    We have not been able to fully implement all aspects of 
Trilogy because of delays with the Government contractor 
regarding the deployment of Full Site Network Capability. This, 
in turn, has delayed our ability to deploy the Virtual Case 
File. And no one is more disappointed about this than I am. 
However, we are working closely with the contractor to ensure 
that we have the network Full Site Capability by this summer 
and the program is ongoing now and it is promising, but I know 
the subcommittee has questions regarding the Trilogy program.
    In the interest of time, I will conclude at this point and 
be happy to respond to any questions that you may have, Mr. 
Chairman.

                           PREPARED STATEMENT

    Senator Gregg. Thank you. Thank you for being concise and 
giving us a chance to ask you some questions.
    [The statement follows:]

              Prepared Statement of Robert S. Mueller, III

                              INTRODUCTION

    Good morning Mr. Chairman, Senator Hollings, and members of the 
Subcommittee. Before I begin, I want to take a moment to thank you for 
your leadership and strong support of the FBI. The funding you have 
provided has been critical to our mission and our efforts to transform 
the FBI. Over the past two and a half years, we have moved from an 
organization that was primarily focused on traditional criminal 
investigations to one that is actively investigating and disrupting 
terrorist operations. I welcome the opportunity to come before you 
today to discuss this transformation and specifically address three 
areas that have been key to it--information technology, management, and 
training.

                                TRAINING

    Training is essential for the FBI to achieve its strategic goals. 
It is the basis for the success of each individual employee, from 
Special Agents to analysts, and for the FBI as a whole. As threats 
based on terrorism and technology increase, the FBI must prepare its 
employees to meet these threats by providing high-quality training. The 
cornerstone of this training is the FBI Academy at Quantico, Virginia. 
As you know, new agents complete a 17-week training program at the FBI 
Academy. All analysts receive training at the College of Analytical 
Studies, also located at Quantico. In addition, the FBI provides 
training to state, local, and international law enforcement officials 
at the National Academy and hosts numerous training conferences.
    Over the past few years, the FBI has made significant progress in 
improving the training we provide to agents, support personnel, and our 
law enforcement partners.
    To prepare Special Agents to meet our highest priority--terrorism 
prevention--our Counterterrorism modules now include financial 
investigative techniques, source development strategies, terrorist 
groups, and domestic terrorism. We have also developed a number of 
practical problems that have greatly enhanced our counterintelligence 
and counterterrorism training. For example, we have developed white-
collar practical problems focusing on terrorist fundraising that 
enables New Agent trainees to experience one of the means of 
identifying and dismantling terrorist networks before they strike. Of 
course, we also include practical problems where the trainees must 
respond to a terrorist event such as the release of cyanide or anthrax. 
In the past, our practical exercises focused exclusively on criminal 
applications, such as bank robberies and kidnappings. While these 
remain an important part of our program, we have refocused our training 
efforts to address our number one priority of protecting the United 
States against terrorist attack.
    We established the College of Analytical Studies (CAS) in October 
2001 to provide analysts with a formal training program in support of 
our counterterrorism mission. The CAS includes a basic course of six 
weeks for FBI analysts, as well as Joint Terrorism Task Force (JTTF) 
analysts, who may be Department of Justice (DOJ) employees, state and 
local law enforcement officials, or analysts from other federal 
agencies. The CAS trained 880 students in fiscal year 2003--a four-fold 
increase over the 193 students in fiscal year 2002.
    The FBI also provides training to its state, local, and 
international partners through the National Academy, the National 
Executive Institute, and the Law Enforcement Executive Development 
Seminar. In addition, we have partnered with the Department of Justice 
to provide a comprehensive ``Train the Trainer'' program, at the FBI 
Academy, to teams of agents from each FBI field office. After 
completing their training, these teams will train state and local 
police officers in their territory on pre-incident awareness, 
preparation, and prevention in the areas of antiterrorism and extremist 
criminal activity. The goal is for each FBI field office to train 120 
police officers per quarter, resulting in the annual training of at 
least 26,800 first responders in basic CT. As of March 9, 2004, one 
``Train the Trainer'' course had been taught, and a second was offered 
last week, resulting in certification of approximately 55 trainers. 
Through the University Education Program (UEP), we are providing 
funding for employees to pursue advanced degrees in critical skills 
areas as identified by the FBI's list of priorities. This will allow 
FBI employees to readily adapt to changes in mission and keep pace with 
rapid advances in technology. In fiscal year 2004, 147 employees were 
approved to work toward their degrees. Eighty-four are pursuing master 
degrees or Ph.D.'s. We have also invested in executive management and 
leadership training, developed by the Kellogg School of Management in 
Chicago. Approximately 250 Senior Executive Service (SES) managers have 
already received training at the Kellogg School.
    Although the FBI Academy at Quantico supports a tremendous amount 
of the training the FBI provides, it is over 30 years old and not in a 
condition conducive to 21st century training. It has become clear that 
a substantial investment is needed in our infrastructure now in order 
to prevent further deterioration. The fiscal year 2005 President's 
budget request includes $21.3 million in nonpersonnel funding in order 
to renovate the FBI Academy and provide for operations and maintenance 
of the facility, so we can ensure the future of law enforcement has the 
best possible training environment.

                         INFORMATION TECHNOLOGY

    We have made substantial progress in the information technology 
(IT) area since I arrived at the FBI in September 2001, eight days 
before the terrorist attacks of September 11th. At that time, the FBI's 
technology systems were several generations behind industry standards, 
existing legacy systems were approaching 30 years old. IT equipment was 
inadequate. For example, our personnel were working on hand-me down 
computers from other federal agencies. We had little to no Internet 
connections in our field offices, and our networks could not do 
something as simple as transmit a digital photo.
    Much of the progress the FBI has made on the investigative front 
rests upon a strong foundation of information technology. Nearly 500 
counterterrorism and counterintelligence FBI Headquarters employees 
have been provided with access to Top Secret/Sensitive Compartmented 
Information (TS/SCI) at their desks. We implemented the Wide Area 
Network on schedule in March 2003. We improved data warehousing 
technology to dramatically reduce stove piping and cut down on man-
hours that used to be devoted to manual searches. We have deployed 
nearly 30,000 new computers for FBI Headquarters and field offices.
    Following the September 11th terrorist attacks, we were required to 
make an in-depth assessment of our information technology systems. This 
assessment determined that we needed to address some key areas 
including the lack of databases that contained current information, 
limited analytical tools, continual dependency on Automated Case 
Support (ACS), and outdated equipment.
    I have taken specific steps to address our deficiencies in 
information technology. I made it a top priority that we establish 
required databases and develop analytical tools. In a post-Robert 
Hanssen environment, it was critical that we implement new security 
protocols. I also completely replaced the management team responsible 
for Trilogy. I brought onboard a new Chief Information Officer (CIO), 
as well as a project manager from the IT community to monitor the 
progress of the project.
    As you know, during the past year we encountered some setbacks 
regarding the deployment of Full Site Capability (FSC) and the Virtual 
Case File, and we are moving quickly to address them. We are working to 
resolve each issue, and will continue deployment throughout the 
country.
    I believe that we are now on the right track, and we are closing in 
on the goal of completion. We are being diligent in our efforts to 
complete this project within the resources available, and I am 
committed to ensuring the successful completion of this project.
    For fiscal year 2005, the FBI requests increases of $20 million in 
technology investments to continue moving forward. A portion of these 
resources will allow the FBI to install the TS/SCI Operational Network 
in up to 10 field offices and add users to the Headquarters TS/SCI 
Local Area Network (LAN). Expanding the TS/SCI network will provide 
every agent and analyst with classified e-mail and message delivery, as 
well as an electronically searchable archive on their desktop. I will 
continue to seek your help and support as the FBI moves forward into an 
increasingly high-tech future.

                              FBI CULTURE

    The culture of the FBI is now--and always has been--a culture of 
hard work, integrity, and dedication to protecting the United States, 
no matter what challenges we face. The FBI was created 96 years ago to 
fight the spread of traditional crime across county and state lines. 
Today's FBI faces a world in which crimes as diverse as terrorism, 
corporate fraud, identity theft, human trafficking, illegal weapons 
trade, and money laundering traverse easily back and forth across 
international boundaries. Today, we are dealing with organized crime 
groups that launder money for drug groups, which sell weapons to 
terrorists, who commit white-collar crime to fund their operations. In 
the wake of the September 11, 2001, attacks, it became clear that the 
FBI must be more flexible, agile, and mobile in the face of these new 
threats. As a result, the FBI has: refocused its mission and revised 
its priorities; realigned its workforce to address these priorities; 
shifted its management and operational environment to strengthen 
flexibility, agility, and accountability; restructured FBI 
Headquarters; and undertaken dozens of projects aimed at reengineering 
our internal business practices and processes.
    We are building a workforce for the future by: expanding the FBI's 
applicant base for critical skills and diversity; updating new agent 
training to reflect our revised priorities; establishing new career 
tracks for counterterrorism, counterintelligence, cyber, security, and 
for analysts; and improving management and leadership development.
    We are modernizing FBI technology by implementing Trilogy and 
developing cutting-edge technology. We have opened and strengthened 
lines of communication between the FBI and our partners in the federal, 
state, local, and international law enforcement and intelligence 
communities. We amended our original core values to accountability for 
our actions and leadership through example--both at work and in our 
communities.
    In short, we have overhauled the FBI, transforming it into a 
stronger, more flexible, more proactive, and more modern organization, 
better equipped to confront the myriad of threats we face in a post-
September 11th world. We will continue to evolve and make comprehensive 
changes in the overall structure, organization, and business practices 
of the FBI to ensure that we remain the very best law enforcement and 
intelligence agency in the world.

                               CONCLUSION

    We have made great progress, but our work is not yet finished. The 
FBI has a duty to protect the United States, secure freedom, and 
preserve justice for all Americans. The FBI has always answered--and 
will always answer--this call with fidelity, bravery, and integrity. 
The men and women of the FBI work tirelessly each and every day to 
fulfill the FBI's mandate to protect the United States. With the 
support of this Subcommittee, we can give the men and women of the FBI 
the resources they need to carry out their mission.
    Thank you.

                            TRILOGY PROGRAM

    Senator Gregg. Let us start where you ended, which is a 
tangible item. Some of the other issues of culture and 
interchange between various agencies of information are less 
tangible, but let us begin with the Trilogy program and the 
problem.
    This committee has dedicated a massive amount of dollars 
and a huge amount of time to trying to assist the Bureau in 
getting this right, and yet it continues to not work. It is 
$200 million over budget, months, literally years, really, out 
of sync on its timetable. The problem, as you mentioned, is 
that the onsite capability hardware didn't work, and hasn't 
been brought online on time and the software, Virtual Case 
File, first round, I guess, was declared to be ineffective.
    Now we have got a new time line and a new date to have the 
onsite capability up and running. Virtual Case File appears to 
be still very much a question. And there doesn't appear to be 
an enterprise architecture plan, something that looks into the 
future and says, this is where we are going with all this 
technology.
    I guess the first question is, give us specifics as to when 
you expect this to work. Second, I understand that one of our 
problems is that we basically have had contracts which haven't 
put penalties in place and now there is some penalty language. 
Tell us what the penalty language is and how it is going to 
create an enforcement of both the Virtual Case File and the 
onsite capability language and what the game plan is for an 
enterprise architecture plan.
    Mr. Mueller. If I could, Mr. Chairman, reflect a bit on the 
history of the program, and I understand this committee's 
concern. But by way of history, the----
    Senator Gregg. I think we should start by making it clear 
to those who may be listening that the purpose here was to give 
the agent, all agents, the ability to have access to the 
database in real time that would be extremely usable and user 
friendly and would be almost an off-the-shelf capability to 
allow them to have a computer at their desk where they could 
communicate with each other and we wouldn't have things happen 
like happened prior to 9/11.
    Mr. Mueller. Absolutely. And if I can, let me just start 
with a history. Then I will focus on the specific questions you 
asked, not the least of which, what is the bottom line? When do 
you expect this to go online?
    But going back a little bit of the history. As, Mr. 
Chairman, you pointed out, contracts were entered into early on 
speedily without the language that perhaps we would have liked 
in retrospect and there were two contracts. One was for 
basically the hardware side of the house and the other was for 
the software side of it. These were let in the year 2001, prior 
to September 11.
    After September 11--and the contracts proposed a certain 
revamping of the archaic, and I have to say archaic, 
information technology infrastructure of the FBI. But what was 
proposed in the contracts prior to September 11 was not what 
the Bureau needed in the wake of September 11.
    And when we did a review in the wake of September 11 as to 
what we would get as a Bureau from these two contracts, we 
realized they were lacking in a number of ways, the principal 
area of which was a tremendous concern to me was that given 
what Trilogy proposed, we were to retain exactly the same 
database structure that we had had before but put a graphical 
user interface or a web-based interface on it, and retaining 
that database would preclude us from doing exactly what you 
have intimated, having a database that would be accessible to 
all and upon which would sit the search tools that would help 
not just our analysts, but all our agents and support staff.
    So we made changes to Trilogy in the wake of September 11. 
I think you are aware of those changes. They cost substantial 
additional sums of money, but they are, I believe, well spent.
    Over a period of time, you could look at Trilogy and the 
four areas of upgrade. The first is the hardware deployment. 
Before September 11, the computers that were on the desks of 
many agents were, 486s, rejects from the Department of Defense. 
Part of the contract was to replace all of these computers. In 
the last 2 years, we have replaced anywhere from 28,000 to 
30,000 computers for all of our agents and our support staff. 
So the first part was the hardware, replacing the computers, 
the printers, scanners, and the like.
    The second part was the Local Area Networks and Wide Area 
Networks. We have 622 sites around the United States, 
everything from a one- or two-person resident agency to the New 
York Field Office. Part of the program was to replace the Local 
Area Networks and the Wide Area Networks. The same contractor 
that had the responsibility for the upgrades, which I will talk 
about in a moment, had the responsibility for completing, or 
not completing, that on schedule and that was completed on 
schedule March 28, in fact, a couple days before schedule, last 
year. That is the backbone, the Local Area Networks and the 
Wide Area Networks.
    The third piece was the upgrade of those computer operating 
systems, what we call a full site capability, which was to be 
completed in October of last year. We came to find out that the 
contractor could not do it. We are in the process of doing it 
now. My expectation is that that will be done by May of this 
year. We have migrated over 25,000 users from the old operating 
system to the newer operating system on which you can place the 
Virtual Case File.
    And last, Virtual Case File. We are now negotiating with 
the contractor who has the responsibility for Virtual Case File 
on the date of completion of that and changes that we had 
wanted to improve its capability. My expectation is that 
sometime, and I can't get a firm date, after we finish with the 
full site upgrade at the end of April, beginning of May of this 
year, it will take another 2 months probably to go and get 
Virtual Case File on board.
    Let me, if I could, just make another point about where we 
will be when we do get Virtual Case File. I had a very real 
concern when I looked at where the Bureau was going in the wake 
of September 11 as to what would be the appropriate mechanism 
for the Bureau to upgrade its capabilities, its investigative 
capabilities for all agents, and there basically were two 
options. One is, take something off the shelf and modify it. 
Another one is to develop our own set of procedures or our own 
software using contractors and the like, but adopt and build a 
software capability that would be usable, user friendly, and 
transform the Bureau.
    I have had a number of persons outside the Bureau look at 
the decision to develop our own, persons, I call them the gray 
beards, who are from a number of private concerns who would 
look at the choice we have made and the product we have come up 
with. I think the reviews are very good for the product we have 
come up with.
    The last point I would make, Mr. Chairman, is that in 
transforming the upgrade to Virtual Case File, while it 
absolutely has its risks, as we complete this process, we will 
upgrade not only the computers, and our investigative 
capability, but also will change the way we have done business 
for 95 years of our existence, going from a paper-driven 
organization to a digital organization.
    It has cost money. There have been delays. There have been 
mistakes that I have made. There have been areas where I could 
have moved faster and there are areas where I urged people to 
move faster that have rebounded and tended to produce a delay 
as opposed to the speed that I had requested. But I do believe 
we are on track. I do believe that we will have a state-of-the-
art system when we are through.
    Senator Gregg. What penalties do you have in place to 
enforce the April 30 deadline on Full Site Capability?
    Mr. Mueller. If either the costs or the schedule are 
missed, there will be no award fee, which is in the sum of $5 
million, and the FBI and the contractor will pay 50 percent 
each of any cost overruns past that date.
    Senator Gregg. And how about with the Virtual Case File, if 
it doesn't work? The first Virtual Case File just didn't work.
    Mr. Mueller. Well, there were glitches in it. I wouldn't go 
so far as to say it didn't work.
    Senator Gregg. Well, the GAO said it. The Inspector General 
said it didn't.
    Mr. Mueller. Yes. We are negotiating with the contractor 
right now. We are in the course of negotiations with the 
contractor on the date and the cost.
    Senator Gregg. I hope there will be some sort of an 
enforcement mechanism in that contract, too, because I think 
one of the things we have learned is that without penalties and 
without enforcement mechanisms, we just end up with the 
taxpayers paying huge cost overruns here.
    Mr. Mueller. I am in hearty agreement.
    Senator Gregg. The enterprise architecture concept of a 
plan for the future, you didn't address that. That was part of 
my question.
    Mr. Mueller. Yes, and I apologize for not having embraced 
that in my remarks. As I believe you are aware, I had my Chief 
Information Officer (CIO), a very experienced individual, from 
July 2002 through May 2003. Quite obviously, one of the 
challenges for him was the enterprise architecture. I 
understand the necessity for it, the need for it. He left in 
May 2003. I hired Zalmai Al Azmi, who is here today in November 
2003, after an extensive search. One of the first things on his 
plate was the architecture. We have just in the last few days 
entered into a contract to have the architecture developed and 
we expect that by the end of the year, the first phase of that 
will be done.
    In the meantime, I have given Zalmai Al Azmi the 
responsibility for approving any IT project as well as the 
funding for any IT project. As anybody who has reviewed the FBI 
has known, we have been stovepiped over the many years. We have 
had any number of IT projects grow up to meet a particular need 
and there has not been an overarching architecture. By placing 
the responsibility for both the funding as well as the 
development of projects in his shop, as well as developing or 
contracting to have the architecture developed on a very short 
timeframe, I think we are moving to address that.
    Senator Gregg. I have a number of other questions, but I 
want to yield to the Senator from Wisconsin.
    Senator Kohl. Thank you, Senator Gregg.
    Director Mueller----
    Mr. Mueller. Senator.

                        TRANSPORTATION SECURITY

    Senator Kohl [continuing]. In lieu of the recent terrorist 
attacks at four train stations in Madrid, the security of our 
own mass transportation system has been called into question. 
Yesterday, Secretary Ridge announced a new plan to secure our 
rail system. This effort would include rapid deployment teams, 
which could be deployed to vulnerable rail systems and stations 
with bomb sniffing dogs. In addition, the Department of 
Homeland Security will accelerate a pilot program to test 
equipment for screening passengers and luggage for explosives.
    How much confidence do you have in the effectiveness of 
this proposal to protect against terrorist attacks? How long do 
you believe it will take to get this program up and running? 
And what role will the FBI be playing to help protect the 
transportation infrastructure, Director Mueller?
    Mr. Mueller. The plan proposed by the Department of 
Homeland Security will go some ways in hardening our 
transportation, the rail transportation. I will tell you that 
in the past, even prior to the announcement of the new 
initiative yesterday from the Department of Homeland Security, 
the Department of Homeland Security, ourselves, and others have 
worked closely with both the railroads, but most particularly 
with the subway systems, particularly New York, Washington, DC, 
Boston, Los Angeles, and Chicago, to assure heightened 
protection of those particular targets.
    So as to the first part of the question, yes, the new 
initiative yesterday will go some ways again to deterring 
terrorists from attacking the rail systems because of the 
heightened security. We have learned, both from our experience 
from gathering information from around the world and more 
particularly from our discussions with detainees who are 
familiar with al Qaeda's thinking that enhanced deterrence 
deters terrorist attacks and they look for the softer targets, 
so yes. Yesterday is yet another step in protecting the rail 
systems as well as the subways, but the fact of the matter is, 
while it goes some substantial ways, one cannot have a failsafe 
system, as we saw in Madrid 2 weeks ago.
    So yes, we are protecting the subways in the various cities 
I mentioned in conjunction with the transit authorities and the 
local police, but it is not a failsafe system. As we develop 
these proposals, we work with the Department of Homeland 
Security to assure that we have the integrated response to 
assure that whatever threat information we have is immediately 
passed on to not only the Department of Homeland Security, but 
to the transit authorities or the police departments in the 
cities that may be threatened.
    If there is a more general threat, that also is basically 
provided through two means of communication. The one means is 
through the Department of Homeland Security advisors throughout 
the United States and in each of our major cities, and the 
second is through the FBI and law enforcement to each of our 
joint terrorism task forces, of which there are 84 around the 
country.

                               EXPLOSIVES

    Senator Kohl. Thank you. Director Mueller, current law 
requires all domestic manufacturers of explosives to mark their 
products with identifying information. This allows 
investigators to determine the origin of the explosives and 
aids them in tracking down criminals. Imported explosives, 
however, do not have to carry such markings.
    In 2002, the United States imported 14,900 metric tons of 
prepared explosives. Without markings, law enforcement has a 
distinct disadvantage in investigating crimes involving 
foreign-made explosives. The Justice Department has been 
working on regulations that would require importers to mark 
explosives when they enter the country, but these regulations 
have not been finalized.
    What effect does this loophole have on our ability to 
effectively investigate crimes involving explosives, and would 
you support legislation that would require appropriate markings 
to be placed on all imported explosives?
    Mr. Mueller. Well, I do believe markings assist 
investigators in solving the crime, so to speak, and 
determining the sourcing of the components to any explosive 
device will assist you in determining who was responsible for 
any act using such a device. And so, yes, I think markings are 
helpful.
    I will tell you that in many cases, overseas and actually 
domestically, our laboratory can identify a sourcing of a 
particular explosive just because of the vast knowledge that 
they have gained over a number of years as to the manufacturers 
of various components and their identifying data. But that is 
not the same as the markings we have domestically.
    With regard to the support of that, again, that would be an 
administration position and I would have to defer to the 
Department as to exactly what position they are taking on a 
specific piece of legislation.
    Senator Kohl. Would you like to see personally all imported 
explosives to be marked?
    Mr. Mueller. I think markings are helpful to the 
investigator and the laboratory technician who is trying to 
identify the sourcing of that explosive.

                       TERRORIST SCREENING CENTER

    Senator Kohl. All right. Director Mueller, the media has 
reported that biological threats may have played a role in the 
cancellation of numerous commercial flights in December and 
January. When asked at a hearing last month, Secretary Ridge 
admitted that our airline security procedures cannot currently 
protect against these types of biological threats. Secretary 
Ridge suggested that the best way to prevent such attacks is to 
concentrate on going after the people who may launch such an 
attack.
    A terrorist watch list is vital to our national security. 
The FBI, through the creation of the Terrorist Screening 
Center, known as TSC, is partially responsible for creating a 
single integrated terrorist watch list. In a recent interview, 
you said that this integrated list would be completed by March. 
Is this list fully operational today with a completely 
integrated watch list, and if it is not, when can we expect 
such a list to be fully integrated and operational?
    Mr. Mueller. The Terrorist Screening Center was first 
established on December 1, 2003, and what it brought together 
was individuals' access to the databases of all of the watch 
lists, and there are approximately 12, in a variety of agencies 
in the Government. What it brought together at that time was 
the ability, when there was a hit on the watch list, to 
thereafter determine whether it was valid and then to follow up 
with action through the joint terrorism task forces or through 
the border agencies.
    In the meantime, since December 1, 2003, the Terrorist 
Screening Center has been working with each of the agencies 
that had a relevant watch list to import its data in a way that 
assures that the name of the person is a valid name, that there 
is identifying information that supports it, and there is a 
basis for having the person on a Terrorist Watch List.
    I can tell you that the State Department has a list of 
easily over 100,000, not just terrorists, but others whom they 
want to bar from the country. So extracting those names is a 
substantial process, and assuring that there is a basis for 
that name going into the watch list is also a very extensive 
process.
    We are about halfway through that process at this point. We 
have a consolidated watch list, but we do not have all of the 
watch list names in it because we are going through that 
screening process. I expect it to be finished by this summer.
    Senator Kohl. Thank you. Mr. Chairman, I thank you.
    Senator Gregg. Thank you, Senator.

  DUPLICATION OF EFFORTS/TERRORIST EXPLOSIVE DEVICE ANALYTICAL CENTER

    Following up on Senator Kohl's point on the Terrorist 
Screening Center, we have been setting up these new initiatives 
that I presume are trying to get away from stovepipes and 
cross-fertilize the different agencies involved, such as the 
Foreign Terrorist Tracking Task Force and the Terrorist 
Screening Center and the Terrorist Threat Integration Center 
and the Terrorist Explosive Device Analytical Center (TEDAC) 
and the Joint Intelligence Coordination Council.
    I guess my question is, are we spinning here? Are we 
duplicating? Are some of these groups ending up being redundant 
and not adding value but actually just shifting deck chairs 
around? I would take, for example, the Terrorist Explosive 
Device Analytical Center, which as I understand it is 
essentially taking over the role, or attempting to take over 
the role, or attempting to duplicate the role that already 
exists at ATF, where they have two databases on explosive 
devices and where they have had the role of overseeing 
explosive devices for quite a while.
    Mr. Mueller. Let me start with TEDAC, which the ATF quite 
obviously participates in. It was an idea that came from the 
Saudi Arabia bombings of May 12, 2003, and our participation in 
helping the Saudis on that case, and most recently what we have 
come to find in Iraq.
    There was not a worldwide effort to in develop a database 
in one place with an expertise associated with it to identify 
explosive devices from around the world used by various 
terrorist groups. So the idea came out of our work in Iraq, 
where we along with the Department of Defense (DOD), the 
British, and a number of others, are developing the database 
related to the various incidents occurring in Iraq.
    We have expanded that under the auspices of the FBI 
laboratory to include devices from around the world. Now, the 
first step was to get our own house in order to make certain 
that we are working together with DOD, the CIA, with ATF, and 
NSA to cooperatively develop this database.
    And so it was an idea borne out of our experiences in Iraq 
and elsewhere----
    Senator Gregg. Let me get specific, Director. ATF has 
something called the X-Base, I believe it is called, and then 
they have something called the Bomb and Arson Tracking System. 
You are saying that TEDAC is not going to be duplicative of 
those but will have more of an international flavor than those 
have?
    Mr. Mueller. I believe it will, but I would have to get 
back to you on how they can or should be integrated.
    [The information follows:]

               Possible Integration of X-Base Into TEDAC

    The mission of the TEDAC is to forensically and technically 
analyze terrorist explosive devices used against U.S. interests 
anywhere in the world and to develop actionable intelligence. 
As such, the TEDAC will require a very robust database with 
state of the art link analysis software that will enable 
computers to compare Improvised Explosive Device (IED) 
components sent in from a variety of sources. This 
functionality will allow the TEDAC to rapidly recognize 
otherwise non-observable connections between IEDs that exist 
with a tremendous volume of detailed technical and forensic 
information and intelligence. The ultimate goal will be to 
identify those individuals associated with the IED and the 
unique signature used to manufacture the bomb. All intelligence 
gathered from the forensic and technical analyses of IEDs will 
be disseminated among the military and law enforcement 
explosives community for technical and tactical purposes.
    Currently, the Department of Justice is conducting a review 
of all explosives-related databases. The Department will, upon 
completion of the review, advise the relevant committees of the 
Department's final conclusions.

    Senator Gregg. And the other question that goes into that 
issue is that I understand the FBI is considering taking over 
all of the explosive activity that was traditionally with ATF. 
Is that true?
    Mr. Mueller. That is not true.
    Senator Gregg. The investigative activity in the area of 
explosives?
    Mr. Mueller. That is not true.
    Senator Gregg. Well, then maybe I am misinformed. It is my 
understanding that in this budget, we have a shift of that 
responsibility from ATF over to FBI.
    Mr. Mueller. There is a differentiation of responsibilities 
between the FBI and ATF. We do have the responsibility for 
addressing terrorist, or possible terrorist incidents within 
the United States, and generally, the ATF has a responsibility 
for most other explosive incidents that you have within the 
United States.
    In terms of training, our training focuses on render safe, 
that is, how persons render safe the explosive device prior to 
there being an explosion and the ATF has the expertise in 
training what you do and how you investigate explosive devices 
that have gone off.
    I can tell you that there is a division of responsibility. 
There are occasionally tensions, both in the field and here, 
now that ATF is within the Department of Justice, the 
Department of Justice has a task force that is looking at that 
allocation of responsibility.
    Senator Gregg. That must be what I was informed of, and I 
guess I was misinformed, because our impression was that they 
had gone much further than just looking at it, that there had 
been sort of a preliminary move to have ATF move explosive 
activity over to FBI. I am glad to hear that is not the case, 
because I understand only about 1 percent of the explosions 
that occur are terrorist related.
    Mr. Mueller. There is no move for us to take over ATF's 
responsibility when it comes to investigating incidents 
involving explosions----
    Senator Gregg. That are not terrorist.
    Mr. Mueller [continuing]. Beyond the terrorism field.
    Senator Gregg. We have had this Madrid incident----
    Mr. Mueller. Yes.
    Senator Gregg [continuing]. And my question to you is, 
Europe is now starting to expedite its efforts in the area of 
counterterrorism and the European Union is talking about 
setting up a Europe-wide database that is counterterrorism 
oriented. I guess they had one, but they are talking about 
significantly improving it and increasing it.
    To what extent have you had discussions post-Madrid as to 
the role of ourselves and the FBI specifically in this new 
effort by the Europeans to become more sensitive to and more 
knowledgeable about the threat?
    Mr. Mueller. Since the Madrid explosions I have not had 
much opportunity to talk to counterparts overseas other than my 
counterpart in the Spanish National Police, and the discussion 
there was not addressed to what Europe could do as a whole 
itself to integrate terrorism information, and then a subpart 
of that, involvement of the United States.
    For the most part, our relationships with our European 
counterparts are very good on a bilateral basis and we share a 
great deal of information, depending on the country, with our 
counterparts overseas. The European Union has what is called 
Europol, which is an entity established by the European Union 
to address law enforcement, terrorism issues and it, I would 
say, is in its opening stages.
    I have had discussions within the FBI, some outside, with 
regard to a proposal suggested by Congressman Wolf about our 
participating in an international terrorism information 
exchange and we are exploring the possibility of doing that 
under the auspices of NATO. One of the problems you have in 
terms of exchanging information is having everyone on the same 
security level so that one is given access to meaningful 
information. And one of the problems that one has where you 
have a group of countries working together, you wonder what the 
security level may be. Who gets the information? One has to 
work through that. Our thought is that NATO may give us the 
vehicle to do that because there are security levels, and 
persons seconded to NATO with the appropriate security 
clearances. This is a vehicle that we are currently exploring.
    Senator Gregg. So right now, there is no formal structure 
or communication process other than personal relationships 
between the Director of the CIA and yourself that causes 
information to move back and forth efficiently?
    Mr. Mueller. No, I would say there is a lot more, a great 
deal more than that. Ourselves and the agency, we have legal 
attache offices in most European capitals, not every one of 
them, and it is that legal attache office that meets daily with 
our counterparts, whether it be in France or the United Kingdom 
or Spain. So there is an exchange of information between our 
legal attaches overseas and our counterparts overseas on a 
daily basis.
    We also have the foreign Embassies in Washington, DC. You 
also have Scotland Yard, MI-5, MI-6, and others who will have 
persons here who have exchanges with our people daily. And so 
there is a network of exchange of information that is ongoing 
that people don't often hear much about but has been 
tremendously effective since September 11.
    What you do not have is Europol, which has been established 
by the European Union. While we have persons that have spent 
time at Europol, it is just getting established and whether it 
will be an effective information exchange for the European 
Union is still to be seen. In the meantime, we are going to 
explore this other option of exchanging with a number of 
countries information relating to terrorism under the umbrella 
of NATO.
    Senator Gregg. Is there compatible Terrorist Screening 
Center in Europe yet?
    Mr. Mueller. No, there is not at this point.
    Senator Gregg. Would you presume that if there were, that 
we would integrate with it?
    Mr. Mueller. Yes. I think we would exchange lists, yes.
    Senator Gregg. Should we help them get that going? It seems 
to me that a lot of our threat is going to be based there, and 
granted, you have got your Legats all over the place who I am 
sure are developing names, but that is a pretty ad hoc 
approach.
    Mr. Mueller. I met with a representative of Europol maybe 2 
to 3 weeks ago in terms of what they have established in terms 
of capability and it is relatively small at this juncture.

                                 TOPOFF

    Senator Gregg. What did you learn from the TOPOFF events 
that you could impart to us that we need to do in order to 
improve communication between the various parties who 
participated? I mean, the purpose of TOPOFF was to simulate an 
event and see where the weaknesses are. What was the FBI's 
weakness and what should we do to address it?
    Mr. Mueller. It has been some time since I have looked at 
TOPOFF. I think one of the basic lessons we learned out of it 
was the Seattle aspect of it, that is, the necessity of 
identifying the relative chain of command and the authorities 
beforehand. Since that time, I know the Department of Homeland 
Security has identified individuals in most cities, I believe, 
who would be the representative of the Department of Homeland 
Security on scene and is training those individuals. I think 
that was a weakness that I saw.
    There were certain weaknesses that we saw out of the TOPOFF 
exercise in Chicago, which was a chem-bio attack, and I would 
have to go back and refresh my memory on what those weaknesses 
were in terms of responding to that attack.
    Senator Gregg. Is there a formal structure for responding 
to the weaknesses that were identified?
    Mr. Mueller. Yes. I know there is an after-action report 
and that the various items on that after-action report were 
identified and are being addressed by Homeland Security.
    Senator Gregg. Maybe you could give us a summary of what is 
being addressed for the record.
    Mr. Mueller. I will be happy to do that.
    [The information follows:]

                Summary of TOPOFF 2 After-Action Report

    Since the publication of the ``TOPOFF 2 After-Action Summary 
Report,'' the Department of Homeland Security (OHS) has used the 
conclusions from this analytical document to lead the federal 
government's national effort to revamp, centralize, and unify a range 
of pre-existing federal and other incident response contingency plans. 
Among the actions undertaken by the DHS in response to TOPOFF 2 arc:
  --Enhanced interagency coordination for incident management.--At the 
        time of TOPOFF 2, DHS had instituted a Crisis Action Team (CAT) 
        to address incident management requirements. TOPOFF 2 After-
        Action comments suggested that the DHS develop more formal 
        standard operating procedures with incident-specific 
        interagency staffing requirements. These suggestions led to the 
        transformation of the CAT into the Interagency Incident 
        Management Group (IIMG), which was formed to address decision 
        and coordination processes in elevated threat environments 
        through bringing together federal, state, local, and private 
        sector agencies as one functional entity to address specific 
        contingencies, threats, or events.
  --Enhanced Principal Federal Official (PFO) capabilities.--The PFO 
        concept, which was first tested in TOPOFF 2, has been enhanced 
        through the establishment of training courses with curriculum 
        that clarifies the mission, roles, and functions of these 
        senior DHS officials in response operations.
  --Improved emergency public information coordination.--The DHS has 
        led an intensive interagency effort that has resulted in the 
        creation of an interagency incident communications strategy, 
        emergency communications protocols, and vastly improved 
        federal, state, and local coordination.

    Senator Gregg. Where do you see the status of training 
first responders relative to the FBI role, to the extent there 
is any in that?
    Mr. Mueller. Well----
    Senator Gregg. And how do you see our first responder 
capability these days?
    Mr. Mueller. We do a tremendous amount of training in 
evidence recovery throughout the country, throughout the world 
now in crime scene exploration. That is not what traditionally 
is called first responder, but it is our niche that we will 
continue to address.
    We have a render safe capability that we have continued to 
grow over the years and we will continue to grow that 
capability.
    In terms of the response from the fire or the ambulances 
and that form of first responder, as with the TOPOFF exercises, 
there have been other exercises. Every one of our special 
agents in charge in each of our cities is integrated now, both 
through our joint terrorism task forces, but also through 
various exercises in various cities with those first responders 
so the communication, the ability to stand up quickly and 
respond to a devastating attack, is much enhanced since 
September 11.
    Senator Gregg. So you think we are making progress on 
training first responders?
    Mr. Mueller. Yes.
    Senator Gregg. Do you think it should be threat based, 
where we choose to put the money for this?
    Mr. Mueller. I am going to have to leave that to others. 
That is a little bit out of my bailiwick. I think that is more 
in Tom Ridge's. I am not that familiar with the financing----
    Senator Gregg. Okay. I will----
    Mr. Mueller [continuing]. Structure, I will just put it 
that way, of allocating the funds.
    Senator Gregg [continuing]. Okay, onto other topics, then. 
Three, just quickly. Do you believe al Qaeda was responsible 
for the Madrid attack?
    Mr. Mueller. From what we have seen to date, I believe so. 
Now, when you say al Qaeda, let me just qualify that to a 
certain extent. There may well have been a group of individuals 
who have adopted and believe in Bin Laden's philosophy, 
theology, who are responsible for this, but may not have had, 
either sought or had the approval of those remaining leaders of 
al Qaeda. But I think it is fair to say that the evidence tends 
to point to individuals who were supportive of the radical 
fundamentalism and would be supporters of al Qaeda's mission.

                        COUNTERTERRORISM AGENTS

    Senator Gregg. In changing the culture of the FBI, how many 
agents are you planning to put into the Counterterrorism 
Division?
    Mr. Mueller. Well, we had----
    Senator Gregg. Approximately?
    Mr. Mueller. I moved 518 in fiscal year 2002. I would 
expect that at the end of 2004, we are authorized 2,418 agents. 
That is up from 1,351 agents in fiscal year 2001. With the 
additional increases sought in the 2005 budget, we will be up 
to 2,592 agents.
    Senator Gregg. As I understand it, there are still about 
380 agents who are assigned to the Criminal Division that are 
being used in counterterrorism, is that correct?
    Mr. Mueller. I believe it is about 380 at the end of this 
year, yes. We are actually overburdening some more than that at 
this point. But with the 2004 budget increases, I believe we 
will be 389, is what we anticipate at the end of this year.
    Senator Gregg. I guess the obvious question is, and I am 
sure you have a strong answer to it, but the obvious question 
is, if counterterrorism is your number one responsibility now 
and if you have got 12,000 agents overall, approximately, 
first, why are we only dedicating 2,500 to the effort?
    And number two, why haven't we been able to move the full 
complement into this arena, and is that a reflection of the 
fact that there is still some significant--resistance is the 
wrong term, but some significant desire or feeling amongst the 
line agents that they want to do things other than 
counterterrorism, that they were trained, they were brought up 
for 20 years, 30 years, 15 years in white collar crime and 
chasing the mafia and finding out who robbed the bank and they 
like that?
    Mr. Mueller. It is not a reflection--of what a particular 
agent or group of agents want to do. I have sought, as we have 
discussed before, to request additional resources in 
counterterrorism, to move additional resources when I thought 
it was necessary. I moved in excess of 500 agents in fiscal 
year 2002 and I have sought additional enhancements so that if 
we get the 2005 budget, that 389 figure should be down above, 
just a little above 230.
    I am also considering making a move of additional agents to 
counterterrorism. You will see that in the budget, we are 
looking at--in the budget submission, we are looking at a 
number of agents who in the past have been working on 
Government fraud cases where I believe the Inspector Generals 
can take up some of those cases. And I am looking for other 
ways to transfer agents to counterterrorism.
    I have looked to see what our continuous level of 
assignment of agents to counterterrorism would be absent the 
peaks. We have, as we have discussed before, we have had two 
peaks in the past, certainly with regard to--in the wake of 9/
11 and then in anticipation of the hostilities in Iraq. I do 
believe that one of the benefits from having a number who are 
still being reassigned from criminal in some offices reflects 
the desire to have flexibility in the system.
    In the savings and loan crisis, when we were given 
additional resources, whether it be prosecutors or agents, we 
identified where the problem was and the agents were put in the 
particular city and they are there to this date. What we found 
in terrorism is that terrorism cells can arise anyplace in the 
United States, and when they arise, we have to do a combination 
of pushing resources to those particular offices as well as 
taking persons from those offices who are addressing another 
priority. Part of the reason that you have the statistics you 
have as to the overburn is attributable to that desire to be 
flexible.
    The bottom line is I am continuously looking at it. I will 
look at the end of this year, or as we go through this year, at 
the feasibility of reassigning agents from other programs to 
counterterrorism.
    Senator Gregg. I noticed you dropped a couple of 
activities. There were two specific areas that you decided----
    Mr. Mueller. The first one was fraud on the Government. The 
other one was assistance of EPA.
    Senator Gregg. We put a lot of things on the FBI's table 
over the years before 9/11. There is probably a list that is 
longer than that that you could drop, isn't there?
    Mr. Mueller. There are areas that I have looked at. I mean, 
there are some areas that are relatively insignificant that 
don't make a big cut. The one area where I have reassigned the 
most agents was from the drug program and we have continued to 
underburn in the drug program as a result of those agents being 
reassigned to do counterterrorism.
    One of the things, and it may be--I don't think it is that 
different than what happened in the past, but each of the 
special agents in charge are directed to expend the resources 
to do the job in counterterrorism, even if it cuts into other 
programs. So if you have a terrorism lead that has gone 
unaddressed and agents assigned to counterterrorism are busy 
with terrorism matters, then you have to take them from 
someplace else. That is the type of flexibility that we have 
not necessarily used in the past that I think is important to 
use in the future where we have terrorism not limited to one 
city or two cities, but it can pop up anyplace around the 
country. And I say not just international terrorism, but 
domestic terrorism.

                          LANGUAGE TRANSLATION

    Senator Gregg. I understand that. I noticed that you have 
something like 65 people who are now trained in language who 
are fluent in Arabic languages, is that right?
    Mr. Mueller. We have 24 Arabic speakers in the agent 
population. Now, we have dramatically increased our linguists 
and our translators in the Bureau, as I think you are aware.
    Senator Gregg. That is maybe where the 65 came from. That 
seems like an awfully small number.
    Mr. Mueller. We are pushing training. We are recruiting as 
hard as we can for those who speak Arabic. We have had some 
success, but not as much success as I would like. We are 
enhancing the language training for our agents and those who 
receive the training will now be in a position where they can 
use that training, which has not always been the case.
    Senator Gregg. How can we help you get more people on 
board? Do you need a pay differential?
    Mr. Mueller. We have gotten in our request last year in the 
2004 budget as well as in the 2005 budget. You have increased 
our budget to assist in sending agents as well as analysts and 
others for language training, not only in Arabic but Mandarin 
Chinese and other languages that we need to have an agent cadre 
fluent in.
    Senator Gregg. I would hope if there is something further 
we could do, we would like to do it.

                              IDENT SYSTEM

    In talking with Director Hutchinson at Homeland Security 
about the new IDENT system, US VISIT, where they are 
fingerprinting people coming into the United States, he advises 
us that they are using a flat screen, two index fingers, 
printing system for the sake of speed, basically was what it 
came down to, because using all five fingers or a roll system 
just took too long.
    We now built IAFIS, which cost us a huge amount of money, 
before you arrived. We had the same problems with that that we 
have had with Trilogy, except I think it even cost more in 
overruns.
    Mr. Mueller. But it is also, if I can interject, it has 
been tremendously successful.
    Senator Gregg. Well, it took a long time to get there, 
believe me. It has been successful, and that is my point. It 
has been successful. It has got 44 million fingerprints on 
file, and yet it is not compatible with IDENT. This seems to be 
one of those things which is very hard to explain to a 
taxpayer, that we are putting in place a system at the State 
Department and Homeland Security to identify people coming into 
the country. We have 44 million fingerprints over here. Sure, 
most of them may be domestic, but there are certainly a lot 
that aren't and the two systems can't talk to each other. The 
next terrorist event, we may find out a fellow got through the 
IDENT system but his fingerprints were over at IAFIS.
    Mr. Mueller. Well, this has been a matter of much 
discussion, not just recently, but over the last year. Quite 
obviously, the 10-print roll prints is the gold standard. I 
know that the Department of Homeland Security was faced with 
the necessity of establishing very quickly a biometric system 
that was affordable and could be put up quickly and opted for 
the two-print system in the meantime. There are discussions 
about how that can be expanded to a 10-print flat as opposed to 
a 10-print rolled, which would take a long time for everybody 
and I don't think we would want at our borders with the fact 
that 1 million persons go in or out of the country every day.
    So it is a combination of, on the one hand, you have the 
gold standard. On the other hand, you have the practicality of 
identifying persons coming in swiftly in such a way that you 
can identify terrorists. The way we do it now is we have a file 
that we provide to the Department of Homeland Security that 
includes all the fingerprints and they strip off the two index 
fingerprints and utilize that to identify persons who may be 
terrorists, on the wanted list, coming through the country, or 
coming through the border. We are working with State and the 
Department of Homeland Security to improve that system.
    Senator Gregg. I appreciate that but what are we actually 
doing?
    Mr. Mueller. We are meeting to decide what the standard 
will be down the road, taking into account that the 10-rolled 
print is the gold standard which everybody would like and 
looking at the practicality both of the software, the hardware 
and what it would mean to allowing persons through our borders 
of having a system that is more substantial than the two-
fingerprint system that we currently have at the borders.
    Senator Gregg. Is it doable to integrate the two systems?
    Mr. Mueller. I think it is. I do believe so. Just in the 
two-print system, I do think it is doable down the road. We are 
exploring----
    Senator Gregg. What do you need to do to do it?
    Mr. Mueller. Developing the technology, and I am not 
intimately familiar with the technology that is being used 
currently, the two in the VISIT system at the borders, but 
developing the technology and the communications capability so 
that given just the two-print system, there can be a timely 
search against the FBI database by a communications carrier.
    Senator Gregg. Maybe you could have somebody in your group 
meet with Mr. Hutchinson and----
    Mr. Mueller. We are.
    Senator Gregg. Well, I know you are, daily, I am sure, and 
with State and get back to this committee with a proposal as to 
how you plan to do this and a timeframe.
    Mr. Mueller. Yes, sir.
    Senator Gregg. It just seems to us, to me, anyway, that we 
are wasting our resources. We have put a lot of money into it 
and we should be trying to figure out a way to get the two to 
talk to each other. It may not be doable if you have got a 
condition that you are going to have to get people through the 
checkpoint in 13 seconds or whatever the condition is, but it 
would seem to me that if there is a way to do it and we need 
money to do it from a technology standpoint, we could find the 
money, because we would hate to see that database just sit 
there and not be accessed.
    I appreciate it. You have been very courteous with your 
time today. Is there anything further you wish to add?
    Mr. Mueller. The only item I didn't address is the concern 
that you raised, and that is about the adaptability of the 
Bureau to the new mission. You read these books about taking a 
corporation or an agency or a large organization through a 
transformation. The books will tell you that there are 30 
percent that welcome the transformation and see the future, 
there are 30 percent that have to be persuaded, and there are 
30 percent that like the old ways.
    There are agents in the FBI, without a question of a doubt, 
who enjoyed what they were doing before, perhaps enjoyed doing 
it more than some of the things they are called upon to do at 
this point, and there will be for a number of years. But I do 
believe that just about every FBI agent understands the 
responsibility that the Bureau has, along with other agencies, 
to prevent another terrorist attack, they understand that 
responsibility, the necessity of transforming the organization, 
the new mission, and are pursuing that new mission as we have 
missions in the past.
    It was something new for us to develop a game plan to 
address La Cosa Nostra or the Mob, to change from doing bank 
robberies and bank embezzlements to an extended multi-year 
integrated multi-agency plan to address a threat against the 
United States and we adapted then. I do believe we are 
adapting, and will continue to adapt with this new challenge 
thanks to the dedication and loyalty of FBI agents and analysts 
and support staff to the Bureau, the Government, the American 
people, and their understanding the importance of our role in 
protecting the national security of the United States.
    With that, thank you, sir.
    Senator Gregg. We thank you for your service and thank your 
agents for their service and the people who work at the FBI and 
do an extraordinary job. It is very much appreciated. To the 
extent we criticize you, we hope it is taken as constructive. 
That is our goal. Thank you.
    Mr. Mueller. Thank you, sir.

STATEMENT OF GLENN A. FINE, INSPECTOR GENERAL, 
            DEPARTMENT OF JUSTICE
    Senator Gregg. Our next panel will include members of the 
Government Accountability Office and the Inspector General.
    We have with us Glenn Fine, who is the Inspector General 
for the Department of Justice; Dr, Randolph Hite and Dr. Laurie 
Ekstrand, who both work for the Government Accountability 
Office. All of them specialize, obviously, in making sure that 
various agencies function efficiently and effectively and focus 
especially on the issue of the FBI and other agencies 
responsible for counterterrorism.
    We appreciate you taking the time to come and testify. You 
all were here to hear, I believe, Director Mueller's thoughts 
and what we would like to do is get your thoughts on the 
specific issues of technology and how it is being put in place 
at the FBI and what we can do to make sure we don't have these 
continued cost overruns, and more importantly, what we can do 
to make sure the technology works the way it is supposed to 
work.
    We will start with Mr. Fine, anything you wish to say, or 
if you want to submit a statement, that is fine, too.
    Mr. Fine. Thank you, Mr. Chairman. Thank you for inviting 
me to testify about the FBI's efforts to modernize its 
information technology systems. Within the past 2 years, the 
Office of the Inspector General has issued several reports that 
examined IT issues in the FBI, including a review of the FBI's 
management of its IT investments as well as the implementation 
of the FBI's most important IT project, Trilogy.
    My written statement provides a detailed description of the 
history of delays and cost overruns in Trilogy. My statement 
also describes other reviews that the OIG recently has 
completed or has ongoing in the FBI, including a report 
describing the delays in integrating IDENT, the Department of 
Homeland Security's automated fingerprint identification 
database, with IAFIS, the FBI's fingerprint database; a review 
of the FBI's use of investigative resources before and after 
the September 11 attacks; a report examining the FBI's failure 
to detect the espionage of Robert Hanssen for more than 20 
years; and ongoing reviews of other important FBI programs, 
such as the FBI laboratory's DNA unit, the FBI's Language 
Translation Services Program, and the FBI's Foreign Legats, 
among others.
    You have asked me in my oral remarks this morning to 
briefly focus on the OIG's assessment of the Trilogy project. 
Trilogy is essential to modernizing the FBI's archaic and 
inadequate computer systems. The FBI's current systems do not 
permit FBI employees to readily access and share information 
throughout the FBI. Without this capability, the FBI cannot 
efficiently investigate criminal cases, effectively analyze 
intelligence information, and bring together all the 
investigative information in the FBI's possession to solve 
crimes and help prevent future terrorist attacks.
    The Trilogy project, as you know, has three main 
components: One, the upgrade of the FBI's hardware and 
software; two, the upgrade of the FBI's communications network; 
and three, the upgrade and consolidation of the FBI's five most 
important investigative applications.
    Our reviews have found that Trilogy has grown from what in 
the year 2000 was estimated to be a 3-year, $379 million 
project to what is now a $581 million project that may not even 
be fully completed before the end of this calendar year. Senior 
FBI IT managers recently told OIG auditors that the 
infrastructure components, the first two components of Trilogy, 
should be completed by April 30. However, there is still a 
significant risk of missing even the latest deadline.
    The third component of Trilogy, upgrading and consolidating 
the investigative applications, is still ongoing. The most 
important part of this component is the Virtual Case File, 
which will replace the FBI's inadequate Automated Case Support 
System.
    In our view, the reasons for the repeated delays and the 
increased costs in the Trilogy project include poorly defined 
requirements as Trilogy was developed, the lack of firm 
milestones and penalties to the contractors for missing 
deadlines, the FBI's weak IT investment management structure 
and processes, the lack of a qualified project integrator to 
manage the two main Trilogy contractors and take responsibility 
for the overall integrity of the final product, and the lack of 
FBI management continuity and oversight, due in part to the 
frequent turnover of senior FBI IT managers.
    These problems with Trilogy were consistent with the OIG's 
repeated warnings about the FBI's IT systems and its management 
processes in general. A variety of OIG reports have identified 
significant deficiencies in the FBI's IT program, including 
fragmented management, inadequate training, and a failure to 
adequately respond to recommendations regarding IT 
improvements.
    Although the FBI has had a difficult time developing and 
deploying Trilogy, at this juncture the completion of at least 
the initial phase of Trilogy is in site. Director Mueller has 
made Trilogy a priority and has focused personal attention on 
this project, to his credit. In addition, the FBI recently 
appears to have focused its attention on addressing many of the 
weaknesses we have described. Both the FBI and the Department 
of Justice now have Chief Information Officers who appear 
committed to a no-nonsense approach to managing the Trilogy 
project.
    Once completed, Trilogy will significantly enhance the 
FBI's ability to manage its cases and share information. But 
more progress is still needed on Trilogy's user applications, 
particularly the Virtual Case File, and completion of Trilogy 
will not signal the end of the FBI's IT modernization effort. 
Trilogy will only lay the foundation for future IT 
advancements.
    The FBI must focus sustained attention on ensuring that it 
has state-of-the-art information technology systems to permit 
FBI employees to effectively process and share information. As 
the FBI looks to the future to meet the continuing threat of 
terrorism and the increased sophistication of domestic and 
international crime, it must give its employees the IT tools 
they need to perform their mission effectively and efficiently. 
Given the importance of this issue, the OIG will continue to 
review and report on the FBI's progress or lack of progress in 
this critical area.
    That concludes my prepared statement and I would be happy 
to answer any questions, Mr. Chairman.

                           PREPARED STATEMENT

    Senator Gregg. I have got a lot of questions, but I want to 
hear from the whole panel first.
    [The statement follows:]

                  Prepared Statement of Glenn A. Fine
    Mr. Chairman, Senator Hollings, and Members of the Subcommittee on 
Commerce, Justice, State and the Judiciary:

                              INTRODUCTION

    I appreciate the opportunity to testify before the Subcommittee as 
it examines the Federal Bureau of Investigation's (FBI) fiscal year 
2005 budget request. I have been asked to speak about the FBI's 
progress in modernizing its information technology (IT) systems, 
specifically its agency-wide IT modernization project known as Trilogy. 
Within the past two years, the Office of the Inspector General (OIG) 
has issued several reports that examined IT-related issues at the FBI, 
including the FBI's responsiveness to previous OIG recommendations 
dealing with IT issues and a review of the FBI's IT Investment 
Management process. As part of the latter review, issued in December 
2002, we examined the FBI's implementation of Trilogy. In addition, 
last month we opened a new audit that is currently examining the 
overall management of the Trilogy project and the extent to which 
Trilogy will meet the FBI's current and longer-term IT requirements.
    Our overall assessment is that the FBI has had a difficult time 
trying to modernize its information technology systems, and has 
experienced a series of delays, missed deadlines, and cost increases. 
However, at this juncture, the completion of Trilogy is in sight. 
Director Mueller has made Trilogy a priority and has focused personal 
attention on this project, to his credit. Although more progress is 
needed on Trilogy's user applications, particularly the Virtual Case 
File, once completed Trilogy will significantly enhance the FBI's 
ability to manage its cases and share information.
    Trilogy and the first version of the Virtual Case File system are 
just the start of the FBI's information technology modernization 
effort. In the years ahead, the FBI will need to focus even greater 
attention to ensure that it implements state-of-the-art information 
technology to allow its employees to effectively perform their critical 
mission.
    In the first section of my statement, I will provide a brief 
overview of the Trilogy project, describe the history of the FBI's 
progress in developing Trilogy, and summarize the OIG's preliminary 
assessment of the reasons for the delays in its implementation. In the 
next section, I will discuss the results of other, recent OIG reviews 
of the FBI's IT management process. I will conclude the statement by 
providing a brief overview of recently completed and ongoing OIG 
reviews that examine other important FBI issues that may be useful to 
this Committee.

                          THE TRILOGY PROJECT

Overview
    Trilogy is the largest of the FBI's IT projects and has been 
recognized by the FBI and Congress as essential to modernizing the 
FBI's archaic and inadequate computer systems. One component of 
Trilogy, the Virtual Case File, will replace one of the FBI's 
inadequate database systems, the Automated Case Support (ACS) system, 
which is used as a case tracking system. Among its many shortcomings, 
ACS does not permit FBI agents, analysts, and managers to readily 
access and share case-related information throughout the FBI. Without 
this capability, the FBI cannot efficiently investigate criminal cases, 
analyze intelligence information, and bring together all of the 
investigative information in the FBI's possession to help prevent 
future terrorist attacks.
    The Trilogy project has three main components:
  --Information Presentation Component (IPC)--intended to upgrade the 
        FBI's hardware and software;
  --Transportation Network Component (TNC)--intended to upgrade the 
        FBI's communication networks; and
  --User Applications Component (UAC)--intended to upgrade and 
        consolidate the FBI's five most important investigative 
        applications.
    The first two components of Trilogy provide the infrastructure 
needed to run the FBI's various user applications. The User Application 
component of Trilogy will upgrade and consolidate the FBI's 
investigative applications, beginning with the five most critical. 
However, it is important to note that Trilogy will not replace the 37 
other less-critical investigative applications or the FBI's 
approximately 160 other non-investigative applications. Rather, Trilogy 
is intended to lay the foundation so that future enhancements will 
allow the FBI to achieve a state-of-the-art IT system that integrates 
all of the agency's investigative and non-investigative applications.

Project Schedule and Costs
    In the last several years, the FBI's Trilogy project has suffered a 
continuing series of missed completion estimates and associated cost 
growth. In November 2000, Congress appropriated $100.7 million for the 
initial year of what was estimated to be a 3-year, $379.8 million 
project. The FBI hired DynCorp in May 2001 (in March 2003, DynCorp was 
merged into Computer Sciences Corporation (CSC)) as the contractor for 
the IPC/TNC infrastructure components of Trilogy. At that time, the 
scheduled completion date for the Trilogy infrastructure was May 2004. 
In June 2001, the FBI hired Science Applications International 
Corporation (SAIC) to complete the user applications component of 
Trilogy--including the Virtual Case File--with a scheduled completion 
date of June 2004.

            Infrastructure Components
    A stable schedule for Trilogy was never firmly established for much 
of the project's history. Beginning in 2002, the FBI's estimated dates 
for completing the Trilogy project components began to swing back and 
forth and were revised repeatedly. The FBI moved up the completion date 
for deploying the Trilogy infrastructure to June 2003 from the original 
date of May 2004 because the September 11, 2001, terrorist attacks had 
increased the urgency of completing Trilogy. Later, the FBI said the 
infrastructure would be completed by December 31, 2002. In February 
2002, the FBI informed Congress that with an additional $70 million, 
the FBI could accelerate the deployment of Trilogy. According to the 
FBI, this acceleration would include completion of the two 
infrastructure components by July 2002 and rapid deployment of the most 
critical analytical tools in the user applications component. Congress 
therefore supplemented the FBI's fiscal year 2002 Trilogy budget by $78 
million, for a total of $458 million, to accelerate the completion of 
all three components.
    The promised milestone for completing the infrastructure components 
slipped from July 2002 to October 2002 and then to March 2003. On March 
28, 2003, CSC completed the Wide Area Network for Trilogy. In April 
2003, Director Mueller reported to Congress that more than 21,000 new 
desktop computers and nearly 5,000 printers and scanners had been 
deployed. He also reported that the Trilogy Wide Area Network--with 
increased bandwidth and three layers of security--had been deployed to 
622 sites. While this deployment improved the hardware available to FBI 
staff, it provided no new software capability.
    In April 2003, the FBI and CSC agreed to a statement of work for 
the remaining infrastructure components of Trilogy, including servers, 
upgraded software, e-mail capability, and other computer hardware, with 
final engineering change proposals and a completion date of October 31, 
2003. In August 2003, CSC informed the FBI that the October 2003 
completion date would slip another two months to December 2003. In 
October 2003, CSC and the FBI agreed that the December 2003 date again 
would slip.
    The General Services Administration's Federal Systems Integration 
and Management Center, known as FEDSIM, competes, awards, and manages 
contracts for its federal agency clients. FEDSIM had used its Millennia 
contracting vehicle to award contracts for Trilogy on behalf of the 
FBI. In November 2003, the General Services Administration formally 
announced that CSC failed to meet the deadline for completing work on 
the infrastructure portions of Trilogy that are required to support the 
user applications, including the Virtual Case File.
    On December 4, 2003, CSC signed a commitment letter agreeing to 
complete its infrastructure portions of the Trilogy project by April 
30, 2004, for an additional $22.9 million, including an award fee of 
over $4 million. An award fee is used when the government wants to 
motivate a contractor with financial incentives. The FBI covered these 
additional costs by reprogramming funds from other FBI appropriations. 
In January 2004, the FBI converted the agreement with CSC to a revised 
statement of work providing for loss of the award fee if the April 30, 
2004, deadline is not met. In addition, the revised statement of work 
provides for cost sharing at a rate of 50 percent for any work 
remaining after the April 30 deadline.
    As of early March 2004, CSC was in the process of installing in the 
FBI's field offices the remaining computer hardware infrastructure 
needed to use the previously deployed Wide Area Network. If completed 
by April 30, 2004, the original target set in 2001 for the 
infrastructure components of Trilogy will be met, but the accelerated 
schedule funded by Congress will be missed by some 22 months.
    Senior FBI IT managers recently told OIG auditors that the 
infrastructure components appear to be on target for meeting the latest 
milestone of April 30, 2004, although they cautioned that there is a 
risk of missing this latest deadline because the schedule is ambitious 
and there is no slack time. However, other FBI officials involved in 
the project believed that CSC's ability to complete the remaining 
engineering work by April 30, 2004, is an open question. A contractor 
recently hired by the FBI's Chief Information Officer to facilitate 
solutions with the two Trilogy contractors described the April 30 
deadline as ``a real management challenge.''

            User Applications
    With respect to development of the Virtual Case File, the first of 
three system deliveries for the Virtual Case File occurred in December 
2003. However, it was not functional and therefore was not accepted by 
the FBI. FBI officials told our auditors that, as of January 2004, 17 
issues of concern pertaining to the functionality and basic design 
requirements of the Virtual Case File needed to be resolved before the 
Virtual Case File could be deployed. According to FBI personnel working 
on the resolution of these problems, the 17 issues were corrected as of 
March 7, 2004. However, significant work still remains on addressing 
security aspects and records management issues in the Virtual Case 
File.
    The FBI is now requiring the contractor, SAIC, to provide a new, 
realistic completion date and cost estimate for delivery of a usable 
Virtual Case File. Based on this information, expected within the next 
week or two, the FBI intends to renegotiate the contract for the user 
applications component to include firm, verifiable milestones and 
penalties for missing the milestones.
    The remaining work required to actually deploy a usable and 
functional initial version of the Virtual Case File appears 
significant. The Virtual Case File will be installed in stages, with 
the first stage including the migration of the ACS database. However, 
our conversations with FBI IT managers suggest uncertainty about the 
completion dates for each stage. As noted above, the timetable is 
currently being negotiated with SAIC.
    No one interviewed by our auditors in the FBI, the Department, or 
the General Services Administration thought the Virtual Case File would 
be ready when the supporting infrastructure for the system is scheduled 
to be in place as of April 30, 2004. They said that to speed the 
delivery of at least a basic functional Virtual Case File system, it is 
possible that some features initially intended as part of the first 
delivery of the system will have to be deferred until later. Many FBI 
managers told us that they are uncertain whether a functional, complete 
version of the VCF will be deployed before the end of calendar year 
2004.

Trilogy Cost
    In addition to frequent schedule slippages, Trilogy costs have 
grown considerably. To accelerate the project, the original estimated 
project cost of $380 million increased by $78 million to $458 million. 
Through reprogramming and other funding in fiscal year 2003, the 
currently authorized total funding level is $581 million. According to 
an FBI report, as of January 2004 the remaining available funds were 
about $12 million. As of March 19, 2004, the FBI's Chief Information 
Officer believed that current funding appears to be adequate to 
complete Trilogy. However, in our view, until the user applications 
contractor provides an updated cost estimate, it will be difficult to 
gauge the approximate total cost of the Trilogy project, particularly 
since enhanced versions are planned sometime after the initial 
deployment.
    Further, the FBI's ability to track Trilogy costs adequately was 
questioned by a March 3, 2004, FBI inspection report. The report 
recognized internal control weaknesses and said that Trilogy-related 
financial records are fragmented and decentralized with no single point 
of accountability. Because the FBI's Financial Management System does 
not capture detailed Trilogy-related expenditures, FBI auditors could 
not ascertain a ``global financial profile'' of Trilogy.

Problems in Trilogy's Development
    Based on the OIG's previous audit work that examined the FBI's IT 
management process, together with the preliminary results of our 
ongoing audit of Trilogy, we believe the reasons for the delays and 
associated increased costs in the Trilogy project include: lack of firm 
milestones and penalties for missing milestones; lack of a qualified 
project integrator who would manage the interfaces between the two 
contractors and would have responsibility for the overall integrity of 
the final product; weak IT investment management structure and 
processes; until recently, lack of management continuity and oversight 
due, in part, to the frequent turnover of FBI IT managers and the FBI's 
focus on its other important law enforcement challenges; poorly-defined 
requirements that evolved as the project developed; and unrealistic 
scheduling of tasks by the contractors.

            Contract Weaknesses
    The FBI's current and former Acting Chief Information Officers told 
us that the primary reason for the schedule and cost problems 
associated with the infrastructure components of Trilogy is a weak 
statement of work in the contract with CSC. In addition, despite the 
use of two contractors to provide three major project components, until 
recently the FBI did not hire a project integrator to manage contractor 
interfaces and take responsibility for the overall integrity of the 
final product. According to FBI IT managers, FBI officials acted as the 
project integrator even though they had no experience to perform such a 
role.
    According to FBI IT and contract managers, the ``cost plus'' award 
fee type of contracts used for Trilogy did not require specific 
completion milestones, did not include critical decision review points, 
and did not provide for penalties if the milestones were not met. Under 
cost plus award fee contracts, the contractors are only required to 
make their best effort to complete the project. Furthermore, if the FBI 
does not provide reimbursement for the contractors' costs, under these 
agreements the contractors can cease work. Consequently, in the view of 
the FBI managers with whom we spoke, the FBI was largely at the mercy 
of the contractors.
    FEDSIM representatives explained that a cost-plus contract is used 
for large projects where the requirements and the costs are not defined 
sufficiently to allow for a firm fixed-price contract. The FEDSIM's 
Millennia contracting vehicle currently has nine ``industry partners'' 
who are eligible to bid on federal projects. Under Millennia, contracts 
can be awarded relatively quickly because of the limited number of 
potential bidders. Because the FBI wanted a quick contract and did not 
have highly defined requirements, it used the cost plus award fee 
contract vehicle.
    In our ongoing audit of Trilogy, we plan to evaluate the effect of 
the contractual terms on the schedule, cost, and performance of the 
project.

            IT Investment Management Weaknesses
    In addition to the lack of controls built into the statements of 
work for Trilogy, the FBI's investment management process was not well 
developed. Had the FBI developed a mature IT investment management 
process, the Trilogy project likely could have been completed more 
efficiently and timely. The investment management process at the FBI is 
still in the early stages of development. Absent a mature IT investment 
process, FBI IT investment efforts are at risk for significant 
developmental problems.

            Management Continuity and Oversight
    Part of the problem acknowledged by the FBI for not acting timely 
on IT recommendations from the OIG over the years has been the turnover 
of key FBI managers. Similarly, we believe that turnover in key 
positions affected the FBI's ability to manage and oversee the Trilogy 
project.
    Since November 2001, 14 different key IT managers have been 
involved with the Trilogy project, including 5 Chief Information 
Officers or Acting Chief Information Officers and 9 individuals serving 
as project managers for various aspects of Trilogy. This lack of 
continuity among IT managers contributed to the problems of ensuring 
the effective and timely implementation of the Trilogy project. 
According to contractor personnel who are advising the FBI on Trilogy, 
the FBI also suffered from a lack of engineering expertise, process 
weaknesses, and decision-making by committees instead of knowledgeable 
individuals. In the contractors' opinion, weak government contract 
management has created more of the problem with Trilogy than the terms 
of the contracts.
    We have spoken to many officials in the FBI, the Department of 
Justice, and FEDSIM who believe that the FBI has recently improved its 
management and oversight of Trilogy and of information technology in 
general. The FBI appears to have hired from other federal agencies and 
from private industry capable individuals, including the current Acting 
Chief Information Officer and several key project management personnel. 
Officials within both the Department of Justice and the FBI now are 
optimistic that the FBI's current information technology management 
team has the talent to solve the FBI's problems in this area. We also 
have been impressed with the quality of the FBI's current managers of 
Trilogy, including the Acting Chief Information Officer. However, we 
believe it essential for the FBI to maintain continuity in the 
management of Trilogy.

            Lack of Defined Design Requirements
    One of the most significant problems with managing the schedule and 
costs of the Trilogy project was the lack of a firm understanding of 
the design requirements by both the FBI and the contractor. Not only 
were Trilogy's requirements ill defined and evolving as the project 
progressed, but certain events triggered the need to change initial 
design concepts. For example, after September 11, 2001, Director 
Mueller recognized that the initial concept of simply modifying the old 
Automated Case Support system would not serve the FBI well over the 
long run, and the FBI created the plans for the Virtual Case File. 
Other changes to the design occurred because of the experiences and 
lessons learned from the response to the September 11 terrorist 
attacks, the Hanssen espionage case, and the belated production of 
documents to defense attorneys in the Oklahoma City bombing case.
    However, during the initial years of the project, the FBI had no 
firm design baseline or roadmap for Trilogy. The FBI also may have 
overly relied on contractor expertise to help define the requirements, 
while the contractor may have overly relied on the FBI to provide 
direction for the Trilogy design.

            Unrealistic Scheduling of Tasks
    According to an FBI official monitoring development of the Trilogy 
infrastructure, CSC has had problems producing an appropriate resource-
driven work schedule. Furthermore, SAIC is using a scheduling tool for 
development of the user applications component with which the FBI is 
unfamiliar. In our view, unrealistic scheduling of project tasks has 
led to a series of raised expectations, followed by frustration when 
the completion estimates were missed. We intend to examine the 
schedules more closely in our ongoing audit of the Trilogy project.

Prior OIG Audits on FBI IT Investment Management Practices and FBI's 
        Implementation of IT Recommendations
    The problems demonstrated by the Trilogy project were consistent 
with our concerns about the FBI's IT systems and management process in 
general. Since 1990, various OIG reports have identified significant 
deficiencies with the FBI's IT program, including outdated 
infrastructures, fragmented management, ineffective systems, and 
inadequate training. Within the past 18 months, the OIG completed two 
reviews that looked at these and other aspects of the FBI's efforts to 
modernize its IT systems, one issued in December 2002 and the other 
issued in September 2003.
    The first audit, issued in December 2002, examined the FBI's IT 
investment management practices. The OIG found that, in the past, the 
FBI had not effectively managed its IT investments because it failed 
to: (1) effectively track and oversee the costs and schedules of IT 
projects; (2) properly establish and effectively use IT investment 
boards to review projects; (3) inventory the existing IT systems and 
projects; (4) identify the business needs for each IT project; and (5) 
use defined processes to select new IT projects. We concluded that 
despite efforts to improve its IT management, the FBI had not fully 
implemented the above five critical processes associated with effective 
IT investment management. Consequently, the FBI continued to spend 
hundreds of millions of dollars on IT projects without adequate 
assurance that the projects would meet their intended goals.
    Our audit made eight recommendations with respect to Trilogy, 
including urging the FBI to establish cost, schedule, technical, and 
performance baselines and track significant deviations from these 
baselines, and taking corrective action as necessary. The FBI agreed 
with all eight of the Trilogy-related recommendations, with one minor 
exception, and to date has taken corrective action on three.
    In a September 2003 audit, the OIG comprehensively examined the 
FBI's implementation of the OIG's prior IT-related recommendations. 
While the FBI had made substantial progress on many of the 
recommendations, implementing 93 of 148 total recommendations, we 
concluded that full implementation of the remaining recommendations was 
needed to ensure that the FBI's IT program effectively supported the 
FBI's mission.

OIG Conclusions on Trilogy
    In sum, we found various reasons for Trilogy's delays and problems. 
Initially, the FBI did not have a clear vision of what the FBI's 
Trilogy modernization project should achieve, let alone specific design 
requirements, and the contractors were not held to a firm series of 
achievable milestones. The FBI's investment management process also 
left it ill equipped to ensure that all three components of Trilogy 
were developed in an integrated fashion. Moreover, at the outset, the 
FBI and others did not provide consistent or effective management of 
Trilogy, leading to technical and scheduling problems.
    The FBI recently appears to have focused attention on addressing 
much of these weaknesses. Our preliminary assessment is that both the 
FBI and the Department of Justice now have Chief Information Officers 
who are committed to a successful implementation of Trilogy, with a no-
nonsense approach to managing the Trilogy contracts and a commitment to 
closely monitor its progress. The FBI also appears to be attempting to 
ensure that Trilogy is completed as soon as possible, and the General 
Services Administration also is participating fully in this oversight 
role. In addition, the Department of Justice Chief Information Officer 
meets regularly with FBI and GSA staff to oversee progress on Trilogy. 
However, significant work remains, particularly on the Virtual Case 
File, which may not be fully implemented by the end of this year. 
Because of the importance of the Trilogy project, the OIG will continue 
to monitor the FBI's implementation of Trilogy.

                   ADDITIONAL OIG REVIEWS IN THE FBI

    In addition to these IT reviews, the OIG continues to conduct wide-
ranging reviews of other priority issues in the FBI. The following are 
a few examples of recently completed reviews in the FBI, as well as 
ongoing OIG reviews, that may be of interest to the Committee.

Recently Completed OIG Reviews
    IDENT/IAFIS: The Batres Case and the Status of the Integration 
Project.--In early March 2004, the OIG issued a special report that 
examined the status of efforts to integrate IDENT, the Department of 
Homeland (DHS) Security's automated fingerprint identification 
database, with IAFIS, the FBI's automated fingerprint identification 
database. The OIG review described the tragic consequences that can 
result because these immigration and criminal fingerprint 
identification systems are not integrated. Victor Manual Batres, an 
alien who had an extensive criminal history, was caught two times by 
the Border Patrol attempting to enter the United States illegally. Both 
times the Border Patrol voluntarily returned him to Mexico without 
checking his criminal record. He came back into the United States, 
where he raped and murdered a nun. During this period, the Border 
Patrol never learned of his extensive criminal history, which should 
have subjected him to detention and prosecution, partly because IDENT 
and IAFIS are not linked.
    The OIG has reported extensively on the slow pace of the 
integration of IDENT and IAFIS in several reports over the past few 
years. In the Batres report, we noted that according to the Department 
and DHS timetable provided to us by integration project managers, full 
integration of the two systems was not scheduled to be completed for 
many years. Since issuance of our Batres report several weeks ago, DHS 
leaders have publicly stated that the integration process will be 
expedited, and that hardware to allow Border Patrol agents to check 
detained aliens in both IDENT and IAFIS will be provided to Border 
Patrol stations on an expedited timetable. However, additional issues 
remain to be resolved, such as access to DHS's immigration databases by 
the FBI and state and local officials and questions about what 
fingerprint information will be made available to immigration 
inspectors at ports of entry.
    The FBI's Efforts to Improve the Sharing of Intelligence and Other 
Information.--A December 2003 OIG audit examined the FBI's efforts to 
enhance its sharing of intelligence and law enforcement information 
with federal, state, and local officials. The audit noted that 
fundamental reform with regard to sharing this information is under way 
at the FBI. The audit also found that the FBI has taken a series of 
actions to improve its ability to communicate information within the 
FBI, analyze intelligence, and disseminate information outside the FBI. 
However, the OIG audit described continued obstacles to the FBI's 
reform efforts and cited the need for: (1) improving information 
technology; (2) improving the FBI's ability to analyze intelligence; 
(3) overcoming security clearance and other security issues concerning 
the sharing of information with state and local law enforcement 
agencies; and (4) establishing policies and procedures for managing the 
flow of information.
    FBI Casework and Human Resource Allocation.--A September 2003 OIG 
audit examined the FBI's use of resources in its investigative programs 
over a 7-year period--6 years prior to September 11, 2001, and 9 months 
after that date. The audit provided detailed statistics on the FBI's 
allocation of resources to its ten program areas during this period. It 
also examined the FBI's planned allocation of resources during this 
same period compared to the actual allocation of resources. In 
addition, the OIG audit detailed the types and numbers of cases the FBI 
investigated in these program areas. Using data from the FBI's systems, 
the OIG found that although the FBI had identified combating terrorism 
as its top priority in 1998, until the September 11 attacks it devoted 
significantly more of its agent resources to traditional law 
enforcement activities, such as white-collar crime, organized crime, 
drug, and violent crime investigations, than to its counterterrorism 
programs.
    In a current follow-up review examining the FBI's use of resources, 
the OIG is examining in greater detail the operational changes in the 
FBI resulting from this ongoing reprioritization effort, including the 
types of offenses that the FBI is no longer investigating at pre-
September 11 levels and the changes in the types of cases worked at 
individual field offices. After completing this follow-up review, the 
OIG plans to open an additional audit to obtain feedback from federal, 
state, and local law enforcement agencies regarding the impact of the 
FBI's reprioritization on their operations.
    Review of the FBI's Performance in Deterring, Detecting, and 
Investigating the Espionage Activities of Robert Philip Hanssen.--In a 
comprehensive special report released in August 2003, the OIG examined 
the FBI's efforts to detect, deter, and investigate the espionage of 
Robert Hanssen, the most damaging spy in FBI history. The OIG review 
concluded that Hanssen escaped detection not because he was 
extraordinarily clever and crafty in his espionage, but because of 
long-standing systemic problems in the FBI's counterintelligence 
program and a deeply flawed FBI internal security program. The review 
also found that the FBI has taken important steps to improve its 
internal security program since Hanssen's arrest, including the 
implementation of a counterintelligence-focused polygraph examination 
program, development of a financial disclosure program, and creation of 
a Security Division. However, the OIG review concluded that some of the 
most serious weaknesses still had not been remedied fully. The OIG is 
continuing to monitor the FBI's response to the recommendations in this 
report.

Ongoing Reviews
    In addition to these recently issued reports, the OIG has 
additional reviews under way that are examining other critical issues 
in the FBI. Examples of these ongoing reviews include the following.
    Terrorist Screening Center.--On September 16, 2003, the President 
established the Terrorist Screening Center (TSC) to consolidate 
terrorist watch lists and provide 24/7 operational support for 
thousands of federal officers who need access to such watch lists. The 
FBI was assigned responsibility to administer the TSC and is working 
with the DHS, the Department of State, the Central Intelligence Agency, 
and other agencies to make the TSC operational. Last week, the OIG 
initiated an audit to examine whether the TSC: (1) has implemented a 
viable strategy for accomplishing its mission; (2) is effectively 
coordinating with participating agencies; and (3) is appropriately 
managing the terrorist-related information to ensure that a complete, 
accurate, and current watch list is developed and maintained.
    Attorney General Guidelines.--In May 2002, the Attorney General 
issued revised guidelines that govern general crimes and criminal 
intelligence investigations. The OIG review is examining the FBI's 
implementation of the four sets of guidelines: Attorney General's 
Guidelines Regarding the Use of Confidential Informants; Attorney 
General's Guidelines on FBI Undercover Operations; Attorney General's 
Guidelines on General Crimes, Racketeering Enterprise and Terrorism 
Enterprise Investigations; and Revised Department of Justice Procedures 
for Lawful, Warrantless Monitoring of Verbal Communications. The OIG 
review seeks to determine what steps the FBI has taken to implement the 
Guidelines, examine how effective those steps have been, and assess the 
FBI's compliance with key provisions of the Guidelines.
    Terrorism Task Forces.--The OIG is examining how the law 
enforcement and intelligence functions of the Department's Terrorism 
Task Forces support their efforts to detect, deter, and disrupt 
terrorism. The review is specifically evaluating the purpose, 
priorities, membership, functions, lines of authority, and 
accomplishments for the FBI's Joint Terrorism Task Forces, National 
Joint Terrorism Task Force, Foreign Terrorist Tracking Task Force, the 
United States Attorneys' Offices' Anti-Terrorism Advisory Councils, and 
the Deputy Attorney General's National Security Coordination Council.
    DNA Laboratory.--The OIG is completing a review that examines the 
failure of a former technician in the FBI Laboratory DNA Analysis Unit 
to complete steps designed to detect contamination in the analysis 
process. In addition, with the assistance of nationally known DNA 
scientists, the OIG is completing a broader assessment of the DNA 
Analysis Unit to determine if vulnerabilities exist in its DNA 
protocols and procedures.
    Language Translation Services.--The OIG is reviewing the FBI's 
language translation services program in light of the FBI's efforts 
after the September 11 terrorist attacks to hire linguists and to use 
technology to handle the increasing backlog of counterterrorism and 
foreign counterintelligence translation work. The OIG review will 
examine the extent and causes of any FBI translation backlog; assess 
the FBI's efforts to hire additional translators; and evaluate whether 
FBI procedures ensure appropriate prioritization of work, accurate and 
timely translations of pertinent information, and proper security of 
sensitive information.
    Intelligence Analysts.--One of the FBI's primary initiatives after 
the September 11 terrorist attacks was to enhance the FBI's analytical 
ability and intelligence capabilities. An OIG audit is examining how 
the FBI hires, trains, and staffs the various categories of FBI 
intelligence analysts. The OIG is reviewing the FBI's progress toward 
meeting hiring, retention, and training goals as well as how analysts 
are used to support the FBI's counterterrorism mission.
    Legal Attache Program.--The FBI's overseas operations have expanded 
significantly in the last decade. The FBI operates offices known as 
Legal Attache or Legats in 46 locations around the world. The primary 
mission of Legats is to support FBI investigative interests by 
establishing liaison with foreign law enforcement agencies. Through 
interviews and visits to several Legats, an OIG review is examining the 
type of activities performed by Legats, the effectiveness of Legats in 
establishing liaison with foreign law enforcement agencies and 
coordinating activities with other law enforcement and intelligence 
agencies overseas, the criteria used by the FBI to determine the 
placement of Legat offices, and the process used for selecting and 
training FBI personnel for Legat positions.
    Smith/Leung Case.--At the request of FBI Director Mueller, the OIG 
is conducting a review of the FBI's performance in connection with 
former FBI Supervisory Special Agent James J. Smith, who recently was 
charged with gross negligence in his handling of national defense 
information. The OIG's review will examine Smith's career at the FBI 
and his relationship with Katrina Leung, an asset in the FBI's Chinese 
counterintelligence program with whom Smith allegedly had a long-term 
intimate relationship. The OIG also will examine a variety of 
performance and management issues related to the Smith/Leung case.

                               CONCLUSION

    The FBI is making significant strides in reevaluating and 
reengineering many of its historic processes and procedures. Central to 
this transformation is the FBI's critical need to modernize its archaic 
IT systems. Development and deployment of the Trilogy system--the 
centerpiece of the agency's IT modernization project--has until 
recently been frustratingly delayed and costly. The delays have left 
FBI managers, agents, analysts, and other employees without the modern 
tools they need. Considering the antiquated information technology 
environment in which they have had to operate for many years, FBI 
employees deserve much credit for what they have been able to 
accomplish.
    Trilogy, when it is finally implemented, will greatly enhance the 
FBI's information technology capabilities. Much of the Trilogy upgrade 
is nearing completion, although the Virtual Case File still needs 
significant effort. However, implementation of Trilogy will not signal 
the end of the FBI's information technology modernization effort. The 
project will lay the foundation for future information technology 
advancements, but constant effort will be needed to ensure that the FBI 
implements and maintains cutting edge technology that permits its 
employees to effectively process and share information. This must 
remain a critical priority for the FBI. The FBI needs to provide 
sustained and careful management of the continuing upgrades to ensure 
that FBI employees have the tools they need to perform their mission. 
The FBI's ability to perform its functions effectively, including 
counterterrorism, counterintelligence, and criminal law enforcement, 
depends to a large degree on the success of the FBI's information 
technology projects. Given the importance of this issue, the OIG will 
continue to review and monitor the FBI's progress in these efforts.

STATEMENT OF LAURIE E. EKSTRAND, DIRECTOR, HOMELAND 
            SECURITY AND JUSTICE ISSUES, GOVERNMENT 
            ACCOUNTABILITY OFFICE
ACCOMPANIED BY RANDOLPH HITE, DIRECTOR, INFORMATION TECHNOLOGY 
            ARCHITECTURE AND SYSTEMS ISSUES, GOVERNMENT ACCOUNTABILITY 
            OFFICE

    Senator Gregg. Dr. Ekstrand?
    Ms. Ekstrand. Thank you, Mr. Chairman. I have a statement, 
a brief oral statement for both Mr. Hite and myself, and this 
statement covers overall progress in transformation, 
specifically in the areas of strategic planning and human 
capital planning, information technology management, and the 
realignment of staff resources to priority areas.
    Let me start with transformation. Overall, we are 
encouraged by the progress that the FBI has made in several 
areas, and of particular note, we want to focus on the 
completion of a new strategic plan and of a human capital plan. 
While for both of these plans we can cite areas where they 
could be improved, on the whole, we believe they contain a 
number of elements of best practice.
    Among the positive elements of the strategic plan include a 
comprehensive mission statement, results-oriented long-term 
goals and objectives, and it delineates priorities. But it 
could be improved by discussions of several additional topics, 
including how success in achieving goals is going to be 
measured. We understand that the FBI is going to augment their 
plan and include some of the information that we are 
recommending and we certainly commend that effort.
    In terms of strategic human capital planning, this also 
includes a number of the principles of sound human capital 
planning. Our main concerns in this area are that, first, the 
FBI has not hired a human capital officer as yet, and second, 
the performance management system for non-SES staff is not 
adequately linked to performance.
    Now let me turn your attention to the FBI's effort to 
leverage the vast potential of information technology, IT, to 
assist the Bureau in transforming how it operates. While the 
FBI has long recognized the potential, as evidenced by sizeable 
sums of money that it has invested in IT projects, not the 
least of which is Trilogy, what it has not recognized, as well, 
as is this: How well the Bureau manages IT will ultimately 
determine how well the Bureau leverages IT as a transformation 
tool.
    Our research has shown that organizations that successfully 
exploit IT as a change agent employ similar approaches in 
managing, including adopting a corporate or agency-wide 
approach to managing IT, having an enterprise architecture, and 
having portfolio-based investment management processes.
    Unfortunately, the FBI has yet to manage its IT efforts in 
this way. As we have previously reported, the absence of such 
an approach to IT management results in IT investments that are 
duplicative, not interoperable, do not support mission goals 
and objectives, and cost more and take longer to implement than 
they should. In the case of the FBI, such cost, schedule, and 
performance problems can be seen in Trilogy.
    Now, to the FBI's credit, its strategic plan and its recent 
proposals and actions recognize longstanding IT management 
shortcomings. That is the good news. The bad news is that until 
these recent steps become institutionalized, the prognosis for 
the FBI's ability to effectively use IT to transform itself is 
uncertain, at best.
    Now, just briefly, let me turn to the staffing of priority 
areas, that is, counterterrorism, counterintelligence, and 
cyber, and the effects on more traditional crime areas, 
specifically drugs, white collar crime, and violent crime.
    The FBI's three top priority areas now deploy about 36 
percent of field agent positions, and this is the largest 
single category of agents. But despite the growth in agents in 
the area, agents from traditional crimes are still needed to 
work all leads, and this is fairly substantial, as Director 
Mueller indicated.
    Now, as would be suspected, the number of counterterrorism 
matters have increased substantially since 9/11. Conversely, 
the number of open matters in drugs, violent crime, and white 
collar crime has diminished. We have ongoing work to develop 
further information concerning potential effects of these 
shifts, particularly in the drug area, and we expect to report 
our findings later this year.
    This concludes our oral statement. Mr. Hite and I would be 
happy to answer any questions.
    Senator Gregg. Did you want to add anything, Mr. Hite?
    Mr. Hite. No, sir. We are fully integrated and 
interoperable up here.

                           PREPARED STATEMENT

    Senator Gregg. That is a first. We appreciate that.
    [The statement follows:]

                Prepared Statement of Laurie E. Ekstrand

                           FBI TRANSFORMATION

FBI CONTINUES TO MAKE PROGRESS IN ITS EFFORTS TO TRANSFORM AND ADDRESS 
                               PRIORITIES

What GAO Found
    We commend the FBI for its progress in some areas of its 
transformation efforts since we last testified on this subject in June 
2003. We believe that commitment from the top, a dedicated 
implementation team, involvement of employees in the process, and the 
achievement of key milestones are encouraging signs of progress. 
However, we continue to encourage the development of a comprehensive 
transformation plan that would consolidate the crosswalks between the 
various aspects of transformation. This could help management oversee 
all aspects of the transformation.
    The FBI's strategic plan has been completed. Overall we found the 
plan has important strengths as well as some areas in which 
improvements could be made. For example, the plan includes key elements 
of successful strategic plans (i.e. a comprehensive mission statement 
and results-oriented, long-term goals and objectives). However, the 
plan is missing some elements that could have made it more informative. 
Officials advised us that some of these elements are available 
elsewhere (i.e. lists of stakeholders and performance measures). The 
absence of these elements makes the plan less comprehensive and useful.
    The FBI has also developed a strategic human capital plan that 
contains many of the principles that we have laid out for an effective 
human capital system (i.e. the need to fill identified skill gaps by 
using personnel flexibilities). However, the FBI has yet to hire a 
human capital officer to manage the implementation of this process and 
the performance management system for the bulk of FBI personnel remains 
inadequate to discern meaningful distinctions in performance.
    The FBI recognizes the importance of information technology (IT) as 
a transformation enabler, making it an explicit priority in its 
strategic plan and investing hundreds of millions of dollars in 
initiatives to expand its systems environment and thereby improve its 
information analysis and sharing. However, FBI's longstanding approach 
to managing IT is not fully consistent with the structures and 
practices of leading organizations. A prime example of the consequences 
of not employing these structures and practices is the cost and 
schedule shortfalls being experienced on Trilogy, the centerpiece 
project to modernize infrastructure and case management applications. 
Recent FBI proposals, plans, and initiatives indicate that it 
understands its management challenges and is focused on addressing 
them.
    Another key element of the FBI's transformation is the realignment 
of resources to better focus on the highest priorities--
counterterrorism, counterintelligence and cyber investigations. The FBI 
resources allocated to priority areas continue to increase and now 
represent its single largest concentration of field agent resources--36 
percent of its fiscal year 2004 field agent positions.
    Mr. Chairman and Members of the Subcommittee: We are pleased to be 
here today to address this committee regarding GAO's work assessing the 
Federal Bureau of Investigation's (FBI) transformation efforts. As you 
are well aware, the September 11, 2001, terrorist attacks were the most 
destructive and costly terrorist events that this country has ever 
experienced. The event precipitated a shift in how the FBI uses its 
investigative resources to prevent future terrorist incidents and 
ultimately led to FBI's commitment to reorganize and transform itself. 
Today's testimony follows up on our June 2003 testimony before the 
House Appropriations Subcommittee on Commerce, Justice, State and the 
Judiciary and Related Agencies on the FBI's transformation efforts.\1\
---------------------------------------------------------------------------
    \1\ See U.S. General Accounting Office, FBI Reorganization: 
Progress Made in Efforts, but Major Challenges Continue, GAO-03-759T 
(Washington, D.C.: June 18, 2003).
---------------------------------------------------------------------------
    It also draws on continuing work for the same subcommittee, the 
House Select Committee on Intelligence and several individual 
requestors.
    We will discuss the FBI's: overall progress in transformation, 
efforts to update its strategic plan, development of a strategic human 
capital plan, information technology management capabilities, and 
realignment of staff resources to priority areas and the impact of the 
realignments on the FBI's drug and other criminal investigation 
programs.
    In brief, we commend the FBI for its progress in its transformation 
efforts. We believe that commitment from the top, a dedicated 
implementation team, involvement of employees, and the development of 
strategic and human capital plans are encouraging signs of FBI's 
reorganization progress. However, we want to note some activities that 
may enhance the value of future planning efforts, reiterate the 
importance of developing and tracking measures of progress toward 
achieving goals, discuss the history and future of IT efforts, and the 
shift in resources from the traditional crime areas to the new priority 
areas.
    Our testimony today is based on interviews with management and 
program officials at FBI headquarters during the last 2 years. We also 
interviewed management personnel in FBI field offices; \2\ and obtained 
input from special agents and analysts in FBI field offices last 
spring.\3\ Additionally, to assess the progress that the FBI has made 
in its transformation efforts, we reviewed information from an October 
2003 and March 2004 briefing that the FBI provided to GAO on its 
transformation efforts and FBI's recent strategic plan and strategic 
human capital plan. We compared these documents against GAO's leading 
practices in the areas of organizational mergers and transformations, 
strategic planning, and strategic human capital management.
---------------------------------------------------------------------------
    \2\ We judgmentally selected field offices with the largest number 
of special agent positions to be reallocated either away from drug 
enforcement or to the counterterrorism program areas based on the FBI's 
May 2002 reallocation plans. As a result, we visited the FBI's Atlanta, 
Chicago, Dallas, Denver, Detroit, Los Angeles, Miami, Newark, New York 
City, Phoenix, Sacramento, San Antonio, San Francisco, and Washington 
field offices in 2003 and the Dallas, Miami, and Washington field 
offices in 2004.
    \3\ We obtained input from 176 special agents and 34 analysts. 
These FBI investigative resources were not randomly selected from all 
agents and analysts in the 14 offices we visited. In addition, we did 
not specifically choose the agents who completed our questionnaire. FBI 
field office managers selected agents and analysts to participate in 
our inquiry. Consequently, we consider the questionnaire and interview 
results to be indicators of the FBI's transformation efforts but they 
cannot be generalized to all agents and analysts in these offices or to 
the FBI nationwide.
---------------------------------------------------------------------------
    We focused on assessing the FBI's strategic plan for key elements 
required by the Government Performance and Results Act of 1993 
(GPRA).\4\ GPRA provides a set of practices for developing a useful and 
informative strategic plan that can be applied to any level of the 
federal government to improve the quality and informative value of 
strategic plans to Congress, other key stakeholders, and the staff 
charged with achieving the agency's strategic goals. To make this 
assessment we used criteria we developed for assessing agency strategic 
plans under GPRA.\5\ Our assessment is based on a review of the FBI's 
strategic plan with limited information about the process the FBI 
undertook to develop the plan. We acknowledge that the FBI may be 
addressing these elements in other ways.
---------------------------------------------------------------------------
    \4\ Pub. L. No. 103-62, 107 Stat. 285 (1993).
    \5\ U.S. General Accounting Office, Agencies' Strategic Plans Under 
GPRA: Key Questions to Facilitate Congressional Review, GAO/GGD-10.1.16 
(Washington, D.C.: May 1, 1997). U.S. General Accounting Office, 
Executive Guide: Effectively Implementing the Government Performance 
and Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1996).
---------------------------------------------------------------------------
    We reviewed FBI's strategic plan to see how it addressed six key 
elements: mission statement, long-term goals and objectives, 
relationship between the long-term goals and annual performance goals, 
approaches or strategies to achieve the goals and objectives, key 
external factors that could affect achievement of goals, and use of 
program evaluation to establish or revise strategic goals.
    Our analysis of the FBI's information technology (IT) management 
capabilities is based on our prior work on the FBI's enterprise 
architecture efforts and follow-up work to determine recent progress, 
information from the Justice Inspector General's work on evaluating the 
FBI's IT investment management process, and recent work on the 
organizational placement and authority of the FBI's Chief Information 
Officer (CIO). We also used our prior research of CIO management 
practices of successful organizations and our evaluations of large IT 
modernization efforts similar to the Trilogy program. Further, we 
conducted follow up work with the FBI's program management office to 
determine the cost and schedule overruns for Trilogy.
    To address the effect of the FBI's resource realignments on drug 
and other traditional law enforcement efforts, we analyzed FBI 
budgetary, staffing, and caseload data and interviewed selected FBI, 
Drug Enforcement Administration (DEA), and local law enforcement 
officials.\6\
---------------------------------------------------------------------------
    \6\ We interviewed officials from the National Sheriffs' 
Association, National Association of Chiefs of Police, International 
Association of Chiefs of Police, and local police agencies located in 
most of the cities in which we made FBI field office visits in 2003.
---------------------------------------------------------------------------
    We performed our audit work in accordance with generally accepted 
government auditing standards.
FBI Continues to Make Progress in its Transformation Efforts but Needs 
        a Comprehensive Transformation Plan to Guide Its Efforts
    In our June 2003 testimony on the FBI's reorganization before the 
House Appropriations Subcommittee on Commerce, Justice, State, the 
Judiciary and Related Agencies, we reported that the FBI had made 
progress in its efforts to transform the agency, but that some major 
challenges continued \7\. We also noted that any changes in the FBI 
must be part of, and consistent with, broader, government-wide 
transformation efforts that are taking place, especially those 
resulting from the establishment of the Department of Homeland Security 
and in connection with the intelligence community. We also noted that 
to effectively meet the challenges of the post-September 11, 
environment, the FBI needed to consider employing key practices that 
have consistently been found at the center of successful transformation 
efforts.\8\ These key practices are to ensure that top leadership 
drives the transformation; establish a coherent mission and integrated 
strategic goals to guide the transformation; focus on a key set of 
principles and priorities at the outset of the transformation, set 
implementation goals and a time line to build momentum and show 
progress from day one; dedicate an implementation team to manage the 
transformation process; use the performance management system to define 
responsibility and ensure accountability for change; establish a 
communication strategy to create shared expectations and report related 
progress; involve employees to obtain their ideas and gain their 
ownership for the transformation; and build a world-class organization 
that continuously seeks to implement best practices in processes and 
systems in areas such as information technology, financial management, 
acquisition management, and human capital.
---------------------------------------------------------------------------
    \7\ U.S. General Accounting Office, FBI Reorganization: Progress 
Made in Efforts to Transform, but Major Challenges Continue GAO-03-759T 
(Washington, D.C.: June 18, 2003).
    \8\ For more information, see U.S. General Accounting Office, 
Results-Oriented Cultures: Implementation Steps to Assist Mergers and 
Organizational Transformation GAO-03-669 (Washington, D.C.: July 2, 
2003).
---------------------------------------------------------------------------
    Today, we continue to be encouraged by the progress that the FBI 
has made in some areas as it continues its transformation efforts. 
Specifically worthy of recognition are the commitment of Director 
Mueller and senior-level leadership to the FBI's reorganization; the 
FBI's communication of priorities; the implementation of core 
reengineering processes to improve business practices and assist in the 
bureau's transformation efforts \9\; the dedication of an 
implementation team to manage the reengineering efforts; the 
development of a strategic plan and a human capital plan; the efforts 
to involve employees in the strategic planning and reengineering 
processes; and the FBI's efforts to realign its activities, processes, 
and resources to focus on a key set of principles and priorities.
---------------------------------------------------------------------------
    \9\ The FBI has core-reengineering processes under way in the 
following areas: (1) strategic planning and execution, (2) capital 
(human and equipment), (3) information management, (4) investigative 
programs, (5) intelligence, and (6) security management. There are 
about 40 business process-reengineering initiatives under these six 
core areas. Appendix I outlines the various initiatives under each core 
area.
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    While the FBI has embedded crosswalks and timelines in their 
various transformation plans that relate one plan to another, we still 
encourage the development of an overall transformation plan that will 
pull all of the pieces together in one document. This document can be 
both a management tool to guide all of the efforts, as well as a 
communication vehicle for staff to see and understand the goals of the 
FBI. It is important to establish and track intermediate and long-term 
transformation goals and establish a timeline to pinpoint performance 
shortfalls and gaps and suggest midcourse corrections. By demonstrating 
progress towards these goals, the organization builds momentum and 
demonstrates that real progress is being made. We will continue to 
review this issue.

FBI Has Developed a Strategic Plan with a Mission, Strategic Goals, and 
        Approaches That Reflect Its New Priorities
    When we last testified in June 2003, the FBI was in the process of 
compiling the building blocks of a strategic plan. At that time it was 
anticipated that the plan would be completed by the start of fiscal 
year 2004. Although delayed by about 5 months, the FBI has since 
completed its strategic plan.\10\ FBI officials indicated that the 
implementation of two staff reprogrammings and delays in the 
appropriation of its fiscal year 2003 and fiscal year 2004 budget, as 
well as initiatives undertaken to protect the homeland during the war 
in Iraq, delayed the completion of the strategic plan.
---------------------------------------------------------------------------
    \10\ Strategic planning is one of about 40 ongoing reengineering 
projects the FBI has undertaken to address issues related to its 
transformation efforts.
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    Overall we found the plan has some important strengths as well as 
some areas in which improvements could be made. The strategic plan 
includes key elements of successful strategic plans, including a 
comprehensive mission statement; results-oriented, long-term goals and 
objectives; and approaches to achieve the goals and objectives. The FBI 
plan presents 10 strategic goals that appear to cover the FBI's major 
functions and operations, are related to the mission, and generally 
articulate the results in terms of outcomes the FBI seeks to achieve. 
For example, one of the plan's strategic goals is ``protect the United 
States from terrorist attack;'' another goal is ``reduce the level of 
significant violent crime.'' The plan also lists strategic objectives 
and performance goals for each long-term strategic goal. However, the 
performance goals do not appear to be outcomes against which the FBI 
will measure progress; rather they appear to describe approaches or be 
key efforts that FBI will undertake to achieve its long-term strategic 
goals and objectives.
    Importantly, the plan acknowledges that the FBI faces competing 
priorities and clearly articulates its top 10 priorities, in order of 
priority. The strategic plan also frequently discusses the role 
partnerships with other law enforcement, intelligence, and homeland 
security agencies will play in achieving the plan's goals. The plan 
discusses the FBI's approach to building on its internal capacity to 
accomplish its mission-critical goals by improving management of human 
capital, information technology, and other investigative tools. The 
plan also discusses the external factors, such as global and domestic 
demographic changes and the communications revolution, which have 
driven the development of its strategic goals.

            Strategic Plan Could Be Improved by Discussing Other Key 
                    Elements
    Although the FBI has addressed several key elements in its 
strategic plan, the plan needs more information on other elements of 
strategic planning that we have identified as significant to successful 
achievement of an organization's mission and goals. FBI officials 
indicated that some of these elements are available in other documents 
and were not included in the plan for specific reasons. As the FBI 
moves forward with its new strategic planning and execution process, it 
should consider addressing in its strategic plan the following key 
elements:
    Involving Key Stakeholders.--As we have previously testified, any 
changes at the FBI must be part of, and consistent with, broader 
governmentwide transformation efforts that are taking place, especially 
those resulting from the establishment of the Department of Homeland 
Security and in connection with changes in the intelligence community. 
Successful organizations we studied based their strategic planning, to 
a large extent, on the interests and expectations of their 
stakeholders. Federal agency stakeholders include Congress and the 
administration, other federal agencies, state and local governments, 
third-party service providers, interest groups, agency employees, and, 
of course, the American public. Involving customers served by the 
organization--such as the users of the FBI's intelligence--is important 
as well. The FBI strategic plan does not describe which stakeholders or 
customers, were involved or consulted during the plan's development or 
the nature of their involvement. Such information would be useful to 
understanding the quality of the planning process FBI has undertaken 
and the extent to which it reflect the views of key stakeholders and 
customers. Consultation provides an important check for an organization 
that they are working toward the right goals and using reasonable 
approaches to achieve them.
    Relationship between Strategic and Annual Goals.--Under GPRA, 
agencies' long-term strategic goals are to be linked to their annual 
performance plans and the day-to-day activities of their managers and 
staff. OMB guidance states that a strategic plan should briefly outline 
(1) the type, nature, and scope of the performance goals being included 
in annual performance plans and (2) how these annual performance goals 
relate to the long-term, general goals and their use in helping 
determine the achievement of the general goals. Without this linkage, 
it may not be possible to determine whether an agency has a clear sense 
of how it will assess the progress made toward achieving its intended 
results.
    It is not clear from the plan how the FBI intends to measure its 
progress in achieving the long-term strategic goals and objectives 
because the plan's strategic objectives and performance goals are not 
phrased as performance measures and the plan does not describe or make 
reference to another document that contains annual performance 
measures. The plan also lacks a discussion of the systems FBI will have 
in place to produce reliable performance and cost data needed to set 
goals, evaluate results, and improve performance. According to an FBI 
official and documents the FBI provided, the FBI has developed 
``performance metrics'' for each of its strategic goals.
    External and Internal Factors that Could Affect Goal Achievement.--
While the plan clearly communicates how its forecast of external 
drivers helped to shape the FBI's strategy, the plan does not discuss 
the external and internal factors that might interfere with its ability 
to accomplish its goals. External factors could include economic, 
demographic, social, technological, or environmental factors. Internal 
factors could include the culture of the agency, its management 
practices, and its business processes. The identification of such 
factors would allow FBI to communicate actions it has planned that 
could reduce or ameliorate the potential impact of the external 
factors. Furthermore, the plan could also include a discussion of the 
FBI's plans to address internal factors within its control that could 
affect achievement of strategic goals. The approach the FBI plans to 
take to track its success in achieving change within the agency should 
be an integral part of FBI's strategy. A clear and well-supported 
discussion of the external and internal factors that could affect 
performance could provide a basis for proposing legislative or 
budgetary changes that the FBI may need to accomplish the FBI's goals.
    Role of Program Evaluation in Assessing Achievement of Goals and 
Effectiveness of Strategies.--Program evaluations can be a potentially 
critical source of information for Congress and others in ensuring the 
validity and reasonableness of goals and strategies, as well as for 
identifying factors likely to affect performance. Program evaluations 
typically assess the results, impact, or effects of a program or 
policy, but can also assess the implementation and results of programs, 
operating policies, and practices. The FBI's strategic plan does not 
explicitly discuss the role evaluation played in the development of its 
strategic plan or its plans for future evaluations (including scope, 
key issues, and time frame), as intended by GPRA. The FBI has 
redesigned its program evaluation process and updated the performance 
metric for each program. This information could have been, but was not 
included in the strategic plan. As discussed elsewhere in this 
testimony, the FBI has a series of reengineering efforts under way that 
relate to six core processes they are seeking to transform. A 
discussion of how these reengineering efforts relate to and support the 
achievement of the FBI's strategic goals would be a useful addition to 
the FBI's strategic plan.
    We believe that an organization's strategic plan is a critical 
communication tool and the credibility of the plan can be enhanced by 
discussing, even at a summary level, the approach the organization took 
in addressing these elements.

            FBI Has Involved Employees in the Strategic Planning 
                    Process and Communicated its Priorities
    As noted earlier, employee involvement in strategic planning, and 
transformation in general, is a key practice of a successful agency as 
it transforms. FBI executive management seems to have recognized this. 
Field office managers and field staff we spoke with last year generally 
reported being afforded the opportunity to provide input. For example, 
field management in the 14 field offices we visited in 2003 reported 
that they had been afforded opportunities to provide input into the 
FBI's strategic planning process. In addition, 68 percent of the 
special agents and 24 of the 34 analysts who completed our 
questionnaire in 2003 reported that they had been afforded the 
opportunity to provide input to FBI management regarding FBI 
strategies, goals, and priorities by, among others, participating in 
focus groups or meetings and assisting in the development of the field 
offices' annual reports. FBI managers in the field offices we visited 
and 87 percent of the special agents and 31 of the 34 analysts who 
completed our questionnaire indicated that FBI management had kept them 
informed of the FBI's progress in revising its strategic plan to 
reflect changed priorities.
    FBI management also seems to have been effective in communicating 
the agency's top three priorities (i.e., counterterrorism, 
counterintelligence, and cyber crime investigations) to the staff. In 
addition to the awareness of management staff in FBI headquarters and 
field offices, nearly all of the special agents and all of the analysts 
who answered our questionnaire indicated that FBI executive management 
(i.e., Director Mueller and Deputy Director Gebhardt) had communicated 
the FBI's priorities to their field offices. Management and most of the 
agents we interviewed in the field were aware of the FBI's top three 
priorities.\11\ Further, over 90 percent of special agents and 28 of 
the 34 analysts who completed our questionnaire generally or strongly 
agreed that their field office had made progress in realigning its 
goals to be consistent with the FBI's transformation efforts and new 
priorities.
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    \11\ Over 80 percent of the special agents and 24 of the 34 
analysts who completed our questionnaire in 2003 ranked 
counterterrorism, counterintelligence, and cyber crime investigations 
as the FBI's first, second, and third priorities, respectively.
---------------------------------------------------------------------------
FBI Has Developed a Strategic Human Capital Plan
    In prior testimony, we highlighted the importance of the 
development of a strategic human capital plan to the FBI's 
transformation efforts, noting that strategic human capital management 
is the centerpiece of any management initiative, including any agency 
transformation effort. We noted that a strategic human capital plan 
should flow from the strategic plan and guide an agency to align its 
workforce needs, goals, and objectives with its mission-critical 
functions. We also noted that human capital planning should include 
both integrating human capital approaches in the development of the 
organizational plans and aligning the human capital programs with the 
program goals. In a September 2003 letter to the FBI director, we 
specifically recommended that the FBI: (1) hire a human capital officer 
to guide the development of a strategic human capital plan and the 
implementation of long-term strategic human capital initiatives and (2) 
replace its current pass/fail performance management system with one 
that makes meaningful distinctions in employee performance.
    Although the FBI has not yet hired a human capital officer, it has 
developed a strategic human capital plan. This plan contains many of 
the principles that we have laid out for an effective human capital 
system.\12\ For example, it highlights the need for the FBI to fill 
identified skill gaps, in such areas as language specialists and 
intelligence analysts, by using various personnel flexibilities 
including recruiting and retention bonuses.\13\ Concerning the hiring 
of a human capital officer, the FBI has efforts under way to recruit 
and hire a qualified candidate.
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    \12\ U.S. General Accounting Office A Model of Strategic Human 
Capital Management, GAO-02-373SP, Washington, D.C.: (March 2002).
    \13\ U.S. General Accounting Office Human Capital: Effective Use of 
Flexibilities Can Assist Agencies in Managing Their Workforces, GAO-03-
2, Washington, D.C.: (Dec. 6, 2002).
---------------------------------------------------------------------------
    The FBI said that it recognizes the need to review and revise its 
performance management system to be in line with its strategic plan, 
including desired outcomes, core values, critical individual 
competencies, and agency transformation objectives. It also recognizes 
that it needs to ensure that unit and individual performance are linked 
to organizational goals. A key initiative that has been undertaken by 
the FBI in this regard is the planning of a system for the Senior 
Executive Service that is based on, and distinguishes, performance. We 
have not reviewed the Senior Executive performance management system, 
but it should include expectations to lead and facilitate change and to 
collaborate both within and across organizational boundaries are 
critical elements as agencies transform themselves.\14\ As yet, the 
performance management system for the bulk of FBI personnel remains 
inadequate to identify meaningful distinctions in performance. The 
FBI's human capital plan indicates that the FBI is moving in the 
direction of addressing this need, and we are encouraged by this.
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    \14\ U.S. General Accounting Office, Results-Oriented Cultures: 
Using Balanced Expectations to Manage Senior Executive Performance, 
GAO-02-966 (Washington, D.C.: Sept. 27, 2002).
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    Clearly, the development of a strategic human capital plan is a 
positive step in this direction. However, the FBI, like other 
organizations, will face challenges as it implements its human capital 
plan. As we have noted before, when implementing new human capital 
authorities, how it is done, when it is done, and the basis on which it 
is done can make all the difference in whether such efforts are 
successful.

Effective Information Technology Management Is Critical to the FBI's 
        Ability to Successfully Transform
    Information technology can be a valuable tool in helping 
organizations transform and better achieve mission goals and 
objectives. Our research of leading private and public sector 
organizations, as well as our past work at federal departments and 
agencies, shows that successful organizations' executives have embraced 
the central role of IT as an enabler for enterprise-wide 
transformation.\15\ As such they adopt a corporate, or agencywide, 
approach to managing IT under the leadership and control of a senior 
executive--commonly called a chief information officer (CIO)--who 
operates as a full partner with the organizational leadership team in 
charting the strategic direction and making informed IT investment 
decisions.
---------------------------------------------------------------------------
    \15\ U.S. General Accounting Office, Maximizing the Success of 
Chief Information Officers: Learning from Leading Organizations, GAO-
01-376G (Washington, D.C.: February 2001) and U.S. General Accounting 
Office, Architect of the Capitol: Management and Accountability 
Framework Needed for Organizational Transformation, GAO-03-231 
(Washington, D.C.: January 2003).
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    In addition to adopting centralized leadership, these leading 
organizations also develop and implement institutional or agencywide IT 
management controls aimed at leveraging the vast potential of 
technology in achieving mission outcomes. These include using a systems 
modernization blueprint, commonly referred to as an enterprise 
architecture,\16\ to guide and constrain system investments and using a 
portfolio-based approach to IT investment decision making. We have also 
observed that without these controls, organizations increase the risk 
that system modernization projects (1) will experience cost, schedule, 
and performance shortfalls; (2) will not reduce system redundancy and 
overlap; and (3) will not increase interoperability and effective 
information sharing.
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    \16\ An architecture is a set of descriptive models (e.g., diagrams 
and tables) that define, in business terms and in technology terms, how 
an organization operates today, how it intends to operate in the 
future, and how it intends to invest in technology to transition from 
today's operational environment to tomorrow's.
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    FBI currently relies extensively on the use of IT to execute its 
mission responsibilities, and this reliance is expected to grow. For 
example, it develops and maintains computerized systems, such as the 
Combined DNA (deoxyribonucleic acid) Index System to support forensic 
examinations, the Digital Collection System to electronically collect 
information on known and suspected terrorists and criminals, and the 
National Crime Information Center and the Integrated Automated 
Fingerprint Identification System to identify criminals. It is also in 
the midst of a number of initiatives aimed at (1) extending data 
storage and retrieval systems to improve information sharing across 
organizational components and (2) expanding its IT infrastructure to 
support new software applications. According to FBI estimates, the 
bureau manages hundreds of systems and associated networks and 
databases at an average annual cost of about $800 million. In addition, 
the bureau plans to invest about $255 million and $286 million in 
fiscal years 2004 and 2005, respectively, in IT services and systems, 
such as the Trilogy project. Trilogy is the bureau's centerpiece 
project to (1) replace its system infrastructure (e.g., wide area 
network) and (2) consolidate and modernize key investigative case 
management applications. The goals of Trilogy include speeding the 
transmission of data, linking multiple databases for quick searching, 
and improving operational efficiency by replacing paper with electronic 
files.
    The FBI Director recognizes the importance of IT to transformation, 
and as such has made it one of the bureau's top 10 priorities.\17\ 
Consistent with this, the FBI's strategic plan contains explicit IT-
related strategic goals, objectives, and initiatives (near-term and 
long-term) to support the collection, analysis, processing, and 
dissemination of information. Further, the FBI's newly appointed CIO 
understands the bureau's longstanding IT management challenges and is 
in the process of defining plans and proposals to effectively execute 
the FBI's strategic IT initiatives. Nevertheless, the bureau's 
longstanding approach to managing IT is not fully consistent with 
leading practices, as has been previously reported by us and others. 
The effect of this, for example, can be seen in the cost and schedule 
shortfalls being experienced on Trilogy.
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    \17\ For example, see Federal Bureau of Investigation, Statement of 
Robert S. Mueller, III, Federal Bureau of Investigation before the 
Subcommittee for the Departments of Commerce, Justice, and State, the 
Judiciary, and Related Agencies, Committee on Appropriations, House of 
Representatives, (Washington, D.C.: June 2002).
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            FBI Has Not Had Sustained IT Management Leadership with 
                    Bureauwide Authority
    Our research of private and public sector organizations that 
effectively manage IT shows that they have adopted an agencywide 
approach to managing IT under the sustained leadership of a CIO or 
comparable senior executive who has the responsibility and the 
authority for managing IT across the agency.\18\ According to the 
research, these executives function as members of the leadership team 
and are instrumental in developing a shared vision for the role of IT 
in achieving major improvements in business processes and operations to 
effectively optimize mission performance. In this capacity, leading 
organizations also provide these individuals with the authority they 
need to carry out their diverse responsibilities by providing budget 
management control and oversight of IT programs and initiatives.
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    \18\ For example, see GAO-03-231 and GAO-01-376G.
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    Over the last several years, the FBI has not sustained IT 
management leadership. Specifically, the bureau's key leadership and 
management positions, including the CIO, have experienced frequent 
turnover. For instance, the CIO has changed five times in the past 24 
months. The current CIO, who is also the CIO at the Department of 
Justice's Executive Office of the U.S. Attorneys (EOUSA), is 
temporarily detailed to the FBI for 6 months and is serving in an 
acting capacity while also retaining selected duties at EOUSA. In 
addition, the IT official responsible for developing the bureau's 
enterprise architecture, the chief architect, has changed five times in 
the past 16 months. As a result, development and implementation of key 
management controls, such as enterprise architecture, have not 
benefited from sustained management attention and leadership and thus 
have lagged, as described in sections below.
    In addition, the FBI has not provided its CIO with bureauwide IT 
management authority and responsibility. Rather, the authority and 
responsibility for managing IT is diffused across and vested in the 
bureau's divisions. As our research and work at other agencies has 
shown, managing IT in this manner results in disparate, stove-piped 
environments that are unnecessarily expensive to operate and maintain. 
In the FBI's case, it resulted, as reported by Justice's Inspector 
General in December 2002,\19\ in 234 nonintegrated applications, 
residing on 187 different servers, each of which had its own unique 
databases, unable to share information with other applications or with 
other government agencies. According to the acting CIO, the FBI is 
considering merging bureauwide authority and responsibility for IT in 
the CIO's office with the goal of having this in place in time to 
formulate the bureau's fiscal year 2006 budget request. In our view, 
this proposal, if properly defined and implemented, is a good step 
toward implementing the practices of leading organizations. However, 
until it is implemented, we remain concerned that the bureau will not 
be positioned to effectively leverage IT as an bureauwide resource.
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    \19\ U.S. Department of Justice, Office of the Inspector General, 
Federal Bureau of Investigation's Management of Information Technology 
Investments, Report 03-09 (Washington, D.C.: December 2002).
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            FBI Does Not Have an Enterprise Architecture but Is Taking 
                    Steps to Develop One
    As discussed in our framework for assessing and improving 
enterprise architecture management,\20\ an architecture is an essential 
tool for effectively and efficiently engineering business operations 
(e.g., processes, work locations, and information needs and flows) and 
defining, implementing, and evolving IT systems in a way that best 
supports these operations. It provides systematically derived and 
captured structural descriptions--in useful models, diagrams, tables, 
and narrative--of how a given entity operates today and how it plans to 
operate in the future, and it includes a road map for transitioning 
from today to tomorrow. Managed properly, an enterprise architecture 
can clarify and help optimize the interdependencies and 
interrelationships among a given entity's business operations and the 
underlying systems and technical infrastructure that support these 
operations; it can also help share information among units within an 
organization and between the organization and external partners. Our 
experience with federal agencies has shown that attempting to modernize 
systems without having an enterprise architecture often results in 
systems that are duplicative, not well integrated, unnecessarily costly 
to maintain, and limited in terms of optimizing mission 
performance.\21\
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    \20\ U.S. General Accounting Office, Information Technology: A 
Framework for Assessing and Improving Enterprise Architecture 
Management (Version 1.1), GAO-03-584G (Washington, DC: April 2003).
    \21\ See for example, U.S. General Accounting Office, DOD Business 
Systems Modernization: Improvements to Enterprise Architecture 
Development and Implementation Efforts Needed, GAO-03-458, (Washington, 
D.C.: February 2003); Information Technology: DLA Should Strengthen 
Business Systems Modernization Architecture and Investment Activities, 
GAO-01-631 (Washington, D.C.: June 2001); and Information Technology: 
INS Needs to Better Manage the Development of Its Enterprise 
Architecture, GAO/AIMD-00-212 (Washington, D.C.: August 2000).
---------------------------------------------------------------------------
    We reported in September 2003, that the FBI did not have an 
enterprise architecture to guide and constrain its ongoing and planned 
IT investments.\22\ We also reported that the necessary management 
structures and processes--the management foundation, if you will--to 
develop, maintain, or implement an architecture were not in place. At 
the time, the bureau was beginning to build this foundation. For 
instance, the bureau had designated a chief architect, established an 
architecture governance board as its steering committee, and chosen a 
framework to guide its architecture development. However, it had yet to 
complete critical activities such as ensuring that business partners 
are represented on the architecture governance board, establishing a 
formal program office, adopting an architecture development 
methodology, and defining plans for developing its architecture. 
Further, it had not addressed other important activities, including 
developing written and approved architecture policy and integrating 
architectural alignment, into its IT investment management process. FBI 
officials told us then that the architecture was not a top priority and 
it had not received adequate resources and management attention. 
Consequently, we recommended, among other things, that the FBI director 
immediately designate development, maintenance, and implementation of 
an enterprise architecture as a bureau priority and manage it as such.
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    \22\ U.S. General Accounting Office, Information Technology: FBI 
Needs an Enterprise Architecture to Guide Its Modernization Activities, 
GAO-03-959 (Washington, D.C.: September 2003) and U.S. General 
Accounting Office, Federal Bureau of Investigation's Comments on Recent 
GAO Report on its Enterprise Architecture Efforts, GAO-04-190R 
(Washington, D.C.: November 2003).
---------------------------------------------------------------------------
    Since our report, the FBI has made architecture development an 
explicit imperative in its strategic plan, and it has made progress 
toward establishing an effective architecture program. For instance, 
the FBI director issued a requirement that all divisions identify a 
point of contact that can authoritatively represent their division in 
the development of the architecture. In addition, a project management 
plan has been drafted that identifies roles and responsibilities and 
delineates plans and a set of actions to develop the architecture. The 
FBI is also in the process of hiring a contractor to help develop the 
architecture. Current plans call for an initial version of the 
architecture in June 2004. However, until the enterprise architecture 
is developed, the FBI will continue to manage IT without a bureauwide, 
authoritative frame of reference to guide and constrain its continuing 
and substantial IT investments, putting at risk its ability to 
implement modernized systems in a way that minimizes overlap and 
duplication and maximizes integration and mission support.

            FBI Is Working to Establish Control over IT Resources and 
                    Investments
    Federal IT management law provides an important framework for 
effective investment management. It requires federal agencies to focus 
more on the results they have achieved through IT investments, while 
concurrently improving their acquisition processes. It also introduces 
more rigor and structure into how agencies are to select and manage IT 
projects. In May 2000, GAO issued \23\ a framework that encompasses IT 
investment management best practices based on our research at 
successful private and public sector organizations. This framework 
identifies processes that are critical for successful IT investment, 
such as tracking IT assets, identifying business needs for projects, 
selecting among competing project proposals using explicit investment 
criteria, and overseeing projects to ensure that commitments are met.
---------------------------------------------------------------------------
    \23\ U.S. General Accounting Office, Information Technology 
Investment Management: A Framework for Assessing and Improving Process 
Maturity, Exposure Draft, GAO/AIMD-10.1.23 (Washington, D.C.: May 
2000). In March 2004, GAO updated this version: U.S. General Accounting 
Office, Information Technology Investment Management: A Framework for 
Assessing and Improving Process Maturity, Version 1.1, GAO-04-394G 
(Washington, D.C.: March 2004).
---------------------------------------------------------------------------
    Using GAO's framework, the Inspector General evaluated the FBI's IT 
investment management process in 2002, including a case study of 
Trilogy, and concluded that the process at that time was immature and 
had hindered the bureau's ability to effectively manage IT.\24\ 
Specifically, the Inspector General reported that the bureau lacked a 
basic investment management foundation. For instance, the bureau did 
not have fully functioning investment boards that were engaged in all 
phases of investment management. In addition, the bureau had not yet 
developed an IT asset inventory, the first step in tracking and 
controlling investments and assets. In a January 2004 follow-on 
report,\25\ the Inspector General credited the bureau with developing a 
plan to implement the recommendations and assigning responsibility to 
the Project Management Office to execute it, but noted that the office 
had not been granted authority to carry out this task. Project 
Management Office officials stated that as of February 24, 2004, they 
had not yet been provided such authority. According to the acting CIO, 
the FBI is currently in the process of hiring a contractor to assist 
with implementing all IT investment management processes bureauwide, 
including addressing remaining Inspector General recommendations. Until 
these steps are completed and mature investment processes are in place, 
the FBI will remain challenged in its ability to effectively minimize 
risks and maximize the returns of investments, including ensuring 
projects do not experience cost, schedule, and performance shortfalls.
---------------------------------------------------------------------------
    \24\ Department of the Justice, Office of the Inspector General 
Report 03-09.
    \25\ U.S. Department of Justice Office of the Inspector General, 
Action Required on the Federal Bureau of Investigation's Management of 
Information Technology Investments, Audit Report Number 03-09, 
(Washington, D.C.: January 2004).
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            Until Effective IT Leadership and Management Controls are 
                    Implemented, Projects Remain at Risk
    As discussed in the previous sections, the FBI has efforts 
proposed, planned and under way that, once implemented, are intended to 
establish an IT leadership and management controls framework that is 
consistent with those used by leading organizations. Until this is 
accomplished, however, the bureau will largely be relying on the same 
management structures and practices that it used in the past and that 
produced its current IT environment and associated challenges. As 
previously stated, these practices increase the risk that system 
modernization projects will not deliver promised capabilities on time 
and within budget. A prime example is Trilogy, the FBI's ongoing effort 
to, among other things, modernize its systems infrastructure and 
investigate case management applications. It consists of three 
components:
  --Transportation Network Component, which is communications network 
        infrastructure (e.g., local area networks and wide area 
        networks, authorization security, and encryption of data 
        transmissions and storage),
  --Information Presentation Component, which is primarily desktop 
        hardware and software (e.g., scanners, printers, electronic 
        mail, web browser), and
  --User Applications Component, which includes the investigative case 
        management applications \26\) that are being consolidated and 
        modernized. This component is commonly referred to as the 
        Virtual Case File, which when completed, is to allow agents to 
        have multimedia capability that will enable them to among other 
        things scan documents and photos into electronic case files and 
        share the files with other agents electronically.
---------------------------------------------------------------------------
    \26\ According to the FBI, the existing applications are Integrated 
Intelligence Information Application (a database of over 20 million 
records supporting collection, analysis and dissemination of 
intelligence for national security and counterterrorism 
investigations); Criminal Law Enforcement Application (a repository for 
storing, searching, and linking investigative data about people, 
organizations, locations, vehicles, and communications); Telephone 
Application (FBI's central repository supporting collection, analysis, 
correlation and processing of telephone records for investigations); 
and Automated Case Support (a suite of integrated applications for 
managing, storing and searching information and documents for FBI 
investigations and administrative cases).
---------------------------------------------------------------------------
    To date, the FBI's management of Trilogy has resulted in multiple 
cost overruns and schedule delays. The table below details the cost and 
schedule shortfalls for each of the three components that comprise 
Trilogy. In summary, the FBI established its original project 
commitments in November 2000 but revised them in January 2002 after 
receiving additional funding ($78 million) to accelerate the project's 
completion. About this time, the FBI also revised the Trilogy design to 
introduce more functionality and capability than original planned. 
Based on the January 2002 commitments, the first two components of 
Trilogy were to be completed in July 2002, and the third was to be 
completed in December 2003. However, the project's components have 
collectively experienced cost overruns and schedule delays totaling 
about $120 million and at least 21 months, respectively.

                                               TABLE 1.--TRILOGY COST AND SCHEDULE SHORTFALLS BY COMPONENT
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Variance between                    Variance between
                                                                                                      November 2000                     January 2002 and
                                                                  November 2000     January 2002    and January 2002     March 2004        March 2004
                        Trilogy Component                          commitments       commitments       commitments       commitments       commitments
                                                                (date/funding in  (date/funding in    (schedule in    (date/funding in    (schedule in
                                                                    millions)         millions)      months/funding       millions)      months/funding
                                                                                                      in millions)                        in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transportation Network Component..............................          \1\ 5/04          \1\ 7/02   \2\ (22 months)    Completed 3/03          8 months
                                                                      \1\ $238.6        \1\ $288.1             $49.5              $0.0  ................
Information Presentation Component............................          \1\ 5/04          \1\ 7/02   \2\ (22 months)              4/04         21 months
                                                                      \1\ $238.6        \1\ $288.1             $49.5            $339.8             $51.7
 User Applications Component..................................              6/04             12/03    \2\ (6 months)          \3\ 6/04          6 months
                                                                          $119.2            $139.7             $20.5        \3\ $170.0             $30.3
Project management and other funding..........................             $22.0             $30.0              $8.0             $71.3             $41.3
                                                               -----------------------------------------------------------------------------------------
      Total funding...........................................            $379.8            $457.8             $78.0            $581.1            $123.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Commitment date and funding amount is for both Transportation Network Component and Information Presentation Component.
\2\ Months the schedule commitment was accelerated.
\3\ According to a key Trilogy project official, new schedule and cost commitments are being developed for the User Applications Component.

Source: GAO based on FBI data.

    These Trilogy shortfalls in meeting cost and schedule commitments 
can be in part attributed to the absence of the kind of IT management 
controls discussed earlier. Specifically, in its study of the FBI's 
investment management processes which included a case study of Trilogy, 
the Inspector General cited the lack of an enterprise architecture and 
mature IT investment management processes as the cause for missed 
Trilogy milestones and uncertainties associated with the remaining 
portions of the project. In our view, a major challenge for FBI going 
forward will be to effectively manage the risks associated with 
developing and acquiring Trilogy and other system modernization 
priorities discussed in its strategic plan, while the bureau is 
completing and implementing its enterprise architecture and other IT-
related controls and is adopting a more centralized approach to IT 
management leadership.

FBI Continues to Realign Staff Resources to Address Counterterrorism 
        Related Priorities
    As we pointed out in our June 2003 testimony and our follow-up 
letter to the FBI in September 2003, a key element of the FBI's 
reorganization and successful transformation is the realignment of 
resources to better ensure focus on the highest priorities. Since 
September 11, the FBI has permanently realigned a substantial number of 
its field agents from traditional criminal investigative programs to 
work on counterterrorism and counterintelligence investigations. 
Additionally, the bureau has had a continuing need to temporarily 
redirect special agent and staff resources from other criminal 
investigative programs to address higher-priority needs. Thus, staff 
continue to be redirected from other programs such as drug, white 
collar, and violent crime to address the counterterrorism-related 
workload demands. The result of this redirection is fewer 
investigations in these traditional crime areas.
    We want to make clear that we in no way intend to fault the FBI for 
the reassignment of agents from drug enforcement, violent crime, and 
white collar crime to higher-priority areas. Indeed, these moves are 
directly in line with the agency's priorities and in keeping with the 
paramount need to prevent terrorism.\27\ In 2002, the FBI Director 
announced that in keeping with its new priorities, the agency would 
move over 500 field agent positions from its drug, violent crime, and 
white collar crime programs to counterterrorism. The FBI has 
transferred even more agent positions than it originally announced and 
has augmented those agents with short-term reassignment of additional 
field agents from drug and other law enforcement areas to work on 
counterterrorism.\28\ As figure 1 shows, about 25 percent of the FBI's 
field agent positions were allocated to counterterrorism, 
counterintelligence, and cyber crime programs in prior to the FBI's 
change in priorities. Since that time, as a result of the staff 
reprogrammings \29\ and funding for additional special agent positions 
received through various appropriations, the FBI staffing levels 
allocated to the counterterrorism, counterintelligence, and cyber 
program areas have increased to about 36 percent and now represent the 
single largest concentration of FBI resources and the biggest decrease 
is in organized crime and drugs.
---------------------------------------------------------------------------
    \27\ We currently have work under way for the House Appropriations 
Subcommittee to assess the impact of the FBI's realignment of resources 
away from drug and other traditional criminal programs, including an 
assessment of changes in price, purity, and use of illegal drugs. We 
expect to report out on this effort later in the year.
    \28\ The FBI later in fiscal year 2003 initiated another 
reprogramming to permanently reallocate about an additional 160 agent 
positions from its drug program to one of the priority areas.
    \29\ The FBI has the authority to reprogram funds (i.e., move funds 
between activities within a given account) without notifying the 
relevant Appropriations Committees unless a specific purpose is 
prohibited or the amount of the reprogramming exceeds a dollar 
threshold ($500,000 or a 10-percent change in funding level, whichever 
is less). Any other reprogramming action requires notification of the 
relevant Appropriations Committee 15 days in advance of the 
reprogramming.



    \30\ These percentages differ from those reported in our June 18, 
2003 testimony (GAO-03759T), which were limited to direct funded field 
---------------------------------------------------------------------------
agent positions.

    The FBI's staff reprogramming plans, carried out since September 
11, have now permanently shifted 674 field agent positions \31\ from 
the drug, white collar crime, and violent crime program areas to 
counterterrorism and counterintelligence. In addition, the FBI 
established the Cyber program, which consolidated existing cyber 
resources.
---------------------------------------------------------------------------
    \31\ The figure of 674 positions excludes 11 supervisory positions 
that were returned to the drug program.
---------------------------------------------------------------------------
    Despite the reprogramming of agent positions in fiscal year 2003 
and the additional agent positions received through various 
supplemental appropriations since September 11, agents from other 
program areas continue to be temporarily redirected to work on leads in 
the priority areas, including counterterrorism-related leads.\32\ This 
demonstrates a commitment on the part of the FBI to staff priority 
areas.
---------------------------------------------------------------------------
    \32\ The FBI has certain managerial flexibilities to temporarily 
redirect staff resources to address critical needs and threats.
---------------------------------------------------------------------------
    As figure 2 shows, the average number of field agent workyears 
charged to investigating counterterrorism-related matters has 
continually outpaced the number of agent positions allocated to field 
offices for counterterrorism since September 11.\33\ The FBI's current 
policy is that no counterterrorism leads will go unaddressed even if 
addressing them requires a diversion of resources from other criminal 
investigative programs such as the drug, violent, and white collar 
crime.
---------------------------------------------------------------------------
    \33\ A workyear represents the full-time employment of one worker 
for 1 year. For this statement, a matter is an allegation that is being 
or has been investigated by the FBI.



    As we previously reported, as the FBI gains more experience and 
continues assessing risk in a post-September 11 environment, it should 
gain more expertise in deciding which matters warrant additional 
investigation or investment of investigative resources. However, until 
the FBI develops a mechanism to systematically analyze the nature of 
leads and their output, the FBI will have to continue its substantial 
investment of resources on counterterrorism-related matters to err on 
the side of safety. We are not intending to imply that, even with more 
information from past experience, that all leads should not be 
investigated, but more analytical information about leads could help 
prioritize them.
    Neither the FBI nor we were in a position to determine the right 
amount of staff resources needed to address the priority areas. 
However, the body of information that might help to make these 
determinations is growing. Since the September 11 attacks, the FBI has 
updated its counterterrorism threat assessment and has gained 
additional experience in staffing priority work. This development, 
along with an analysis of the nature of all leads (those that turn out 
to be significant and those that do not) and the output from them, 
could put the bureau in a better position to assess the actual levels 
of staff resources that the agency needs in counterterrorism, 
counterintelligence, and cyber programs. Of course, any new terrorist 
incidents would again, upset the balance and require additional staff 
in the priority areas.
    An FBI counterterrorism manager we spoke with during a recent field 
office visit said that to develop a system to determine which terrorist 
leads to pursue and which ones to not pursue would be a complex task. 
He noted that in the past there would have been some citizen contacts 
that the FBI may not have generally pursued, but said that now any 
lead, regardless of its nature, is followed up. He observed that 
following up on some of these leads have resulted in the arrests and 
convictions of terrorists. For example, the FBI manager recounted a 
telephone lead from a tour boat operator who reported concerns about a 
passenger who was taking photographs of bridges and asking unusual 
questions about infrastructure. That lead started an investigation that 
led to the arrest of, and criminal charges against, the suspect, who 
was alleged to be plotting a terrorist attack.
    According to FBI officials, information from leads is collected in 
a database that can be searched in a number of ways to help in 
investigations. To the extent that more systematic and sophisticated 
analysis routines can be developed and applied to these data (or any 
expansions of this data set) the FBI may be able to develop richer 
information about the relative risk of leads. This information could 
help prioritize work and manage scarce resources. While we agree with 
the FBI counterterrorism manager we cited above who labeled this a 
complex task, the potential value of the output, given that resources 
are always limited, seems worth the investment.

            Counterterrorism Matters Have Continued to Increase

    The level of effort in counterterrorism is further reflected in the 
number of counterterrorism matters that have been opened following 
September 11. As figure 3 shows, the number of newly opened 
counterterrorism matters has remained significantly above the pre-
September 11 levels, peaking in the second quarter of fiscal year 2003 
and dropping somewhat in the most recent quarters.



            Reallocation of FBI Resources Has Affected the FBI's Drug 
                    Enforcement and Other Traditional Law Enforcement 
                    Efforts
    Use of field agent staff resources in other traditional criminal 
investigative programs (such as drug enforcement, violent crime, and 
white collar crime) has continuously dropped below allocated levels as 
agents from these programs have been temporarily reassigned to work on 
counterterrorism-related matters. As would be expected, the number of 
newly opened drug, violent crime, and white collar crime cases has 
fallen in relation to the decline in the number of field agent 
positions allocated or assigned to work on these programs.
    The change in priorities and the accompanying shift in 
investigative resources have affected the FBI's drug program the most. 
Nearly half of the FBI field agent drug positions have been permanently 
reallocated to priority program areas. Since September 11, about 40 
percent of the positions allocated to FBI field offices' drug program 
have been reallocated to counterterrorism and counterintelligence 
priority areas. As figure 4 shows, just prior to September 11, about 
two-thirds (or 890) of the 1,378 special agent positions allocated to 
FBI field offices for drug program matters were direct-funded.\34\ The 
remaining one-third (or 488) of the special agent positions was funded 
by the Organized Crime and Drug Enforcement Task Force program 
(OCDETF). As of the first quarter of fiscal year 2004, the number of 
direct-funded positions allocated to FBI field offices for the drug 
program had decreased over 60 percent, going from 890 to 337. OCDETF-
funded agent positions, which have remained constant, now account for 
about 60 percent of the FBI field offices' drug program staff 
resources.
---------------------------------------------------------------------------
    \34\ FBI's drug program workforce is composed of field agent 
positions funded through direct FBI appropriations and those supported 
with OCDETF funds. The OCDETF Program was established in 1982 to focus 
federal, state, and local law enforcement efforts against organized 
crime drug-trafficking organizations that pose the most serious threat 
to our national interests.



    While this reduction represents a substantial decline in the number 
of field agent positions allocated to drug work, in fact, the reduction 
in drug enforcement workyears was actually larger than these figures 
reflect. Specifically, as needs arose for additional agents to work 
counterterrorism leads, field agents assigned to drug program squads 
were temporarily reassigned to the priority work. As figure 5 shows, at 
the extreme, during the first quarter of fiscal year 2002 (just after 
the events of September 11), while 1,378 special agent positions were 
allocated to drug work, only about half of these staff resources worked 
in the FBI drug program. In mid-fiscal year 2003, the allocated number 
of drug agent positions and the average number of field agent workyears 
charged to drug matters started to converge toward the new targeted 
levels. Since that time, however, the FBI has had to redirect 
additional field agents allocated to its drug program to 
counterterrorism and other priority areas. As of the second quarter of 
fiscal year 2004, about a quarter (225 of 825) of the agents assigned 
to the FBI's drug program were actually working in higher-priority 
areas. The reduction in drug enforcement resources has reduced both the 
number of drug squads in FBI field offices as well as the number of FBI 
agents supporting the High-Intensity Drug Trafficking Area (HIDTA) 
program initiatives, according to FBI officials.\35\
---------------------------------------------------------------------------
    \35\ The HIDTA program began in 1990 to provide federal assistance 
to help coordinate and enhance federal, state, and local drug 
enforcement efforts in areas of major illegal drug production, 
manufacturing, distribution, transportation, and use.



    The significant reduction in agent strength in the drug enforcement 
area is likely to be an important factor in the smaller number of FBI 
drug matters opened in fiscal year 2003 and the first quarter of fiscal 
year 2004. As figure 6 shows, the number of newly opened drug matters 
went from 2,420 in fiscal year 1998 to 950 in fiscal year 2002 and to 
587 in fiscal year 2003.
    The openings for the first quarter of fiscal year 2004 indicate a 
rate for the entire year at about fiscal year 2003 levels.



    Similarly, as figures 7 and 8 show, the average number of field 
agent workyears charged to violent crime and white collar crime matters 
also declined below the number of allocated agent workyears as these 
agents too have been temporarily redirected to counterterrorism-related 
matters.



    As figures 9 and 10 show, the number of newly opened violent crime 
and white collar crime matters has declined since September 11.



                              CONCLUSIONS

    The FBI's transformation effort is driven in part by challenges 
facing the federal government as a whole to modernize business 
processes, information technology, and human capital management. It is 
also driven by the need to make organizational changes to meet changes 
in its priorities in the post-September 11 environment. This effort 
will require a structure for guiding and continuously evaluating 
incremental progress of the FBI's transformation. It must also be 
carried out as part of, and consistent with, broader government-wide 
transformation efforts that are taking place, especially those 
resulting from the establishment of DHS and in connection with the 
intelligence community. The FBI has made substantial progress, as 
evidenced by the development of both a new strategic plan and a 
strategic human capital plan, as well as its realignment of staff to 
better address the new priorities. Although the new strategic plan and 
strategic human capital plans include cross walks to each other, we 
still believe that an overall transformation plan is more valuable in 
managing the transformation process. The FBI is also making progress in 
strengthening its management of IT, including establishing 
institutional IT management controls and considering changes to the 
scope of CIO's authority over IT spending.
    Impacts of the FBI shift in field agent resources on crime programs 
including the FBI's drug, white collar, and violent crime programs 
should be monitored. Our ongoing work, which we expect to complete 
later this year, will provide information on whether other federal and 
state resources are replacing lost FBI resources in the traditional 
crime areas and on whether reductions in FBI drug program field agents 
have had an impact on the price, purity, availability, and use of 
illegal drugs.
    Mr. Chairman and Members of the Subcommittee, this concludes my 
prepared statement. I would be pleased to answer any questions you and 
the Subcommittee members may have.
     Appendix 1.--FBI Reengineering Projects Completed and Underway

------------------------------------------------------------------------
              Core processes                   Reengineering projects
------------------------------------------------------------------------
Strategic planning and execution (6)......  HQ organizational structure
                                            Strategic planning process
                                            Communication strategy
                                            Executive secretariat
                                            Project management
                                            Inspection process
Capital (human and equipment) (17)........  Career development/
                                             succession planning
                                            Executive development and
                                             selection program (EDSP)
                                            File/clerical support
                                            Office of Professional
                                             Responsibility
                                            Training
                                            Hiring and recruiting
                                            Fitness test/height-weight
                                             standards
                                            Preparation for legal
                                             attache assignment
                                            Administrative officer
                                             position upgrade
                                            Analyst professionalism
                                            Culture/values
                                            Time utilization record
                                             keeping system (TURK)
                                            Asset Management
                                            Financial audit streamlining
                                            Management of supplies
                                             purchase and distribution
                                            Field office reorganization
                                            Resident agency
                                             consolidation
Information management (4)................  Trilogy
                                            Top secret/sensitive
                                             compartment information (TS/
                                             SCI) local area network
                                            Records management division
                                             reorganization
                                            Rapid start/ICON
Investigative programs (6)................  Counterterrorism strategy
                                            Counterintelligence strategy
                                            Cyber strategy
                                            Criminal investigation
                                             division strategy
                                            Manual of Investigative
                                             Operations and Guidelines
                                             (MIOG)/Manual of
                                             Administrative Operations
                                             and Procedures (MAOP)
                                             Project
                                            Foreign Intelligence
                                             Surveillance Act
Intelligence (2)..........................  Review criminal informant
                                             program (CIP) and asset
                                             program issues
                                            Analytical tools for
                                             intelligence analysts
Security Management (5)...................  Continuity of operations
                                             planning (COOP)
                                            FBI headquarters space
                                             strategy
                                            Vital records
                                            Security manual pilot
                                             project
                                            Repository for Office of
                                             Professional Review (OPR)
                                             appeals/security violations
------------------------------------------------------------------------
Source: FBI.

                        ENTERPRISE ARCHITECTURE

    Senator Gregg. Dr. Ekstrand, what should the enterprise 
architecture plan be?
    Ms. Ekstrand. I defer to my counterpart.
    Mr. Hite. An enterprise architecture is not a one-size-
fits-all proposition. It is a function of what the organization 
is about, its complexity, its size, its mission, and it is also 
a function of what it is intended to be used for.
    So in the case of FBI, you have a very large organization, 
huge in scope, important mission, and the intended purpose 
ultimately is to drive IT modernization and these are very 
demanding goals. So, therefore, it would argue to have a very 
well-defined, robust enterprise architecture.
    So having said that, what it would be is a set of 
interrelated models, diagrams, tables and narrative that define 
what the FBI does, where it does it, how it does it, when it 
does it, who does it, defines all these things both in business 
terms, in mission or logical terms, and also in terms of the 
technology that is going to be employed in order to exercise 
those kinds of operations. So it would include the standards 
and the protocols and the rules that are going to govern the 
types of technology that are going to be employed, both from an 
application standpoint and from a supporting infrastructure 
standpoint. It is like the mother of all system change tools.
    Senator Gregg. How should it be developed? Should it be 
developed by outside consultants or should it be developed 
internally, and how do you perceive that the FBI intends to 
develop it?
    Mr. Hite. It could be developed either way. We recently did 
a survey of the state of enterprise architecture across the 
Government and looked to see how agencies were doing this. The 
vast preponderance hire a contractor to assist them in doing 
this and they work with the contractor. There are very few who 
actually contract out the entire operation to a contractor, and 
there are a few that do it in-house.
    My understanding of how the FBI is going to proceed is to--
and they have, I believe as of yesterday, awarded a contract 
for development of its enterprise architecture. It has a draft 
plan to set up an organization to lead this effort and to 
manage the contractor. So it will be done largely by a 
contractor under the FBI's direction and guidance. The FBI 
will, in essence, be acquiring its enterprise architecture 
product from a contractor.
    Senator Gregg. Have you looked at the contract that they 
have developed and signed and do you think that this is a game 
plan that makes sense? Have they outlined a game plan that 
makes sense?
    Mr. Hite. No, sir, I have not. I have not seen that. That 
is a fair question to ask.
    Senator Gregg. Since you have been actively involved in 
this, wouldn't it have been logical that they would have come 
to you and said, does this make sense, before they signed the 
contract?
    Mr. Hite. That is certainly a service that we would be 
willing to work with them on. We----
    Senator Gregg. Did they do that?
    Mr. Hite. We have had FBI-initiated dialogue by the acting 
CIO for him to share with us what his plans and proposals are 
going forward and it allowed us to provide feedback. We have 
not spoken specifically about the contractual terms for this 
enterprise architecture development area.
    Senator Gregg. Well, I would like to ask you if you could 
take a look at what they have proposed as to how they are going 
to develop this enterprise zone conceptually and then in the 
specifics of the contract and get back with this committee with 
your assessment of whether it is an approach that is going to 
work.
    Mr. Hite. Yes, sir.
    Senator Gregg. I don't want to do another thing where we--I 
mean, we have got a track record here of approaches that don't 
work.
    Mr. Hite. Understood.
    Senator Gregg. Although I have to admit, this Director has 
really tried to address the issue aggressively.

    FEDERAL BUREAU OF INVESTIGATION/DRUG ENFORCEMENT ADMINISTRATION 
                              RELATIONSHIP

    You mentioned that you have been looking at the effect that 
the reallocation of FBI people has had on drug enforcement 
efforts. Have you looked at the relationship between DEA and 
FBI and whether we should have DEA even take a--obviously, it 
is their name, it is what they should be doing. Why is the FBI 
in drug enforcement at all? Where are we going here? Have you 
done a study of that at all?
    Ms. Ekstrand. We haven't done a study of that, but when we 
testified last June before House Appropriations, we had had a 
substantial amount of interaction with DEA in terms of how they 
perceived their role changing with the withdrawal, to some 
extent, of FBI presence in the area. We are planning to do some 
additional work in that area and report out this summer for 
House Appropriations.
    Senator Gregg. I would be very interested in an assessment 
of, as FBI migrates over to counterterrorism and has to give up 
some of its portfolio, the Director was quite up front. He said 
most of the portfolio they are giving up is in drug 
interdiction. What is DEA's role in picking that up? Can it do 
more? In other words, could DEA step in and do more of what the 
FBI has been doing in this arena so the FBI could actually free 
up more agents? Are you looking at that?
    Ms. Ekstrand. We are looking at some of that. We do know 
that as of last June, there had been a number of new positions 
authorized at DEA and that even more were requested for the 
following year. So we do know that DEA's resources, number in 
terms of agents, has been growing. But we haven't had the 
opportunity as yet to get into this in detail.
    Senator Gregg. To the extent you could, that would be 
useful to us because this committee has the unique position of 
being able to move resources and we don't mind doing that if it 
is constructive, but we would like to have some substance upon 
which to make those decisions. But it seems logical to me that 
DEA's role has got to significantly increase and you have got 
to give them more resources and we have got to then expect the 
FBI to move resources out of drug enforcement and into 
counterterrorism as a result of freeing those up.
    Mr. Fine, there are so many areas I would like to talk to 
you about, but I will focus on this IT issue. I thought it was 
good that everybody said the FBI appears to be getting on the 
right track here and things are moving well. How do we sustain 
that as we move forward and especially with the Virtual Case 
File issue? We have got all this hardware and we have got the 
communications capability, but if you don't have anything to 
put on the hardware or the communications capability that 
works, what good is it?
    Mr. Fine. I do think the FBI is making progress in 
improving things, but it does need to do more. It has to ensure 
that they have definitive milestones that the contractors have 
to meet. They have to hold them accountable for those 
milestones. They have to keep sustained attention on this. They 
have to define their requirements right up front so that the 
contractor knows what it has to deliver and be held accountable 
if it doesn't deliver that.
    I think there has also been, unfortunately, a fair amount 
of turnover and not necessarily stability in the senior FBI IT 
management structure, so that people are moving on and not 
having responsibility, sustained responsibility, to assure a 
project through to completion. I do think they have a new 
acting CEO that is technically astute and seems committed to 
this. But there has to be that constant attention on that, as 
well.
    So I think there has to be a hard-nosed approach to this 
that perhaps in the past the FBI has not fully implemented.

                       VIRTUAL CASE FILE CONTRACT

    Senator Gregg. Have you looked at what they are doing now 
in the Virtual Case File contract that they are negotiating 
right now? Have you been involved in that process to put in 
place that type of a discipline?
    Mr. Fine. Yes. We have an audit opened. We recently opened 
it. We have done it in the past and recently opened a new audit 
on Trilogy, on all the aspects of Trilogy. So our auditors are 
talking to the FBI IT managers every day and trying to find out 
where they are going, how they are doing it, and ensuring that 
there is this aggressive approach to ensuring that it comes in 
without excessive cost overruns or delays.
    Senator Gregg. If I understood the Director correctly, and 
maybe I didn't hear him correctly, but my impression was that 
he said, with regard to the Virtual Case File, that they were 
in the process of developing a new contract, essentially, to 
get the program into the next phase and that it had not been 
agreed to and that he agreed that disciplines should be put 
into it. He didn't necessarily say they were going to be put 
into it. And I would be interested in getting your current 
assessment, not now, but as this moves forward as to how 
effectively that is being done.
    Mr. Fine. We would be happy to do that. Our understanding 
is that there was a contract, but they are negotiating and 
renegotiating the requirements of it and when to do it, and 
they are in the process of defining that now. And we will be 
involved with monitoring and overseeing it because of the 
importance of this issue.

                        IDENT/IAFIS INTEGRATION

    Senator Gregg. You mentioned IAFIS and you have done an 
IDENT/IAFIS paper.
    Mr. Fine. Report, yes.
    Senator Gregg. Report.
    Mr. Fine. We have done a number of studies on that, but 
most recently, a report on the Batres case and the status of 
the IDENT/IAFIS integration.
    Senator Gregg. Is this possible? I mean, the Director 
seemed to think it was possible to integrate these two. But, 
the IDENT people want to have a very short timeframe to get the 
person through and IAFIS is built on the concept of what he 
refers to as the gold standard, which takes 20 minutes probably 
to take fingerprints under that scenario. Is there some 
capacity to resolve this?
    Mr. Fine. I think there is and I think it is 
technologically possible. I think there are three main issues 
with the IDENT/IAFIS integration. One, along the border, having 
the Border Patrol ensure that it checks detained aliens against 
IAFIS. And they are getting the machines out there but they 
don't have the machines out there, the 10-print machines that 
would connect IAFIS at all the border stations. As a result, or 
after our report, the Department of Homeland Security said it 
would expedite a process of getting----
    Senator Gregg. Is that an issue of money or just an issue 
of the machines not being available or bureaucracy----
    Mr. Fine. I think it is an issue of money, to some extent, 
but also attention and urgency to the process. I think there is 
an urgency now, and there needs to be that urgency. That is the 
first issue.
    The second issue is ensuring that the FBI and State and 
local law enforcement has access to IDENT and access to the 
information in IDENT, and going that way, as opposed to simply 
having the immigration authorities have access to the FBI 
system.
    And the third issue is the issue that you raised, at ports 
of entry, US VISIT, and what information is going to be taken 
from people who are coming to enter the country and what it is 
going to be bounced off against. I don't believe they have 
determined what they intend to do and how they intend to do it. 
And part of the issue is getting the parties together and 
determining what they can do and what they should do. Prior to 
this, I don't think there has been that focus on that issue.
    Senator Gregg. How do we get that focus? I have raised it 
now at two different hearings and I have gotten very nice 
responses, but is there actually something happening?
    Mr. Fine. I think there is something happening. I have 
spoken to Director Mueller. I speak with him regularly and he 
has indicated that they are talking with the Department of 
Homeland Security, with the State Department, and even, my 
understanding, the National Security Council is also involved 
in the process. It is a cross-agency issue, but there needs to 
be that focus on it and a decision made on a government-wide 
basis how they are going to do it.
    It was hard enough when the INS was in the Department of 
Justice, getting them on the same page with the FBI. It is even 
harder now that they are in separate agencies, but that is what 
needs to happen. There needs to be clear terms. There needs to 
be memoranda of understanding, and they need to decide how they 
are going to go forward with this.
    Mr. Hite. Mr. Chairman----
    Senator Gregg. Yes?
    Mr. Hite [continuing]. If I could just add a couple of 
comments on that, I testified last week on US VISIT and we have 
issued a number of reports on it. We actually have one coming 
out for the Appropriations Committee next month, which is an 
update on the status of US VISIT, and the way US VISIT is being 
developed and deployed. It is going to be in increments and 
some of these near-term increments are designed to meet 
legislative requirements for deployment of a capability to 
certain ports of entry by a certain time.
    The initial deployment that has occurred at airports and 
seaports does provide for a biweekly download of certain files 
from IAFIS to the IDENT component of US VISIT. It is not a 
real-time download of information, but it is every 2 weeks. 
That is all part of an interim solution approach to US VISIT 
that is needed in order to meet these very aggressive 
milestones.
    They are also in the process of bringing on an integration 
contractor and one of the responsibilities of that integration 
contractor will be to develop the long-term solution for US 
VISIT, which will get into some of these other issues about how 
many fingerprints are necessary, and I know they are working 
with NIST and the other agencies on that. There was talk about 
whether eight fingerprints would be a sufficient standard, and 
I think there has been talk that maybe dropping back to two 
prints for the intended purpose of US VISIT will be enough. But 
there is this dialogue. There are memorandums of understanding 
and working groups among all these agencies involved in US 
VISIT.
    Senator Gregg. Well, I hope you are right. I have the 
feeling this is deja vu all over. This committee has been down 
this road before 9/11, when we tried to get these various 
agencies to talk to each other. As Mr. Fine points out, we 
couldn't even get Border Patrol and FBI to talk to each other 
when we had them both under our jurisdiction.
    There is a real frustration in seeing 44 million 
fingerprints sitting over here and setting up a system which is 
supposed to fingerprint people coming into the country and 
knowing that the ones you are doing as you fingerprint people 
coming into the country does not have the capability of 
accessing that database. I hope that there is some greater 
being up there that is straightening this out, but I don't 
really sense it. I haven't seen any reaction that gives me that 
impression.
    Mr. Hite. We did, in our issued report 6 months ago, we 
made a recommendation about having a government-wide governing 
structure for US VISIT because it is a government-wide program, 
and based on the steps that have been taken in the last 6 
months, we have closed out that recommendations as having been 
satisfied. They have a three-tiered approach to establishing 
this government-wide governance structure.
    Senator Gregg. That is good news. I hope it translates into 
results. It is always nice to hear that there is movement.

                             LEGAT PROGRAM

    You also, Mr. Fine, have a report coming out, I think, on 
the Legat program. I would be interested in just your reaction 
to it. It has expanded dramatically with this committee's very 
strong support, although sometimes occasional words of caution 
from our most senior member, Senator Hollings. But it has been 
expanded. It was a priority of the prior Director and has been 
proven to be, I think, an invaluable resource in light of what 
our present threat is and the changed personality of the FBI 
and the international role it has.
    But I would be interested in where you see the weaknesses 
are and where are the strengths, or aren't you going to be able 
to tell us yet?
    Mr. Fine. Well, we haven't issued the report, so I don't 
want to get into all of it, but I do agree with you that it has 
been an important component of the FBI's efforts. With the 
globalization of crime, with the increase of international 
terrorism, it had to do this and I think it deserves credit for 
moving forward in that regard.
    I think it is working generally well. I do think there are 
some issues, particularly with training of the people who are 
going abroad, with language training, with training of them to 
pursue their roles in foreign countries immediately. So I think 
that is an important issue. But beyond that, I think we should 
wait for the report. But I think it is a critical issue that 
the FBI has taken on and that we need to follow up on.
    Senator Gregg. What about the language issue? The Director 
said they have 24 agents who speak Arabic. I think there are 65 
who are in the backup who aren't agents who speak Arabic. There 
are 250 or something like that as I recall that speak Mandarin. 
Not a lot of people. There is a lot of information floating 
around for that few people to be on top of.
    Mr. Fine. I think that is absolutely right. We do have an 
ongoing review of that issue. We have a review of the FBI's 
efforts to hire and train linguists, for example, to ensure 
that they are able to translate all the information they have. 
There are backlogs. There are backlogs of translations. And 
when that happens and they have information in the FBI in their 
files, in their transcripts that they can't translate, it 
undermines their mission. So I think it is a critical issue 
that the FBI has to focus on.
    I know that the Director is focused on that. It is not 
easy. But we are going to review how they can improve their 
efforts to be able to translate all that they have and to 
expand the pool of agents who have foreign language 
capabilities.

                               LINGUISTS

    Senator Gregg. Has GAO looked at this issue of an 
overriding centralized translation center capability?
    Ms. Ekstrand. We have not. We had reported last June in 
terms of the number of linguists hired and they are 
substantially the same numbers that Director Mueller just gave. 
But we have not had a renewed opportunity to look at that----
    Senator Gregg. So you haven't discussed whether we should 
have basically a translation capability that is independent of 
the Bureau?
    Ms. Ekstrand. No, sir, we have not looked at that.
    Senator Gregg. Have you looked at that?
    Mr. Fine. I think we are sort of involved in the issue, but 
I don't think that is the focus of our review, how government-
wide to address this issue.
    Senator Gregg. Is there something else this committee 
should know about specifically the technology area or the 
personnel allocations that would help us as we try to make sure 
we have a more effective and aggressive Bureau?
    Mr. Fine. I think the committee's efforts in this regard 
are very important. It is important to monitor and ensure that 
the FBI does upgrade its technology. I think that the FBI 
recognizes this. But it is important to point out that even 
when Trilogy is online, and it is not clear when it will be 
online, I am not completely optimistic that it will happen, the 
first two components at the end of April and then a Virtual 
Case File, as the Director said, 2 months later.
    To have a real operating system that works, that the agents 
know about and are trained on and accept is, in my view, going 
to take longer than that. But I do think it is important to 
focus attention on the fact that Trilogy itself is not the end 
of the road. It is only a portion. It is only the foundation. 
As one, I think, FBI manager has said, it gets the FBI out of 
the ditch and gets them on the road, but it doesn't get them on 
the highway. And the FBI needs to sustain its attention on 
these efforts because without it, FBI employees can't do the 
job that they are assigned to do. It is actually a credit to 
them that they have done well with the archaic systems they 
have. But we need to give them better systems.
    Senator Gregg. Isn't that what the enterprise architecture 
should do, give them the road map to getting on the highway?
    Mr. Hite. That will be part of the--one variable in the 
equation, to that end. I would echo what Mr. Fine said and use 
a different metaphor, that Trilogy is the beginning of a long 
marathon of systems modernization. It is not a sprint. And in 
order to finish a marathon, you have got to be trained and 
equipped to finish it. You have got to be ready to finish it.
    And being ready means you have the tools at your disposal 
to effectively execute a modernization. Enterprise architecture 
is one of those tools. Mature investment processes are another. 
There is a whole host of things that need to be in place, and 
unfortunately, the FBI historically has not been a favorable 
poster child for good IT management. Now you have got some 
people in place----
    Senator Gregg. It has been behind.
    Mr. Hite [continuing]. I believe who understand that and 
are trying to change that. But changing that is not going to be 
an overnight endeavor, so there is going to be hundreds of 
millions of dollars to modernize systems. There is going to be 
hundreds of millions of dollars going into operating and 
maintaining existing systems, and it is not going to change 
overnight.
    Senator Gregg. Should we have a more disciplined approach 
from the appropriations side in funding IT at the FBI so there 
is not a peak and a valley approach, or are we approaching it 
appropriately as appropriators?
    Mr. Fine. It is hard to answer that question, but I do 
believe and appreciate the fact that the committee is asking 
these questions, is keeping the pressure on the FBI. In my 
understanding, it is regularly asking for updates from the FBI 
and I think that is important rather than to appropriate the 
money and wait to see what happens. So I think the committee's 
efforts are instrumental in this regard.
    Mr. Hite. There are mechanisms that other subcommittees use 
with regard to IT modernization programs like US VISIT. The 
CBP's, Custom and Border Protection's, Automated Commercial 
Environment, which is an import-export processing system, for 
the IRS, what has the Tax Systems Modernization, now the 
Business Systems Modernization, where the Appropriations 
Committees ask, or actually direct in their appropriation 
language that the agency develop each year a plan of 
expenditure, how they plan to invest the money, which gets into 
what they are going to spend it on, when, and how are they 
going to ensure that the money is spent wisely and there is 
adequate control surrounding the use of that money.
    They require that the expenditure plan be approved by the 
head of the Department for that agency, to be approved by OMB, 
and to be reviewed by GAO, and then we support the committee in 
reviewing it and giving them information to make decisions 
about their oversight of the use of that money. I am not 
advertising----
    Senator Gregg. Is the FBI at the level where it can do 
that? I mean, right now, we are just trying to get it up and 
running.
    Mr. Hite. And so that would be the focus of any plan for 
how they are going to invest the funds, to deal with how they 
are going to get it up and running, the near-term priorities as 
well as setting the groundwork for the long-term disciplined 
approach to wholesale systems modernization.
    Senator Gregg. I don't think the FBI is the only 
organization that needs to be disciplined and systematized. I 
think we do, too, as appropriators. So I would be interested in 
getting that information. Maybe you could sit down with our 
staff and review how that is done in other committees. I am 
sure they are probably familiar with it. I think we should have 
a systematized approach, also.
    I thank you very much. This hearing has been very 
informative. I appreciate the work you folks do in keeping 
these various agencies on track. It is very constructive and 
very much appreciated.

                          SUBCOMMITTEE RECESS

    The next hearing is scheduled for this Thursday. It will be 
with the Secretary of State, Colin Powell, at the office in the 
Capitol Building at 10 o'clock. Thank you.
    [Whereupon, at 12:14 p.m., Tuesday, March 23, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
March 25.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        THURSDAY, MARCH 25, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room S-146, the 
Capitol, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Stevens, Domenici, Hollings, Kohl, 
and Byrd.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF COLIN L. POWELL, SECRETARY OF STATE
    Senator Gregg. First off, we want to thank the Secretary 
for coming before the subcommittee today. He certainly had a 
hectic schedule, just back from Spain and we very much 
appreciate your time, Mr. Secretary, in light of all the 
responsibilities you have and especially in light of your 
extraordinary travel schedule. You have got to be a little 
tired and we appreciate that, but we do thank you for taking 
time to come in.
    This subcommittee has a lot of involvement obviously in the 
State Department. We have tried and we are going to continue to 
try to be supportive of the State Department. There are a lot 
of issues I know we want to get to so I am going to reserve an 
opening statement so we can get your statement and then move to 
questions. But I will obviously yield to Senator Hollings for 
any statement he wishes to make.
    Senator Hollings. I think that is the best approach and I 
yield also.
    Senator Gregg. Then we will start right out unless, Senator 
Byrd, did you want to say anything?
    Senator Byrd. I will follow the same standard here.
    Secretary Powell. I am almost reluctant to say anything 
after that.
    Senator Gregg. We came to hear you.
    Secretary Powell. Mr. Chairman, I thank you and Senator 
Hollings, and Senator Byrd. I am just back from Madrid. I flew 
overnight the night before last, attended a very moving 
memorial service for the Spaniards who were killed in the 
terrible tragedy of 
3/11, had meetings with outgoing Prime Minister Aznar and with 
the new incoming Prime Minister, Mr. Zapatero. Although we have 
some disagreements with Mr. Zapatero on Iraq and we will work 
through that, one thing there is no disagreement on is that the 
United States and Spain will be united in this fight against 
terrorism. Spain has been fighting terrorism long before 3/11 
or 9/11. They have had to face the ETA terrorists, so I am 
confident that we will find ways to cooperate in this battle 
against terrorism.
    It is always a pleasure to appear before this subcommittee. 
This is not like the old army story like we are always glad to 
see the inspector general. But in this case really it is true 
because, Mr. Chairman, you and the members of the committee 
have been supportive of what we have been trying to do in the 
Department for the last 3 years. I remember during my 
transition pre-confirmation period when we talked about some of 
the problems that you saw in the Department with respect to 
management, with respect to construction of our Embassies and 
things of that nature. I have tried in the 3 years I have been 
Secretary to be responsive to your concerns.
    Before I go further, let me take this opportunity to 
especially acknowledge Senator Hollings, since this may well be 
the last chance we will have to see each other in this 
particular capacity, to thank you for your support, your 
prodding, and your friendship for so many years, Dr. Hollings.
    Senator Hollings. Thank you. He and I got honorary degrees 
at Tuskegee together. That is Dr. Powell.
    Senator Gregg. Very appropriate.
    Senator Hollings. We had Cappy James and the Air Force down 
there. The Tuskegee flyers trained in South Carolina.
    Secretary Powell. Tuskegee Airmen.
    Mr. Chairman and members of the subcommittee, I thank you 
for the opportunity to testify on the State Department's 
portion of the President's budget request for fiscal year 2005. 
I have a longer statement I would submit for the record, Mr. 
Chairman, with your permission.
    Senator Gregg. Absolutely.
    Secretary Powell. While I know that this subcommittee's 
specific oversight deals with that part of the request that 
involves State Department operations, I want to give you as 
well an overview of what those operations will support in the 
way of foreign policy. So let me give you the overall budget 
picture first and then touch on foreign operations. Finally I 
will deal with the top priorities of our specific funding 
request before you.
    The 2005 international affairs budget for the Department of 
State, USAID, and other foreign affairs agencies totals $31.5 
billion broken down as follows, foreign operations $21.3 
billion, State operations of principal interest to this 
subcommittee, $8.4 billion, Public Law 480, food aid, $1.2 
billion, international broadcasting $569 million and the 
Institute of Peace $22 million.
    President Bush's top foreign policy priority reflected in 
this budget is winning the war on terrorism. Winning on the 
battlefield with our superb military forces is just one step in 
this effort. To eradicate terrorism altogether, the United 
States must help create stable governments and nations that 
once supported terrorism like Iraq and Afghanistan. I visited 
both of those places last week and I hope in the course of our 
questioning I can say a word about what I saw.
    We must go after terrorist support mechanisms as well as 
the terrorists themselves, and we must help alleviate 
conditions in the world that enable terrorists to bring in new 
recruits. To these ends, the 2005 budget will support our 
foreign affairs agencies as they focus on the reconstruction of 
Iraq and Afghanistan. We will continue to support our coalition 
partners to further our counterterrorism, law enforcement and 
intelligence cooperation, and we will continue to expand 
democracy and help generate prosperity, especially in the 
Middle East.
    Forty-eight percent of the President's foreign affairs 
budget supports the war on terrorism. For example, $1.2 billion 
supports Afghanistan reconstruction, security and democracy 
building in 2005. More than $5.7 billion provides assistance to 
countries around the world that have joined us in the war on 
terrorism. And $3.5 billion indirectly supports our war on 
terrorism by strengthening our ability to respond to emergency 
and conflict situations. And finally, $190 million is aimed at 
expanding democracy in the greater Middle East; crucial if we 
are to attack successfully the motivation to terrorism.
    Two of the greatest challenges facing us today are the 
reconstruction of Iraq and the reconstruction of Afghanistan. 
With respect to Iraq, the Coalition Provisional Authority and 
the Iraqi Governing Council, in my judgment have made great 
strides in the areas of security, economic stability and 
growth, and democratization. Iraqi security forces are now in 
the forefront of our security efforts, and you can see that 
they are taking casualties as they go about securing their 
country for their people.
    In addition, the CPA has established a new Iraqi army, 
issued a new currency, and refurbished schools, hospitals, the 
sanitary infrastructure, working on the oil infrastructure. So 
much good work is going on with respect to reconstruction that 
it is unfortunate that the continuing security situation we 
face tends to drown out or put a black cloud over the good work 
that is being done.
    But much work remains to be done. Working with our 
coalition partners we will continue to train Iraqi police, 
border guards, the civil defense corps and the army in order to 
ensure the country's security. At the same time, as I noted, we 
are going to work on these critical infrastructure needs.
    But there is progress taking place. The definitive example 
of that progress, on March 8 the Iraqi Governing Council 
adopted a transitional administrative law, which is essentially 
an interim constitution for Iraq. This was a remarkable 
milestone. You will recall that Friday when we thought it was 
going to be signed and suddenly there was a signing table, 25 
pens and nobody showed up because there was a problem over it. 
And over the weekend that problem was solved, through argument, 
through debate, through democratic process; something that they 
had never had experience with before. But it happened.
    This administrative law recognizes freedom of religion and 
puts the judiciary on an independent track. It puts the 
military firmly under civilian control. It gives women the 
access to civil society and the political life of the country. 
It is a huge step for the Iraqi people and we should not sell 
short what an accomplishment this is.
    The U.N. Secretary General's special advisor Mr. Brahimi, 
Ambassador Brahimi, has been invited back to Iraq by the 
Governing Council in order to work with the Council and the CPA 
to put in place a revised interim government that will take 
sovereignty from the CPA on the first of July. In my visit with 
Ambassador Bremer last week we talked about the transition from 
the CPA to a very large State Department chief of mission 
operation, a very large Embassy. Already I have four 
Ambassadors over there working with Ambassador Bremer and 
trying to make this transition as smooth as possible.
    Mr. Chairman, Afghanistan is another high priority and I 
was there last week. We are committed to helping build a stable 
and democratic Afghanistan. They had a very fine constitutional 
process at the end of last year where they adopted a 
constitution for this country that just a few years ago was a 
basket case, a despotic basket case. Now it has a constitution, 
and as you saw in press reporting this morning, President 
Karzai has scheduled elections for early September for both a 
new president as well as for a legislature.
    Still there are problems along the Afghan-Pakistan border, 
still problems out in Herat but as I drove through Kabul last 
week you could see buildings going up, you could see women who 
felt secure enough in their life now to remove the burkha; 
about 50 percent covered and 50 percent not covered. I visited 
a registration place in a school where women were registering 
to vote, filling out the forms, stepping forward, getting their 
registration card and proudly showing it to me that they are 
now part of the life of the new Afghanistan. So we have 
accomplished a lot in Afghanistan, but here too there is much 
more work to do.
    I was watching some footage yesterday that we are going to 
use at the Donors' Conference next week that shows some of our 
reconstruction efforts in Afghanistan, and one shot on this 
video is of the new blacktop road, complete with markers that 
goes from Kabul to Kandahar. We will continue that road around 
to Herat, in working with our Saudi partners, our Japanese 
partners, and provide a beltway for this country. But it is 
more than just a beltway. It is a road that will link the 
country together, give the central government the ability to 
control the regions a little more effectively. It will 
contribute to the economic life of the country. But more 
importantly, it will also link Afghanistan with the other 
nations of central Asia.
    Pakistan is looking at this and is starting to readjust its 
infrastructure, its port activities, to take into account that 
there will be peace in this part of the world as we go into the 
years ahead. The old silk route of 2,000 years ago is going to 
be recreated, except this time it will be with hard roads and 
ports, with an information infrastructure, and hope eventually 
with pipelines that criss-cross this area and move oil and 
natural gas from central Asia to the east and not just to the 
west.
    So the opportunities here are enormous. We have to deal 
with security. We have got to get rid of those remaining 
Taliban and al Qaeda elements. But we should not sell short not 
only our accomplishments of the last couple of years, but the 
potential that lies ahead for a region, the Caucuses, central 
Asia, south Asia all being linked in a new hub of 
transportation and trade as long as we can keep the peace and 
security, and that is what we are committed to.
    The 2005 budget, as I said, includes $1.2 billion in 
assistance for Afghanistan, which is on top of the $2.2 billion 
in 2004; $1.2 billion already out there and I will make a 
public announcement of the other $1 billion at the Afghan 
Donors' Conference in Berlin next week.
    As important as waging the war on terrorism is to America, 
we have other priorities in our foreign affairs budget; HIV/
AIDS, 8,000 people a day are dying of this terrible disease. It 
is extremely difficult to make economic improvements in a 
country if you are not working on these kinds of problems, and 
the President is with his HIV/AIDS program. Over the past year 
we have worked with Congress to pass legislation laying the 
groundwork for this fight.
    In marking our progress, earlier this month, Ambassador 
Tobias who heads the program for us, Secretary Thompson, 
Administrator Natsios of AID, and I rolled out the strategy for 
the HIV/AIDS plan and announced the first dispensation of 
dollars for these programs; $350 million in contracts will roll 
out to some of the NGOs and PDOs. As a crucial next step, the 
2005 budget request expands on the President's plan with $2.8 
billion to combat AIDS in the most affected countries in Africa 
and the Caribbean. Together, the Department of State, USAID, 
and the Department of Health and Human Services, will use the 
significantly increased resources quickly and effectively to 
achieve the President's ambitious goals in the fight against 
global AIDS.
    Just as a digression, we are also seeing polio back in 
certain parts of Africa, and this has to be part of our health 
efforts as well, coming out of the Department of State and 
coming out of USAID.
    Of course, there are other dimensions of economic success 
in Africa, and the program that we are pushing forward and you 
know a great deal about, the Millennium Challenge Corporation. 
The corporation has now been formed. I am the chairman of the 
board. We have sent a nominee to the Senate to be the CEO of 
this board, Mr. Paul Applegarth. The Millennium Challenge 
Corporation will fund infrastructure and other similar 
proposals to those countries that are committed to democracy, 
the free enterprise system, individual rights of men and women, 
the rule of law, and the end of corruption. We have other 
foreign assistance accounts, but the millennium challenge 
account will invest in those countries that are moving in the 
right direction.
    Let me turn now, gentlemen, to the part of the budget 
request that is of particular interest to you, State 
operations. As you recall, we created the diplomatic readiness 
initiative in 2002 to address staffing and training gaps that 
had become very averse to the conduct of America's diplomacy. 
The goal of the diplomatic readiness initiative was to hire 
1,158 new foreign and civil service employees over a 3-year 
period. These new hires, the first over-attrition hires in 
years, would allow us to provide training opportunities for our 
people and greatly improve the Department's ability to respond 
to crises, to ramp up when we needed to, such as we have had to 
do in Iraq and Afghanistan.
    I cannot say strong enough what a dynamic impact this 
program has had on the Department. The Department sees that its 
leadership, but more importantly its leadership in Congress 
cares about the Department. Your are willing to invest in the 
readiness of our people, bring in new people. I got a report 
from the Under Secretary for Management yesterday that close to 
30,000 people have already signed up for the next giving of the 
foreign service exam. We have been averaging 50,000 people a 
year for the last 2 years wanting to become part of this new 
team, which I think has been energized by the support we have 
been receiving from the Congress and for that I am very 
appreciative.
    We also created new mandatory leadership and management 
training. It is great for our people to learn how to speak 
different languages and learn all about foreign policy and to 
be experts and write papers. But they also have to be able to 
lead and manage people in these very, very complicated missions 
that we have around the world. So beginning from the first day 
that you come into the foreign service and go to the junior 
officers' course, the entry level course, you will receive 
leadership and management training and will continue throughout 
your whole career. If this bears a marked similarity to the way 
they do it in the military, it is not coincidental or 
accidental. We are essentially adopting what I learned in the 
military and bringing it over to the foreign service and to the 
civil service. We are giving leadership training to our senior 
civil service employees as well.
    The other thing I am very proud of, of course, is the 
information technology investment that we have made with your 
support. It has paid off. Every desk in the State Department, 
everywhere in the State Department now has an Internet capable 
computer sitting there. We did it in-house for the most part.
    Senator Gregg. And it worked.
    Secretary Powell. It works.
    Senator Gregg. Not like some of our other agencies.
    Secretary Powell. Frankly, we looked outside and then we 
decided, we can do this ourselves. You may recall, gentlemen, 
that you had a real problem with the way we were running our 
Diplomatic Telecommunications Service for years, and Mr. Tenet 
and I sat down and said, let us figure out who can deliver the 
capacity best, and we solved that. Mr. Tenet provides the 
capacity, and the person working for Mr. Tenet to do that also 
works for me. So we have a good deal and it is working. Our 
capacity has increased, the cost has gone down considerably, 
and everybody is happy. Therefore, I can put broadband 
capability in every mission around the world.
    Just a little war story on how this works, as you know, 
part of our effort to reach out to the Congress was to create a 
State Department office up here to respond to Members of 
Congress. I was able to get an office in the House. I do not 
want to point any fingers but I have not yet been able to get a 
room on the Senate side. Be that as it may, 30 percent of the 
work of my House office comes from the Senate side. I was in 
there the other day waiting for a hearing to begin and just 
talking to my folks who work there. There are three people in 
there. I said, what kind of requests are you getting? 
Constituent requests, visa problems, all this, hundreds and 
hundreds--the volume is going up 300 percent in the last year.
    I said, give me an example of how you solve a problem that 
a Member of Congress brings to you. They said visa problems are 
common ones. Somebody will come in and say, why didn't a friend 
of mine get a visa when they applied in New Delhi or Mumbai or 
somewhere like that? I said, how do you handle that? Do you go 
to the Department and ask Consular Affairs? They said, no, we 
go right to the Embassy. How do you go right to the Embassy? 
Information technology. I said, show me. Sandra Shipshock, the 
officer who was working in the office, went to her computer and 
in 10 seconds she had not only gotten to the Embassy, she got 
into the Embassy's consular section data base. And in less than 
20 seconds she had pulled up the specific visa application with 
a picture of the individual who had applied for the visa and 
why the visa was denied.
    This data base is all secure. We have firewalls. Not 
anybody can just go in like you are going to Google. But the 
fact of the matter is that the kind of information technology 
system we have put in place allows us to provide that kind of 
service, not only to Members of Congress but to the public.
    In that same vein, now that we have this information 
technology system coming along, we have to change the way we do 
business. We cannot just be an information system without a 
change in the process and the thinking of the Department. That 
is what our SMART Project is all about that we are asking for 
your support. We want to get rid of cables. Get rid of the way 
we used to do it in World War II. My staff gave me a chart the 
other day and it was recognizing that the last Wang computer 
left the Department 3 months ago. I am pleased to hear that. It 
should have left 10 years ago. But we are now in the 
information age and I ask for your support for our SMART 
program so that we can change the thinking in the Department as 
well as just put new computers and software into place.
    Mr. Chairman, the Department has the responsibility to 
protect more than 60,000 Government employees who work in 
Embassies and consulates abroad. I know how interested you have 
been in this program over the years. You know that we have 
reorganized our efforts. We reorganized the Office of Overseas 
Building Operations to manage the effort with speed, efficiency 
and effectiveness under the leadership of General Chuck 
Williams. At the beginning of this administration we were 
building one new secure Embassy a year. Today we are building 
10 new secure Embassy compounds a year. Many of these compounds 
also have separate facilities for USAID. They are also 
deserving of protection.
    Moreover, we have reduced the Embassy's program cost by 20 
percent using modern management techniques, using common 
components among our Embassy projects. Within the budget we are 
watching a plan to replace the remaining 150 Embassies and 
consulates that do not meet current security standards over the 
next 14 years for a total cost of $17 billion.
    To fund construction of these compounds we will begin the 
capital security cost-sharing program in 2005. Not everybody is 
crazy with this cost-sharing program, but it has to be done and 
I am working with my Cabinet colleagues on it. Each agency with 
staff overseas will contribute annually toward construction of 
new facilities based on the number of positions that that 
Department or agency wants in the type of space that we are 
preparing for them. We arrived at the cost shares in the 2005 
President's budget request in consultation with each agency and 
Department.
    Along with securing our facilities we have focused on 
assuring that overseas staffing is deployed where they are 
mostly needed to serve U.S. interest. As agencies assess the 
real cost of maintaining staff overseas I hope they will adjust 
their overseas staffing levels to the minimum absolutely 
necessary since they will now have to contribute to the cost of 
maintaining them overseas.
    Our budget request also, I might say, touches on physical 
security improvements to those soft targets in our missions, 
schools, recreational facilities. You know that we have an 
extensive plan to go after the soft targeting possibility, 
providing physical security improvements to overseas schools 
attended by dependents of Government employees and other 
citizens. Our 2005 request includes $27 million for this 
effort, including $10 million for the schools, $5 million to 
improve security at employee association facilities, and $12 
million for residential security upgrades. Protection of 
Americans living and working overseas is one of our highest 
priorities.
    We also appreciate the ongoing support from this committee 
for our peacekeeping budget. U.N. peacekeeping operations in 
troubled and fragile regions have been and remain critical to 
ensuring that such places are given stability and the time they 
need to work on long-term solutions to their underlying 
conflicts and problems. UNAMSIL in Sierra Leone and UNMISET in 
East Timor have been effective in helping new governments to 
establish themselves. We are also supporting peacekeeping 
missions in Liberia and Ivory Coast, and I would just ask for 
your continued support.
    I am going to have difficulty meeting all of the 
peacekeeping financial responsibilities that I expect to arise 
over the next year, but the 2005 submission is certainly a good 
start on meeting those responsibilities. We will just have to 
see how the cost flows out in the course of the fiscal year.

                           PREPARED STATEMENT

    Mr. Chairman, Senator Hollings, Senator Byrd, thank you for 
this opportunity to present our case. I thank you for your past 
support and I will thank you in advance for your future 
support.
    [The statement follows:]

                 Prepared Statement of Colin L. Powell

    Mr. Chairman, members of the subcommittee, thank you for the 
opportunity to testify on the State Department's portion of the 
President's Budget Request for fiscal year 2005. While I know that your 
specific oversight is of the State Department operations portion of 
that budget request, I want to give you as well an overview of what 
those operations will support in the way of foreign policy. So let me 
give you the overall budget picture first and, then, touch on foreign 
operations. Finally, I will deal with highlights of our funding request 
for State Department operations.
    The President's fiscal year 2005 International Affairs Budget for 
the Department of State, USAID, and other foreign affairs agencies 
totals $31.5 billion, broken down as follows: Foreign Operations--$21.3 
billion; State Operations--$8.4 billion; Public Law 480 Food Aid--$1.2 
billion; International Broadcasting--$569 million; and U.S. Institute 
of Peace--$22 million.
    Mr. Chairman, the President's top foreign policy priority is 
winning the war on terrorism. Forty-eight percent of the President's 
budget for foreign affairs directly supports that priority by assisting 
our allies and strengthening the United States' diplomatic posture. For 
example: $1.2 billion supports Afghanistan reconstruction, security and 
democracy building, and more than $5.7 billion is provided for 
assistance to countries around the world that have joined us in the war 
on terrorism, and $3.5 billion indirectly supports the war on terrorism 
by strengthening our ability to respond to emergencies and conflict 
situations. Moreover, $190 million is aimed at expanding democracy in 
the Greater Middle East, in part to help alleviate the conditions that 
spawn terrorists.
    In addition, $5.3 billion is targeted for the President's bold 
initiatives to fight HIV/AIDS and create the Millennium Challenge 
Corporation, both of which will support stability and improve the 
quality of life for the world's poor--and, again, help to relieve 
conditions that cause resentment and despair.
    Mr. Chairman, let me elaborate a bit on how some of these dollars 
will be spent.

                      WINNING THE WAR ON TERRORISM

    Winning on the battlefield with our superb military forces is just 
one step in defeating terrorism. To eradicate terrorism, the United 
States must help create stable governments in nations that once 
supported terrorism, go after terrorist support mechanisms as well as 
the terrorists themselves, and help alleviate conditions in the world 
that enable terrorists to bring in new recruits. To this end, in fiscal 
year 2005 the State Department and USAID will continue to focus on the 
reconstruction of Iraq and Afghanistan, support our coalition partners 
to further our counterterrorism, law enforcement and intelligence 
cooperation, and expand democracy and help generate prosperity, 
especially in the Middle East.
Building a Free and Prosperous Iraq
    The United States faces one of its greatest challenges in 
developing a secure, free and prosperous Iraq. The USG is contributing 
almost $21 billion in reconstruction funds and humanitarian assistance 
to this effort. The World Bank and the International Monetary Fund are 
expected to provide another $4 to 8 billion in loans and grants over 
the next three years. These resources, coupled with the growing 
assistance of international donors, will ease the transition from 
dictatorship to democracy and lay the foundation for a market economy 
and a political system that respects human rights and represents the 
voices of all Iraqis.
    The Coalition Provisional Authority (CPA) and the Iraqi Governing 
Council (IGC) have made great strides in the areas of security, 
economic stability and growth, and democratization. Iraqi security 
forces now comprise more than half of the total security forces in the 
country. In addition, the CPA has established a New Iraqi Army, issued 
a new currency and refurbished and equipped schools and hospitals. And, 
as you know, the CPA is taking steps to help the Iraqis form a fully 
sovereign government this summer.
    Much work remains to be done. Working with our coalition partners, 
we will continue to train Iraqi police, border guards, the Civil 
Defense Corps and the Army in order to ensure the country's security as 
we effect a timely transition to democratic self-governance and a 
stable future.
    At the same time, we are helping provide critical infrastructure, 
including clean water, electricity and reliable telecommunications 
systems which are essential for meeting basic human needs as well as 
for economic and democratic development. Thousands of brave Americans, 
in uniform and in mufti, are in Iraq now working tirelessly to help 
Iraqis succeed in this historic effort. Alongside their military 
colleagues, USAID, State Department and the Departments of the Treasury 
and Commerce are working to implement infrastructure, democracy 
building, education, health and economic development programs. These 
efforts are producing real progress in Iraq.
    As a definitive example of this progress, on March 8, the IGC 
formally signed the Transitional Administrative Law (TAL)--essentially 
an interim constitution for Iraq. This was a remarkable milestone. The 
TAL recognizes freedom of religion and expression, the right to 
assemble and to organize political parties, and other fundamentally 
democratic principles, as well as prohibiting discrimination based on 
gender, nationality or religion. This is a huge step for the people of 
Iraq and for the region--a step toward constitutional democracy. It is 
a step that just a year ago, Iraqis would not have imagined possible.
    The U.N. Secretary General's Special Advisor, Lakhdar Brahimi, was 
invited back to Iraq by the IGC last week. He will help the Iraqis to 
determine what sort of transitional Iraqi government will be developed 
and to prepare for elections at the end of this year or early in the 
next. Creating a democratic government in Iraq will be an enormous 
challenge. But Ambassador Bremer, working with the Iraq Governing 
Council and with the United Nations and our coalition partners, is 
committed to success. And when the CPA, funded and directed by the 
Department of Defense, goes out of business on June 30 and the State 
Department assumes the lead role in representing and managing U.S. 
interests in Iraq, we will carry on that commitment. We are already 
thoroughly involved. I was just in Baghdad last week meeting with 
Ambassador Bremer, members of the IGC, and talking to some of our 
troops. I know how thoroughly involved we are. And we will all succeed.

Winning the Peace in Afghanistan
    Mr. Chairman, Afghanistan is another high priority for this 
Administration. The United States is committed to helping build a 
stable and democratic Afghanistan that is free from terror and no 
longer harbors threats to our security. After we and our coalition 
partners defeated the Taliban government, we faced the daunting task of 
helping the Afghan people rebuild their country. We have demonstrated 
our commitment to this effort by providing over $3.7 billion in 
economic and security assistance to Afghanistan since 2001.
    Through our assistance and the assistance of the international 
community, the government of Afghanistan is successfully navigating the 
transition that began in October 2001. Afghanistan adopted a 
constitution earlier this year and is preparing for democratic national 
elections this summer. With technical assistance from the United 
States, Afghanistan successfully introduced a new stable currency in 
October 2002 and is working to improve revenue collection in the 
provinces. The lives of women and girls are improving as women pursue 
economic and political opportunities and girls return to school. Since 
2001, the United States has rehabilitated 205 schools and 140 health 
clinics and trained fifteen battalions of the Afghan National Army 
(ANA). Also, President Bush's commitment to de-mine and repave the 
entire stretch of the Kabul-Kandahar highway was fulfilled. The road 
had not been functional for over 20 years. What was once a 30-hour 
journey can now be accomplished in 5 or 6 hours.
    While the Afghanistan of today is very different from the 
Afghanistan of September 2001, there is still much left to accomplish. 
In the near-term, the United States will assist the government of 
Afghanistan in its preparations for elections this summer to ensure 
that they are free and fair. To demonstrate tangible benefits to the 
Afghan people, we will continue to implement assistance on an 
accelerated basis. The fiscal year 2005 Budget contains $1.2 billion in 
assistance for Afghanistan that will be focused on education, health, 
infrastructure, and assistance to the ANA, including drawdown authority 
and Department of Defense ``train and equip''. For example, U.S. 
assistance efforts will concentrate on rehabilitation and construction 
of an additional 275 schools and 150 health clinics by June 2004, and 
complete equipping of the fifteen army battalions. The United States 
will also extend the Kabul-Kandahar road to Herat so that people and 
commerce will be linked East and West across Afghanistan with a ground 
transportation link between three of the largest cities.
    Last week, when I was in Kabul to meet with President Karzai and 
his team, I had the chance to visit a voter registration site. I saw 
how far Afghanistan has progressed, in only two years, along the path 
to constitutional democracy. I saw also clear evidence of the Afghan 
people's commitment to continue on that path despite the many 
challenges ahead. I met 9 or 10 women at the site and they knew what 
was at stake in their country. They were eager for the free and fair 
elections called for in the Bonn Agreement and I assured them that 
America was solidly behind them. I told them that as long as they are 
committed to building a new, democratic Afghanistan, we will stand 
shoulder to shoulder with them.

Support for Our Coalition Partners
    As part of the war on terrorism, President Bush established a clear 
policy to work with other nations to meet the challenges of defeating 
terror networks with global reach. This commitment extends to the 
front-line states that have joined us in the war on terrorism and to 
those nations that are key to successful transitions to democracy in 
Iraq and Afghanistan.
    Our assistance enables countries cooperating closely with the 
United States to prevent future attacks, improve counter-terrorism 
capabilities and tighten border controls. As I indicated earlier, the 
fiscal year 2005 Budget for International Affairs provides more than 
$5.7 billion for assistance to countries around the world that have 
joined us in the war on terrorism, including Turkey, Jordan, 
Afghanistan, Pakistan, Indonesia and the Philippines.
    U.S. assistance has also resulted in unparalleled law enforcement 
and intelligence cooperation that has destroyed terrorist cells, 
disrupted terrorist operations and prevented attacks. There are many 
counterterrorism successes in cooperating countries and international 
organizations. For example:
  --Pakistan has apprehended more than 500 al Qaeda terrorists and 
        members of the Taliban through the leadership of President 
        Musharraf, stronger border security measures and law 
        enforcement cooperation throughout the country. I talked with 
        President Musharraf when I was in Islamabad last week. As you 
        know, his military forces were over the weekend hotly engaged 
        with Taliban and al Qaida fighters in the border areas. More of 
        the terrorists were being killed or captured. Fighting will 
        likely continue.
  --Jordan continues its strong counterterrorism efforts, including 
        arresting two individuals with links to al Qaeda who admitted 
        responsibility for the October 2002 murder of USAID Foreign 
        Service officer Lawrence Foley in Amman.
  --The North Atlantic Treaty Organization has endorsed an ambitious 
        transformation agenda designed to enhance its capabilities by 
        increasing deployment speed and agility to address new threats 
        of terrorism.
  --Colombia has developed a democratic security strategy as a 
        blueprint for waging a unified, aggressive counterterror-
        counternarcotics campaign against designated foreign terrorist 
        organizations and other illegal, armed groups.
    The United States and its Southeast Asian allies and friends have 
made significant advances against the regional terrorist organization 
Jemaah Islamiyah which was responsible for the Bali attack in 2002 that 
killed more than 200 people. In early August 2003, an Indonesian court 
convicted and sentenced to death a key figure in that bombing.
    Since September 11, 2001, 173 countries have issued orders to 
freeze the assets of terrorists. As a result, terror networks have lost 
access to nearly $200 million in more than 1,400 terrorist-related 
accounts around the world. The World Bank, International Monetary Fund 
and other multilateral development banks have also played an important 
role in this fight by strengthening international defenses against 
terrorist finance.
    While progress has been made attacking terrorist organizations both 
globally and regionally, much work remains to be done. The fiscal year 
2005 President's Budget strengthens our financial commitment to our 
coalition partners to wage the global war on terror. Highlights of the 
President's request include $700 million for Pakistan to help advance 
security and economic opportunity for Pakistan's citizens, including a 
multi-year educational support program; $461 million for Jordan to 
increase economic opportunities for Jordanian communities and 
strengthen Jordan's ability to secure its borders; and $577 million for 
Colombia to support President Uribe's unified campaign against drugs 
and terrorism.
    In September 2003, at the United Nations, President Bush said: 
``All governments that support terror are complicit in a war against 
civilization. No government should ignore the threat of terror, because 
to look the other way gives terrorists the chance to regroup and 
recruit and prepare. And all nations that fight terror, as if the lives 
of their own people depend on it, will earn the favorable judgment of 
history.'' We are helping countries to that judgment.
    Mr. Chairman, one of the aspects of the War on Terrorism that gives 
us a particular sense of urgency is proliferation of weapons of mass 
destruction. These terrible weapons are becoming easier to acquire, 
build, hide, and transport.
    On February 11, President Bush spoke at the National Defense 
University (NDU) and outlined the Administration's approach to this 
growing danger. The President described how we have worked for years to 
uncover one particular nefarious network--that of A.Q. Khan.
    Men and women of our own and other intelligence services have done 
superb and often very dangerous work to disclose these operations to 
the light of day. Now, we and our friends and allies are working around 
the clock to get all the details of this network and to shut it down, 
permanently.
    We know that this network fed nuclear technology to Libya, Iran, 
and North Korea.
    At NDU, President Bush proposed seven measures to strengthen the 
world's efforts to prevent the spread of WMD:
  --Expand the Proliferation Security Initiative (PSI) to address more 
        than shipments and transfers; even to take direct action 
        against proliferation networks.
  --Call on all nations to strengthen the laws and international 
        controls that govern proliferation, including passing the UNSCR 
        requiring all states to criminalize proliferation, enact strict 
        export controls, and secure sensitive materials.
  --Expand our efforts to keep Cold War weapons and other dangerous 
        materials out of the hands of terrorists--efforts such as those 
        accomplished under Nunn-Lugar.
  --Close the loophole in the Nuclear Nonproliferation Treaty that 
        allows states such as Iran to produce nuclear material that can 
        be used to build bombs under the cover of civilian nuclear 
        programs.
  --Univeralize the IAEA Additional Protocol.
  --Create a special committee on the IAEA Board of Governors to focus 
        on safeguards and verification.
  --And, finally, disallow countries under investigation for violating 
        nuclear nonproliferation treaties from serving on the IAEA 
        Board of Governors.
    As the President said at NDU, the nexus of terrorists and WMD is a 
new and unique threat. It comes not with ships and fighters and tanks 
and divisions, but clandestinely, in the dark of the night. But the 
consequences are devastating. No President can afford to ignore such a 
threat. And President Bush will not ignore it.

Expansion of Democracy in the Middle East
    We believe that expanding democracy in the Middle East is critical 
to eradicating international terrorism. But in many nations of the 
Middle East, democracy is at best an unwelcome guest and at worst a 
total stranger. The United States continues to increase its diplomatic 
and assistance activities in the Middle East to promote democratic 
voices--focusing particularly on women--in the political process, 
support increased accountability in government, assist local efforts to 
strengthen respect for the rule of law, assist independent media, and 
invest in the next generation of leaders.
    As the President emphasized in his speech last November at the 
National Endowment for Democracy (NED), reform in the Middle East is of 
vital importance to the future of peace and stability in that region as 
well as to the national security of the United States. As long as 
freedom and democracy do not flourish in the Middle East, resentment 
and despair will continue to grow--and the region will serve as an 
exporter of violence and terror to free nations. For the United States, 
promoting democracy and freedom in the Middle East is a difficult, yet 
essential calling.
    There are promising developments upon which to build. The 
government of Jordan, for example, is committed to accelerating reform. 
Results include free and fair elections, three women holding Cabinet 
Minister positions for the first time in Jordan's history, and major 
investments in education. Positive developments also can be found in 
Morocco, which held parliamentary elections last year that were 
acclaimed as free, fair and transparent.
    In April 2003, the Administration launched the Middle East 
Partnership Initiative (MEPI), an intensive inter-agency effort to 
support political and education reform and economic development in the 
region. The President continues his commitment by providing $150 
million in fiscal year 2005 for these efforts.
    To enhance this USG effort with a key NGO, the President has 
doubled the NED budget to $80 million specifically to create a Greater 
Middle East Leadership and Democracy Initiative. NED is a leader in 
efforts to strengthen democracy and tolerance around the world through 
its work with civil society. We want that work to flourish.
    As President Bush said in his November speech at NED: ``The United 
States has adopted a new policy, a forward strategy of freedom in the 
Middle East. This strategy requires the same persistence and energy and 
idealism we have shown before. And it will yield the same results. As 
in Europe, as in Asia, as in every region of the world, the advance of 
freedom leads to peace.''

Public Diplomacy in the Middle East
    And the advance of freedom is aided decisively by the words of 
freedom.
    Democracy flourishes with freedom of information and exposure to 
diverse ideas. The President's fiscal year 2005 Budget promotes 
expansion of democracy in the Middle East by providing public access to 
information through exchange programs and the Middle East Television 
Network.
    New public diplomacy efforts including the Partnerships for 
Learning (P4L) and Youth Exchange and Study (YES) initiatives have been 
created to reach a younger and more diverse audience through academic 
and professional exchange programs. In fiscal year 2005, the P4L and 
the YES programs, funded at $61 million, will focus more on youth of 
the Muslim world, specifically targeting non-traditional, non-elite, 
often female and non-English speaking youth.
    U.S. broadcasting initiatives in the Middle East encourage the 
development of a free press in the American tradition and provide 
Middle Eastern viewers and listeners access to a variety of ideas. The 
United States revamped its Arabic radio broadcasts in 2002 with the 
introduction of Radio Sawa, which broadcasts to the region twenty-four 
hours a day. As a result, audience size for our Arabic broadcasting 
increased from under 2 percent in 2001 to over 30 percent in 2003. 
Based on this successful model, the United States introduced Radio 
Farda to broadcast to Iran around the clock. Building on this success, 
the fiscal year 2005 President's Budget Request provides over $70 
million for Arabic and Persian radio and television broadcasts to the 
Middle East. Last month, the United States launched the Middle East 
Television Network, an Arabic language satellite network that will have 
the capability of reaching millions of viewers and will provide a means 
for Middle Easterners to better understand democracy and free market 
policies, as well as the United States and its people. This network 
kicked off on February 14 with nine hours per day of broadcasting. 
Today, the broadcasting is 24/7. The network--Al-Hurra, or ``the Free 
One''--reaches 22 countries, including Iraq. President Bush has already 
appeared on the network and I did an interview several weeks ago.

                 OUR NEW APPROACH TO GLOBAL PROSPERITY

    President Bush's approach to global economic growth emphasizes 
proven American values: governing justly, investing in people, and 
encouraging economic freedom. President Bush has pledged to increase 
economic engagement with and support for countries that commit to these 
goals through an ambitious trade agenda and new approaches to 
development assistance focusing on country performance and measurable 
results.

The Millennium Challenge Account (MCA)
    In February of 2003, we sent the Congress a budget request for the 
MCA and legislation to authorize the creation of the Millennium 
Challenge Corporation (MCC), the agency designed to support innovative 
development strategies and to ensure accountability for results.
    The MCC will fund only proposals for grants that have clear, 
measurable objectives, a sound financial plan and indicators for 
assessing progress.
    The Congress appropriated $1 billion for MCA for fiscal year 2004. 
The fiscal year 2005 budget request of $2.5 billion makes a significant 
second year increase to the MCA and paves the way to reaching the 
President's commitment of $5 billion in fiscal year 2006.

Trade Promotion Authority (TPA)
    President Bush recognizes that the fastest, surest way to move from 
poverty to prosperity is through expanded and freer trade. America and 
the world benefit from free trade. For this reason, one of his first 
actions upon taking office in 2001 was to seek TPA, allowing him to 
negotiate market-opening agreements with other countries. The President 
aims to continue vigorously to pursue his free trade agenda in order to 
lift developing countries out of poverty, while creating high-paying 
job opportunities for America's workers, businesses, farmers and 
ranchers and benefiting all Americans through lower prices and wider 
choices. As the President said in April, 2001 at the Organization of 
American States: ``Open trade fuels the engines of economic growth that 
creates new jobs and new income. It applies the power of markets to the 
needs of the poor. It spurs the process of economic and legal reform. 
It helps dismantle protectionist bureaucracies that stifle incentive 
and invite corruption. And open trade reinforces the habits of liberty 
that sustain democracy over the long term.''
    Since receiving TPA in 2002, the President has made good on his 
promise, completing free trade agreements with Chile and Singapore, 
which were quickly approved by Congress and went into effect on January 
1. We have recently completed negotiations with five Central American 
countries on the Central America Free Trade Agreement (CAFTA) and our 
work to bring the Dominican Republic (DR) into that agreement concluded 
successfully on March 14 with the signing of an FTA with that country. 
Now, the DR can join CAFTA. In February, we announced the conclusion of 
an agreement with Australia. More recently, negotiations have been 
completed with Morocco and an agreement announced, and negotiations are 
ongoing with the Southern African Customs Union (SACU), Bahrain, and on 
the Free Trade Agreement of the Americas (FTAA). We are concluding 
comprehensive agreements that include market access for goods and 
services, strong intellectual property and investment provisions, and 
include commitments for strong environmental and labor protections by 
our partners. These arrangements benefit Americans and our trading 
partners.
    Building on this significant progress, the President intends to 
launch free trade negotiations with Thailand, Panama, and the Andean 
countries of Colombia, Ecuador, Bolivia and Peru. The President has 
also stated his vision for a Middle East Free Trade Area by 2013, to 
ignite economic growth and expand opportunity in this critical region. 
Finally, the President is committed to wrapping up successfully the 
World Trade Organization's Doha agenda. The United States has taken the 
lead in re-energizing these negotiations following the Cancun 
Ministerial.

             CARING FOR THE WORLD'S MOST VULNERABLE PEOPLE

Emergency Plan for AIDS Relief
    When President Bush took office in January 2001, the HIV/AIDS 
pandemic was at an all time high, with the estimated number of adults 
and children living with HIV/AIDS globally at 37 million, with 68 
percent of those individuals living in sub-Saharan Africa. From fiscal 
years 1993 to 2001 the total U.S. Government global AIDS budget was 
about $1.9 billion. As part of the Emergency Plan for AIDS Relief, the 
President proposed $2 billion in fiscal year 2004 as the first 
installment of a five-year, $15 billion initiative, surpassing nine 
years of funding in a single year. The President's Emergency Plan for 
AIDS Relief represents the single largest international public health 
initiative ever attempted to defeat a disease. The President's Plan 
targets an unprecedented level of assistance to the 14 most afflicted 
countries in Africa and the Caribbean to wage and win the war against 
HIV/AIDS. In addition, programs will continue in 75 other countries.
    By 2008, we believe the President's Plan will prevent seven million 
new infections, treat two million HIV-infected people, and care for 10 
million HIV-infected individuals and those orphaned by AIDS in 
Botswana, Cote d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, 
Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia.
    Announced during President Bush's State of the Union address on 
January 28, 2003, the Emergency Plan provides $15 billion over five 
years for those countries hardest hit by the pandemic, including $1 
billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria. 
The fiscal year 2005 Budget provides $2.8 billion from State, USAID, 
and the Department of Health and Human Services (HHS) to combat global 
AIDS, more than tripling funding for international HIV/AIDS since the 
President took office.
    Over the past year, we have worked with the Congress to pass 
legislation laying the groundwork for this effort and to appoint a 
senior official at the State Department to coordinate all U.S. 
Government international HIV/AIDS activities. Ambassador Randall Tobias 
has been confirmed by Congress and has now taken steps to assure 
immediate relief to the selected countries.
    Earlier this month, Ambassador Tobias, Secretary Thompson, USAID 
Administrator Andrew Natsios, and I rolled out the strategy for this 
plan and announced the first dispensation of dollars--$350 million in 
contracts to some of the NGOs and PVOs who will be carrying out the 
fight at the grass-roots level. It was a thrilling moment, I can assure 
you.
    As a crucial next step, the fiscal year 2005 Budget Request expands 
on the Emergency Plan. By working together as a highly collaborative 
team, and placing primary ownership of these efforts in the hands of 
the countries that we are helping--just as you will recall the Marshall 
Plan did so successfully in post-WWII Europe--the Department of State, 
USAID and HHS can use significantly increased resources quickly and 
effectively to achieve the President's ambitious goals in the fight 
against global AIDS.
    Mr. Chairman, President Bush summed it up this way in April of last 
year, ``There are only two possible responses to suffering on this 
scale. We can turn our eyes away in resignation and despair, or we can 
take decisive, historic action to turn the tide against this disease 
and give the hope of life to millions who need our help now. The United 
States of America chooses the path of action and the path of hope.'' 
These dollars put us squarely on that path.

Emergency Humanitarian Assistance--Helping Others in Need
    The President's Budget Request reflects a continued commitment to 
humanitarian assistance. The request maintains U.S. leadership in 
providing food and non-food assistance to refugees, internally 
displaced persons, and other vulnerable people in all corners of the 
world. In addition, the budget reflects the findings of the Program 
Assessment Rating Tool (PART) evaluations completed for the United 
Nations High Commissioner for Refugees and for USAID's Public Law 480 
Title II international food assistance, which confirmed a clear purpose 
for these programs.
    In 2003, the Administration provided funding to several 
international and non-governmental organizations to assist nearly 
200,000 Angolan refugees and internally displaced persons return home 
after decades of civil war.
    In an Ethiopia enveloped by drought, the Administration led 
international efforts to prevent widespread famine among 13 million 
vulnerable people, providing over one million metric tons of emergency 
food aid (valued at nearly half a billion dollars) to the World Food 
Program and NGOs, funding immunizations for weakened children, and 
supplying emergency seeds to farmers.
    In Sudan, the Administration worked with the United Nations and the 
Government of Sudan so that vital assistance could be delivered to the 
Sudanese people. This year the United States will provide about $210 
million in vital assistance to the people in the south, including 
approximately 125,000 metric tons (valued at nearly $115 million) in 
food aid, as well as non-food assistance, such as sanitation and water. 
We anticipate that a comprehensive peace agreement in Sudan will allow 
us to expand significantly our development assistance to help the 
Sudanese people in effecting a long-awaited recovery following decades 
of civil war. The fiscal year 2005 Budget includes $436 million in 
humanitarian and development, economic, and security assistance 
funding, much of which will be contingent upon a peace settlement 
between the government and the south.
    The fiscal year 2005 Budget ensures that the Administration can 
continue to respond quickly and appropriately to victims of conflict 
and natural disasters and to help those in greatest need of food, 
shelter, health care and other essential assistance, including those in 
areas starting to recover from conflict and war, such as Liberia. In 
particular, the budget requests funding for a flexible account to give 
the President the ability to respond to unforeseen emergency needs, the 
Emergency Fund for Complex Foreign Crises, funded at $100 million.
    Now, Mr. Chairman, let me turn to the State Department operations 
portion of the President's Budget Request which, as you will recall, 
totals $8.4 billion.

               KEEPING AMERICANS SAFE AT HOME AND ABROAD

    The State Department has the responsibility to protect more than 
60,000 U.S. Government employees who work in embassies and consulates 
abroad. Since the 1998 bombings of two U.S. embassies in East Africa, 
the State Department has improved physical security overseas; however, 
as many of you are well aware, many posts are still not secure enough 
to withstand terrorist attacks and other dangers. To correct this 
problem, in 1999, the State Department launched a security upgrade and 
construction program to begin to address requirements in our more than 
260 embassies and consulates.

Capital Security Cost Sharing Program
    Working with the Congress, President Bush has accelerated the pace 
of improving and building new secure facilities. Moreover, we have 
reorganized the Overseas Buildings Office to manage the effort with 
speed, efficiency, and effectiveness. Within the budget, we are 
launching a plan to replace the remaining 150 embassies and consulates 
that do not meet current security standards over the next 14 years, for 
a total cost of $17.5 billion. To fund construction of these new 
embassy compounds, we will begin the Capital Security Cost Sharing 
(CSCS) Program in fiscal year 2005. We will implement this program in 
phases over the next five years.
    Each agency with staff overseas will contribute annually towards 
construction of the new facilities based on the number of positions and 
the type of space they occupy. We arrived at the cost shares in the 
fiscal year 2005 President's Budget Request in consultations with each 
agency and the State Department's Overseas Buildings Office.
    CSCS is also a major component of the President's Management Agenda 
Initiative on Rightsizing. Along with securing facilities, we have 
focused on assuring that overseas staffing is deployed where they are 
most needed to serve U.S. interests. As agencies assess the real cost 
of maintaining staff overseas, they will adjust their overseas staffing 
levels. In this way, new embassies will be built to suit appropriate 
staffing levels. The program is already producing rightsizing results. 
Agencies are taking steps to eliminate unfilled positions from their 
books to reduce any unnecessary CSCS charges, which in turn is leading 
to smaller embassy construction requirements.

Border Security
    Prior to September 11, 2001, the State Department's consular 
officers focused primarily on screening applicants based on whether 
they intended to work or reside legally in the United States. In 
deciding who should receive a visa, consular officers relied on State 
Department information systems as the primary basis for identifying 
potential terrorists. The State Department gave overseas consular 
officers the discretion to determine the level of scrutiny that should 
be applied to visa applications and encouraged the streamlining of 
procedures.
    Today, Consular Affairs at the State Department, working with both 
Customs and Border Protection and the Bureau of Citizenship and 
Immigration Services at the Department of Homeland Security, are 
cooperating to achieve our goals more effectively by sharing 
information and integrating information systems.
    The Department of State has invested substantial time, money, and 
effort in revamping its visa and passport process as well as its 
provision of American Citizen Services. The Department has more than 
doubled its database holdings on individuals who should not be issued 
visas, increased training for all consular officers, established 
special programs to vet applications more comprehensively, increased 
the number of skilled, American staff working in consular sections 
overseas, and improved data-sharing among agencies. The State 
Department, along with the Department of Homeland Security, is 
currently developing biometrics, such as fingerprints, digital 
photographs or iris scans, for both visas and passports in order to 
fulfill requirements of the Patriot and Border Security Acts and the 
International Civil Aviation Organization.
    As a part of the State Department's efforts to screen visa 
applicants more effectively, and in particular to ensure that a 
suspected terrorist does not receive a visa to enter the United States, 
we will be an active partner in the Terrorist Screening Center (TSC). 
The TSC, established in December 2003, will maintain a single, 
consolidated watchlist of terrorist suspects to be shared with Federal, 
state, local and private entities in accordance with applicable law. 
The Department of State will also participate in the Terrorist Threat 
Integration Center (TTIC), a joint-effort aimed at reducing the 
potential of intelligence gaps domestically and abroad.
    To achieve our goal of secure borders and open doors, in fiscal 
year 2005 the State Department plans to expand the use of biometrics to 
improve security in the visa and passport processes; more effectively 
fill gaps worldwide by hiring people with specific skills including 
language expertise; improve and maintain all consular systems; and more 
broadly expand data sharing with all agencies with border control or 
immigration related responsibilities. The budget in fiscal year 2005 
includes $175 million for biometric projects including photographs and 
fingerprints to comply with Border Security and Patriot Acts.
    The Border Security program underwent a PART analysis in the 
development of the fiscal year 2004 and fiscal year 2005 budgets and 
this budget request reflects the results of those analyses. The 
Department is moving ahead on program management improvements that 
clearly link to the Department of Homeland Security goals related to 
visa policy.

The Critical Importance of Diplomatic Readiness
    You will recall, Mr. Chairman, members of the subcommittee, that we 
created the Diplomatic Readiness Initiative (DRI) in 2002 to address 
staffing and training gaps that had become very adverse to the conduct 
of America's diplomacy. The goal of DRI was to hire 1,158 new foreign 
and civil service employees over a three-year period. These new hires, 
the first over-attrition hires in years, would allow us to provide 
training opportunities for our people and greatly improve the 
Department's ability to respond to crises and emerging priorities 
overseas and at critical domestic locations. To bring these new people 
on board--and to select the best men and women possible--we 
significantly improved Department hiring processes, to include 
recruiting personnel from more diverse experience and cultural 
backgrounds and people who could fill critical skill gaps. In the 
process, we broke records in recruiting and thus had the best and the 
brightest from which to select. The Department of State will be reaping 
the benefits from this process for many years to come. We also created 
new mandatory leadership and management training, enhanced public 
diplomacy and consular training, and made significant increases in the 
amount of language training available for new Foreign Service Officers. 
DRI hiring has supported the Department's efforts in responding to 
crises since September 11th and provided the additional resources 
necessary to staff overseas locations that truly represent the front 
line in the war on terrorism.
    Some of these positions, however, are being diverted to support new 
requirements not envisioned by DRI, such as permanently staffing new 
embassies in Afghanistan, Iraq, Sudan, and possibly in Tripoli. Because 
of this, the fiscal year 2005 Budget Request provides additional 
resources to continue our DRI commitment.
    DRI has allowed the Department to focus on recruiting, training and 
retaining a high quality work force, sized to requirements that can 
respond more flexibly to the dynamic and demanding world in which we 
live. We need to continue it.
    USAID has begun a similar effort to address gaps in staffing in 
technical skills, calling it the Development Readiness Initiative. 
USAID plans to hire approximately 40 Foreign Service Officers in fiscal 
year 2004 under this initiative. This Budget Request includes authority 
for USAID to hire up to 50 additional Foreign Service Officers in 
fiscal year 2005, in order to fill critical skill gaps identified 
through a comprehensive workforce analysis.

Information Technology
    Mr. Chairman, with your help and support, last year was a watershed 
year for the Department of State in the field of Information 
Technology. Shortly after assuming my position, I identified 
Information Technology as one of my highest priorities. Our objective 
was faster, smarter, simpler, and more effective diplomacy at every 
level. Three years later, we now have worldwide Internet access on 
desktops, as well as classified communications at every appropriate 
post. This has changed the way the State Department does business and 
could not have been accomplished without your support and that of the 
other members of the subcommittee, as well as the full Appropriations 
Committee. As we move forward with our efforts to replace our decades 
old cable system with the SMART program, the Committee's continued 
support of our IT modernization efforts will be as important as ever.

Soft Target Protection
    Mr. Chairman, I also want to tell you that your subcommittee's 
leadership in ensuring the protection of so-called ``overseas soft 
targets'' including overseas American schools is greatly appreciated. 
The Department has established a three-phased, multi-year program to 
provide physical security improvements to overseas schools attended by 
the dependents of U.S. government employees and other U.S. citizens. 
Our fiscal year 2005 request includes $27 million for this effort 
including $10 million for the schools, $5 million to improve security 
at employee association facilities, and $12 million for residential 
security upgrades. The protection of Americans living and working 
overseas is our highest priority.

Peacekeeping Operations
    We also appreciate the ongoing support from this Committee for our 
peacekeeping budget. U.N. Peacekeeping Operations in troubled and 
fragile regions has been and remains critical to ensuring that such 
places are given the stability and time they need to work on long-term 
solutions to their underlying conflicts. UNAMSIL in Sierra Leone, and 
UNMISET in East Timor have been effective in helping the new 
governments to establish themselves. We also supported peacekeeping 
missions in Liberia and Ivory Coast to assist their fragile 
transitional governments to implement peace agreements in those war-
torn states. Your support in meeting these important needs has been 
indispensable. We look forward to working with you on helping us meet 
additional peacekeeping obligations as they emerge.

                        CONCLUSION AND QUESTIONS

    Mr. Chairman, I have focussed your attention for long enough. There 
is more in the President's Budget Request for fiscal year 2005; but 
what I have outlined above represents the top priorities for the State 
Department. I will be pleased to answer any questions you have about 
these priorities or about any other portion of the budget request in 
which you are interested. If I cannot answer the question myself, I 
have a Department full of great people who can; and I will get you an 
answer for the record.
    Thank you.

    Senator Gregg. Thank you, Mr. Secretary. We will try to be 
helpful. There are so many issues that we would like to take 
up, and I know each of us has a series of areas. Let me just do 
a couple and then turn it over to Senator Hollings and Senator 
Byrd and then we will go around again.

            FAILURE OF CLINTON ADMINISTRATION WITH TERRORISM

    The first one is, I think you ought to be given the 
opportunity to respond to what Mr. Clarke said yesterday, 
although you were in Madrid. This committee dealt a great deal 
with the prior administration on the way it ramped up for 
terrorism and therefore with Mr. Clarke directly and 
indirectly, and we had some issues which are fairly well 
documented, with the failure of the prior administration to 
really get its act together and get coordinated.
    One of the big problems we had was the terrible stovepipe 
approach in the other administration. We tried to set up 
something called the National Domestic Preparedness Office 
(NDPO), and we tried to set up a number of major initiatives, a 
Deputy Attorney General to focus activity on terrorism, and 
quite honestly we ran into a lot of resistance and most of it 
came out of Mr. Clarke's shop, because I think he had much more 
of a centralized rather than cross-fertilization approach. So, 
I personally have reservations about his own track record in 
this area, but his criticism is there and he is a professional 
in this area.
    However you came into the office of Secretary of State and 
he has stated essentially that this administration did not put 
a high priority on terrorism. It focused primarily on China and 
Russia and the relationship on the Korean peninsula. Of course, 
the attack on the American observer ship, was the first major 
foreign crisis of this administration, and that terrorism was a 
backburner issue, to paraphrase from his viewpoint, once this 
administration came into office. I think you are probably the 
fairest broker around here, to be very honest. I think the 
American public views you as a straight shooter who has seen it 
all, both as, obviously, the Chairman of the Joint Chiefs of 
Staff and as Secretary of State, and Chairman of Joint Chiefs 
under both Republican and Democratic Presidents.

                        TERRORISM--HIGH PRIORITY

    So I would be honest in your assessment as a fair broker as 
to what level of interest you folks put into terrorism, what 
the priority was when you took office as Secretary of State, 
and do you agree with Mr. Clarke's characterizations?
    Secretary Powell. No, I do not. Terrorism was an important 
issue for President Bush and for all of us coming in. We were 
not unmindful of the fact that the Cole had just been attacked. 
We were not unmindful of the fact that our Embassies had been 
blown up, and terrorism was a danger. As I testified before the 
commission the other day, the very first briefing I received 
during my transition period, some 4 days after President Bush 
announced me, was from Mr. Clarke. The other colleagues that he 
had and that were becoming my colleagues, and the outgoing 
administration were involved in intelligence and terrorism. 
This is not the sign of somebody who did not have an interest 
in terrorism. It was also something the President made clear we 
had to be interested in.
    But you cannot ignore when a China problem comes along or a 
Russia problem. All of these are important issues, and 
terrorism was an important issue.
    I did not have adequate opportunity in my presentation the 
other day to describe all of the things that the State 
Department was doing in the name of the President throughout 
the spring and summer of 2001 to warn and alert American 
citizens around the world, to warn and alert our Embassies, all 
the things that Mr. Rumsfeld was doing to make sure that our 
military forces were secure, sending fleets to sea, taking our 
ships and our other military forces out of areas of 
vulnerability. The CIA was hard at work. We saw the threat. We 
did not ignore the threat. We responded to the threat.
    The suggestion, however, that there was one magic moment or 
one magic bullet or one moment in time when you could connect 
two dots and say, we know that these individuals are in our 
country and we know that they are planning to fly planes into 
the World Trade Center is not right. We never connected the 
dots like that, and I am not sure that except in hindsight 
could one have seen that the dots might have been connected in 
that way. So I think all of us were working hard.
    The question about, you did not have enough meetings, I had 
all kinds of meetings in the Department. But the whole thing 
did not rest on all the principals getting together every day 
to talk to one another or to stare at one another. You do that 
when something is unfolding in a crisis atmosphere, as Mr. 
Clarke makes reference to, just before the millennium Y2K 
period. That is different. That is when you were in a real-time 
mode and you were expecting something to happen over New Year's 
Eve Y2K.
    But I can tell you that the President was interested in 
this. He gave instructions to the chiefs of mission. The 
President sends a letter to every Ambassador who is taking over 
as a chief of mission, and one of the elements in that letter 
was, you are responsible for the security of your Embassy. I 
was charged by the President to work with those Ambassadors.
    We did not see, to the best of my knowledge and you have 
heard from Mr. Tenet, and the FBI will be presenting before the 
commission next week, we did not see enough information to say 
that we knew that there was a threat already inside the 
country, nor did I see in my first several months until 9/11 
came along, those first 7 months--the previous administration 
had 7, 8 years. But in our first 7 months I never saw a case 
come together that was of sufficient power of persuasion that 
you could say, we know enough about al Qaeda and we know enough 
about the Taliban that we could simply on our own, without 
getting Pakistan on our side, to go and invade Afghanistan and 
look for Osama bin Laden. It would not have been possible 
without the support and cooperation of the countries in the 
region, Uzbekistan, Pakistan, and not just say what we had to 
work out with the Russians and others in the region.
    So I have thought about this. I have listened to the 
testimony. Mr. Clarke says that he tried to get access to 
various people in the administration. Dr. Rice has responded to 
this. She was available to him. He worked directly for her. 
There has been a discussion of memos sent, memos not sent, e-
mails sent, e-mails not sent. I hope all of this will be 
balanced by the commission as they complete their work. I will 
wait for the commission's final report as opposed to daily 
comments that come from members of the commission in the press.

                     UPDATE ON IRAQ AND AFGHANISTAN

    Senator Gregg. Thank you for that evaluation. You mentioned 
that you have been to Afghanistan and Iraq, and of course, that 
is the future of how we fight terrorism. You said you wanted to 
give us an update on what is going on there. Tell us what your 
thoughts are.
    Secretary Powell. Yes, sir. Afghanistan, it has been 2 
years since I was there. I was there shortly after the Taliban 
was booted out, when there was only one telephone available for 
the whole government and money was being moved around by the 
half-ton in order to pay for something. I went back this time 
and we have a functioning government. We have a government that 
is slowly extending its reach out to the provinces. It is still 
difficult but it is slowly moving in that direction. We have a 
government that now rests on a solid constitution, and we 
should be proud of our effort in making that happen.
    We have buildings going up all over. The Pakistanis were 
noting to me that 95 percent of the capacity of their cement 
industry has been reached because of construction that is 
taking place next door in Afghanistan. They are very delighted 
with that, of course. We have a road that has been rebuilt. We 
have restored hope to a people, and we have got to stay the 
course. We have got to stay the course with our NATO allies, 
who are now taking an active role under the leadership of NATO 
for security in Kabul and for putting it place more provincial 
reconstruction teams. I think it is up to 12 now.
    So Afghanistan has shown a lot of progress over the last 2 
years. Even though there are problems that remain, we should 
not sell ourselves short on what we have been able to 
accomplish. This is a country that 3 years ago had every woman 
walking around covered, that had nothing but the most despotic 
regime imaginable on the face of the Earth. That was the home 
office for al Qaeda and the home office for international 
terrorism. Now it has a government resting on a constitution, 
rights for the people, people are registering to vote. If there 
are remaining al Qaeda elements in the country or along the 
border with Pakistan, they are running and hiding. The remnants 
of the Taliban are causing trouble but they are also running 
and hiding.
    We have gotten Pakistan to completely reverse its strategy 
from being a supporter of the Taliban to being an enemy of the 
Taliban; losing men in the fight along the border now to go 
after these remnants. So we have got to stay the course, and 
because we have created a better life for the Afghan people, we 
have got to finish the job.
    With respect to Iraq, Ambassador Bremer and I spent a long 
time going over the progress that has been made. I see in the 
future an interim government coming in place, a full 
constitution being written. I see a new national assembly 
coming into being, a new national government coming into being. 
I see the United Nations getting involved. The major problem is 
security. Remnants of the old regime, terrorists and criminals 
who are operating inside of Iraq, and it is a problem for us, a 
serious problem. We have got to get on top of it.
    But we cannot say that just because we are having this 
security problem that this therefore makes this a mission that 
should not have been undertaken. It was the right mission to be 
undertaken. We have freed 25 million people. We have given them 
the beginning of a democratic system, and what we have to do 
now is not shrink back from the fight that is ahead of us but 
to fight this fight, fight it well with our friends and allies, 
and work with the Iraqi people who by any poll that anyone has 
taken, wants us to be involved. Wants us to leave, of course, 
but wants us to help them get the kind of country and the kind 
of system we are talking about, and then leave. And create a 
place, a country that we will not be arguing about with respect 
to weapons of mass destruction, who will be living in peace 
with its neighbors. This is a sound objective for us to pursue 
and we should pursue it.

                          STATE BUDGET IN IRAQ

    Senator Gregg. One more question and then I will turn to 
Senator Hollings. On that point, the Coalition Provisional 
Authority is using approximately $1 billion this year, 
projected to basically try to reconstruct Iraq. This gets 
handed off from the DOD to you on July 1, as you mentioned. Yet 
as we look at the budget that was sent up, there does not 
appear to be any funding to support the State Department on 
this. The question is obvious.
    Secretary Powell. Yes, there is not a specific line item in 
2005. We believe that, and Ambassador Bremer and I had very 
candid talks about this because, you are quite right, it 
becomes the responsibility of the State Department on the first 
of July. But right now we believe that there will be sufficient 
funds available to the Department on the first of July that 
will carry us through the end of the year.

                  FUNDS FROM THE DEPARTMENT OF DEFENSE

    Senator Gregg. Will they be coming from DOD?
    Secretary Powell. Yes, the funds that are available to the 
CPA do not suddenly disappear on the first of July. A lot of 
the things that are being done now for the CPA will continue be 
done for the State Department. Just a brief example. The 
Program Management Office that the Department of the Army runs 
now, that is getting policy direction from the CPA as well as 
from the Department of Defense, that the same Program 
Management Office will continue to provide that contracting, 
administrative fund flow service, but now it will be getting 
its policy direction and its supervision from the chief of 
mission.

                DEPARTMENT OF DEFENSE SHARING WITH STATE

    Senator Gregg. Have you ever found the DOD to be very 
generous about sharing funds with the State Department?
    Secretary Powell. No, nor has the State Department been 
very generous about sharing funds with DOD. But when both 
Departments know what they have to do and the President wants 
done, I have found that both Departments over time will what 
the President wants. In this case, the funds that are going to 
be used are funds that are for this purpose.

              WHO PAYS THE COALITION PROVISIONAL AUTHORITY

    Senator Gregg. Will the CPA employees become State 
employees? Will you be paying them directly or will their 
payment continue to flow through DOD?
    Secretary Powell. It will be a combination. Some of them 
are State employees now working within the CPA, and of course, 
they remain on my rolls when we change over to the chief of 
mission. But a lot of people who are there we hope will 
continue to do their work on non-reimbursable details from 
their Department. I am not going to pay the Army Program 
Management Office.
    Senator Gregg. Can we get a projection as to how this is 
going to be handled?
    Secretary Powell. Yes.
    [The information follows:]

    Secretary Powell asked me to respond to your question at his March 
25, 2004, hearing about how the State Department plans to fund 
personnel costs as operations transition from the Coalition Provisional 
Authority (CPA) to U.S. Embassy Baghdad.
    We are currently working with our colleagues in the Department of 
Defense (DOD), the CPA, and many other U.S. Government agencies to 
address this question.
    We plan to establish, by July 1, 2004, a U.S. Ambassador and U.S. 
Embassy staff and U.S. Mission facilities that will house the USG 
agencies in Iraq serving under Chief of Mission authority. The State 
Department has announced positions for 142 American employees. On 
average, the cost to establish a new State Department position overseas 
is about $350,000. Of course, in Iraq, a number of additional cost 
factors are thrown into the mix that are not considered within this 
average.
    We do not yet have refined cost estimates for how much the U.S. 
Mission will cost the State Department in fiscal year 2004. Estimates 
of personnel costs must include not only base salaries, but also 
certain additive costs for being posted in Iraq (e.g., allowances and 
differentials), locally engaged staff costs, travel, and rough order of 
magnitude logistics/life support costs for the currently planned State 
Department staffing. Estimates must also include certain staffing 
assumptions for provincial teams.
    However, as you are aware, the big ticket costs for our Iraq 
presence will be incurred to provide security, facilities, logistics/
life support, and information technology/communications for the U.S. 
Mission complex. The cost of these requirements in fiscal year 2004 
will depend on the total size of the U.S. Mission, including USG 
agencies other than State, and the support arrangements now being 
discussed with CPA, DOD, and other agencies.
    As of April 15, ten other agencies have requested a presence in 
Embassy Baghdad, for a total of 254 American positions. In the long 
term, we estimate a total of 350-400 permanently assigned Americans 
from some 12-15 other agencies will serve under the Chief of Mission in 
Iraq.
    Together with other agencies, we continue to refine plans and 
budget estimates for our operations in Baghdad after June 30. We should 
soon have more accurate estimates to share with you.

    Senator Gregg. Because it does seem to us that you are 
going to end up getting the ball handed to you but it will not 
have any air in it.
    Secretary Powell. We will have air in it, sir. I have 
Ambassador Ricciardone, our Ambassador from Manila has been 
working this for me. He stayed on in Baghdad after I left last 
week with retired General Mick Kicklighter, representing 
Secretary Rumsfeld, so that we can have a smooth baton pass.

                                TRANSFER

    Senator Gregg. Maybe your staff could brief our staff on 
how the baton pass is coming along.
    Secretary Powell. Yes, it is coming along.
    Senator Gregg. Senator Hollings.

                   ARMED SERVICES WILL NOT GIVE MONEY

    Senator Hollings. The Armed Services Committee has already 
provided in law that DOD shall not pay you. Did you know that?
    Secretary Powell. They shall not----
    Senator Hollings. The Armed Services authorization bill, 
the defense authorization bill, there is a proviso in there 
that they shall not pay you.
    Secretary Powell. Shall not pay me?
    Senator Hollings. Any money into the cost sharing program.
    Secretary Powell. Cost sharing. I thought we were still on 
Iraq.
    Senator Hollings. That is what I am talking about too. So 
you better get it straightened out. I think we are getting a 
policy where all departments are going to take care of cost 
sharing and I am worried about State Department ending up 
holding the bag for all of these departments. Even though the 
President, the White House has set out that policy and it is 
understood, we are signing legislation into law that says, none 
of these monies can be used for cost sharing.
    Secretary Powell. But I do not think that relates directly 
to Iraq. That relates to our worldwide effort to get cost 
sharing in our facilities.
    Senator Hollings. That is right.
    Secretary Powell. We will push back on that provision of 
law, and maybe some people who are not willing to participate 
in cost sharing will not find that we provide facilities for 
them.

                      CLARKE AND STATE CONNECTION

    Senator Hollings. I think you are the gentleman to push 
back on it. Now I was not even going to get into Clarke, but 
how many times did he meet with you? Was he in your loop at the 
Department of State?
    Secretary Powell. I saw Mr. Clarke at various meetings that 
were held, interagency fora, whenever the subject of terrorism 
was being discussed or counterterrorism, and we were in the 
White House meetings and Mr. Clarke was there. I know Mr. 
Clarke very well. I have known him for many years. The day he 
briefed me he came over to the Department on the 20th of 
December with his colleagues at my invitation.

                             CLARKE LACKING

    Senator Hollings. And he did brief you on counterterrorism. 
Did you find him wanting in his task as a terrorism czar as 
they call him?
    Secretary Powell. Wanting in his task?
    Senator Hollings. Yes.
    Secretary Powell. He knew the subject well. He had been 
working on the subject for many years. He was engaged in it and 
he was pushing it. But I have no reason to believe that he was 
not able to press his case to his immediate supervisors in the 
White House.
    Senator Hollings. But you could not know.
    Secretary Powell. I cannot tell you what he did day to day 
in the White House.
    Senator Hollings. You cannot tell me what went on with him 
and Condoleezza Rice and the National Security--you are over at 
the Department of State.
    Secretary Powell. Yes.

                        SECRETARY WITNESS CLARKE

    Senator Hollings. I love the effort here, because you do 
have the credibility. I agree with the distinguished chairman 
that you have got credibility with us all. It is nice to try to 
superimpose your understanding and everything else about this 
situation with the Clarke matter, but in truth you are not a 
witness about all of that, are you?
    Secretary Powell. I am a witness to the extent that I 
participated in discussions on terrorism and counterterrorism 
matters, and my Department and people working for me 
participated in this on a very, very regular basis, and 
interacted on a regular basis with Mr. Clarke. It is not just 
principals meetings that were being held, but counterterrorism 
security group meetings were held on a regular basis. My 
intelligence officials, I have my own intelligence bureau, I 
have my own counterterrorism coordinator in the Department, and 
they all worked on a regular basis with Mr. Clarke and with the 
CIA and with the FBI. That is why whenever the threat level was 
modified, it went up or went down, it was a matter of immediate 
interest to us. We put out warnings and advisories. We 
sometimes told Embassies to close down for a couple days. We 
responded on a constant, continuous basis to the threat 
information that we had.
    Senator Hollings. I am totally familiar with your 
intelligence operation because some people have questioned it. 
But I investigated it in 1954 when it was run by Scott MacLeod 
and Park Armstrong. They were the individuals in the Department 
of State.
    Be that as it may, I want to commend you--we were together 
Friday night in Islamabad and you really did the country credit 
in your little presentation at that dinner. We were very proud 
of you, and later on on CNN going into it that night.
    Secretary Powell. Thank you, Senator.
    Senator Hollings. With relation, and that is why I am 
asking on Afghanistan. You take Iraq and you take Afghanistan, 
Afghanistan has got 4 million more people than Iraq. And 
different than Iraq, we have got the people with us. They are 
solid with us in Afghanistan. You got the Taliban there, but 
the people are with us. We have got a history of having helped 
defeat the Soviets and so they are glad to have us. 
Specifically when they tell us about weapons and cache of 
weapons and any kind of munitions and everything else, we go 
there and find it. In Iraq, we have got 11,000 leads and come 
up dry on 11,000 leads with nothing.

                          MONEY TO AFGHANISTAN

    We have got NATO there in Afghanistan and we do not have 
NATO or really an alliance in Iraq. I cannot, for the life of 
me watching and listening and working with both of them, here 
we have got over $100 billion, they say $125 billion on Iraq. I 
know they requested only $1.2 billion for Afghanistan and we 
got it up to $2 billion. And that was the big meeting that we 
had with your folks, with the Ambassador and all of his folks, 
even with Karzai and everyone else. They just needed more help. 
The opportunities were galore. The AID fellow was slipping me 
one card with $600 million and all. It just seemed to me that 
we were not following through.
    Specifically, I want you to comment on it and see if you 
cannot help it. Let us get right to helicopters. And I will 
name the gentleman, General Stone. General Stone, he came on 
board last June and they had no attack operations whatsoever. 
It took him until about September and October to train them, 
and the first one they pulled off was in the end of November, 
December. Now as you and I both know, they are doing darn good 
up there on the border. They are putting their lives on the 
line and everything else like that.
    We were told with respect to helicopters they had yet to 
arrive. He says, you know my word is my success out here. If I 
cannot give my word and follow through with it, he says, I am 
nothing. I told him back in September, and in fact the 
contractor has already been manufacturing the helicopters and 
everything else of that kind, but the State Department has not 
authorized the Defense Department or the Defense Department--I 
never could get it exactly straight, but there is some snarl in 
the bureaucracy. When you and I were there they did not have 
any, and the next say, on Saturday they brought over a couple 
of them from Nepal so they could make some raids.
    So here, 2\1/2\ years later we have yet to equip them with 
night goggles. They said they were on the way. But I am 2\1/2\ 
years behind looking for Osama and I am finally getting some 
operations, and I still do not have the helicopters, and you 
can help us there.
    And as you indicate with that election coming off, we ought 
to be putting way more in the National Endowment for Democracy. 
We got it up to $30 billion and then we added another $60 
billion and everything else, but relatively nothing in 
Afghanistan.
    I learned with the foreign minister in Tunis, because we 
took that in World War II, and I was amazed coming out of 
Morocco where they had 65 percent illiteracy, they had 65 
percent literacy in Tunis, 80 percent homeownership and 
everything else of that kind. The foreign minister said, the 
secret, Senator, is let the women vote. In Muslim countries, 
you let the women vote, they want good schools, they want good 
homes. Karzai is doing just as you have attested, getting the 
women to participate in that September election. But he does 
not have the money to follow through and everything else of 
that kind.
    We are pennypinching. We are just throwing, like you say, 
the largest State Department facility in history, almost $900 
billion to go into Baghdad where the jury is out. I am not as 
sanguine as you are. I am worried about it.

                    PUTTING MORE AID IN AFGHANISTAN

    But we know, and you and I both agree on Afghanistan, but 
let us put the money to it. Karzai needs about $5 billion to 
really follow through. General Jones, as you know, the 
commander of NATO says, one, two, three, he will have three 
areas secured by September and the fourth area where the 
Taliban is, there are about 1,300 there and he can get rid of 
those by the end of the year. So we are on course. I am very 
hopeful about Afghanistan. Like I saw, the jury is out on the 
other. That is one of the main things. I have got two or three 
other questions, but if you would like to comment----
    Secretary Powell. Let me just touch on a few, if I may, 
Senator. With respect to Pakistan, we are working the 
helicopter issue. They need more helicopter capacity in that 
part of the tribal areas. On night vision goggles, when we were 
there last week they had not----
    Senator Hollings. They had not arrived.
    Secretary Powell. They had not signed the letter of 
agreement (LOA). They are working on it.
    Senator Hollings. Whatever the snarl is, good God, you and 
I are trying to get Osama for 2\1/2\ years and we just had not 
signed the papers to get----
    Secretary Powell. No, they had not signed the LOA.
    Senator Hollings. They had not signed or whatever it is.
    Secretary Powell. It is being worked now.
    One other indicator of how things are going in Afghanistan, 
and we should not dismiss the fact that this is an example of 
what we can do if we stick with it, and it is an example that 
might apply to Iraq, 3 million refugees have come home from the 
largest refugee population in the world. Three million people 
who are being accommodated, slowly but surely, but they will be 
accommodated.
    With respect to NATO in Afghanistan, I think ultimately 
there will be a NATO role in Iraq as well as an alliance. But 
most of the nations of NATO are already involved in Iraq as 
part of our coalition efforts. We should not dismiss that. So 
they have expressed their support for what we are trying to do.
    There is a difference in the funding that has been made 
available to Afghanistan and the funding that is made available 
to Iraq, but I think we have determined that our needs in Iraq 
are far greater than the needs in Afghanistan, even if we had 
double or triple the amount available.

                         AFGHANISTAN OVER IRAQ

    Senator Hollings. The opportunity is greater in 
Afghanistan. The needs are greater in Iraq. You and I agree. 
But let us take the opportunity that is there where you put 
just--the President has asked for $1.2 billion, for God's sake, 
and hundreds of millions over there for the needs in Iraq. But 
here are the opportunities. You could take $20 million and put 
in what we call a VOIP, a voice over Internet provider, and we 
could get the Internet going and communications going and we 
could have that by the end of the year if you got a good 
contractor in there, and then we would have communications in a 
friendly country where they like us, they support us, they 
support NATO and everything else, and they are working with us 
to try to get rid of the Taliban. That is an opportunity.
    Secretary Powell. The only other thing I would mention is, 
as you know, we have asked for doubling of the NED funds this 
year.
    Senator Hollings. In Iraq.
    Secretary Powell. No, overall. The overall account, we have 
asked for a doubling of the National Endowment for Democracy 
(NED).
    And I congratulate the Tunisians for what they have done 
with respect to literacy. That is what we would like to see in 
all these other places as well.
    Senator Hollings. Let me yield.
    Senator Gregg. Senator Byrd.
    Senator Byrd. Thank you, Mr. Chairman.
    Mr. Secretary, I am an ex-officio member of this committee. 
I take this opportunity to thank the chairman and the ranking 
member of this subcommittee. They are very learned and 
experienced, dedicated members of the Appropriations Committee. 
I also want to thank you for your long service to your country. 
I have observed your service from my vantage point of several 
positions going back over a number of years, and I share the 
encomiums that have been expressed already by the chairman and 
the ranking member.
    There has been some discussion here about foreign aid and 
the Pentagon. Press reports indicate that the Pentagon will 
continue to handle foreign aid in Iraq even after a new U.S. 
Embassy is established on July 1, 2004. I never understood why 
the CPA should be under the control of the Defense Department 
in the first place. DOD is responsible for fighting wars and 
protecting national security. Getting the Pentagon into the 
foreign aid business is a mistake, and I have been fighting 
that, and I have been fairly effective as the ranking member 
and as the chairman from time to time of the Appropriations 
Committee of the Senate, but not in the case of Iraq. I have 
been opposed to shifting monies over to the Defense Department, 
money for foreign aid. It distracts the Department from its 
core mission. I am talking about the Defense Department now.
    Moreover, in every major postwar situation during the last 
50 years, the State Department and USAID have been in charge of 
reconstruction efforts. Even in the case of Vietnam where the 
war was still being fought, the State Department and USAID were 
primarily in charge of economic and development assistance 
efforts. After June 30, the case for the State Department to 
manage the aid will be even more compelling. There will be an 
Iraqi government, there will be a U.S. mission in Iraq. I 
cannot understand why the Defense Department will still be in 
the business of managing foreign aid.

   WHY DOES THE DEPARTMENT OF DEFENSE FUND THE COALITION PROVISIONAL 
                               AUTHORITY

    You are a former chairman of the Joint Chiefs of Staff. 
Should we not be getting the Defense Department out of the 
foreign aid business and letting the State Department do the 
job that it is supposed to do?
    Secretary Powell. Mr. Chairman, a couple of observations. 
The Defense Department is superb at fighting wars, but they 
also have a record of dealing with the situation that one finds 
in a country in the immediate aftermath of a conflict. We all 
can remember very well General MacArthur in Japan after World 
War II and military officers in Germany after World War II 
until such time as we were able to transition over to other 
agencies of government.
    In the case of Iraq, it was logical and made sense that the 
Defense Department should be prepared for the immediate 
aftermath of the war and to be responsible for the country as 
it is being stabilized and as the reconstruction effort got 
underway. But it was always anticipated that once a point had 
been reached when we are ready to return sovereignty and we 
were ready to continue with the reconstruction effort, it would 
all transfer over to the chief of mission, the Ambassador and 
the State Department. That is on track.
    Even so, during this period where Defense has had the 
direct responsibility for CPA, USAID has been intimately 
involved. We have a very large USAID mission there, contracting 
for and undertaking reconstruction efforts. In fact they have 
been the bulk of the reconstruction efforts.
    On the first of July when this transfers over, if we are 
able to keep that schedule, and I hope and think we will be 
able to keep that schedule, everything comes under the chief of 
mission. So you might still, after that point, have an Army 
Program Management Office for the simple reason that the State 
Department is not equipped to program manage the sums of money 
that are going to be available from the supplemental. So I want 
that Army Program Management Office to contribute to provide 
contracting support, all the other things required to handle 
that sum of money.
    What will change is that they will get all policy direction 
and all instructions will come from the chief of mission, the 
Ambassador, who will work for me in the name of the President. 
He ultimately works for the President.
    When I talk to Secretary Rumsfeld and Mr. Bremer about 
this, they all understand this. As I said to Secretary Rumsfeld 
in a conversation we had last week to make sure there is no 
confusion, there is not any confusion between us, on first of 
July, anybody who is doing things that belong to the Pentagon 
now becomes a supporting organization to the chief of mission 
and to the State Department. There are some things that they do 
very, very well and it would be not wise of the State 
Department to say, we do not want you to do this anymore 
because you belong to the Pentagon. We want you to continue to 
do it, but you will be doing it under the authority of the 
chief of mission, and when you need policy guidance as to 
whether a dollar should go here or go there, or whether this 
project is approved or that project is approved, that decision 
will come from the chief of mission reporting to the State 
Department. And the State Department back in Washington will, 
of course, discuss this on an interagency basis with all 
relevant agencies in the Government and we will get our overall 
direction from the President.
    Senator Byrd. Here, Mr. Secretary, in my hands I hold two 
different declassified versions of the national intelligence 
estimate on Iraq. Now I read from a version that was released 
in July 2003 after the war. This passage is part of the 
dissenting view of the State Department's Bureau of 
Intelligence and Research. Here is what it says.

    ``The Assistant Secretary of State for Intelligence and 
Research believes that Saddam continues to want nuclear weapons 
and that available evidence indicates that Baghdad is pursuing 
at least a limited effort to maintain and acquire nuclear 
weapons related capability. The activities we have detected do 
not, however, add up to a compelling case that Iraq is 
currently pursuing what INR would consider to be an integrated 
and comprehensive approach to acquire nuclear weapons. Iraq may 
be doing so, but INR considers the available evidence 
inadequate to support such a judgment.
    ``Lacking persuasive evidence that Baghdad has launched a 
coherent effort to reconstitute its nuclear weapons program, 
INR is unwilling to speculate that such an effort began soon 
after the departure of U.N. inspectors or to project a timeline 
for the completion of activities it does not now see happening. 
As a result, INR is unable to predict when Iraq could acquire a 
nuclear device or weapon.''

    Secretary Powell. Sir, what was the date you said that was, 
July?
    Senator Byrd. This is the declassified version of the 
national intelligence estimate on Iraq. This version was 
released in July 2003 after the war. It is the declassified 
version.
    Also, here is the declassified version of the national 
intelligence estimate on Iraq that was released in October 
2002. That was when the Senate of the United States did the 
most shameful thing that it has done. It washed its hands of 
its responsibility to declare war, and it shifted that 
constitutional power to the President of the United States, to 
one man, to declare war, to decide when to declare war, and how 
and when to use the military.
    This is the declassified version of the national 
intelligence estimate on Iraq that was released in October 
2002. That was when our Senators were misled into casting a 
vote to declare war, to shift that power to one man to declare 
war. This version was released in October 2002, before the war.
    I looked through every page of this version, and the State 
Department's dissenting views from which I just read have been 
omitted from this version. In other words, the intelligence 
views that did not agree, the intelligence views from your 
Department, Mr. Secretary, that did not agree with the White 
House's political agenda were cut out in the version released 
before the war. They were cut out.
    Let me read just one sentence in the State Department's 
alternative views of Iraq's nuclear weapons. One sentence. 
``The activities we have detected do not, however, add up to a 
compelling case that Iraq is currently pursuing what INR would 
consider to be an integrated and comprehensive approach to 
acquire nuclear weapons.'' That language was left out at the 
time when it should have been left in for the American people 
and all to see.
    I know that you have confidence in the Department's 
intelligence bureau. You just stated it today. You just made 
reference to the intelligence bureau. You expressed confidence 
in your own intelligence bureau. And I have confidence in it. 
Yet, it was left out of this document about Iraq's weapons of 
mass destruction program.
    So can you explain why the State Department's views were 
not included in this document right here, that were so 
important to the President's case to go to war in Iraq? Did it 
concern you that the State Department's views were left out in 
the document that was released publicly before the war?
    Secretary Powell. Senator, I do not have the benefit of 
having read or studied those two documents recently. Are you 
saying these are declassified versions of the same document 
separated in time?
    Senator Byrd. Yes.
    Secretary Powell. I would have to read what the overall NIE 
said. I know that the presentation I made on the fifth of 
February tried to carefully balance and put forward to the 
international community what we believed about at the time.
    Senator Byrd. There it is.
    Secretary Powell. I cannot respond to this, Senator, 
because I am not the author of either document, and I do not 
have an opportunity to read what the basic document says, not 
just the footnote. The fact is that, as the INR footnote says 
and I am sure the basic document says, there was never any 
doubt that he wanted to have nuclear weapons. As I testified 
before the world on the fifth of February, he was keeping in 
place the knowledge infrastructure, he was keeping in place the 
capacity to have such weapons, or plans to have such weapons, 
and that there was some indication that he was undertaking 
procurement activities. There was a difference of opinion with 
respect to some of the procurement activities concerning 
centrifuges, and I made that point when I made my presentation.
    So I think it was clear this is something he wanted to 
have, but there were legitimate differences of opinion as to 
how far he was on the road to having such a capability. One 
thing that I have never doubted is that if he had been released 
from the pressure of the international community or if he had 
been released from the sanctions policy that was in effect, all 
of which he was trying to do, there is no doubt in my mind that 
he would have gotten right back on track with the intellectual 
infrastructure and with the money available to him and with the 
plans that he had.
    Senator Gregg. Senator, if you have completed that line of 
questions, could we go on and get to other Senators and then 
come back for another round?
    Senator Byrd. I had not completed it. I will try to be 
brief.
    Based on the declassified national intelligence estimate, 
the State Department's assessments on Iraq appear to be more 
accurate than the assessments of other agencies. But these 
conclusions regarding Iraq's nuclear weapons program were all 
but ignored by senior administration officials. Vice President 
Cheney said virtually the opposite on national television when 
he stated, ``we know [Saddam Hussein] has been absolutely 
devoted to trying to acquire nuclear weapons and we believe he 
has in fact reconstituted nuclear weapons.'' Mr. Secretary, the 
world heard from the National Security Advisor who warned of 
nuclear weapons and mushroom clouds. These statements were 
absolute and unequivocal, but there is no mention whatsoever 
that the nuclear issue was hotly debated within the 
intelligence community. There is no mention of the questions 
raised by the State Department's intelligence service. Those 
concerns did not match the administration's case for war, so 
those concerns were brushed aside, brushed over, and brushed 
away.
    In your view, Mr. Secretary, why were the State 
Department's conclusions, which ended up being the most 
accurate of all, ignored by other senior officials in the 
administration, especially the Vice President?
    Secretary Powell. Sir, I cannot track each statement. All I 
can say is that the position put forward by me and with Mr. 
Tenet behind me, having approved every word of my presentation 
of the fifth of December, reflected the best judgment of the 
intelligence community. Now where there are differences of 
opinion and nuance, you have to make a judgment as to what the 
preponderance of evidence supports, and Mr. Tenet is the one 
who makes that judgment. I think he put a balanced judgment 
into the overall NIE that was available to the Congress, that 
was available to me as I prepared my presentation and which 
reflected the best judgment of the community when I made my 
presentation. And I had qualifiers in my presentation to 
suggest that there were differences of opinion.
    Senator Byrd. I thank you, Mr. Secretary, and I thank you, 
Mr. Chairman.
    Senator Gregg. It is the tradition of this subcommittee at 
least to recognize the chairman of the full committee whenever 
he arrives.
    Senator Stevens.
    Senator Stevens. I would take just a few minutes, if I may. 
There are five hearings this morning. I have tried to visit 
each one of them, Mr. Chairman.
    Mr. Secretary, my first report to you is that my Flat 
Stanley got home all right.
    Secretary Powell. I am pleased to hear that.
    Senator Stevens. We met the Secretary in Jordan and he was 
kind enough to----
    Secretary Powell. We are still looking for the digital 
pictures so we can put it up in the State Department.
    Senator Stevens. I have got one. I hope you know what a 
Flat Stanley is. If you do not have a grandchild----
    Secretary Powell. You do not know what a Flat Stanley is?

       FUNDING FOR THE COALITION PROVISIONAL AUTHORITY POST-JULY

    Senator Stevens. Mr. Secretary, first, I come primarily 
because I am worried about the funding for the CPA in the 
transition after July 1. I do hope that we can get your 
guidance on what will take place there. As I understand it, it 
is fairly certain that the current funding of CPA will run out, 
and I do not know whether we are going to get to the 2005 bill 
in time to start October 1. There may be a gap there. Are you 
prepared to deal with that?
    Secretary Powell. We believe and we are still grinding down 
on this, Senator, in conversations with Ambassador Bremer and 
Secretary Rumsfeld and our two staffs working with each other, 
we will not walk in on the first of July and find no money 
there. There will be sufficient funds that should be able to 
carry the new operations under the chief of mission through 
certainly the end of the year and the end of 2005. But we 
really need to drill down on those numbers to make sure we have 
got it right.
    Senator Stevens. I hope we can visit later on in the year 
here about that funding, because very clearly----
    Secretary Powell. We have got to make sure we have got it 
right.
    Senator Stevens. Senator Hollings and I have met with 
members of the provisional council that did urge that we go 
forward and did urge that they want that authority at the end 
of June, so I think we ought to be sure that the funding is 
there until we do get the 2005 bill approved.
    Having said that, I know of no one I admire more than the 
two gentlemen on my right here, Senator Byrd and Senator 
Hollings. We disagreed of the vote on the war resolution, and I 
still maintain that based upon the briefings that I had as 
chairman of the Defense Subcommittee and as President pro tem I 
had reached the same conclusions that you announced, and I 
still believe that there are weapons of mass destruction. We 
found their airplanes that they were not supposed to have after 
the first gulf war buried in the sand. It took us more than 1 
year to find them, and we only found them by virtue of an 
informant that told us where they were. Now if they can bury 
airplanes, they can bury weapons of mass destruction.

                 READINESS OF IRAQI SELF-DEFENSE FORCES

    But in any event, the problem now is winning the peace. I 
have one other question to ask you about the status of the 
training of their self-defense force. I hope that we will call 
it a self-defense force rather than an army because I do not 
believe they should have an army yet.
    But in any event, the self-defense force and the police 
that will take over the major responsibility will be in Baghdad 
immediately. Do you have information on the status of that? 
Will they be ready and are they trained sufficiently to 
maintain that security to allow us to pull our forces out of 
Baghdad and have them--and the perimeter outside of Baghdad?
    Secretary Powell. I would like to provide a more fulsome 
answer from Ambassador Bremer and the Pentagon, but based on 
what I heard last week the training that the State Department 
is responsible for with respect to police is going well. We are 
producing in two places trained policemen coming through with 8 
weeks of solid training. We have got to make sure they are 
getting equipped with cars, with uniforms, with weapons, with 
the forensic infrastructure that a police department needs. The 
military is now also training police. So I think the volume of 
trained police will increase very significantly in the months 
ahead. Getting them fully equipped is the challenge.
    With respect to the army, there is an army that is being 
trained now, and battalions are starting to come out of that 
flow, and I think General Abazaid is anxious to speed that up. 
There is a huge amount of effort going into training of the 
civil defense units as they are called, but not civil defense 
in the old context that we remember, Senator Stevens, but 
militia--not even militia. A national guard is the closest 
parallel I think that would be located in the different regions 
to provide security.
    Mr. Rumsfeld says that up to 200,000 Iraqi personnel are 
now in uniform helping us with security and putting themselves 
at risk. Eleven of them were killed the other day. So it is not 
as if they are not wanting to go out there and fight for their 
country and protect their country. But we still have challenges 
ahead to fully equip and train this force in a competent way.
    [The information follows:]

    Public security and law enforcement are critical priorities in Iraq 
and key to the new Iraqi government's ability to establish the 
institutions necessary to effectively govern after June 30th. The 
Department of State has been providing extensive support to the 
Coalition Provisional Authority since May of 2003 to achieve these 
goals. These efforts will continue beyond the transition, and will 
enable the Iraqis to ultimately assume full responsibility for security 
and public safety. As more and more Iraqi police are trained and can 
take up regular duties, coalition forces will be able to reduce their 
efforts in this area. Due to the neglect and abuses of the past 35 
years, the security forces must be rebuilt, and it will take time 
before they reach full operational capacity and can operate 
independently.
    It is encouraging to note that there are nearly 200,000 Iraqis 
working with coalition military forces and providing security for their 
country, serving as part of institutions such as the New Iraqi Army, 
Iraq Police Service, Border and Customs, and the Iraq Civil Defense 
Corp (ICDC).
    The Iraqi Civil Defense Corps--which is similar to an internal 
self-defense force--is supporting Coalition operations throughout Iraq. 
Approximately 35,000 troops in 36 ICDC battalions are trained, 
deployed, and operating side-by-side with Coalition companies and 
battalions. CJTF-7 plans to stand up 9 more battalions by June, 
bringing the total number of ICDC to about 41,000 personnel either on 
duty or in training. ICDC training should be completed by August. In 
the Baghdad area, there are currently 6,300 trained and equipped ICDC 
troops. They are fully integrated into the operations of 1 Armored 
Division, which is assigned to the Baghdad area of responsibility.
    Four battalions of the Iraqi Armed Forces have completed recruit 
training. The fifth battalion will enter training in mid-May, and by 
October we expect to have 27 battalions of IAF trained and equipped. 
Their mission will be defense against external threats.
    With respect to the police, the CPA has determined that an Iraq 
Police Service (IPS) of approximately 75,000 personnel will be needed, 
and in order to reach this number, over 35,000 new recruits must be 
selected and trained. The Bureau for International Narcotics and Law 
Enforcement Affairs (INL) is funding necessary construction and 
renovations at a site offered in Jordan for the training, which began 
in November 2003. The training program consists of 8 weeks of intensive 
basic policing skills training that stresses modern, democratically 
based policing methods under the instruction of up to 400 United States 
and other international police instructors trained to deliver the 
course.
    With INL funding, the curriculum for this training was developed by 
the Department of Justice International Criminal Investigative Training 
Assistance Program (ICITAP), and is based largely on the successful 
model used in Kosovo and other post-conflict areas. In a few months, 
the Jordan site will be at full capacity, and will be able to support 
up to 3,000 recruits and 1,000 instructors and staff at any given time.
    As follow-on to the basic training, recruits will then complete a 
structured field-training program over a twenty-four week period 
administered by International Police Advisors who will focus on the 
practical application of the course work and will further develop their 
skills in core policing areas. So far, nearly 1,500 Iraqi police 
recruits have graduated from basic skills training and are deployed 
back at home. In addition, there are approximately 2,300 recruits in 
training in Jordan and Iraq.
    ICITAP has also developed a three week Transition and Integration 
Program (TIP) for delivery to the approximately 46,000 existing IPS 
personnel. The program focuses on international standards of human 
rights, modern police patrol procedures, the applicable Iraqi criminal 
laws and firearms proficiency. This course is designed to facilitate a 
change in outlook, behavior, action and activities of all Iraqi police 
regardless of assignment or rank.
    This course is being conducted country wide and has been 
prioritized to be delivered to those officers who will function as 
field training officers to the new recruits who will soon be graduating 
from basic training. The delivery of this course will continue until 
all existing IPS officers have successfully completed this training. So 
far, over 10,000 Iraqi police have received this training.
    The CPA training plan also calls for further development of three 
police academies in Iraq--in Baghdad, Arbil and Basra, to also deliver 
the 8-week basic course. These three facilities, when fully renovated, 
will, together be able to train approximately 2,000 students at any one 
time. One hundred Iraqi police trainers have already been given a 
``train-the-trainer'' course at the Jordan facility and have returned 
to Iraq. In addition, 230 U.S. military police trainers have been given 
the ``train-the-trainer'' course and will work with the Iraqi trainers 
in the three Iraq academies.
    Our efforts are directed at enabling the Iraqi police to achieve 
the capacity to provide public security and law enforcement, and 
thereby allowing coalition forces to withdraw as soon as practical and 
safe.

    Senator Stevens. One last question Mr. Chairman. When we 
look at the plans now for the period past June 30, it is my 
understanding that the largest Embassy we have will be the 
Embassy that is in Baghdad.
    Secretary Powell. Yes, sir.
    Senator Stevens. Are we going to appoint an Ambassador 
there?
    Secretary Powell. Yes, sir.
    Senator Stevens. I am hard-pressed to understand why it is 
going to be that large. Could you just describe the need for 
that big an Embassy and its staff?
    Secretary Powell. A lot of things have to be done in Iraq. 
First and foremost, we have to make sure that we have the 
people in place to manage a very large sum of money made 
available by the Congress through the supplemental.
    Second, we have got to help the Iraqis develop a 
sophisticated government with ministries that are answerable to 
political authorities, and that is going to take some effort. 
We will have a very large USAID presence in the country. We 
will have representatives of the chief of mission in different 
parts of the country to represent our interests. There will be 
a very large security component, because we expect that it will 
still be not a safe environment.
    So when you add all of these things up, we think it will 
take a fairly large mission staff to do all these things. There 
will be an Office of Security and Cooperation, and we continue 
to work to improve the capabilities of Iraqi police and 
military personnel and the civil defense units that I spoke of. 
And there will be a lot of contracting people who may work for 
other departments but will be answerable to the chief of 
mission, and therefore become part of the overall mission size.
    Senator Stevens. Will any of the funding for that come from 
the supplemental or what's available to the new government?
    Secretary Powell. Yes, there are opportunities to tap into 
the funding stream of the supplement to support this overhead 
for managing of the supplemental money.
    Senator Stevens. Last item, my friend. Any bricks and 
mortar involved in that? Are we going to build a new building?
    Secretary Powell. We are looking now--yes, we are examining 
sites now for a new Embassy facility, and there is wedge money 
in the program now to begin that work.
    Senator Stevens. That is to permanently house that many 
people or will it come down?
    Secretary Powell. I certainly hope it will come down over 
time, but in the first year or two there is a massive amount of 
work that has to be done. The Embassy is not being scaled for 
that large a presence over time. It will take some years to 
build the Embassy and we are still figuring out what to scale 
it for. But it will be a major facility.
    Senator Stevens. Will the provisional authority be there at 
the same time in that building?
    Secretary Powell. The provisional authority will go away.
    Senator Stevens. Is the new government going to be in the 
green zone?
    Secretary Powell. I assume initially it will be, but I do 
not know the answer to that question. I will get it for the 
record.
    Senator Stevens. Thank you.
    Thank you, Mr. Chairman. I do appreciate your courtesy. 
Gentlemen, appreciate your courtesy.
    Senator Gregg. Thank you, Mr. Chairman.

                         HMONG REFUGEES IN LAOS

    Senator Kohl, I appreciate your patience.
    Senator Kohl. Thank you, Senator Gregg. I would like to 
change briefly to another area of the world which my staff has 
told you I was going to inquire about and that is Laos. Mr. 
Secretary, I am deeply concerned about reports coming from Laos 
on the status of the Hmong. My State of Wisconsin is the home 
to 33,000 former Hmong refugees, many of whom are concerned 
about the status of their family and friends in Laos who have 
been living in the jungle since the end of the Vietnam War. 
Estimates are that there are as many as 17,000 still in the 
jungles.
    As you know, Mr. Secretary, the United States is indebted 
to these former Hmong insurgents who fought valiantly with us 
during the Vietnam war. In recent weeks there have been reports 
that hundreds of Hmong have been emerging from the jungle to 
take advantage of an unofficial Lao government amnesty program. 
The Lao government denies that there is such a program. We have 
been receiving reports that many of these Hmong have not 
surrendered willingly, but they have been captured and are 
being severely mistreated.
    Last week Senator Feingold and myself, along with other 
Senators, sent a letter to Ambassador Negroponte asking for his 
assistance in urging the United Nations to send a high level 
U.N. representative or a fact-finding mission to Laos to 
monitor the treatment of the Hmong. To ensure the safety of 
this Hmong population we need to do all we can to shed light on 
the situation there. Unfortunately, as you know, there is 
virtually no international access to the areas where the Hmong 
live. So can I ask for your support in this request for a high 
level U.N. representative or fact-finding mission to Laos?
    Secretary Powell. Sir, we will be answering your letter in 
the next day or so, but we believe the United Nations can play 
an important role. There are U.N. agencies working in the area 
now. I really do need to talk to Kofi Annan as to whether he 
wants to designate another new special representative for this, 
but we will consider this request.
    Our initial look into the issues raised in your letter 
suggest that they are coming out, but we have not yet got any 
evidence to suggest they are being abused in the way that some 
people have said they are being abused. I do not say it has not 
happened or is not happening, but we still have to do more work 
to establish the facts. We are trying to get greater access to 
them, and we are in touch with the Lao government about the 
need for greater access, and we are about pushing the United 
Nations to achieve greater access.
    As a separate matter, as you know, there is a Hmong 
population that is in Thailand and we are working hard to see 
if we can settle them as refugees as part of our refugee 
resettlement program here in the United States.
    [The information follows:]

    I would like to respond on behalf of the Secretary regarding the 
Department's position on normal trade relations (NTR) for Laos which 
you raised during the March 25 Commerce, Justice, State Appropriations 
hearing.
    The Administration supports granting NTR status for Laos and 
bringing into force the bilateral trade agreement negotiated in 1997 
and signed in 2003. Laos is one of only three countries worldwide (the 
other two being Cuba and North Korea), and the only lesser-developed 
country, subject to tariff rates generally far higher than those 
available under NTR. Extending NTR to Laos could help open Laos to the 
outside world, which could in turn lead to more internal openness and 
transparency. Progress toward a more open and democratic society will 
help us achieve our foreign policy objectives across the board. While 
some opponents of NTR argue that it should be used as a reward for a 
completed democratic reform process, we believe that granting NTR to 
Laos will benefit the Lao people, and will create a more cooperative 
environment in which the United States can effectively pursue key human 
rights and democratization objectives.
    The United States Government remains deeply concerned about human 
rights in Laos, including treatment of the Hmong minority. We have 
repeatedly made clear to the Lao government the strong concern of the 
American people and government about the poor human rights situation 
and will continue to do so. In regard to recent reports of Hmong living 
in remote areas seeking to resettle in Laos, reports so far indicate 
that the Lao Government has treated those seeking resettlement 
humanely. We have offered assistance for this population, but the Lao 
Government has not responded. Also, Secretary Powell has written to the 
Lao Foreign Minister supporting Ambassador Hartwick's urging that the 
Lao Government allow our Embassy or international organizations access 
to these people so that we can assess their conditions first hand. We 
do have reports that fighting continues between some Hmong groups and 
the Lao Government, and we have urged that the Lao take a humanitarian 
approach.
    I hope this answers your questions. Please feel free to contact me 
if we may be of further assistance.

                                      United States Senate,
                                    Washington, DC, March 15, 2004.
Ambassador John D. Negroponte,
U.S. Ambassador to the United Nations, United States Mission to the 
        United Nations, 799 UN Plaza, New York, NY.
    Dear Ambassador Negroponte: We are writing to ask for your 
assistance in urging the United Nations to send a U.N. representative 
or fact-finding mission to Laos to monitor the treatment of hundreds of 
Hmong-Lao, many of whom are former insurgents and their families, who 
have recently emerged from the jungles of Laos. A high-level U.N. 
presence is essential in securing the safety of these individuals, as 
well as in providing greater transparency regarding Lao governmental 
actions to the international community.
    Over the past several weeks, hundreds of Hmong-Lao and their 
families have left the jungles of Laos. Many of these former insurgents 
fought with the Central Intelligence Agency during the Vietnam War to 
rescue downed American pilots, to thwart supply lines along the Ho Chi 
Minh trail and to hold off North Vietnamese troops. When the Vietnam 
War ended and the communist Pathet Lao took over the government, 
thousands of Hmong were killed and sent to reeducation camps. Most 
Hmong fled Laos or hid in the jungles of Laos, fearing for their lives. 
Some estimate that as many as 17,000 Hmong have been living in the 
jungles since 1975. The United States remains indebted to these 
courageous individuals and their families.
    The U.S. government claims that these individuals have surrendered 
to the Lao government and are participating in an unofficial and 
``unstated'' amnesty program organized by the government of Laos. Yet, 
our offices have heard contradictory information. Reports indicate that 
the Laotian government denies the existence of any amnesty program for 
these individuals. In addition, many of our constituents claim that 
these former insurgents have been captured by the Lao military and did 
not surrender. Our constituents fear that these people are in serious 
danger and allege that many have already been killed, including women 
and children. Amnesty International in a report on March 4, 2004 
states, ``Amnesty International has received conflicting reports as to 
their [the Hmong's] reception and treatment by Lao authorities.''
    The restrictions imposed by the Lao government on international 
access have prevented policymakers, journalists and humanitarian groups 
from knowing the reality on the ground and understanding the needs. The 
United Nations can play a crucial role in shedding light on the 
situation. We ask you, therefore, to urge the United Nations to send a 
U.N. representative or fact-finding mission to ensure that these former 
insurgents are treated humanely and that the Lao government respects 
its obligations under international law.
    We thank you for your consideration.
                                   Senator Russ Feingold,
                                   Senator Herb Kohl,
                                   Senator Barbara Boxer,
                                   Senator Mark Dayton,
                                   Senator Dianne Feinstein,
                                   Representative Ron Kind,
                                   Representative Mark Green,
                                   Representative Devin Nunes,
                                   Representative George Radanovich,
                                   Representative Dana Rohrabacher,
                                               Members of Congress.

    Senator Kohl. Thank you. Mr. Secretary, an AP story earlier 
this week based on information from the Hmong leader in the 
jungle reported that 6,000 Laotian troops using machine guns, 
grenades, mortars, and helicopter gunships had launched a new 
attack against a group of 2,000 Hmong insurgents and their 
families. At least seven women and children were killed. 
Amnesty International reported in October that the Lao 
government has used starvation as a weapon of war against 
thousands of Hmong in the jungle. We have seen reports, such as 
photos in a Time Asia piece last summer that Hmong in the 
jungle are living in deplorable conditions.
    What can we do to press the Laotians on the human rights 
situation? Senator Feingold and myself contacted the Lao 
government about the Amnesty report. They have denied the 
report. Our ambassador industry has been pressing for normal 
trade relations with Laos, and that bill was recently 
introduced in the Finance Committee.
    My question is, is this the time for us to be rewarding 
that government with normal trade relations when we are 
supposedly, and I believe should be, so concerned about their 
human rights treatment?
    Secretary Powell. We are concerned about the human rights 
treatment. We have received reports of this military operation 
and we are trying to confirm or get a denial of it; to find out 
what the fact are. The Embassy is working hard to establish the 
facts. While I have seen the same reports that you have, I just 
do not know the real facts yet.
    The Lao government does have an amnesty policy with respect 
to the trade relief legislation. Let me take another look at it 
because I really am not familiar with it.
    Senator Kohl. I would appreciate that very much.
    Secretary Powell. I would be delighted, Senator.
    Senator Kohl. Finally, you refer to the Buddhist temple in 
Thailand and resettlement efforts. I would like to know what 
the State Department plans are to ensure the humane treatment 
of those Hmong Lao who do not qualify for resettlement in the 
United States. In the interest of time I will submit the 
question and I look forward to some response from you.
    Secretary Powell. Yes, sir. Thank you, Senator.
    Senator Kohl. I thank you, Mr. Secretary.
    Senator Gregg. Thank you, Senator Kohl. I know the 
Secretary has to leave but there are number of issues we would 
still like to take up with you, and maybe we could all take 
maybe 5 minutes, 10 minutes at the most to go over those.

                     CHARLES TAYLOR BEFORE TRIBUNAL

    There are a series of issues that deal with peacekeeping 
and activities in Africa. One of my concerns, as you know, is 
how we get Charles Taylor over to be tried before the tribunal, 
so I would ask you a series of questions. One is, do you expect 
the UNMIL process to be successful if Charles Taylor is not 
tried? If your answer is no, then how do we get him tried?
    Number two, it appears that there is going to be an 
expanded peacekeeping effort throughout Africa, especially in 
Sudan eventually, what are you projecting that we are going to 
have to come up with for peacekeeping in Africa?
    Secretary Powell. The best I can do with respect to 
projections is what we have now in the 2005 budget, but I want 
to put down a cautionary word that we do have these other 
demands coming along. I hope they are coming along. I hope we 
will be able to work on peacekeeping forces for the Sudan. As 
you know, we are in a very intense, delicate period of 
negotiations with the Sudanese and the SPLN to try to get a 
comprehensive peace agreement. So we may well have to come back 
to the Congress at some point in the future during 2005 for 
additional support for peacekeeping efforts.
    With respect to Mr. Taylor, he is still subject to the 
court. I believe he should come before that court. As you know, 
he is in Nigeria and the circumstances of him being moved to 
Nigeria was that the Nigerian government would not come under 
pressure in this immediate period to turn him over to the 
court. The Nigerian government has said, however, that when 
Liberia has a functioning government that is recognized and 
makes a request for Mr. Taylor, then it can be looked at at 
that time.
    This was not a perfect solution, but last year when we were 
facing this problem we needed to get the violence ended, and we 
needed to get some control of this country and over the 
population. We needed to get Charles Taylor out. We found a way 
to do that and it required us to make a compromise with respect 
to letting him remain in Nigeria without the Nigerians being 
under pressure to turn him over right now, or else we would not 
have been able to----
    Senator Gregg. But the understanding was that he would not 
stay in Nigeria----
    Secretary Powell. He is.
    Senator Gregg [continuing]. And not be a force.
    Secretary Powell. He is not much of a force.
    Senator Gregg. He is. He is agitating. There are reports 
that he has got an army up and running in the Ivory Coast.
    Secretary Powell. He does not have an army up and running. 
He is an annoyance. I have followed this very carefully because 
the last thing I wanted to see was to have Charles Taylor 
trying to create armies or stop what we are trying to do in 
Liberia. I have seen the reports about creating an army but I 
have never been able to verify that one exists.
    Senator Gregg. How can we justify this tribunal if the 
first person they indicted will not be brought before them? We 
brought Milosevic in. Why should we not bring in Taylor?
    Secretary Powell. We will. It took a long while to get 
Milosevic in, and we finally had to apply different kinds of 
pressure and wait for a different set of circumstances in 
Belgrade before we could get Milosevic in. We still believe 
Charles Taylor belongs before this tribunal and we hope that 
that is where he will end up.
    But last year the challenge we were facing was to get food 
into the people of Liberia who were starving and to get the 
killing ended. And we succeeded. We succeeded by getting 
Charles Taylor out, and the way we got Charles Taylor out was 
to send him to Nigeria with an understanding with the Nigerians 
that they would not be pressured. The Nigerians know that 
ultimately Charles Taylor has to be dealt with, and they have 
set out the circumstances under which he could be dealt with. 
That is when there is a functioning government in Liberia and a 
request for his return. I think eventually he will stand before 
the bench of justice.
    Senator Gregg. Before I turn it over to Senator Hollings I 
do what to thank your Department. You are doing a lot of things 
right. You are doing the IT right, and I think General Williams 
has done an excellent job of getting Embassy construction under 
control. I hope he is going to take a serious look at the new 
U.N. building on the security side. This is a big dollar item 
and I think his expertise and his shop's expertise in that 
would be very important on the security side.
    Senator Hollings.

                         MIDEAST-WEST DIALOGUE

    Senator Hollings. Mr. Secretary, we can use your help on 
that International Center for Mideast-West Dialogue. I had the 
pleasure of talking with the president of Austria some 7, 8 
years ago and he allowed how we ought to have better relations 
between the Christian and the Muslim world, or the Western and 
the Mideast world, and that he talked to the Ayatollah Khomeini 
by phone every week, and other leaders there. At that 
particular time we were looking there at the facility--I am 
rushing along because I do not want to use your time--at 
Istanbul that was given to us by the former Ambassador and 
everything else in a card game, and he lost a bet. He bought it 
and gave us a magnificent facility, presently on loan to the 
British.
    I said, wait a minute now, we have gone along and we have 
got a wonderful consulate there, really a well-appointed 
facility, but why not start an East-West Center where you have 
got a secular state, Turkey, and everything else of that kind. 
We put in $7 million, Senator Byrd, in the bill and everything 
else, and we are ongoing. Now all of a sudden, Assistant 
Secretary Frank Taylor in your Department says it is not safe. 
This is not an Inman facility; we do care whether it is safe 
obviously. But we would not be loaning it to the Brits if we 
were not sure of its safety, you know what I mean? If you get 
those entire in there, and this particular facility, they want 
to move it into the United Nations, move it into New York, we 
would have questions about some of the people in the dialogue 
even getting visas to come into New York under the present 
circumstance and turmoil and what have you.
    Now you can get right in behind us and help us. We will put 
some more money and we will get it going. I think it is the 
Council for American Overseas Research Center, and they are a 
private group that is an NGO that takes and gets all these 
things working together and what have you. They have got 
credibility, and they will all join in. I have seen the success 
of the North-South Center, the East-West Center. We have got to 
get something going in the Mideast. Looking at the morning 
headlines, we are getting worse and worse.
    Otherwise, I have got to comment on Iraq, because I am 
worried about you and that big facility that you have taken. 
After all, the largest facility we have ever built for the 
Department of State, and you have got General Williams and he 
is tip-top and we have worked closely together--$450 million 
here. We have got $900-some million set aside and you say they 
have not--the State Department says we expect to have 1,000 
American personnel in there and 2,000 Iraqis working. So they 
are going to have 3,000 in the thing, and here we do not have 
security.
    My friend Senator Stevens said we differ voting for the 
resolution. Let me level, because I did with my own people back 
home and the press and everything else like that, I knew what 
it was doing when I voted for that authority for the President 
to go into Iraq. He had stated amongst all the build-up on 
October 7 in Cincinnati, facing present danger of evil, we 
cannot wait until the smoking gun is a mushroom cloud. When 
your Commander-in-Chief says that, and you know he has got 
availability with the Mossad. We all yap about the 
intelligence. We act like we are the only ones--whether it was 
good or bad, and distorted, twisted, blah, blah, blah. Israel 
depends on knowing what is going on in downtown Baghdad. Their 
survival depends on it. They have got the best of intelligence.
    So when the Commander-in-Chief said that, I voted for the 
resolution. I was misled, and we all were misled and we can see 
it in the morning news. Now we have got to do the best we can 
in there.
    What happens is that we still do not have enough troops. It 
was the same thing--I thought I was back in Saigon with 
Westmoreland talking to General Abazaid. He in the one breath 
said to me we needed 90 more days to train the police. We do 
not have the police trained sufficiently for June 30. We have 
not secured the borders. We have got green troops in the 
turmoil of trying to not have enough troops, bringing in Guard 
and Reserve with the greens, so a fellow lights a hibachi in 
the backyard and that there gives us a radar, a heat signal and 
we shoot and kill the family and the kids. We see another 
photographer and he aims a camera and we think it is a rocket 
and we kill the Reuters newsman.
    I had a good friend that has been in Baghdad for years off 
and on and he said, I shopped in downtown Baghdad in September. 
I went back in November and it was taking my life in my hands.
    So that train--we are doing the work for the Iraqis, and we 
have got the constitution. You feel good about it, but they 
say, wait a minute, that is an open-ended document. It subject 
to amendment. It gives the Kurds autonomy so the rest of them 
want autonomy. And Ambassador Bremer says we are not going to 
have an Islamic democracy, yet you have got a majority vote, 
and the majority vote is going to vote an Islamic democracy.
    With all of that, Bremer is gone come June 30. Abazaid is 
gone. They are all leaving, and they are leaving it for you. 
And you are building up a temple even bigger than Saddam ever 
built, $1 billion, $900 some million for 3,000 personnel, and 
then you say that the AID people are going to--they are. They 
are going to have to go up with their security. They are 
insecure all over the place. And it is going to be open sesame 
come June 30, and we ought to know at this committee level, 
ought not to be planning a $900 million facility. Maybe $90 
million, or take over one of the--they have got them all over 
the place, all those palaces and everything, and we are in 
them, in many of them.
    We can take where they have got--and that is off the beaten 
track and a good facility, and move that crowd that is in 
there, all computerized, looking for WMD. Just move them out 
and move you in, and we have got a facility and everything else 
and we will see how things go. That is a secure place and 
everything else of that kind.
    But I find the Defense Department--look, I asked about all 
those troops everywhere. I got to General McKernan and I said, 
General, I know you and you know me, you need some more troops. 
I said, I could have used more troops in June last year. I 
said, what for? He said, I could have gotten better security in 
the Sunni Triangle. I said, why not more troops now to get the 
Sunni Triangle, get the borders and everything else secure and 
what have you? The de-Baathification under Chalabi--and he will 
need the Secret Service by this time next year--Chalabi in 
charge of that has knocked off the leadership of the army, he 
has knocked off the leadership of the Sunnis and made some of 
them hostile and joined with Saddam loyalists, and they have 
joined with a lot of the insurgency coming in and terrorists 
and what have you, and the movement is--there is a definite 
movement going against us there, and you are going to end up 
holding the bag. That is what I am worried about.
    Senator Gregg. Senator, we are going to run out of time 
here with the Secretary.
    Senator Hollings. That is all right. He can comment or not.
    Senator Gregg. You can comment on that, then we will go to 
Senator Domenici, then to Senator Byrd.
    Senator Hollings. Help us on that Mideast-West Center.
    Secretary Powell. You are right, security is a problem 
there. Remember, the British just had a horrible situation with 
one of their consulates being blown up. I think we have to be 
careful about using that facility.
    Senator Hollings. That is right, we are in trouble.
    Senator Gregg. Senator Domenici, and then we will go to 
Senator Byrd.

                      IRAQ RECONSTRUCTION, COST OF

    Senator Domenici. Thank you very much, Mr. Chairman. Mr. 
Secretary, fellow members on the subcommittee, first I 
apologize for being late, particularly to you, Mr. Chairman. I 
had three committee hearings at the same time.
    I want to talk just for a minute about Iraq reconstruction 
and then I want to change the subject to non-proliferation. It 
still remains an issue. First on reconstruction, I hope that 
the experts that are going to use the $18 billion for 
reconstruction in Iraq will consider the fact that this 
reconstruction money ought to go as far as it can. By that I 
mean if there is any way that you can use it for guarantees and 
the like, so that less dollars get more accomplished, I think 
that would be a very good way to handle it.
    Now I am not familiar with how you plan to reconstruct 
Iraq, and how you plan to bring this economy into being, but I 
would suggest that you have some finance experts advising the 
Department on how to stretch the $18.5 billion. We know here 
that when we do guarantees, their cost on our budget is 
tremendously less than the amount of the loans. I leave that 
with you, and I hope that you will take every opportunity. If 
the $18.5 billion does not permit that and you see some places 
where more is needed, I would hope you would ask us.

              MOX PROGRAM; STATUS OF LIABILITY WITH RUSSIA

    I want to change the subject. It seems almost trivial with 
what we are doing, but I think non-proliferation of nuclear, 
and chemical, and biological weapons remains a terrific problem 
for the world. I want to ask you again about the MOX program. 
You know what that is. That is the program with the Russians 
that caused America to change its policy and start building a 
plant for MOX, which is a new way to convert some of the 
radioactive consequences of nuclear build-up.
    I am very concerned about the Russian-United States program 
that will remove 34 million tons of plutonium from the 
respective stockpiles. As you know, I have been involved with 
this effort beginning way back when we put it into effect. 
Frankly, I do not blame you, but I am very disappointed that 
the negotiations regarding this issue of liability has not yet 
been resolved. I tell you, Mr. Secretary, that it is a matter 
that deserves your attention. The Russians have negotiated a 
deal like this with another group, the G-8 partners and they 
have done it at a level of protection that is different from 
what we are talking about in this United States. I do not think 
we ought to let them get away with treating us differently.
    In other words, they are making the liability question 
harder for our country than they did for the G-8. I would hope 
that again, Mr. Secretary, that you would find the very, very 
best people and get on with this. We must not lose the momentum 
of this huge deal that we made at the same time we got that 
highly enriched uranium. I think you are aware of that. They 
made a deal. We got enough highly enriched uranium that we 
bought that could make thousands of bombs, and it was bought 
and it is here in America. It is being fixed up to where it can 
be used in nuclear powerplants.
    But the MOX program deals with a more dangerous compound. 
It deals with what nuclear weapons are made of. Or put it this 
way, you cannot make them without this. For the Russians to 
give us under an agreement 34 million tons--I believe that my 
staff is wrong. I think it is 34 tons.
    Secretary Powell. It is a lot.
    Senator Domenici. It is a lot and it could make a lot of 
bombs, and they will not be able to be made. Could I have your 
comments on this?
    Secretary Powell. I am familiar with the program and I am 
familiar with the liability issue. Our responsibility in this 
is outside of Russia, so I have got to take the question back 
to other colleagues in the administration and get back to you 
on it, and talk to my friends at DOE and my own staff to see 
what we can do about the liability problem.
    Senator Domenici. It would be done if you solve that 
problem. Thank you, and thank you, Mr. Chairman.
    [The information follows:]

    On March 25 at the hearing on CJS appropriations, you and Secretary 
Powell discussed the status of the liability issues with Russia and how 
it affects progress in United States and other G-8 partners' 
participation in Russia's plutonium disposition program. The Secretary 
promised to follow-up with you on this matter. This is an interim 
reply.
    State and other interested agencies remain engaged at senior levels 
on the issues you raised. We will provide a substantive response as 
soon as those deliberations are completed. We appreciate your strong 
interest in this issue and this critical initiative.

    Senator Gregg. Senator Byrd.
    Senator Byrd. Let me thank you again, Mr. Chairman, and 
Senator Hollings for your patience, and for your many 
courtesies to me. I am not a member of the subcommittee.
    Let me thank you again, Mr. Secretary, for the good work 
you do. When I came to Congress, we had Secretary Dulles as our 
Secretary of State. My first trip out of this country was a 
trip around the world. I remember that in high school I was 
assigned a book to read, Jules Verne's ``Around the World in 
Eighty Days.'' We went around the world in 68 days, I believe 
it was, in an old Constellation. Of course, that would have 
been called a junket in these days.
    We visited Afghanistan, where they went into the town 
square there, the men wore leggings and looked as though they 
wore secondhand clothing. The time of day was announced in the 
town square. There was no warm water in the hotel where we 
stayed. Mrs.--I am trying to remember the name of the lady from 
Illinois who was a member of the delegation. There were seven 
on the delegation, among whom was a member from Minnesota, a 
former missionary to China. We visited Afghanistan. We also 
visited Iraq and visited the king of Iraq, as it was at that 
time. I sometimes think that I would like to go back to 
Afghanistan and see what changes have been made.

      ISRAEL FENCE STATUS AND COST AND ISRAEL-PALESTINIAN CONFLICT

    While I was in Iraq, I decided to go down to Babylon, the 
old Biblical city of Babylon, sitting on the banks of the 
Euphrates River, and my memory carried me back to that chapter 
in the Bible where Daniel was called in before the king to 
interpret the handwriting on the wall, mini, mini, tiki, 
euphrasi. The meaning as Daniel interpreted it, God hath 
numbered thy Kingdom and finished it. Thou art weighed in the 
balance and art found wanting. Thy kingdom is divided and given 
to the Meads and Persians. That night the king was killed, and 
his dominions were indeed given to the Meads and the Persians.
    I marvel at the prophesies that we have heard and read from 
the Bible, and have seen them come true, and are seeing them 
come true.
    I agree with Richard Clarke's statement, and I paraphrase 
it, in that the war in Iraq has distracted us from the war 
against those who attacked us on 9/11 and the war in 
Afghanistan. I believe that, and believed it before he stated 
it. I am against that war in Iraq, I was against it, am against 
it, and will continue to be against it. I made no bones about 
that. I think that it has been a terrible distraction from our 
homeland security, our own security of this country. I think 
that we are lacking, and I think that something terrible will 
happen again in this country. I think that it is only a matter 
of time. I believe that these people are patient and that they 
will come back. I do not think that this country is being made 
more secure by our being in Iraq. I do not fall for that 
baloney. I was sold lots of that in my time, having been an old 
meat cutter, bologna.
    I think that the war in Iraq has also been a great 
distraction from the handling of the Israeli-Palestinian 
conflict. I think that is where the basic problems have arisen. 
There has been a lot written in the press about the wall that 
the Israeli government is building inside the 1967 boundaries. 
Every country has that right of self-defense. I do not question 
that right. I am sure that you do not agree with those who 
criticize the administration for abandoning the Middle East 
peace process, but for all practical purposes, the Bush road 
map, which was never really anything more than words on paper, 
is dead.
    The fact is that neither Israelis nor Palestinians have any 
reason to believe that this administration is going to expend 
any political capital to move the process forward anytime soon. 
Real progress was being made before this administration took 
office, but since that day, the situation has slid steadily 
backwards and bloodshed has spun out of control. Hundreds, if 
not thousands, of deaths could have been avoided. This 
administration's disengagement from the Israeli-Palestinian 
conflict is a major impediment to what we are trying to do to 
promote democracy and combat terrorism in the Middle East.
    The issue with respect to the wall is where this wall is 
located. It has already cut off hundreds of thousands of 
Palestinians from their land, from their neighbors, and even 
from their family members. Does not this action violate the 
policy that the location of boundaries should be decided 
through negotiation, not by unilateral action by the parties? 
My question would be, what is the administration's position on 
this? What are we going to do about it?
    Secretary Powell. We have problems with the wall and we 
have expressed those problems to the Israelis. They are free to 
protect themselves against the kind of terrorist activities 
that have so frustrated our peace efforts and frustrated the 
peace efforts of the previous administration. We have expressed 
our concern where the wall moves away from what could be seen 
as something that is clearly Israeli into Palestinian 
territory, taking into the wall large numbers of Palestinians 
on their land. There have been adjustments made to the fence, 
or the wall, as you prefer to call it. We just call it a fence. 
Adjustments have been made to the fence that take this into 
account, and we are continuing to work with the Israelis on 
this matter.
    But it is mostly a fence and not a wall, and for that 
reason the Israelis do not believe, and they think this with 
good merit, that it is not necessarily a defining feature that 
cannot be changed in the future as a result of negotiations 
between the two sides. A fence can be put up. A fence can be 
taken down. We have seen that over the past few months where 
some parts of the fence have already been taken down.
    The road map is not dead, and the President did invest 
considerable political capital in it. He went to Sharmel Sheikh 
and he went to Akuba last year. That was an investment of his 
personal prestige, and political energy of this administration. 
President Clinton invested enormous political capital, only to 
see it all come crashing down in the last week of his 
administration because of the intransigence of Yasser Arafat, 
and the same problem we have faced with Yasser Arafat and his 
unwillingness to do what should be done, what we believe can be 
done to bring terror under control.
    For this reason, the President put forward of the two 
states living side by side in peace. He made it clear; called 
one of them Palestine and the other one Israel and worked 
toward that end. We tried to get new people into positions of 
authority in the Palestinian Authority. Prime Minister Abumaz 
in the last year, we invested in him. We put political capital 
on him. But he was frustrated by Mr. Arafat's unwillingness to 
yield any authority over security forces. He stepped down, and 
now Prime Minister Karai, we are ready to help him. We are 
working with the Egyptians, we are working with our British 
colleagues, we are working with the Israelis.
    The President said yesterday we were prepared to send 
another team over. We have had teams going back and forth 
trying to get some traction, trying to see if we can use the 
Israelis' recent idea for moving out of Gaza as a way to get 
this thing going forward, depending on what the Israelis are 
also planning at the same time with respect to the West Bank at 
the route of the fence.
    So we are not disengaged, Senator Byrd. But perhaps the 
most difficult portfolio that we have to manage begins and ends 
with terror. As long as terror continues, as long as the 
Palestinian leaders and the Palestinian people do not crack 
down on terror then we are going to continue to have problems 
getting this peace process moving forward. Israel has a right 
of self-defense. Israel cannot participate with a partner that 
has really no leader to that partnership.
    Senator Hollings. Would you yield just one second? The MLR, 
you and I understand that, the main line of resistance to 
terrorism is Palestine-Israel. General Musharraf just said, 
look, if you folks can go and settle that, terrorism the world 
around will disappear. What you need--if I were king for a day, 
is I would reconstitute you as the general in charge of an 
international peacekeeping force and move right in between the 
two.
    When you have got Sharon, the Bull Connor of Israel--if you 
look on page 152 of the Seven Day War and then Prime Minister 
Levi Eschov turned to Major Ari Sharon when Sharon said, we are 
going to eliminate Egypt, just like he is trying to eliminate 
Palestine. He says, Ari, victory in war settles nothing. The 
Arabs will still be there. You have got a hardhead. He cannot 
learn, and we cannot just put our future in his hands. We have 
got to move in with some kind of international peacekeeping 
force and get something going. Not maps and talking and every 
other darn thing. We know what is necessary, separate the two 
of them. The only object to that is the United States and 
Israel. The free world is for that. I will bet you on it.
    Thank you.
    Senator Byrd. Mr. Chairman, may I just close with this 
thought, with this question? The United States provided $480 
million to Israel in this current fiscal year. How much is 
Israel spending to build this wall? Since money is fungible and 
our aid goes to Israel in the form of a big check, can it be 
said that America is paying for this wall?
    Secretary Powell. Money is fungible, but I cannot give you 
an answer off the top of my head as to what the wall 
expenditures are. As you know with respect to loan guarantees, 
we do dock those loan guarantees in response to Israeli 
activities with response to settlement activities.
    [The information follows:]

    This is in response to your March 25 inquiry of Secretary Powell 
regarding Israeli expenditures on the seam-line fence, and whether U.S. 
assistance to Israel is being used in that effort.
    U.S. assistance to Israel serves multiple purposes--relieving the 
impact of economic burdens Israel has incurred due to its regional 
isolation; maintaining Israel's qualitative military edge; preventing 
regional conflict; and building the confidence necessary for Israel to 
take calculated risks for peace.
    Economic Support Funds (ESF)--$477 million in fiscal year 2004, 
with $360 million requested for fiscal year 2005--may only be used for 
balance-of-payments support. At the discretion of the Israeli 
Government, ESF can be used to (a) purchase goods and services from the 
United States; (b) service debt owed to, or guaranteed by, the U.S. 
Government; (c) pay to the U.S. Government any subsidies or other costs 
associated with loans guaranteed by the USG; (d) service Foreign 
Military Sales debt, both current and refinanced; and (e) finance other 
uses as agreed upon by both sides. Use of ESF money for military 
purposes--including the procurement of commodities or services for 
military purposes--is explicitly ruled out.
    Foreign Military Financing (FMF)--$2.15 billion in fiscal year 
2004, with $2.22 billion requested for fiscal year 2005--represents 
about 25 percent of the Israeli defense budget and is crucial to 
Israel's multi-year defense modernization plan. 26.3 percent of this 
FMF (approximately $580 million in fiscal year 2004) may be used for 
Off-Shore Procurement. Most of this amount is spent in Israel, which 
supports their maintenance of a strong domestic defense industry.
    In addition to ESF and FMF, the Emergency Wartime Supplemental 
Appropriations Act, 2003, authorized $9 billion in loan guarantees for 
Israel, to be made available in fiscal years 2003-2005. The Act states 
that the loan guarantees may be issued only to support activities in 
the geographic areas that were subject to the administration of the 
Government of Israel before June 5, 1967. The Act further states that 
the guarantees shall be reduced by an amount equal to Israeli 
expenditures (between March 1, 2003, and the date of issue of the 
guarantee) for activities which the President determines are 
inconsistent with the objectives and understandings reached between the 
United States and the Government of Israel regarding the implementation 
of the loan guarantee program.
    Thus, on November 25th, the United States Government announced a 
deduction of $289.5 million from the total of $3 billion in loan 
guarantees available to Israel in fiscal year 2003. This deduction 
reflects issues of concern to the United States, including settlement 
activities and the route of the security fence. As the President has 
stated clearly and consistently, ``Israel should freeze settlement 
construction, dismantle unauthorized outposts, end the daily 
humiliation of the Palestinian people, and not prejudice final 
negotiations with the placements of walls and fences.''
    As for costs incurred by the GOI in construction of the separation 
barrier, publicly available estimates are on the order of $2 million 
per kilometer. With the Government of Israel having built nearly 200 
kilometers of fence so far, total costs are approximately $400 million. 
The planned route of the fence calls for another 400 kilometers to be 
built, bringing the total, on completion, to approximately $1.2 
billion. These, of course, are only estimates.
    I hope that this addresses your concerns. If we can be of 
assistance in the future on this or any other matter, please do not 
hesitate to contact us.

    Senator Hollings. We need Secretary Powell to go there and 
say, Mr. Sharon, pull down this wall, just like Reagan. Go 
ahead and do it. We can stop some terrorism. Iraq has no 
terrorism. We started it there. We know where the terrorism is 
and we know the MLR, you and me. You can do it. Thank you.
    Senator Byrd. Thank you, Mr. Chairman.
    Senator Gregg. Do you want to respond?
    Secretary Powell. Terrorism will emanate from those places, 
even with an international force there, until such time as the 
Palestinian leaders decide that it is not serving their 
interest any more and they stop it.
    Senator Hollings. But you do not have any leaders. They are 
a basket case after 35 years of occupation. Anybody with get up 
and go has got up and gone.
    Secretary Powell. There are people who claim they are 
leaders, and there are people who are invested with leadership 
by the people themselves. They are the ones that are not 
acting.
    Senator Hollings. But if you want a democracy in the 
Mideast you would have gone to Syria where Lebanon is a sort of 
50-50 democracy, get the Syrian army out of Lebanon and then 
you would solve the Hezbollah and Hamas problem. Not Iraq.
    Senator Gregg. I wish we could solve the Israeli-
Palestinian issue at this conference table this morning.
    Senator Hollings. I think you can. We have got the man to 
do it.
    Senator Gregg. I suspect that even with our unique talents 
it may be beyond our capacity.
    Mr. Secretary, we appreciate your generous commitment of 
time, especially after all your flying the past few days.
    Secretary Powell. Thank you, Mr. Chairman.

                         CONCLUSION OF HEARINGS

    Senator Gregg. If there is nothing further, the 
subcommittee will stand in recess.
    [Whereupon, at 12 noon, Thursday, March 25, 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 2005

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [The following testimonies were received by the 
Subcommittee on Commerce, Justice, and State, the Judiciary, 
and Related Agencies for inclusion in the record. The submitted 
materials relate to the fiscal year 2005 budget request for 
programs within the subcommittee's jurisdiction.]

      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, 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 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.
    More than 200 Museum scientists, 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, supports doctoral and postdoctoral 
scientists with 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 scientific data to mitigate 
threats to global biodiversity, and integrating this information into 
the conservation process and to disseminate it widely. It conducts 
conservation-related field projects around the world, trains 
scientists, organizes scientific symposia, presents public programs, 
and produces 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 was on conservation issues 
related to increased ecotourism in Southeast Asia, and 2004's symposium 
examines the role of invertebrates in environmental systems.
    The Museum's vast collections provide 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. Collections such as these are historical 
libraries 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.
    The Museum's renovated Hall of Ocean Life, reopened in Spring 2003, 
is a major focal point for public education on marine science issues. 
Drawing on the Museum's world-renowned expertise in Ichthyology as well 
as other areas of vertebrate as well as invertebrate zoology, the Hall 
is pivotal in educating visitors about the oceans' key role in 
sustaining life on our planet. 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) 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.
    In its Halls of Biodiversity, Planet Earth, and the Universe, 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 present features on such issues as 
marine biodiversity, ocean life discoveries, and more. In addition, the 
Museum's comprehensive education programs attract more than 400,000 
students and teachers and more than 5,000 teachers for professional 
development opportunities. The Museum also takes its resources beyond 
its walls with Moveable Museums, an after-school program, online 
resources, and through the National Center for Science Literacy, 
Education, and Technology, launched in 1997 in partnership with NASA.

              COMMON GOALS OF NOAA AND THE AMERICAN MUSEUM

    Today, as throughout its history, the National Oceanic and 
Atmospheric Administration [NOAA] is committed to managing and 
conserving the nation's living marine resources and their environments, 
forecasting environmental changes, providing decision makers with 
reliable scientific information, and fostering global environmental 
stewardship, especially of coastal and marine resources. The American 
Museum shares NOAA's commitment to these environmental goals and to the 
scientific research, technologies, and public education that support 
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.
    The Museum has also long been at the forefront of developing new 
research tools--including molecular technologies, new collection types, 
innovations in computation, and GIS and remote sensing--that are 
revolutionizing the way research can be conducted and data analyzed, as 
well as the way museum collections can be used. The Museum has 
significant resources in these areas, which it would bring to bear in 
continued partnership with NOAA. These include:
    Remote Sensing and Geographical Information Systems Technologies.--
The CBC launched the Remote Sensing/Geographical Information Systems 
(RS/GIS) lab 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; and to 
develop visual depictions and digital presentations for reports, 
publications, and meetings. RS/GIS is also key for predictive modeling, 
which when coupled with groundtruthing significantly enhances 
understanding of aquatic habitats.
    Molecular Research Program.--The Museum is also home to a 
distinguished molecular systematics program that is at the leading edge 
of comparative genomics and the analysis of DNA sequences for 
biological research. In its laboratories, more than 40 researchers in 
molecular systematics, conservation genetics, and developmental biology 
conduct their research on a variety of terrestrial and aquatic study 
organisms. Their work is supported by the Museum's new frozen tissue 
collection of biological tissues and isolated DNA stored in a super-
cold storage facility, which preserves genetic material and gene 
products from rare and endangered organisms that may become extinct 
before science fully exploits their potential. These researchers also 
have onsite access to a 700-processor supercomputing cluster--the 
fastest parallel computing cluster in an evolutionary biology 
laboratory and one of the fastest installed in a non-defense 
environment.

                     MARINE ENVIRONMENTS INITIATIVE

    The explosion of research technologies has created an opportunity 
for the Museum 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. This intersection of research capability and 
technological opportunity underlies the Museum's marine environments 
initiative. The Museum proposes to continue, in partnership with NOAA, 
this basic and applied research initiative in areas of shared concern, 
such as the following:
    Biodiversity and Conservation Research.--AMNH investigators are 
exploring applications of GIS and remote sensing technologies to 
advance research pertinent to conservation and protecting threatened 
species and habitats. For example, 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. In addition to the 
discovery and classification of many still unknown species, Museum work 
concerns the protection and conservation of many species whose habitats 
and survival are at risk. These researchers rely on the capacities of 
GIS/RS to develop finer, tighter, more precise datasets. Also, GIS 
analysis enables researchers to ask more sophisticated and flexible 
questions, and to discover patterns, series, and gradations. Projects 
include the following:
  --Marine reserve networks.--Analyzing the physical, biological, and 
        cultural processes affecting coral reef systems in the Bahamas. 
        GIS 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.--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 and create a database that contains identification 
        photos, biopsies, DNA sequences, and sighting information for 
        hundreds of whales.
  --Aquatic ecosystem research.--Aquatic ecosystems research includes 
        predictive modeling and riparian ecosystems research, and 
        focuses on questions of restoration, management, and 
        monitoring, drawing on resources of the Museum and facilities 
        of the Southwestern Research Station.
  --Biotic surveys and inventories.--The CBC has conducted floral and 
        faunal surveys in Bolivia and Vietnam, providing data on the 
        distribution and abundance of species, and enabling researchers 
        to analyze the role of climate change on land cover and develop 
        plans to reduce threats to biodiversity. Researchers are also 
        experienced in training local field biologists and conservation 
        managers how to conduct surveys using RS data and biophysical 
        measures and how to apply results to the long-term conservation 
        of biodiversity.
    Collections data and access.--Museum researchers 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, researchers worldwide are able to pose more sophisticated 
questions and uncover new connections and relationships among the 
collections data.
    Public education and outreach.--The Museum features current NOAA-
related science and discovery in the Hall of Ocean Life as well as in 
its other educational programs and resources. For example, the Museum 
is collaborating with partners such as the New York State Marine 
Education Association and the New York Sea Grant on an annual 
conference, scheduled for Summer 2004, to promote marine awareness and 
encourage the growth and exchange of instructional resources within the 
scientific, commercial, and educational communities.
    These applications for GIS and other technologies demonstrate the 
Museum's unique capabilities to advance environmental forecasting, 
provide decision makers with reliable scientific information, and 
foster global environmental stewardship.
    We therefore request $1 million to continue in partnership with 
NOAA to build its marine environmental sciences initiative. 
Contributing its participatory share with funds from nonfederal as well 
as federal sources, the Museum will use cutting-edge technologies to 
advance basic and applied research, integrated with education and 
access efforts, related to marine environments. In so doing, we seek to 
increase scientific understanding and public awareness of vital 
environmental resource management issues.

                                 ______
                                 
 Prepared Statement of the National Association of State Universities 
 and Land-Grant Colleges (NASULGC) and the University Corporation for 
                      Atmospheric Research (UCAR)

    On behalf of the 235 institutions that constitute the University 
Corporation for Atmospheric Research (UCAR) and the National 
Association of State Universities and Land-Grant Colleges (NASULGC), we 
thank the Subcommittee for your support of weather and climate research 
and education within the National Oceanic and Atmospheric 
Administration (NOAA). Under your leadership, Congress has taken 
important steps to recognize NOAA's contribution to our nation's 
quality of life, national security, public health, and economic well-
being. However, UCAR and NASULGC have grave concerns that the fiscal 
year 2005 President's budget request places that progress in serious 
jeopardy by recommending significant reductions or eliminations of 
funding compared to the fiscal year 2004 appropriated amount.
    The proposed reductions in funding for extramural research and 
education programs are very worrisome and seem in direct contradiction 
to the atmospheric science community's repeated request to establish a 
significant peer-reviewed NOAA extramural research fund to strengthen 
NOAA research by creating strong partnerships between the agency and 
the academic and private sectors. Enabling such collaborations among 
the country's best scientists is warranted given the statement 
contained in the fiscal year 2005 Budget Request that, ``Weather- and 
climate-sensitive industries, directly or indirectly, account for 
approximately $2.7 trillion of the Nation's gross domestic product.'' 
We urge the Subcommittee to return NOAA to its fiscal year 2004 
appropriated level of $3.689 billion at the very minimum.
    Currently, NOAA is undergoing a congressionally mandated evaluation 
of its research enterprise. During this time of change and uncertainty, 
it is critical that Congress continue to support, and use any 
restructuring to enhance, NOAA's core research programs and competitive 
programs and partnerships with the academic community. These 
partnerships leverage research and research applications expertise, 
bring the best talent to bear in addressing high priority technology 
development requirements, and serve to train a new generation of 
scientists that NOAA and the rest of the scientific community will 
desperately need as present employees retire. As NOAA research 
activities are strengthened, we urge the Subcommittee to keep in mind 
the concept of the competitive, peer-reviewed Collaborations Fund, an 
external, peer-reviewed grants program to accelerate progress in the 
nation's weather research, for which the atmospheric sciences community 
has been advocating for several years.
    We would like to offer the following specific NOAA program 
recommendations:

Office of Oceanic and Atmospheric Research (OAR)
    Climate and Global Change Program.--The fiscal year 2005 budget 
request includes a reduction of $9.15 million and 12 FTE for the 
Climate and Global Change program. We understand that this is a partial 
offset to fund climate increases for observation programs, but we 
question the choice of programs, all involving the external research 
and education communities, that will be diminished greatly or 
eliminated. Each of the targeted programs has much to do with the 
nation's basic climate research and the future of the atmospheric 
science in this country. They include NOAA's entire post doctoral 
program in climate science; NOAA's entire participation in the inter-
agency funded, Presidential award-winning Significant Opportunities in 
Atmospheric Research and Science (SOARS) program for undergraduate 
students who are underrepresented in the atmospheric sciences; 
university climate research grants that enable this country to 
participate in international field programs, such as the Climate 
Variability and Predictability World Climate Program (CLIVAR), designed 
to improve our ability to observe, understand, predict, and respond to 
changes in the global environment; and the entire Human Dimensions of 
Global Change Research Program that funds competitively awarded social 
sciences research grants to advance understanding of the human response 
to and planning for the effects of climate variability. NOAA is the 
only agency funding this applied social sciences research examining how 
social and economic systems are influenced by fluctuations in short-
term climate (seasons to years), and how human behavior can be affected 
by variability in the climate system, and it is the only agency funding 
this country's participation in CLIVAR. We urge the Subcommittee to 
restore the fiscal year 2005 Climate and Global Change funding and 
personnel levels to the fiscal year 2004 enacted level of $69.66 
million and current FTE level.
    Climate Observations and Services.--We urge the Subcommittee to 
support the requested amount of $72.82 million, particularly the 
increases requested for the Global Ocean Observing System (increased by 
$10.7 million over current program levels) and Carbon Cycle Atmospheric 
Observing System (increased by $6.5 million over current program 
levels). The increases for these programs will build the climate 
observing system required to support the research, modeling, and 
decision support activities for the Administration's Climate Change 
Research Initiative. We ask that the Subcommittee urge NOAA to expand 
partnerships with academia in this area, as we understand that most of 
the research is slated to be conducted internally.
    Educational Partnership Program for Minority-Serving Institutions 
(EPPMSI).--We urge the Subcommittee to support the fiscal year 2005 
$15.0 million request for EPPMSI, and to support the requested transfer 
of the program from Program Support to OAR. The under-representation of 
minorities in the earth science disciplines continues to be a glaring 
problem, and NOAA's outreach initiatives provide vital contributions 
toward correcting the imbalance. EPPMSI also has the full support of 
NASULGC's Office for the Advancement of Public Black Colleges.
National Weather Service (NWS)
    The U.S. Weather Research Program (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. It is a program that engages in basic 
research, the societal applications of that research, and to moving 
these applications into operations. It therefore straddles the missions 
of OAR (research and applications oriented) and NWS (operations 
oriented). Within the President's fiscal year 2005 request, USWRP is 
moved from OAR to NWS. Before this is accomplished, we ask that the 
Subcommittee take into consideration relevant recommendations of the 
NOAA Research Review Team, of a current internal USWRP study, of the 
OAR and NWS administration, and of congressional authorizers. We 
support any plan that is carefully considered and that strengthens 
NOAA's leadership role in this interagency program. We urge the 
Subcommittee to support the fiscal year 2005 request of $4.25 million 
for USWRP.
    THORPEX.--A Global Research Program is a component of the USWRP 
that has its own line in the fiscal year 2005 request. THORPEX is an 
interagency, international program the goal of which is to provide, for 
the benefit of society and the economy, 7-14 day forecasts that are as 
reliable and useful as are current 2-3 day forecasts. We urge the 
Subcommittee to support the fiscal year 2005 THORPEX request of $2.3 
million.
    The Space Environment Center (SEC) is the national and world 
warning center for solar disturbances that can affect people and 
equipment working in the space environment as well as the 
communications network of the nation. We agree with the 
Administration's conclusions that the operational nature of SEC is a 
good fit with the NWS mission and that the Center should therefore be 
transferred from OAR. We urge the Subcommittee to support the $7.5 
million requested for the Space Environment Center, as well as the 
proposed SEC transfer to NWS from OAR.
    The Cooperative Observer Network Modernization (COOP) will 
eventually provide the country with a network of accurate surface 
weather data that is critical to the maintenance of the country's 
climate record as well as to work of NWS local field offices and 
university research laboratories. We urge the Subcommittee to support 
the reinstatement and modernization of the Cooperative Observer Network 
by appropriating the requested fiscal year 2005 funding level of $1.4 
million.
    The NOAA Profiler Network is zeroed out in the fiscal year 2005 
request, terminating the nation's 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. The 
Network saves lives and helps mitigate the destruction of property in 
severe weather. The fiscal year 2004 enacted funding for the Network 
was $4.1 million, an amount that allowed continued operation of the 
stations while the NWS prepared a report, requested by Congress, 
analyzing the need for a profiler network and producing a plan for 
implementation of a modernized system. This report has not been 
completed. We strongly urge the Subcommittee to restore in fiscal year 
2005 $4.1 million plus inflation for the continued operation of the 
Profiler Network, and to urge the NWS to produce, as soon as possible, 
the detailed plan requested by Congress for the replacement of the 
current Network with a much-needed state-of-the-art system.

National Environmental Satellite, Data, and Information Service 
        (NESDIS)
    National Polar-orbiting Operational Environmental Satellite System 
(NPOESS).--We support the requested increase of $30.9 million for 
NPOESS, and urge you to ensure that the necessary resources are 
provided to guarantee the system's capability to utilize, manage, 
store, and make available the data from this critical observing 
program. Resources are necessary also for education and training 
activities that are critical to encourage and enable the efficient and 
effective use of these data. This service is provided through the 
Cooperative Program for Operational Meteorology, Education and Training 
(COMET) program. We urge the Subcommittee to support the requested 
fiscal year 2005 amount of $307.6 million for NPOESS.
    Regional Climate Centers.--The President's budget terminates 
funding for these centers, which are located on university campuses and 
continue to provide detailed climate and related products essential to 
private sector economic activities specific to each of the regions. 
They are needed to address the expanding demand for climate services, 
currently growing at a rate of 25 percent per year. We urge the 
Subcommittee to restore funding for Regional Climate Centers to the 
fiscal year 2003 level of $2.98 million.

Facilities
    Boulder Facilities Operations.--Six OAR laboratories, one NESDIS 
Data Center, one OAR Joint Institute, and the Denver Forecast Office of 
the National Weather Service are all housed in Boulder at the David 
Skaggs Research Center. The rent for this important facility should 
definitely be paid out of facilities operating costs and not have to be 
taken from research funding as has been forced upon NOAA in past years. 
We urge the Subcommittee to support the $4.56 million fiscal year 2005 
request for Boulder Facilities Operations.

About UCAR
    UCAR is a consortium of 68 universities that manages and operates 
the National Center for Atmospheric Research 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.

About NASULGC
    NASULGC is the nation's oldest higher education association. 
Currently the association has 213 member institutions--including the 
historically black Land-Grant institutions--located in all fifty 
states. Its members constitute the major public research institutions 
in the nation. The Association's overriding mission is to support high 
quality public education through efforts that enhance the capacity of 
member institutions to perform their traditional teaching, research, 
and public service roles.

Conclusion
    The academic community is cognizant of the serious budgetary 
constraints that face the Congress in the coming fiscal year. However, 
short-term savings achieved by cutting funding for extramural research 
and education programs will surely result in long-term degradation of 
NOAA's ability to meet its core mission requirements which are critical 
to the economic health, safety, and security of the nation. We thank 
you for your past support for atmospheric science and look forward to 
working with you to restore and stabilize the funding base for NOAA's 
extramural research and education programs.
                                 ______
                                 
    Prepared Statement of the Association for Enterprise Opportunity

    Chairman Gregg, Ranking Member Hollings and other Members of the 
Subcommittee: On behalf of the Association for Enterprise Opportunity 
(AEO), thank you for the opportunity to submit comments to the 
Commerce-Justice-State Appropriations Subcommittee regarding the 
proposed termination of the Small Business Administration (SBA) 
Microloan Program and the Program for Investments in Microentrepreneurs 
(PRIME) in the President's fiscal year 2005 budget. My name is Bill 
Edwards, and I am Executive Director of AEO. AEO is the national trade 
and membership association for microenterprise development in the 
United States with nearly 500 member organizations nationwide. The vast 
majority of AEO's membership consists of microenterprise practitioner 
agencies, including over half of all Microloan Intermediaries and PRIME 
grantees. AEO is requesting $30 million in lending capital for the SBA 
Microloan Program, $25 million for SBA Microloan Technical Assistance, 
and $15 million for the SBA PRIME Program.
    The Administration's proposed elimination of the SBA Microloan and 
PRIME Programs threatens to wipe out two essential federal funding 
sources for microenterprise development in the United States, 
effectively terminating the only available sources of business 
assistance for thousands of underserved entrepreneurs across the 
country.
    AEO respectfully requests that this Subcommittee fund these crucial 
SBA programs at the following levels: $30 million for Microloan Lending 
(requiring a $2.8 million appropriation), $25 million for Microloan 
Technical Assistance, $15 million for PRIME, and $14.5 million for 
Women's Business Centers.

The SBA Microloan Program
    The SBA Microloan Program, the single largest source of funding for 
microenterprise development in the nation, was created in 1992 to help 
small business owners in need of small amounts of capital (less than 
$35,000) that are not yet ``bankable'' in the private sector lending 
community. Since 1992, SBA Microloan Intermediaries have made nearly 
19,000 Microloans totaling over $213 million, primarily to women, 
minority, and low-income entrepreneurs. In fiscal year 2003, 
Intermediaries made 2,422 loans, totaling $29,932,410.49, well 
exceeding the SBA's stated goal of $28 million in new loans.
    The Administration contends that banks will now lend to Microloan 
borrowers through 7(a) loan programs such as SBA Express, Community 
Express, and Lowdoc. This is not true. While banks may at times make 
business loans under $35,000, these programs serve entirely different 
borrowers, using entirely different criteria. Microloan borrowers often 
have FICO credit scores as low as 550, past credit problems, little or 
no collateral, and a lack of business experience. Traditional banks 
will simply not lend to these borrowers, with or without a SBA 
guarantee. Also, it is important to note that 40 percent of SBA 
Microloans go to start-ups while 7(a) loan guarantees require that 
individuals already be in business anywhere from 1 to 3 years.
    Despite lending to the riskiest borrowers, the Microloan Program 
has experienced a default rate of less than 1 percent. This 
accomplishment can be primarily attributed to the countless hours of 
intensive technical assistance that Intermediaries provide to Microloan 
borrowers. The technical assistance acts as a driver for business 
success and greatly improves the chances for successful business 
repayment.
    Finally, the Administration claims that the Microloan Program costs 
taxpayers $.97 per $1.00 loaned, but fails to recognize that this cost 
is directly related to the high level of technical assistance that 
borrowers receive and, thus, to the success of the program itself. 
Without technical assistance, these borrowers would be ill-equipped to 
manage a business! AEO is awaiting the SBA's response to a question 
posed by the Senate Small Business Committee regarding the methods by 
which the $.97 per $1.00 loaned were calculated.

The SBA PRIME Program
    PRIME is the only federal microenterprise program that provides 
intensive training and technical assistance to low- and very low-income 
entrepreneurs. For many entrepreneurs, lack of access to capital is 
only one of the barriers to starting or growing a successful small 
business. PRIME provides grants to microenterprise organizations 
throughout the country to offer this invaluable assistance. In 
addition, PRIME is unique in that at least 50 percent of all grant 
award dollars must be used to provide these services to very low-income 
individuals.
    The Administration has proposed the elimination of the PRIME 
Program for the past four years. However, Congress has continued to 
fund PRIME each year and in doing so has recognized that by investing 
in very low-income entrepreneurs, the program succeeds in creating jobs 
and income in communities that need it most. PRIME is just that--an 
investment. PRIME clients create and retain jobs, move off of public 
assistance and pay increased taxes as their businesses and incomes 
grow.

The SBA Women's Business Center Program
    The Women's Business Centers (WBC) of the Office of Women's 
Business Ownership provide training and technical assistance to women 
starting or expanding their businesses. In 2003 alone, Women's Business 
Centers across the country trained and counseled over 104,000 women in 
core business areas such as marketing, bookkeeping and finance. The 
Centers serve an invaluable role in meeting the special needs of female 
entrepreneurs across the country.
    America's 9.1 million women-owned businesses employ 27.5 million 
people and contribute $3.6 trillion to the economy. However, women 
continue to face unique obstacles in the world of business and greatly 
need the specialized services that Women's Business Centers provide.
    Again, we ask that the Subcommittee do what is truly best for small 
business in America and appropriate: $30 million for Microloan Lending 
(requiring a $2.8 million appropriation), $25 million for Microloan 
Technical Assistance, $15 million for PRIME, and $14.5 million for 
Women's Business Centers.
                                 ______
                                 
 Prepared Statement of the National Association of State Universities 
and Land-Grant Colleges (NASULGC) and the Consortium for Oceanographic 
                     Research and Education (CORE)

    On behalf of the 256 institutional members of the Consortium for 
Oceanographic Research and Education and the National Association of 
State Universities and Land-Grant Colleges, thank you for your support 
of ocean sciences within the National Oceanic and Atmospheric 
Administration (NOAA). Under your leadership, Congress has taken 
important steps to recognize NOAA's contributions to our nation's 
quality of life, national security, public health, and economic well-
being. However, CORE and NASULGC have serious concerns that the 
Administration budget request for fiscal year 2005 puts that progress 
in jeopardy by recommending significant cuts in funding for NOAA's 
extramural ocean research programs.
    As you are aware, NOAA is the third largest source of federal 
funding for marine academic research, oversees the nation's coastal and 
ocean monitoring networks, and participates in several important 
climate research programs. In that capacity, NOAA provides support for 
scientists at many of our member institutions to conduct research that 
provides critical information to policy-makers. This external research 
offers important benefits to NOAA, leveraging limited resources to meet 
ever-expanding needs for scientific support of its missions.
    University research funds are awarded through peer-reviewed, 
competitive processes, ensuring that tax dollars support the best 
science and that duplication is minimized. In addition to grants 
awarded by NOAA, the states and universities themselves support 
academic research through their contributions to scientists' salaries 
and research facilities. This reduces NOAA's personnel and 
infrastructure costs, and gives the agency greater flexibility to make 
rapid changes in order to address emerging issues and priorities.
    NOAA-sponsored extramural research also is essential to support the 
training of the next generation of ocean scientists and engineers. 
Because the competitive review process ensures that funding is awarded 
to the highest-priority science, graduate students have the opportunity 
to work on cutting edge research. These students will provide the 
foundation upon which our nation's future ability to understand and 
manage marine issues is built. University partnerships will also be the 
best remedy for the large number of anticipated NOAA retirements in the 
coming years. Currently NOAA is undergoing a congressionally mandated 
evaluation of its research enterprise. During this time of change and 
uncertainty, it is critical that Congress continue to support, and use 
any restructuring to enhance NOAA's competitive research programs and 
partnerships with the academic community. These partnerships will allow 
NOAA to bring the best talent to bear in addressing high priority 
research and development requirements.
    The academic community recognizes the serious budgetary constraints 
that Congress faces in the coming fiscal year. However, short term 
savings achieved by cutting funding for extramural research programs 
could seriously jeopardize NOAA's long term capacity to meet its core 
mission requirements.
    We thank you for your past support for ocean science and look 
forward to working with you to restore and stabilize the funding base 
for NOAA's extramural programs. A list of recommended funding levels 
for specific programs is below.
    Thank you for your consideration.

National Ocean Service
    Competitive programs of the National Centers for Coastal Ocean 
Science (NCCOS).--The Administration's fiscal year 2005 budget request 
includes reductions of approximately $10 million from the competitive 
research programs of the National Centers for Coastal Ocean Science. 
These programs support important peer-reviewed, multi-disciplinary 
research in three goal areas: coastal ecosystem studies, cumulative 
coastal impacts, and harmful algal blooms and hypoxia. The proposed 
cuts would have devastating impacts on ongoing research and threaten 
the viability of future science plans, and we urge you to restore 
funding to the previously appropriated level of $23.5 million.
    National Estuarine Research Reserve System (NERRS).--We support the 
National Estuarine Research Reserve Association's requested level of 
$20 million for NERRS, an increase of $3.6 million over the fiscal year 
2005 President's request. This level is necessary to maintain support 
for the system's basic operating requirements and core programs, and to 
provide support for one new site in Texas. NERRS operates the only 
national monitoring program for estuaries, identifying short-term 
variability and long-term trends in coastal environmental quality and 
health at national, regional, and local levels. These funds would also 
support the NERRS graduate fellowship program that brings academic 
research expertise to bear upon coastal and estuarine research data 
gaps and trains the next generation of scientists.

Oceanic and Atmospheric Research
    Climate and Global Change Program.--The fiscal year 2005 budget 
request includes a reduction of $9.15 million for the Climate and 
Global Change program. This important competitive grants program helps 
further our understanding of how the oceans control Earth's climate and 
enhances our predictive capability with respect to forecasting climate 
cycles affecting the United States. We urge you to restore the program 
to the fiscal year 2004 enacted level of $69.7 million.
    Global Ocean Observing System.--For fiscal year 2005, NOAA is 
requesting an increase of $10.7 million to continue building a global 
ocean observing system. These funds bring the completion of the system 
to 53 percent, establishing a global network of ocean reference 
stations to document long-term ocean/atmosphere variability and provide 
validation points for climate forecast models. This funding is an 
important step towards completion of a multi-year plan to fully 
implement the ocean climate observing system by 2010.
    Oceans and Human Health.--The fiscal year 2004 omnibus 
appropriations bill provided $10 million to continue an important new 
program in NOAA studying the role of the oceans in human health. This 
developing effort is composed of three key elements: establishment of 
NOAA centers of excellence, implementation of a competitive external 
research grants, and support for traineeships and distinguished 
scholars. NOAA's program, which complements the joint National Science 
Foundation and the National Institute of Environmental Health Sciences 
initiative, is particularly important given the agency's unique 
leadership position with respect to ocean and coastal stewardship. We 
urge the Committee to continue the program and provide a modest 
increase of $2 million in fiscal year 2005.
    National Sea Grant College Program.--For over 35 years, Sea Grant 
has proven its value to U.S. taxpayers as a program that supports 
rigorous, high-quality research that is directly responsive to the 
concerns of coastal constituents. Over 300 Sea Grant institutions 
across 31 programs collaborate to respond to issues of national and 
regional importance using federal, state and industry partnerships that 
provide an extraordinary return on a modest federal investment. 
Congress recognized the value of Sea Grant when it reauthorized the 
program in 2002 at funding levels 25 percent higher than before. 
However, Sea Grant has lost significant opportunities to respond to 
critical national issues simply because actual program funding has not 
kept pace with inflation and needs. For this reason, we urge you to 
provide $68.4 million for Sea Grant in fiscal year 2005.
    Ocean Exploration.--The Administration's fiscal year 2005 budget 
requests a decrease of $1.8 million for the Ocean Exploration program 
which funds partnerships with public and private institutions to search 
for new ocean resources, assess and explain the diversity of marine 
organisms, survey and explore historic shipwrecks, monitor ocean 
acoustics, and support educational efforts and outreach. This reduction 
will lead to a 20 percent decline in funding available for the academic 
community and other partners to engage with NOAA's program on specific 
projects. We urge you to restore this funding so that the ocean science 
community will be able to continue their participation in efforts to 
promote ocean exploration and research.
    National Undersea Research Program (NURP).--Each year, NOAA's 
undersea research program supports over 200 research projects focused 
on developing the tools and expertise needed to work in the undersea 
environment. Projects are carried out primarily through the six 
regional NURP Centers, and are chosen on the basis of a merit-based 
peer-review process. This open, competitive process ensures a variety 
of high quality research projects directed towards pressing national 
and regional problems. We urge you to provide funding of $15 million in 
fiscal year 2005 to support the work of the NURP centers.
    Educational Partnership Program for Minority-Serving Institutions 
(EPPMSI).--We support the request of $15 million for EPPMSI, and 
support the requested transfer of the program from Program Support to 
OAR. The under-representation of minorities in the earth science 
disciplines continues to be a glaring problem, and NOAA's outreach 
initiatives are vital steps towards correcting the imbalance. This 
program also has the support of NASULGC's Office for the Advancement of 
Public Black Colleges.

National Marine Fisheries Service
    Marine Mammals.--Sound is an essential tool for ocean researchers 
to penetrate the otherwise opaque waters of the sea. However, in recent 
years, concerns have grown about the impact of many types of noise on 
marine mammals, including acoustic research. One of the primary 
challenges to addressing this issue is our current, very limited 
scientific understanding of the effects of sound on marine mammals. 
Increasing this understanding would clarify and guide NOAA managers in 
developing administrative policies to allow the conduct of ocean 
research in compliance with applicable environmental laws as well as 
making it easier for researchers to include effective mitigation 
measures in their experimental plans. We urge that $4 million be made 
available to NOAA for its participation in an independent, peer-
reviewed interagency research program on the effects of sound on marine 
mammals. In addition, we urge that $1 million be provided to NOAA 
Fisheries to strengthen its permitting capabilities and develop more 
efficient and effective criteria and guidance for ocean researchers 
with respect to marine mammals.

NOAA Education Programs
    National Ocean Sciences Bowl (NOSB).--Since its establishment in 
1997, the National Ocean Sciences Bowl has reached more than 8,200 
students and teachers in 24 regions, bringing the oceans into high 
school classrooms. The NOSB, an academic competition for high school 
students who excel in math and science, is funded through a partnership 
with NOAA and other federal agencies, academia, foundations and 
industry. The Committee's past support for the NOSB has supported 
important program enhancements including a pilot program to introduce 
the NOSB in inner-city schools with high numbers of disadvantaged 
students, the National Ocean Scholars program in which students who 
have participated in the NOSB compete for two-year college 
scholarships, and increased regional support. To continue and expand 
the NOSB program, $1.5 million is requested for fiscal year 2005.

Program Support--Marine Operations and Maintenance
    Oceanographic Fleet Support.--For fiscal year 2005, NOAA has 
requested $2.5 million from the University-National Oceanographic 
Laboratory System fleet to support work in the Pacific Ocean. The time 
at sea would be used to support long-time series research for 
Fisheries-Oceanographic Coordination Investigations (FOCI), studies of 
deep-sea vents and the maintenance of tsunami moorings in the Gulf of 
Alaska and the Pacific Ocean. Increased utilization of the UNOLS fleet 
by our federal colleagues helps to lower the overall costs of fleet 
support, leaving more funding for agency operations and research and 
experimentation.
                                 ______
                                 
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 fiscal year 2005 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 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, such as in the areas of combating 
aquatic nuisance and marine invasive species. The program is an 
excellent example of collaboration between federal and state 
governments and universities. Unfortunately, the Sea Grant program has 
been undermined by project terminations and a requested decrease in 
fiscal year 2005. Therefore, NAUFWP strongly urges Congress to 
appropriate $62.4 million for this program in fiscal year 2005, which 
is $5 million above the President's request.
    NAUFWP supports the National Invasive Species Act (NISA) Program to 
prevent and control invasive species, and the Marine Aquaculture 
Program. These partnership programs within NOAA 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 request of $500,000 for NISA/Prevent and Control, and 
$1.612 million the Marine Aquaculture Program. We urge Congress to 
appropriate these amounts for fiscal year 2005.
    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. Please include this testimony in the 
official written record.
                                 ______
                                 
              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 (NOAA), the Department of State's Bureau 
of Oceans and International Environmental and Scientific Affairs and 
the Marine Mammal Commission and requests that this statement be 
included in the official record for the fiscal year 2005 Commerce, 
Justice, State, the Judiciary and Related Agencies bill.
    TOC cannot overstate the importance of this Subcommittee in 
advancing marine conservation and appreciates the funding provided in 
fiscal year 2004. TOC is deeply troubled by the severe cuts totaling 
over $237 million to the National Ocean Service and the National Marine 
Fisheries Service proposed in the Administration's fiscal year 2005 
budget request. If enacted, these cuts will cripple the agency's 
ability to properly manage our oceans. TOC recognizes the constraints 
this Subcommittee faces, but with the upcoming release of the U.S. 
Commission on Ocean Policy's draft report, we urge that you reject 
these cuts and make ocean conservation a top priority.

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Conservation Trust Fund
    Passed by Congress in 2000, the Conservation Trust Fund 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 four fiscal years and calls for your continued 
commitment in fiscal year 2005 by dedicating $560 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 to net 
increases, rather than using the fund as a substitute for base funding.

Coral Reef Conservation
    NOAA plays a critical role in protecting coral reefs, serves on the 
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, territorial, local and other parties to reduce land-based 
pollution, overfishing, diseases, and other threats to coral reefs. TOC 
urges the Subcommittee to provide $2 million above the Administration's 
request, which will leverage an additional $2 to $4 million in matching 
resources, to support local action strategies to protect coral reefs 
through partnerships with local, state and territorial governments, 
universities and the private sector.

National Ocean Service
            National Marine Sanctuary Program
    The 13 U.S. national marine sanctuaries encompass more that 18,000 
square miles of our most significant marine resources. TOC applauds the 
Subcommittee's recognition of the importance of the Sanctuary program 
by providing $49 million for operations in fiscal year 2004 and urges 
at least level funding in fiscal year 2005. Continued funding at this 
level will reduce staffing shortages, support conservation, community 
outreach, research, and education programs, as well as provide the 
necessary funds for updating sanctuary management plans as required by 
law. TOC also supports $10 million for construction, particularly for 
interpretive facilities to educate the public about the federal 
government's role in managing our nation's ocean and coastal resources.

            Marine Protected Areas (MPAs)
    TOC appreciates this Subcommittee's continued support of NOAA's MPA 
initiative and requests $5 million in fiscal year 2005. This $0.5 
million increase will allow NOAA to work more effectively with federal 
and state agencies and other partners to acquire data for the ongoing 
MPA inventory, support the Marine Protected Areas Advisory Committee 
and better assist stakeholders, including states and the National Park 
Service, by holding regional workshops and providing training and 
technical assistance.

            Nonpoint Pollution Implementation Grants
    Polluted runoff continues to be the nation's largest source of 
water pollution. TOC urges the Subcommittee to reject the 
Administration's proposed termination of this program and maintain 
level funding in fiscal year 2005 to help coastal states and 
territories continue to implement their approved nonpoint pollution 
control plans.

National Marine Fisheries Service
            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 $18 
million in fiscal year 2004 and urge that this trend continue with 
$33.9 million in fiscal year 2005, $15 million above the 
Administration's request. Regular stock assessments will give managers 
baseline information critical to managing our fisheries and help reduce 
the backlog in research days-at-sea, which currently exceeds 3,800 days 
according to NMFS's current 10-year plan. This funding is one of The 
Ocean Conservancy's highest priorities.

            Fisheries Observers
    Along with stock assessments, reliable, objective information about 
how many fish and marine wildlife are being caught, directly and as 
bycatch, is crucial to responsible management of our ocean resources. 
Observers are a key means of collecting such information. TOC 
recommends $35 million for fisheries observers in fiscal year 2004, 
$12.5 million above the Administration's request, and encourages the 
Subcommittee to prioritize the following programs.
  --West Coast Observers.--TOC respectfully requests that the 
        Subcommittee fund west coast observers at $5 million in fiscal 
        year 2005, $120,000 above fiscal year 2004 enacted.
  --Pelagic Longline Observers.--TOC strongly supports $3 million in 
        funding for Atlantic and $4 million in funding for Western 
        Pacific pelagic longline fisheries observers. High interaction 
        rates with endangered sea turtles have resulted in partial 
        closures in both fisheries in recent years to avoid 
        jeopardizing the continued existence of these species. In 2004, 
        fishermen will return to the closed areas with gear and bait 
        modifications expected to reduce the number and severity of sea 
        turtle interactions. Adequate observer coverage is essential to 
        determine the effectiveness of these modifications in each 
        fishery. NMFS will require 100 percent observer coverage in the 
        reopened longline swordfish fishery in the Western Pacific. TOC 
        believes that a minimum of 20 percent observer coverage should 
        be required throughout the Atlantic, with 100 percent coverage 
        for any further gear research. Since 2001, Atlantic observer 
        coverage has not met even the 5 percent level required by NMFS 
        in order to comply with the ESA. As a result, NMFS estimates 
        that several hundred endangered sea turtles were captured in 
        excess of authorized levels before the agency took action to 
        require further protections.
  --New England Observers.--TOC appreciates this Subcommittee's 
        inclusion of report language and $9.3 million for New England 
        groundfish observers in fiscal year 2004 and requests level 
        funding and the inclusion of the following report language in 
        fiscal year 2005: ``The Subcommittee expects NMFS to allocate 
        sufficient funds to achieve ten percent observer coverage in 
        the New England groundfish fishery, and in the non-directed 
        fishery to the extent practicable.''
  --Bycatch Observers.--TOC respectfully requests the Subcommittee 
        support level funding at $4.9 million in fiscal year 2005.
            Endangered Species Act--Other Species
    TOC urges the Subcommittee to restore funding in fiscal year 2005 
for Endangered Species Act (ESA) recovery planning and implementation. 
This funding is vital for NMFS to support the recovery of endangered 
marine species like the smalltooth sawfish, respond to listing 
petitions in a timely fashion, conduct Section 7 consultations, 
designate critical habitat and implement recovery plans. Of the 52 ESA-
listed species managed by NOAA, less than one-third have recovery plans 
in place, most of which are critically out of date. We implore the 
Subcommittee to address this problem and provide $5.7 million in fiscal 
year 2005, $2.0 million above the Administration's request.

            Marine Mammal Protection
    A lack of adequate resources has severely hampered NMFS's ability 
to effectively implement the Marine Mammal Protection Act. TOC is 
deeply disappointed that the Subcommittee cut funding in fiscal year 
2004 and strongly urges the Subcommittee to provide at least $15 
million in fiscal year 2005. This will allow NMFS to fund top priority 
studies identified by the take reduction teams; design and implement 
fishery management plans that will not endanger marine mammals; conduct 
research on population trends, health, and demographics; and carry out 
education and enforcement programs. This funding is one of The Ocean 
Conservancy's highest priorities. In addition, we urge the Subcommittee 
to restore funding for the Marine Mammal Health and Stranding Response 
Program, which was cut in fiscal year 2004, and provide $2 million in 
fiscal year 2005. Die-offs of large numbers of marine mammals, 
including a recent bottlenosed dolphin event in Florida, are of 
significant conservation importance. Determining the cause of these 
events requires not only expertise, but also financial resources.

            Protected Resources Stock Assessments
    The MMPA and the ESA require NMFS to regularly evaluate the status 
of approximately 230 stocks of marine mammals, sea turtles, and other 
marine and anadromous species. Accurate and precise biological 
information is necessary to carry out effective conservation programs, 
promote recovery, evaluate listing status, and authorize scientifically 
defensible incidental take permits. Unfortunately, over 130 marine 
mammal stocks and all U.S. sea turtle populations lack the necessary 
data required under MMPA or ESA. TOC urges the Subcommittee to consider 
providing $5 million in fiscal year 2005, which will begin to address 
the problem.

            National Environmental Policy Act (NEPA) Implementation
    TOC supports the Administration's $8.0 million request for 
implementing NEPA. This funding is critical, as NMFS is required by law 
to consider and document potential environmental impacts of agency 
actions, ranging from complex rulemakings to controversial research 
permits. Of these funds, we urge the committee to dedicate $2 million 
to ensure robust NEPA analyses for marine mammal permitting.

            Highly Migratory Shark Fisheries Research Program
    This effective multi-regional collaborative effort conducts vital 
research on shark and ray populations in the Gulf of Mexico, the 
Atlantic, and the Pacific. This research provides NMFS with critical 
information necessary for effective management and conservation of 
shark fishery resources. TOC appreciates the Subcommittee's rejection 
of the Administration's proposed cut in fiscal year 2004 and requests 
level funding at $2.0 million in fiscal year 2005.

                          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 implement the 
landmark Inter-American Convention for the Protection and Conservation 
of Sea Turtles and the Memorandum of Understanding on the Conservation 
and Management of Marine Turtles and their Habitats of the Indian Ocean 
and South East Asia. The United States played a leading role in the 
establishment of these conservation instruments and our continued 
leadership and support will ensure that momentum continues.

                        MARINE MAMMAL COMMISSION

    TOC requests that the Subcommittee support the Marine Mammal 
Commission's base program at $2.25 million in fiscal year 2004, 
$350,000 above the Administration's request.

                       ANTI-ENVIRONMENTAL RIDERS

    TOC urges the 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 roll back environmental 
protections 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 
2005. Thank you for considering our requests.
                                 ______
                                 
Prepared Statement of the National Federation of Community Broadcasters
    Thank you for the opportunity to submit testimony to this 
Subcommittee requesting a $55 million appropriation for the Public 
Telecommunications Facilities Program (PTFP) in fiscal year 2005. As 
the President and CEO of the National Federation of Community 
Broadcasters, I speak on behalf of nearly 250 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 $55 million in funding for the Public 
Telecommunications Facilities Program in fiscal year 2005. 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 $55 million in funding to ensure that both the on-going 
program--currently funded in fiscal year 2004 at $22 million--will be 
continued, and that the increase to $55 million will be available to 
help cover the cost of radio and television converting to digital 
transmission. This increase in funding is urgent because the FCC has 
now endorsed a standard for digital radio broadcasting and the 
television conversion deadline is imminent. In addition, commercial 
radio stations are converting to digital transmission and public radio 
should not be left behind.
    Funding from PTFP has been essential to keep public radio stations 
on the air by funding replacement of equipment, often after 20 or more 
years of use. The program is administered carefully to be sure that 
stations are acquiring the most appropriate type of equipment. They 
also determine that equipment is being properly maintained and will not 
fund the replacement of equipment before an appropriate length of time. 
PTFP has also helped bring public radio service to rural areas where it 
is not available. Sometimes they fund translators to expand the 
coverage of an existing station and sometimes they help with the 
planning and equipment needs of a new station. Recently, many of these 
new projects have been for Native American controlled stations on 
Indian Reservations or new local Low Power FM installations.
    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 is mandated by the Federal Communications 
Commission, public radio is converting to digital to provide more 
public service and to keep up with the market. The digital standard for 
radio has been approved. The initial conversion of radio stations is 
being concentrated in 13 seed markets and it is important that public 
radio be part of this project. Most exciting to public radio is the 
encouraging results of tests that National Public Radio has conducted 
that indicate that stations can broadcast two high quality signals, 
even while they continue to provide the analog signal. The development 
of 2nd digital audio channels will potentially double the public 
service that public radio can provide, particularly to unserved and 
underserved communities.
    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. Therefore, the 
Committee has included $15,000,000 to assist radio stations and 
television stations in the conversion to digitization . . .'' (S. Rpt. 
105-300)

    Thank you for your consideration of our testimony. If the 
Subcommittee has any questions or needs to follow-up on any of the 
points expressed above, please contact: Carol Pierson, President and 
CEO, National Federation of Community Broadcasters, 1970 Broadway, 
Suite 1000, Oakland, CA 94612. Telephone: 510-451-8200. Fax: 510-451-
8208. E-mail: [email protected].
    The NFCB is a twenty-nine year old grassroots organization which 
was established by and continues to be supported by our member 
stations. Large and small, rural and urban, NFCB member stations are 
distinguished by their commitment to local programming, community 
participation and support. NFCB's nearly 250 members come from across 
the United States, from Alaska to Florida; from every major market to 
the smallest Native American reservation. While urban member stations 
provide alternative programming to communities that include New York, 
Minneapolis, San Francisco and other major markets, rural members are 
often the sole source of local and national daily news and information 
in their communities. NFCB's membership reflects the true diversity of 
the American population: 41 percent of members serve rural communities, 
and 46 percent are minority radio services.
    On community radio stations' airwaves examples of localism abound: 
on KWSO in Warm Springs, Oregon, you will hear morning drive programs 
in their Native language; throughout the California farming areas in 
the central valley, Radio Bilingue programs five stations targeting 
low-income farm workers; in Chevak, Alaska, on KCUK you will hear the 
local weather reports and public service announcements in Cup'ik/Yup'ik 
Eskimo; in Dunmore, West Virginia, you will hear coverage of the local 
school board and county commission meetings; KABR in Alamo, New Mexico 
serves its small isolated Native American population with programming 
almost exclusively in Navajo; and on WWOZ you can hear the sounds and 
culture of New Orleans throughout the day and night.
    In 1949 the first community radio station went on the air. From 
that day forward, community radio stations have been reliant on their 
local community for support through listener contributions. Today, many 
stations are partially funded through the Corporation for Public 
Broadcasting grant programs. CPB funds represent under 10 percent of 
the larger stations' budgets, but can represent up to 50 percent of the 
budget of the smallest rural stations. PTFP funding is a critical 
source of matching funds for these essential community resources.

                                 ______
                                 
       Prepared Statement of the Marine Fish Conservation Network

    The Marine Fish Conservation Network (Network) is pleased to share 
its views regarding National Marine Fisheries Service (NMFS) programs 
in the National Oceanic and Atmospheric Administration's (NOAA) fiscal 
year 2005 budget request. We ask that this statement be included in the 
hearing record for the fiscal year 2005 Commerce, Justice, State, and 
the Judiciary Appropriations Bill. We are requesting a budget increase 
of $40.75 million for NMFS programs in the fiscal year 2005 budget to 
be allocated for stock assessments ($15 million), observer programs 
($12.5 million), essential fish habitat ($10.15 million), and vessel 
monitoring systems ($3.1 million) as described below.
    The Network is a national coalition of more than 160 environmental 
organizations, commercial and recreational fishing associations, 
aquariums, and marine science groups dedicated to conserving marine 
fish and promoting their long-term sustainability. We greatly 
appreciate the funding this Subcommittee has provided for the marine 
fish conservation programs within NMFS in the past and we look forward 
to working with the Subcommittee to enact adequate levels of funding 
for the coming fiscal year.
    There are four areas of the NMFS budget where we believe the 
requested funding levels need to be increased to help the agency 
fulfill its obligations as the federal government's fish management 
agency.

                           STOCK ASSESSMENTS

Request: Total of $33.9 million
    While we are pleased that NMFS has requested an $800,000 increase 
in the expanding stock assessments line item, we remain concerned that 
funding in this area is insufficient. There currently is a gap of over 
$40 million between what NMFS needs to conduct stock assessments of 
federally managed fish populations and the funding that is available. 
Also, NMFS estimates that under current funding levels it has a deficit 
of 3,811 days at sea, many of which are used to conduct stock 
assessments. The impact of this deficit is demonstrated by the fact 
that the status of three-quarters of all fish species managed by NMFS 
is unknown, largely due to a lack of funding for basic research and 
stock assessments. An additional $15 million, for a total appropriation 
of $33.9 million for expanding stock assessments, would further this 
essential work.

                           OBSERVER PROGRAMS

Request: Total of $35 million
    As stated by NOAA in their budget summary, the current level of 
funding will only provide observers for 43 fisheries and adequate 
coverage for only 29 of those. Last year Congress took a strong 
positive step to improve the management of America's fish populations 
when it increased the overall fisheries observer budget by almost $11 
million. Observers are an essential fish management tool because they 
provide critical data on the amount and type of ocean wildlife killed 
due to fishing. However, the proposed fiscal year 2005 budget would 
decrease this funding by $2.3 million. A nationwide observer program 
for all federal fisheries would cost approximately $118 million. A 
smart investment toward the sustainability of our nation fisheries 
would be to fully fund a national observer program. Increasing funding 
for observers by $12.5 million to a total of $35 million, would be a 
down payment on that effort.

                         ESSENTIAL FISH HABITAT

Request: Total of $15 million
    Essential fish habitats (EFH) are those waters and substrate upon 
which fish depend for reproduction and growth. Land-based activities 
and destructive fishing practices threaten the viability of these 
habitats and the sustainability of the fish populations that depend on 
them. While the Sustainable Fisheries Act of 1996 gave NMFS a clear 
mandate to identify and protect EFH, too little has been done to 
protect these habitats. NMFS has approximately $4.85 million in its 
base budget for EFH. This level of funding is not nearly adequate for 
protecting the EFH for the almost 1,000 federally managed fish, nor for 
the research necessary to understand the relationship between habitat 
and healthy fish populations. Increasing funding by $10.15 million to a 
total of $15 million would better equip NMFS to gain the information 
necessary to further refine EFH designations and take action to protect 
EFH from the adverse impacts of fishing.

                       VESSEL MONITORING SYSTEMS

Request: Total of $12.4 million
    Increasing funding for vessel monitoring systems (VMS) to $12.4 
million would allow for the establishment and implementation of VMS, as 
well as placing VMS transponders on many of the estimated 10,000 
vessels in the U.S. commercial fishing fleet. This represents a $3.1 
million increase over the President's request. VMS programs enhance 
data collection and safety at sea. VMS is beneficial to regulators 
because it will allow officials to know when a fishing vessel is 
violating closed areas or is fishing beyond the end of a regulated 
fishing season.
    Thank you for considering our request for increasing funding for 
these important fish management programs. These increases will go a 
long way toward ensuring that NMFS can better manage and protect our 
nation's fish resources now and for the future.
                                 ______
                                 
     Prepared Statement of the Honorable Jimmie Kerr, Pinal County 
                               Supervisor

    Chairman Gregg, Ranking Member Hollings, and distinguished members 
of the Subcommittee, thank you for allowing me to testify today in 
support of a $9 million Cooperative Assistance Grant (CAP) from the 
U.S. Marshals Service (USMS) for expansion of the Pinal County 
detention facility in the fiscal year 2005 Senate Commerce, Justice, 
State and the Judiciary Appropriations bill.
    As you may know, Mr. Chairman, Arizona is the second fastest 
growing state in the nation. And, Pinal County is the fastest growing 
county per capita in the state. Unfortunately, with increased 
population comes increased crime. Simply put, our jails and prisons are 
grossly overcrowded and each and every year this problem is only 
exacerbated by our growing population. Our county has come up with a 
unique proposal that will repay the federal government, help the 
Marshals Service obtain much needed additional bed space, and, at the 
same time, relieve our county's overcrowded prison population. This 
proposal would be a win-win for the federal government and Pinal 
County.
    Under the proposal, the CAP grant would enable Pinal County to 
build an additional 500 unit pod onto its new detention facility. In 
return, the USMS would be guaranteed an additional 200 beds in the 
Pinal County facility.
    Pinal County would reduce the established USMS per diem rate for 
all inmates in the facility by $18.60 per day until the grant is fully 
repaid to the USMS. It is estimated that USMS would recover the entire 
$9 million in less than seven years, which would save the USMS the 
total annual operating cost equivalent of approximately 153,577 
prisoner days over this roughly seven year period.
    The reduced per diem rate, while working to pay back the USMS, 
would also help fund the additional operating costs of the new facility 
to the tune of about $2.92 million per year (200 inmates  $40 
 365 days = $2,920,000). In addition, the USMS would save 
nearly $1.4 million per year over the next seven years for operating 
expenditures under this unique proposal ($18.60  200  
365 = $1,357,800).
    Again, our detention center facilities are way too overcrowded and 
Pinal County's approach to this problem benefits both the federal 
government and the county. At a time when the federal deficit threatens 
fiscal solvency, this plan responds to those fiscal demands by repaying 
the federal government for all the money that is borrowed.
    Therefore, I strongly urge the Subcommittee to support Pinal 
County's request for a $9 million CAP grant to expand its overcrowded 
facility. Thank you in advance for your consideration of this request.
                                 ______
                                 
 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 2005, 
$50 million to continue their support in combating terrorism, drug 
trafficking, and organized crime.
    These funds will enable RISS to continue services to state and 
local law enforcement agencies to identify, target, prosecute, and 
remove 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 6,600 local, state, tribal, and federal law enforcement member 
agencies across the nation comprising over 744,000 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, 
tribal, 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 desktops and have a secure connection over the 
private riss.net intranet to all RISS criminal intelligence databases 
and resources. RISS member law enforcement agencies accessed riss.net 
an average of 3.6 million times per month during fiscal year 2003. 
Riss.net is a proven, highly effective system that improves the quality 
of criminal intelligence information available to 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, tribal, 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 Australia, 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 force multiplier in fighting increased violent criminal 
activity by terrorists, drug traffickers, sophisticated cyber 
criminals, street gangs, and emerging criminal groups that require a 
cooperative effort by local, state, tribal, and federal law 
enforcement. There is an increasing communications sophistication by 
the criminal networks, including terrorists, and a rising presence of 
organized and mobile narcotics crime. Interagency cooperation in 
sharing information 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 
terrorists, drug traffickers, and other 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 Sheriffs' 
Association (NSA) and the National Fraternal Order of Police (NFOP).
    RISS is operating current state-of-the-art technical capabilities 
and systems architecture that allow local, state, tribal, 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) and is endorsed by the National 
Criminal Intelligence Sharing Plan (NCISP).
    The FBI Law Enforcement Online (LEO) system and the RISS system 
achieved interconnection of the two systems in 2002 for distribution of 
sensitive but unclassified homeland security information to authorized 
users of both LEO and RISS. The value of this interconnection was 
recognized in 2003 by the National Criminal Intelligence Sharing Plan, 
which is sponsored by the U.S. Department of Justice. The Plan 
designates the RISS/LEO interconnection as the initial sensitive but 
unclassified communications backbone for implementation of a nationwide 
criminal intelligence sharing capability. This nationwide sensitive but 
unclassified communications backbone supports fully functional, 
bidirectional information sharing capabilities that reuse existing 
local, state, tribal, regional, and federal infrastructure investments. 
The Plan recommends that interoperability of existing systems with the 
RISS/LEO communications capability proceed immediately to leverage 
information sharing systems and expand intelligence sharing. The 
International Association of Chiefs of Police, the U.S. Attorney 
General, and other federal agency administrators endorse the Plan and 
have adopted it as a national model for all law enforcement agencies, 
organizations, and associations. RISS officials are working to 
implement the Plan recommendations within current budgetary restraints.
    In addition, RISS has recognized that the need for exchange of 
information extends beyond law enforcement and the RISS/LEO virtual 
single system. During 2003, RISS implemented a service available over 
riss.net to link law enforcement with the public safety and first 
responder agencies involved in securing our nation from terrorism. The 
service is known as the RISS Anti-Terrorism Information Exchange, or 
RISS ATIX, and includes a secure Web site, secure bulletin board, and 
secure e-mail. Through this capability, users can post timely threat 
information, view and respond to messages posted by government, police, 
fire, emergency, and infrastructure security personnel, and collaborate 
with law enforcement partners. These additional groups of users include 
public service, public safety, emergency management, utility, and other 
critical infrastructure personnel that have traditionally not been 
served by RISS. RISS began this service with limited funding to provide 
a rapid, secure means for first responder agencies to share 
information.
    RISS has entered into a partnership with the High Intensity Drug 
Trafficking Areas (HIDTA) to electronically connect all of the HIDTAs 
to riss.net for communications and information sharing. Currently, 16 
HIDTAs are electronically connected as nodes to riss.net, and RISS is 
working to complete the connection of the remaining HIDTAs. Twelve 
state agencies are currently connected as nodes on riss.net. An 
additional nine state law enforcement agencies are pending connection 
as nodes to share information, including terrorism and homeland 
security information, using riss.net.
    The Executive Office for United States Attorneys (EOUSA) has 
connected staff to riss.net at each of the 93 U.S. Attorneys' Offices 
(USAO) Anti-Terrorism Task Forces throughout the United States. Staff 
at the U.S. Department of Justice, Criminal Division, has connected to 
riss.net. 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. Other systems 
connected to riss.net include the Law Enforcement Intelligence Unit 
(LEIU), the National Drug Pointer Index (NDPIX), the National White 
Collar Crime Center (NW\3\C), the National Law Enforcement 
Telecommunication System (NLETS), and the Criminal Information Sharing 
Alliance (CISA), formerly the Southwest Border States Anti-Drug 
Information System (SWBSADIS). The United States Postal Inspection 
Service (USPIS) is currently pending connection to riss.net as a node. 
The National Drug Intelligence Center (NDIC) uses the RISS network as a 
communications mechanism for publishing counterdrug intelligence 
products to federal, state, local, and tribal law enforcement members.
    The integration of the above-mentioned state and federal agencies 
and systems with the riss.net secure nationwide communications backbone 
has increased the sharing of criminal intelligence and alerts and 
homeland security information within their own agencies and among the 
other agencies. The operation of RISS ATIX provides first responders 
and critical infrastructure personnel with a secure means via riss.net 
to communicate, share information, and receive terrorist threat 
information.
    Due to the interest of many law enforcement agency systems to 
electronically connect to the RISS/LEO backbone, RISS has developed a 
security architecture solution to allow users with various types of 
security credentials to connect and traverse riss.net to share 
information and access resources without being required to use the RISS 
specific security credentials. Adequate funding is needed to implement 
the technology.
  --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 2005.
    In view of today's increasing demands on federal, state, local, and 
tribal law enforcement budgets, requests for RISS services have risen. 
This support of law enforcement has had a dramatic impact on the 
success of their investigations. Over the three-year period 2001-2003, 
RISS generated a return by member agencies that resulted in 11,701 
arrests, seizure of narcotics valued at over $189 million, seizure of 
over $9.8 million in currency, and recovery or seizure of property 
valued at over $31 million.
    RISS continues to work with federal, state, local, and tribal 
agencies in their efforts to combat the menace of drugs on our street, 
and the significant influence of youth gangs in the distribution and 
sale of drugs. RISS is working to foster relationships with public 
safety and first responder agencies to increase information sharing on 
terrorism and critical infrastructure matters among those groups and 
with law enforcement.
    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 state and 
local governmental units. The Bureau of Justice Assistance also 
monitors the RISS centers for 28 CFR Part 23 compliance. This 
regulation emphasizes adherence to individual constitutional and 
privacy rights and places stricter controls on the RISS intelligence 
sharing function than those placed on most federal, state, or local 
agencies. RISS firmly recognizes the need to ensure that individuals' 
constitutional rights, civil liberties, civil rights, and privacy 
interests are protected throughout the intelligence process. In this 
regard, RISS officials recently adopted a RISS Privacy Policy to 
further strengthen their commitment and support of 28 CFR Part 23 and 
protection of individual privacy rights.
    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, 
investigative funding, and technical assistance, are experiencing 
increased competition for decreasing budget resources. It would be 
counterproductive to require the RISS members from state and local 
agencies to self-fund match requirements, as well as to reduce the 
amount of BJA discretionary funding. The state and local agencies 
require more, not less, funding to fight the nation's crime/drug 
problem. The RISS Program cannot make up the decrease in funding that a 
match would cause, and it has no revenue source of its own. Cutting the 
RISS appropriation by requiring a match should not be imposed on the 
program.
    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 Institute of Makers of Explosives
Interest of the Institute of Makers of Explosives (IME)

    The IME is the safety and security association of the commercial 
explosives industry. Our mission is to promote safety and the 
protection of employees, users, the public and the environment; and to 
encourage the adoption of uniform rules and regulations in the 
manufacture, transportation, storage, handling, use and disposal of 
explosive materials used in blasting and other essential operations. 
ATF is one of the agencies that plays a primary role in assuring that 
explosives are identified, tracked, and stored only to and by 
authorized persons. The ability to manufacture, distribute and use 
these products safely and securely is critical to this industry. With 
this perspective, we have carefully reviewed the Administration's 
fiscal year 2005 budget request and have the following comments.
Performance Measures Fall Short of Strategic Goals
    The commerce of explosives is one of the nation's most heavily 
regulated activities. ATF plays a key role in this regulatory scheme 
through its implementation of Federal Explosives Law. To ensure that 
the Bureau meets its statutory responsibilities, ATF has identified 
goals and performance standards that can measure areas of progress or 
areas needing attention. With regard to its explosives mission, the 
Bureau states that its strategic goals are to ``counter crimes of 
violence'' by effective enforcement of Federal Explosives Law (FEL) and 
to ``protect public safety'' through regulation of the explosives 
industry and explosives safety efforts.\1\ To accomplish these goals, 
ATF sets a number of performance measures.\2\ Regrettably, with two 
exceptions, these measures do not identify outcome measures as required 
by Government Results and Performance Act.
---------------------------------------------------------------------------
    \1\ DOJ Fiscal Year 2005 Budget Summary, page ATF-29.
    \2\ DOJ Fiscal Year 2005 Budget Summary, page ATF-35.
---------------------------------------------------------------------------
    The two exceptions are the measures to ``investigate all reported 
explosives thefts'' and to respond to all ``telephone inquiries from 
industry [within] 72 hours.'' \3\ We support these measures. However, 
we question ATF's determination to limit its efforts to timely respond 
to inquiries from industry to those inquiries received by telephone. 
This measure should be expanded to include other electronic forms of 
communication, as well as letter correspondence.
---------------------------------------------------------------------------
    \3\ DOJ Fiscal Year 2005 Budget Summary, page ATF-35.
---------------------------------------------------------------------------
    This leaves a number of measures with questionable outcomes. Under 
its goal to ``counter crimes of violence,'' the Bureau states that it 
will open some yet to be determined number of explosives investigations 
and related to this the ``number of [explosives] defendants 
convicted.'' However, if ATF's enforcement initiatives were working, a 
more meaningful outcome measure should be the number of investigations 
closed or otherwise resolved, irrespective of whether a conviction was 
obtained. Under its goal to ``protect public safety,'' the Bureau 
states that it will conduct 33 percent of its universe of explosives 
licensee/permittees, which it projects to be about 4,000, and that it 
will resolve up to 850 unsafe explosives conditions discovered by its 
inspectors. In fact, the statutory standard for inspection of licensee/
permittees is, with the exception of ``limited permittees,'' to inspect 
all licensee/permittee applicants prior to the issuance of such license 
or permit.\4\ Thus the appropriate inspection measure should be the 
percentage of inspections performed within the timeframe required by 
law. ATF's standard to resolve up to 850 unsafe explosives conditions 
is also inadequate. ATF has used this estimate at least since the 
Administration's fiscal year 2003 budget request when it suggested that 
850 corrective actions were less than half the Bureau's current 
workload.\5\ The Administration's fiscal year 2005 request does not 
disclose what the Bureau's current corrective action workload is. 
Without this context, the 850 corrective action standard has no basis. 
If ATF's compliance initiatives are working, however, a more meaningful 
outcome measure should be to show a decreasing trend in the percent of 
non-compliance practices that industry fails to rectify after 
corrective actions have been issued.
---------------------------------------------------------------------------
    \4\ 18 U.S.C. 843(b)(4)(A).
    \5\ Statement of Bradley A. Buckles, Director, ATF, Subcommittee on 
Treasury, Postal Service and General Government, House Appropriations 
Committee, February 28, 2002, page 17. (Fiscal year 2001--1,813 
violations; 1st quarter fiscal year 2002--1,763 violations.)
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Concerns about the Adequacy of Budget Resources
    To accomplish the missions of ATF's explosives and arson program, 
the Administration requests $231.2 million, an increase of $16.1 
million over fiscal year 2004, but only $2.6 million over current 
services.\6\ Nearly half of this new money, $1.1 million is for partial 
funding of 62 new positions (31 FTE).\7\ All of these FTP would be 
brought in as inspectors.\8\ Still, the fiscal year 2005 budget request 
raises questions about ATF's ability to perform assigned functions.
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    \6\ DOJ Fiscal Year 2005 Budget Summary, page ATF 29. About 9 
percent of this request, $20.7 million, is programmed for information 
and technology enhancements, basically a level funding of the fiscal 
year 2004 allocation for these functions.
    \7\ DOJ Fiscal Year 2005 Budget Summary, page ATF-A6
    \8\ DOJ Fiscal Year 2005 Budget Summary, page ATF-A5.
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  --Baseline Data.--We cannot comment on the adequacy of ATF's services 
        to industries other than our own. Still, the budget request is 
        difficult to evaluate in terms of resources because it does not 
        disclose information about its current workload, with the 
        exception of reports due to Congress. Even that is incomplete 
        as noted below. To better justify the Bureau's budget 
        submission, ATF should be asked to provide information on: the 
        number of investigations that are open, the date of the oldest 
        and the number of new cases opened in the last fiscal year; the 
        number of inspections that will be required to be preformed do 
        to permit/license renewals; the number of times ATF failed and 
        for what reason to issue a permit or license within the 90-day 
        timeframe required by law; the number of background checks that 
        ATF has performed, within what average timeframe, and of those, 
        how many individuals failed to receive clearance, and of those, 
        how many appealed the Bureau's findings; the number of 
        rulemakings outstanding and their priority; turnover rates 
        among agents and inspectors; and the number of persons and from 
        what agencies that are trained through ATF programs. Absent 
        information of this type, it is unclear how Congress can 
        effectively oversee ATF's explosives operations and determine 
        the adequacy of its budget request.
  --Inspections.--As noted above, the statutory standard for inspection 
        of licensee/permittees is, with the exception of ``limited 
        permittees,'' to inspect the licensee/permittee applicant prior 
        to the issuance of such license or permit. ATF has not met this 
        standard in all instances. We would hope, with the addition of 
        62 inspector positions, that this situation will improve.
  --Rulemakings.--The last publication of a ``final'' rule of 
        consequence to the explosives industry was in 1998.\9\ 
        Currently, ATF has six open rulemakings of interest and concern 
        to the explosives industry.\10\ The oldest of these was 
        proposed in 1997. Several are a result of the enactment of the 
        Safe Explosives Act (SEA) in 2002. Our primary interface with 
        ATF is through efforts to comply with the Bureau's regulations. 
        Two of these rulemakings, which implement the SEA, were issued 
        as ``interim final rules,'' which allows rules to be enforced 
        without standard input as to the effect of the rule on the 
        regulated community. Subsequently, IME raised a number 
        interpretative questions and concerns about these rules which 
        are critical to the continued commerce of commercial 
        explosives. Yet, ATF does not project finalizing these rules 
        until February 2005.
---------------------------------------------------------------------------
    \9\ 63 FR 44999 (August 24, 1998).
    \10\ Semiannual Agenda, 68 FR 73169-72 (December 22, 2003).
---------------------------------------------------------------------------
      Another pending rulemaking deserving of comment stems from a 
        loophole in current regulations that allows the importation of 
        explosives with no marks of manufacture identification. 
        Conversely, ATF regulations require domestic manufacturers to 
        mark all explosive materials they manufacture for sale or 
        distribution for reasons of security and safety.\11\ ATF has 
        emphasized that the failure to apply these markings inhibits 
        law enforcement from tracking explosives to the source, and 
        proving criminal activity. The marks enhance safety because 
        some explosives deteriorate over time and the code allows users 
        to keep inventory fresh. Additionally, the marks are one of 
        industry's ``QA/QC'' tools, allowing the manufacturer the 
        ability to trace product quality problems back to the point of 
        manufacture and distribution. In 2000, IME petitioned ATF for a 
        rulemaking to close this loophole as it applies to high 
        explosives and blasting agents.\12\ Our petition would make it 
        unlawful for any licensee to import such explosive materials 
        without marking all explosives materials in the same manner 
        prescribed by the ATF for domestic manufacturers. ATF finally 
        published a proposed rulemaking on this issue in October 
        2002.\13\ In light of the priority given to strengthening 
        homeland security, we have not understood the lack of urgency 
        given to this rulemaking. In the latest edition of the 
        Administration's semi-annual regulatory agenda, ATF has pushed 
        back for the third time its ``deadline'' for completing this 
        rulemaking.\14\ Now, four years after the filing of our initial 
        petition, we ask you to insist that ATF not let this target 
        release date slip.
---------------------------------------------------------------------------
    \11\ 27 CFR 55.109(a).
    \12\ March 7, 2000 and August 2, 2000.
    \13\ 67 FR 63862 (October 16, 2002).
    \14\ Semiannual Agenda, 68 FR 73170 (December 22, 2003).
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  --Reports.--ATF acknowledges three reports that are due to House and 
        Senate Appropriations Committees.\15\ Two of the reports are 
        required ``prior'' to the obligation of the $14 million fiscal 
        year 2004 allocation to implement the SEA or the National 
        Explosives Licensing Center which will process the SEA license/
        permit applications. The release of these funds is crucial to 
        the effective and efficient implementation of the SEA. We are 
        concerned by ATF's lack of timeliness in submitting these 
        reports given that the provisions of the SEA have been 
        effective since May 24, 2003. According to ATF's estimate, 
        nearly a year will have passed between the effective date of 
        the SEA and the ``target'' date of the delivery of these 
        reports to Congress. We find this delay without 
        justification.\16\ There are other reports due Congress from 
        the ATF and are not mentioned in the Bureau's budget request of 
        particular concern to IME. The Antiterrorism and Effective 
        Death Penalty Act of 1996 charged ATF, which was delegated the 
        authority, to report on the feasibility of tagging explosive 
        materials for purposes of detection and/or identification, 
        rendering common chemicals used to manufacture explosive 
        materials inert, and imposing controls on certain precursor 
        chemicals used to manufacture explosive materials.\17\ We 
        understand that ATF intends to provide two reports to meet this 
        mandate. One will address issues related to the tagging, and in 
        particular ``identification'' tagging, of explosive materials. 
        The other will address issues related to the enhanced control 
        of ammonium nitrate (AN)--a precursor chemical used to 
        manufacture explosives. We have been told by ATF that the 
        ``AN'' report is pending at DOJ and that the ``Taggant'' report 
        has yet to clear the Bureau. We are particularly concerned 
        about the content and recommendations potentially contained in 
        the Taggant report. ATF initially planned to submit the report 
        to Congress by the end of fiscal year 2001. IME had worked with 
        ATF to ensure that the Bureau had the industry data required. 
        Throughout the process ATF made efforts to keep us informed of 
        the work on the study and preliminary findings. As late as 
        August 2001, we were led to believe that ATF's research had 
        concluded, as did contemporary assessments by the National 
        Academy of Sciences, that identification taggants cannot be 
        supported with current technology. However, following the 
        events of September 11, 2001, ATF informed us that the report 
        had been pulled back and its conclusions are being reassessed. 
        As tragic and sobering as the events of September 11th are, it 
        does not alter the fact that current technology does not 
        support identification taggants. In the Subcommittee's 
        oversight capacity, ATF should be asked about the release date 
        of the 1996-mandated report and, after seven years of study, 
        what if any of the reports recommendations have been changed 
        due to the events of September 11th.
---------------------------------------------------------------------------
    \15\ DOJ Fiscal Year 2005 Budget Summary, page ATF-A10.
    \16\ While the President did not enact the law requiring these 
reports until January 23, 2004, ATF was aware of congressional 
intentions with regard to such reports as early as September 5, 2003. 
In view of the fact that the Bureau has been enforcing the SEA since 
May 2003, we would have thought that by September 2003 and certainly 
January 2004, ATF would have a clear idea of its implementation funding 
needs and priorities.
    \17\ Public Law 104-132, Section 732.
---------------------------------------------------------------------------
      ATF has also from time to time, but we hoped annually, reported 
        on arson and explosives incidents. IME uses this data to inform 
        the industry and the public about these incidents, trends they 
        may suggest, and lessons we may learn. However, ATF's last 
        published version of this document is dated, reporting 
        incidents occurring in 1997. A similar, though not identical, 
        report is issued by the Federal Bureau of Investigation (FBI). 
        Since ATF released its 1997 report, the FBI has released a 1998 
        and a 1999 bombing incident report. When IME last asked ATF 
        about the anticipated release date of its report, we were told 
        that it was being held up pending a reconciliation of data 
        between the Bureau and the FBI. It begs the questions of 
        whether the ATF report will continue in its current or a 
        revised form now that the Bureau has been transferred to DOJ, 
        home of the FBI, and the FBI has been, with more regularity, 
        producing a type of explosives incident report.
      The future of the ATF Arson and Explosives Incident Report is but 
        a small example of overlaps and duplications that may exist 
        between the Bureau and other law enforcement programs at DOJ, 
        and provides a segway to a report we are all anxious to review. 
        In the conference report to the fiscal year 2004 Consolidated 
        Appropriations Act, Congress directed DOJ to submit with its 
        fiscal year 2005 budget request ``a proposal to better blend 
        and eliminate duplication of explosives training and other law 
        enforcement programs at the [DOJ].'' \18\ In this regard, we 
        note that the Administration's fiscal year 2005 budget request 
        continues to carry forward language from earlier budget 
        requests that ``no funds made available by this or any other 
        Act may be used to transfer the functions, missions, or 
        activities of the [ATF] to other agencies or Departments in 
        fiscal year 2005.'' \19\ This language appears to be at odds 
        with any attempt to consolidate and streamline programs. 
        Meanwhile, we are anxious to understand what, if any, 
        recommendations in this report may impact how commercial 
        explosives are overseen, regulated and enforced within DOJ, and 
        once understanding these recommendations, reserving the 
        opportunity to provide additional comment to the Subcommittee.
---------------------------------------------------------------------------
    \18\ Conf. Rept. 108-401, to accompany H.R. 2673 (Public Law 108-
199).
    \19\ DOJ Fiscal Year 2005 Budget Summary, page ATF-13.
---------------------------------------------------------------------------
Conclusion
    The manufacture and distribution of explosives is accomplished with 
a remarkable degree of safety. We recognize the important role played 
by ATF in helping our industry achieve and maintain safe and secure 
workplaces. Industry and the public trust that ATF has the resources to 
fulfill its regulatory responsibilities. We, therefore, strongly 
recommend full funding for ATF's explosives program.
                                 ______
                                 
   Prepared Statement of the Confederated Tribes of the Warm Springs 
                         Reservation of Oregon

    Mr. Chairman, I, Garland Brunoe, Chairman of the Tribal Council of 
the Confederated Tribes of the Warm Springs Reservation of Oregon, 
hereby submit this testimony regarding the fiscal year 2005 
appropriation for the U.S. Department of Justice. All of our fiscal 
year 2005 requests address programs in the Justice Department's Office 
of Justice Programs, and are summarized below: (1) Restore State and 
Local Law Enforcement Assistance funding for Indian tribes in the 
amount of $15 million; (2) increase Tribal COPS funding by $10 million 
to $30 million; and (3) provide $20 million for Tribal Juvenile Justice 
programs for fiscal year 2005.
    Our requests are more fully discussed below.

Restore State and Local Law Enforcement Assistance funding for Indian 
        tribes in the amount of $15 million
    The fiscal year 2005 Department of Justice budget proposes to 
completely eliminate funding for the State and Local Law Enforcement 
Assistance program, which in fiscal year 2004 included $2 million for 
tribal jail construction, $8 million for tribal courts, and $5 million 
for tribal alcohol and substance abuse prevention and treatment 
programs. All of these programs are critical to public safety and 
stability on Indian reservations. Our own jail, designed and built by 
BIA, is out of compliance with federal standards and needs to be 
substantially remodeled or rebuilt. Tribal courts are a key link in 
tribal justice systems and essential to tribal sovereignty, and this 
funding has been the only steady source of federal support, even as 
small as it has been, for our court systems. And alcohol and substance 
abuse plague our communities and significantly contribute to crime. 
Accordingly, we request that fiscal year 2005 funding for Indian tribes 
in the State and Local Law Enforcement Assistance program be restored 
to at least their fiscal year 2004 levels.

Increase Tribal COPS funding by $10 million to $30 million
    Indian tribes face significant difficulties in providing law 
enforcement. Reservations are often rural and sparsely populated across 
great distances. Unemployment is often high and infrastructure 
inadequate. Many tribal economies are modest, and cannot on their own 
support much in the way of law enforcement. The Bureau of Indian 
Affairs law enforcement budget is also insufficient. As a result, 
crime, including violent crime, is often exceptionally high in Indian 
Country. Within the last ten years, alarming reports on reservation law 
enforcement and public safety prompted support increases within BIA law 
enforcement and also within the Department of Justice's Community 
Oriented Policing Systems programs. The COPS program is a vital 
component of law enforcement on many reservations, as demonstrated by 
its retention within the drastically cut-back fiscal year 2005 national 
COPS program. Accordingly, we request that the Tribal COPS program be 
increased to $30 million for fiscal year 2005, an increase of $5 
million over fiscal year 2004 and $10 million over the Administration's 
fiscal year 2005 request.

Provide $20 million for Tribal Juvenile Justice programs for fiscal 
        year 2005
    The fiscal year 2005 Department of Justice budget proposes to 
completely eliminate funding for the Juvenile Justice Program, which in 
fiscal year 2004 included $10 million for tribal youth. Tribal youth 
often must confront joblessness and poverty, which can lead to despair 
and delinquency. Today across the United States, Native American young 
people already are among the most troubled, and particular care and 
supervision are essential. A recent audit of Juvenile-related programs 
and services at Warm Springs revealed a dramatic lack of services and 
resources available to work with our troubled youth and correct 
delinquent behavior. Without assistance to address these problems, the 
already devastating circumstances for the young people in our 
communities will only accelerate. Accordingly, we request that the 
Tribal Youth funding in Juvenile Justice be doubled from its fiscal 
year 2004 amount of $10 million to $20 million.
    Mr. Chairman, that concludes the Confederated Tribes of the Warm 
Springs Reservation's appropriations requests of your Subcommittee for 
fiscal year 2005. Thank you.
                                 ______
                                 
               Prepared Statement of The Asia Foundation

    Mr. Chairman: The Asia Foundation is grateful for the strong 
support of the Congress, including the appropriation of $13 million for 
fiscal year 2004. Past committee report language has commended our 
grant making role in Asia and the Appropriations Committees have 
encouraged the Foundation to expand its programs in predominantly 
Muslim countries, including Afghanistan, Indonesia, Pakistan and 
Mindanao in the Philippines. Regrettably, the Administration decided to 
use their fiscal year 2004 requests as the baseline for their fiscal 
year 2005 requests. That resulted in a low fiscal year 2005 request for 
the Foundation. We respectfully urge the Committee to sustain its 
support for the vital work of the Foundation on behalf of U.S. 
interests in this uniquely complex region, particularly as we deepen 
our involvement in front line states, such as Afghanistan, Pakistan and 
Indonesia and India, a regional power of increasing importance to U.S. 
interests in South Asia. The Asia Foundation is requesting a modest 
increase to $15 million, below the $18 million authorized by the State 
Department authorization bill recently passed by the House.
    An appropriation of $15 million would allow The Asia Foundation to 
strengthen programs it has begun in recent years with Congressional 
encouragement, notably in the areas of protecting women and children 
against trafficking, promoting women's political and economic 
participation, strengthening Constitutional democracy and restoring a 
functioning educational system in Afghanistan, promoting tolerance in 
predominantly Muslim nations like Indonesia, protecting human rights, 
and strengthening civil society throughout the region.
    We are cognizant of the fiscal year 2005 budgetary pressures on the 
Committee. However, any cut below the current funding level for the 
Foundation would curtail important work, in some cases, just as the 
program investments over the past few years have reached maturity, and 
positive results are attainable. The Asia Foundation is the only 
American organization with a distinctive history of fifty years of 
presence and engagement in Asia, delivering concrete programs that 
address some of Asia's most pressing needs. Curtailment of Foundation 
programs in these key areas could wrongly signal to people in the 
region a loss of U.S. commitment to democratic governance, civil 
society and human rights in Asia.

                                OVERVIEW

    The United States and Asia face new challenges, complicated by the 
war on terrorism and fragile democracies in Afghanistan, Indonesia, 
Pakistan, and even in Thailand and Korea. More than ever, we must 
support political stability and economic reform, and give attention to 
countries where recent events have complicated bilateral relations, 
specifically in countries that have been traditional allies of the 
United States, and in countries with predominantly Muslim populations. 
Challenges to governance in the newly democratic countries of Asia, 
including Thailand, the Philippines, Indonesia, and Korea, require 
different approaches than in countries struggling to attain democracy, 
peace and stability, such as Afghanistan, Nepal, and Pakistan. 
Continued political instability in Indonesia, lack of a peace 
settlement in the Southern Philippines, and the emergence of regional 
terrorist networks threaten regional stability. Human rights abuses, 
and impunity for perpetrators continue throughout the region. Even 
though women in Asia have made gains in many places, such as Cambodia, 
Thailand and Nepal, they are still subject to economic and political 
inequities. In the worse cases, they are victims of trafficking and 
abuse.
    Working together with Asian organizations as a trusted partner 
through a network of 17 offices in Asia, The Asia Foundation is a 
nongovernmental, nonpartisan American asset combining local 
credibility, a nuanced understanding of the issues facing each country, 
and unparalleled access and relationships with government, 
nongovernmental groups, and the private sector. 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. The Foundation combines a long-term view of policy reform and 
development in Asia, and a rapid response capacity through grant making 
and expert staff to deliver short-term, high impact programs. In 
addition to the importance of these programs to the lives of people in 
Asia, 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 nongovernmental sector; 
        advancing the rule of law; and building institutions to uphold 
        and protect human rights;
  --Open trade and investment: supporting trade, investment and 
        economic reform at the regional and national levels;
  --Women's political participation: encouraging women's participation 
        in public life; protecting women's rights and supporting 
        advocacy training; prevention of trafficking and supporting 
        efforts to protect and provide shelter to victims;
  --Peaceful and stable regional relations: promoting United States-
        Asian dialogue on security, regional economic cooperation, law 
        and human rights.
    The Foundation remains faithful to its grant-making role, steadily 
building institutions and strengthening Asian leadership. Foundation 
assistance supports training, technical assistance, and seed funding 
for new, local organizations, all aimed at promoting reform, building 
Asian capacity and strengthening United States-Asia relations. 
Foundation grantees can be found in every sector in Asia, leaders of 
government and industry and at the grassroots level, in an increasingly 
diverse civil society.
    The Foundation provides necessary technical assistance, and grants 
that cover nuts and bolts necessities to support reform efforts. For 
example, in the case of the drafting of the Afghan Constitution, the 
Foundation provided expert advice on the drafting process, reference 
materials, equipment and administrative support costs for the 
Constitutional Commission, and later, the operational and logistical 
support for the Constitutional Loya Jirga (CLJ). The Asia Foundation 
was awarded a medal for its contribution at the closing ceremony of the 
Loya Jirga by President Karzai. Special Representative of the U.N. 
Secretary General for Afghanistan Brahimi stated at the end of the 
Constitutional Loya Jirga: ``The Asia Foundation staff are the unsung 
heroes of the CLJ process. Without the creativity, intellectual insight 
and flexibility of The Asia Foundation, much that has been accomplished 
would not have been done.''

                                PROGRAMS

    The Asia Foundation makes over 800 grants per year. The Foundation 
also facilitates programs, provides technical assistance and leverages 
funding from public and private donors, to increase program impact and 
sustainability. With additional funding in fiscal year 2004, the 
Foundation's expanded activities include:
    Human Rights, Conflict and Islam: in Indonesia, establishment of 
the International Center for Islam and Pluralism (ICIP) the only 
regional center for progressive Muslim scholarship and exchange in 
Southeast Asia; education reform in 1,000 schools including training on 
pluralism, human rights and civic education for 160 madrassa (day 
schools) teachers through the Center for Human Resources Development 
(PPSDM) at the State Islamic University; curriculum reform for 800 
pesantren (boarding schools), part of the Foundation's education reform 
of 625 Islamic schools nationwide, with over 215,000 students; in 
Cambodia, Sri Lanka and Nepal, human rights education, monitoring, and 
documentation through new information technology networking; in 
Mindanao in the Philippines Local Peace Monitors for the cessation of 
hostilities agreement and madrassa education research for the first 
time in 15 years;
    Civil Society: in Pakistan, public awareness and media campaigns 
promoting democracy, human rights and access to education for women and 
women's rights under the law, civil society development through 
capacity building and training; in Afghanistan, girls education and 
journalism training for women; in Cambodia, human rights and legal 
services; in Indonesia, promote pluralism, tolerance and moderation by 
mainstream Muslim organizations through public education, media through 
radio talk shows and education reform;
    Women's Programs: regionwide, with particular emphasis on 
Indonesia, Cambodia, Thailand, Vietnam and Mongolia, anti-trafficking 
programs including prevention, services for victims, legal drafting and 
advocacy to support increased prosecutions; services and advocacy for 
women victims of domestic violence; in India, Pakistan, Bangladesh, Sri 
Lanka and Indonesia, Thailand, Malaysia and Mindanao projects to 
advance women's rights within an Islamic framework through analysis, 
public education and outreach; in Afghanistan and Cambodia, support for 
scholarships for girls' education;
    Legal Reform: in Afghanistan, constitutional drafting technical 
assistance and operations and logistics for the Constitutional Loya 
Jirga in support of the UNAMA effort, technical support for the 
Constitutional Secretariat and logistics for the delegate selection 
process in Afghanistan; access to justice programs and public 
consultation in lawmaking in East Timor; legal aid services and legal 
education for migrant women workers in China; in Indonesia reform of 
the Supreme Court including civil society input into the reform 
process; in Nepal, mediation programs, legal reform within the courts, 
establishment of legal information systems and watchdog citizens' 
groups to raise awareness on corruption and official misconduct;
    Economic Reform: In Indonesia, Vietnam, Nepal, Bangladesh, small 
and medium enterprise policy reform; in Korea, Japan, China, Mongolia 
and the Philippines, corporate governance reform and e-government 
efforts to counter corruption;
    International Relations: In China, Vietnam and India, scholarships 
for young Ministry of Foreign Affairs leaders, study programs for 
Southeast Asian young leaders to the United States, and support for 
Track II programs on cross-straits relations and Council for Security 
Cooperation in the Asia Pacific (CSCAP).

                               CONCLUSION

    As these examples of our work emphasize, The Asia Foundation is 
first and foremost a field based, grant-making organization. The 
Foundation has consistently received national recognition for its 
efficient grant-to-operating ratio, reflecting its commitment to 
maximizing program impact in Asia while keeping costs low. We are not a 
research organization or 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.
    Public funding is essential to our mission. While the Foundation 
continues to expand its 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. These funds do 
not replace public funding, either in scale or flexibility. Moreover, 
the flexibility afforded by appropriated funds enables the Foundation 
to respond quickly to fast breaking developments and program 
opportunities. For example, we were the first American organization in 
Kabul to assist the Emergency Loya Jirga process, having re-opened our 
office in January 2002.
    Now more than ever, the Foundation and its supporters believe that 
its most important asset is its field office network in Asia, enabling 
the Foundation to address critical development and reforms on the 
ground. Maintaining offices overseas costs more than maintaining 
operations within the United States and new demands to ensure adequate 
security have added to the cost. Today, we continue to face budgetary 
constraints. We must protect our staff, but at the same time, we are, 
as always, committed to ensuring the maximum possible amount of 
appropriated funds are dedicated to programs in Asia.
    In closing, the Foundation has an opportunity and the obligation to 
demonstrate America's strong commitment to working with Asian leaders 
to assure the security, rights 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. Additional funding would enable the 
Foundation to sustain and expand its efforts to meet these goals. Thank 
you.

                                 ______
                                 
  Prepared Statement of the Association of Small Business Development 
                                Centers

    The Association of Small Business Development Centers (ASBDC) urges 
the Subcommittee to provide an appropriation of $100 million for the 
U.S. Small Business Administration's Small Business Development Center 
(SBDC) grant program in the fiscal year 2005 Commerce-Justice-State 
appropriations bill. This is the funding level recommended by the 
Senate Budget Committee for federal SBDC grants in fiscal year 2005.
    Small businesses are struggling. BusinessWeek Online points out 
that small businesses, which usually create most of the new jobs in the 
initial stages of an economic recovery, are increasingly going bankrupt 
and extinguishing jobs. America's SBDC network can help small 
businesses lead the nation's economic recovery and create new jobs--as 
well as generate the additional revenues needed to reduce the budget 
deficit. But we need the resources to do the job.
    Based on its record during the past decade, with an appropriation 
of $100 million our nation's SBDC network could help SBDC in-depth 
counseling clients to: create an estimated 88,846 new full time jobs; 
increase sales by an estimated $7.1 billion; generate an estimated $211 
million in additional revenue for the federal government; and, create 
an estimated $315 million in additional tax revenues for state 
governments.
    Since fiscal year 2001, when Congress appropriated $88 million for 
SBDC grants, the President's budget proposal has not called for an 
increase in funding for SBDC grants, despite the effects of inflation 
and a growing demand for SBDC services. As a result, federal funding 
for our nation's SBDC network has decreased in real terms since fiscal 
year 2001. The SBDCs in 24 states (including Kansas, Kentucky, 
Maryland, New Mexico, West Virginia and Wisconsin) are operating with 
less federal funding than they received in fiscal year 2002. The SBDCs 
in the fifteen least populated states (including Alaska, Hawaii, New 
Hampshire and Vermont) have not had an increase in federal funding 
since fiscal year 1998. This year, SBDC grantees will receive less 
federal funding than they received in fiscal year 2003, and OMB has 
crafted a budget for fiscal year 2005 that proposes to reduce SBDC 
grant funding even further.
    There is room in the budget to provide a needed increase in funding 
for SBDC grants. The Senate Budget Committee has recommended that 
federal SBDC grants be funded in fiscal year 2005 at $100 million. In 
addition, the Senate passed an amendment to increase the SBA's fiscal 
year 2005 budget by $121 million, to fund increases in a range of 
programs including the SBDCs. Moreover, while the SBA's fiscal year 
2005 Congressional Budget Request proposes to cut funding for SBDC 
grants, it calls for the total cost of the SBDC program to increase by 
nearly $9 million--presumably for the SBA's expenses associated with 
administering the SBDC program. The ASBDC would respectfully suggest 
that any additional funding for the SBA to administer the SBDC program 
would be better spent on the delivery of counseling and training 
services to small businesses and aspiring entrepreneurs, by increasing 
funding for grants instead of administration.
    The Association of Small Business Development Centers (ASBDC) 
represents the 63 State, Regional and Territorial SBDC programs 
comprising America's SBDC network. SBDC programs are located in all 50 
states, the District of Columbia, Puerto Rico, The Virgin Islands, Guam 
and American Samoa. America's SBDC network is the most productive 
federal management and technical assistance program for small business. 
It is a unique partnership that includes Congress, the SBA and the 
private sector, as well as the colleges, universities and state 
governments that receive SBDC grants and manage the SBDC network.
    Nationwide, SBDCs provided management and technical assistance to 
more than 1.3 million small business owners and aspiring entrepreneurs 
last year. In 2003, SBDC services included face-to-face counseling of 
an hour or more for 279,281 clients; 1.6 million total hours of 
counseling; 25,970 group training sessions; training of two hours or 
more for 408,254 clients; and more than two million total hours of 
training for small businesses and aspiring entrepreneurs.
    The SBDC program was designed to create a lasting partnership among 
federal, state and local governments and institutions of higher 
learning, to disseminate the very best practical business management 
and technical knowledge to our nation's small business owners and 
aspiring entrepreneurs, and grow the American economy. The plan has 
worked remarkably well:
  --SBDCs help create and save jobs. In the recession of 2001, as big 
        businesses downsized, SBDC in-depth counseling for small 
        businesses generated 46,688 new full time jobs and helped save 
        an additional 34,215 jobs.
  --SBDC counseling clients create more jobs than average businesses. 
        Businesses that received in-depth SBDC counseling experienced 
        10 times the job growth of average businesses (8.4 percent 
        compared to 0.8 percent for U.S. businesses in general in 
        2001).
  --SBDCs help small businesses increase sales. SBDC in-depth 
        counseling helped small businesses generate $3.9 billion in new 
        sales and save $4.3 billion in sales in 2001.
  --SBDC clients' sales grow faster than other businesses' sales. 
        Established businesses that received in-depth SBDC counseling 
        experienced sales growth of 12.1 percent in 2001--compared to 
        3.1 percent for businesses in general.
  --SBDC clients create new businesses. 50 percent of pre-venture SBDC 
        in-depth counseling clients start businesses within one year of 
        receiving assistance. In 2001, SBDC in-depth counseling clients 
        started 12,872 new businesses.
  --SBDC clients make investments in our economy. SBDCs helped small 
        businesses obtain an estimated $2.7 billion in financing in 
        2001. Every dollar spent on the SBDC network helped small 
        businesses invest $15.89 in capital.
    Outstanding institutions of higher education such as the University 
of New Hampshire, the University of Alaska Anchorage, Santa Fe 
Community College, the University of Kentucky, the University of 
Houston, the Dallas County Community College District, Texas Tech 
University, the University of Texas at San Antonio, Fort Hays State 
University (Kansas), the University of South Carolina-Columbia, the 
University of Hawaii at Hilo, the University of Maryland, the Vermont 
State Colleges, the University of Wisconsin-Extension and Washington 
State University, to name a few, are among the hosts of the SBDC 
program. Many host institutions house the great business schools and 
entrepreneurial programs in our nation, such as the Wharton School, the 
Kenan-Flagler School of Business, the Robert H. Smith School of 
Business, the Isenberg School of Management and the Terry College of 
Business. SBDC hosts also include state governments such as the State 
of Colorado and the West Virginia Development Office. These state 
governments, like the institutions of higher learning that host SBDC 
programs, bring to the SBDCs resources, relationships and unparalleled 
leadership in their respective states.
    Among the management and technical assistance services they 
provide, SBDCs provide services in several areas that are of particular 
concern to small businesses, and to members of the Subcommittee, 
including export assistance, procurement and manufacturing.
    Many SBDCs host specialized International Trade Centers, where 
small business owners and aspiring entrepreneurs receive 
individualized, in-depth counseling and specialized training from 
experts in international trade and export expansion. And because the 
SBDC International Trade Centers are part of the larger SBDC network, 
small businesses and aspiring entrepreneurs that seek international 
trade assistance can also access the many other types of assistance--
from marketing to research--that they need to make their export 
businesses succeed. In 2003, SBDCs trained 8,592 small business owners 
and aspiring entrepreneurs in international trade, and provided 
counseling on international trade matters to 9,378 clients.
    SBDCs offer assistance with government procurement and are often 
co-located with Procurement and Technical Assistance Centers (PTACs). 
Services include help with registrations, identifying solicitations and 
special programs, preparing certification documents and bids, 
submitting applications, contract administration and contract close-
outs. In 2003, SBDCs provided government procurement counseling to 
12,784 clients.
    America's SBDC network is also responding to the need for 
management and technical assistance among small manufacturers. Ninety-
five percent of American manufacturers are small and medium-size 
businesses, employing half of all manufacturing workers in the United 
States, and many of them rely on their local SBDCs for assistance. In 
2003, SBDCs provided manufacturing counseling to 22,267 clients.
    SBDCs serve women, minorities and America's veterans. In 2003, 37 
percent of SBDC counseling clients nationwide were women, 35 percent 
were minorities and 10.4 percent were veterans. Forty-five percent of 
SBDC training clients were women, 25 percent were minorities and 8.2 
percent were veterans.
    SBA statistics for the SBDC program show that SBDC counseling cases 
and training attendees combined increased from 650,000 to 685,000 
between fiscal year 2002 and fiscal year 2003. Counseling hours 
increased from 1.47 million to nearly 1.57 million. Training attendees 
increased from 384,000 to 408,000. Training hours increased from 1.58 
million to 2.08 million. These figures clearly demonstrate that 
America's small business owners know they need help and are 
increasingly seeking it from the SBDC network. However, there is a 
limit to the increases in services that the SBDC network can provide 
with flat, or declining, federal funding.



    Finally, SBDCs have a positive revenue impact on the federal 
budget. The President's fiscal year 2004 Budget pointed 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 federal SBDC 
budget of $88 million generated an estimated $182.9 million in federal 
revenue in 2001. SBDCs also leverage federal, state, local and private 
resources. For an SBDC to receive federal funding, it must first raise 
an equal amount of funding from non-federal sources. The SBDCs raise a 
minimum of $88 million a year in non-federal resources to serve small 
business owners and aspiring entrepreneurs.
    The ASBDC appreciates the Subcommittee's consideration of the 
Association's views. We urge the Subcommittee to provide an 
appropriation of $100 million for the SBDC grant program in the fiscal 
year 2005 Commerce-Justice-State appropriations bill, as recommended by 
the Senate Budget Committee.
                                 ______
                                 
           Prepared Statement of the Doris Day Animal League

    Mr. Chairman and members of the Appropriations Subcommittee on 
Commerce, Justice, State, the Judiciary and Related Agencies, thank you 
for the opportunity to submit testimony on behalf of the 350,000 
members and supporters of the Doris Day Animal League in support of our 
request that the Federal Bureau of Investigation assign the crime of 
animal cruelty its own classification in the agency's crime data 
reporting system.
    Law enforcement agencies already collect and submit data on animal 
cruelty crimes, but those data are combined with other crimes in a 
miscellaneous category where it is irretrievable and therefore useless. 
Local law enforcement agencies and many others want this information to 
help them better understand and respond to animal abuse and other 
offenses. To minimize the cost of making this change, we are suggesting 
that this category be added only as reporting agencies switch from the 
original Uniform Crime Reporting Program (UCR) to the current National 
Incident-Based Reporting System (NIBRS, currently used by only 18 
percent of reporting agencies) or to the new system (the ``national 
indices initiative'') the FBI has just started to develop. Thus, we 
estimate the cost to the FBI to add this category to NIBRS would be 
minimal (less than $90,000, based on a comparable FBI estimate) to 
modify materials and computer programs, with no additional costs to 
local agencies beyond the costs they would incur anyway in the 
changeover. There would, of course, be no incremental costs at all 
associated with including this category from the start in the new 
reporting system. Since the FBI has already started updating its crime 
data reporting system, this is the perfect opportunity to ensure that 
this serious category of crimes is handled in a way that makes the data 
usable.

The Significance of Animal Cruelty as a Crime: ``The Violence 
        Connection''
    Animal cruelty 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 30 years, establishes a clear link between animal abuse 
and human violence. One comprehensive study of data from a 20-year 
period found that adults convicted of animal cruelty 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. 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 humans. Research on incarcerated adult males found 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 with serious policy implications is the co-
occurrence of family violence and animal abuse. In interview studies 
with domestic violence victims, between 54 and 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 being supervised by 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. 
In fact, the FBI 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 in the late 1990s 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 warning signs for at-risk youth. Furthermore, researchers 
agree that persistent aggressive behavior in childhood, termed 
``conduct disorder,'' tends to be a 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 agencies, professional organizations, and communities 
have responded to the growing body of evidence of the animal abuse-
human violence connection. For example, before 1990, only seven states 
had felony provisions in their animal anticruelty statutes; that number 
is now 41 states and the District of Columbia. As of this date, 24 
state animal anticruelty statutes permit or mandate psychological 
counseling for offenders.
    In addition to these changes in state cruelty laws, awareness of 
the significance of animal abuse as a crime has resulted in the 
development of a number of initiatives. ``Safe Pet'' programs, which 
provide safekeeping for the pets of domestic violence victims so that 
they 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; likewise, social workers are taught to report animal abuse. 
Intervention strategies for children and adults who abuse animals have 
been developed and mental health professionals are being trained in 
this area of treatment.

Modifying the Categories of the FBI's Crime Data Reporting Program
    The FBI's crime data reporting program is a nationwide effort that 
collects crime statistics from nearly 17,000 local and state law 
enforcement agencies. During 2000, the participating agencies 
represented 94 percent of the U.S. population. Reported crimes vary 
from criminal homicide in Part I to curfew and loitering under Part II. 
Law enforcement, criminologists, legislators, sociologists, municipal 
planners, the media, and others interested in criminal justice use the 
statistics for research and planning purposes. However, under the 
current system, there is no separate category for reporting crimes of 
animal cruelty, and thus no way to use those data, 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. Its inclusion in NIBRS would allow 
precise identification of ``. . . when and where crime takes place, 
what form it takes, and the characteristics of its victims and 
perpetrators.'' (National Incident-Based Reporting System, p. 2, U.S. 
Department of Justice, August 2000). 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 levels, and determine the demographic 
characteristics associated with animal abuse--which is useful in 
developing more effective intervention and prevention strategies to 
interrupt the cycle of violence.
    Designating a separate category for animal cruelty crimes in the 
national indices initiative now being developed would add considerably 
more data analysis capabilities: ``. . . variables such as felony 
animal abuse arrests could be linked with a vast array of other 
statistics to develop useful demographic information.'' (Letter from 
Michael D. Kirkpatrick, FBI, Sept. 30, 2003). The expanded databases of 
the new system would enable law enforcement agencies to identify and 
track individuals with histories of violence.

Categorize Under ``Crime Against Society''
    Animal cruelty is most appropriately categorized as a ``crime 
against society.'' Like other crimes in this category (which include 
family offenses, as well as gambling, drugs, and pornography), animal 
cruelty offenses threaten the general order of society. Animal abusers 
have often committed violent crimes against persons and been arrested 
for property crimes, disorderly conduct, and substance abuse. Most 
significantly, animal abuse is highly correlated with child, spousal, 
and elder abuse; and juvenile animal cruelty is a leading indicator of 
the development of aggressive behavioral disorders, which are 
predictive of future violence. Although animals are often considered 
``property'' under some laws, classification as a ``crime against 
property'' is not appropriate because the nature of animal abuse is 
qualitatively different from property crimes. It involves neglect or 
violence toward a sentient being, often leading to serious injury or 
death; it frequently involves an intimate relationship, as in family 
violence; and it is associated with other crimes.

Proposed Report Language for the Senate Appropriations Subcommittee on 
        Commerce, Justice, State, the Judiciary and Related Agencies
    We respectfully request that the Subcommittee include the following 
language in the Commerce, Justice, State, Judiciary and Related 
Agencies Appropriations bill report:

    ``The Committee directs the FBI to provide the necessary resources 
to assign the crime of animal cruelty, defined as the violation of laws 
or ordinances that prohibit cruelty to animals, its own classification 
under the category `Crime Against Society' in the agency's current or 
any future crime reporting data collection system by adding this 
category to its software and other reporting mechanisms. The Committee 
expects the FBI to establish this classification as quickly as possible 
so that state and local law enforcement agencies will be able to plan 
for its inclusion as they upgrade to the National Incident-Based 
Reporting System, the upcoming national indices system, or any future 
system.
    ``This will enable law enforcement agencies and researchers to 
track crime rates, better understand the factors associated with animal 
abuse and the characteristics of perpetrators, and identify with 
precision when and where the crimes take place, thus facilitating more 
effective interventions. Eventually, the capabilities envisioned for 
the new National Indices Initiative now in development will allow 
animal cruelty to be linked to other crimes, such as domestic violence, 
child abuse, and other violence directed at humans.
    ``The Committee further directs the FBI to report to the Committee 
by March 2005 on the integration of this category into its crime data 
reporting program.''
                                 ______
                                 
 Prepared Statement of the Alliance for International Educational and 
                           Cultural Exchange

    As Chair of the Board of the Alliance for International Educational 
and Cultural Exchange, I appreciate the opportunity to submit testimony 
in support of an overall appropriation of $400 million for the 
educational and cultural exchange programs administered by the 
Department of State's Bureau of Educational and Cultural Affairs (ECA) 
in fiscal year 2005. This level of spending will allow robust funding 
for ECA's core exchange programs, restore funding to the former Soviet 
Union and Eastern Europe through the FSA/SEED programs, and provide 
funding for an Islamic Exchange Initiative.
    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, and its consistent support for 
exchanges.
    The Alliance comprises 65 nongovernmental organizations, with 
nearly 8,000 staff and 1.25 million volunteers throughout the United 
States. Through its members, the Alliance supports the international 
interests of 3,300 American institutions of higher education.
    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.
    Despite widespread support for exchanges in Congress, this account 
still lags well behind its historic levels in constant dollars due both 
to the deep cuts of the mid-nineties and to the significant reductions 
in fiscal year 2004 funding. 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.
    The incorporation of funding for programs provided for under the 
Freedom Support Act (FSA) and Support for East European Democracy Act 
(SEED) into the ECA budget in the fiscal year 2004 budget cycle, at a 
substantially lower level than previously allocated, has resulted in a 
significant reduction in funding for those programs.
    As our experiences since September 11, 2001, demonstrate clearly, 
we need public diplomacy and exchanges more now 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 is 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 exchange budget at $400 million in fiscal year 2005. This 
amount would provide for targeted, meaningful growth in every region of 
the world in support of our most important foreign policy objectives.
Core exchange programs
    An appropriation of $400 million would allow for meaningful growth 
in the Department of State's traditional exchange programs, programs 
that remain at the core of our efforts to build mutual understanding 
and respect between the United States and critical nations around the 
world. These well-established programs--Fulbright and other academic 
programs, International Visitor, and citizen exchanges--continue to 
demonstrate their relevance and effectiveness as changing threats, 
challenges, and opportunities present themselves in a rapidly evolving 
world.
    Among State's academic exchange programs, the Fulbright Program 
continues to demonstrate its unique value in deepening mutual 
understanding between the United States and 140 partner governments. A 
record 5,700 U.S. students and young professionals applied for 
Fulbright grants in 2003, demonstrating the desire of U.S. citizens and 
communities to be internationally engaged.
    Fulbright exchange programs in Iraq and Afghanistan were revived in 
2003, bringing young leaders to study in U.S. graduate programs in 
fields critical to the development of those societies. Other program 
changes include: the cutting-edge research conducted by New Century 
Scholars, which provides deep focus on a single global problem by 
leading scholars from around the world; the Islamic Civilization 
Initiative that incorporates outreach activities upon the American 
student's return to the United States to increase knowledge of the 
Muslim world on the campus and in local communities; and a conflict 
resolution initiative for young leaders from the Middle East, South 
Asia, and the Great Lakes region of Africa.
    Other critical academic exchange programs include the Educational 
Partnerships Program, which fosters substantive, ongoing relationships 
between American universities and their counterparts in high priority 
countries; the Humphrey Fellowships Program, which provides powerful 
academic and professional training experiences for professionals in the 
developing world; Overseas Educational Advising, through which 
prospective foreign students receive reliable information about 
American higher education and professional assistance in the 
application process; the Gilman Fellowship Program, which enables 
American students with financial need to study abroad; and English 
teaching and U.S. Studies programs, designed to enhance understanding 
of American society and values.
    The International Visitor program continues to be ranked by many 
U.S. ambassadors as their most effective program tool. This results-
oriented program allows our embassies to address directly their highest 
priority objectives by bringing emerging foreign leaders to the United 
States for intensive, short-term visits with their professional 
counterparts. The program also exposes visitors to American society and 
values in homes and other informal settings. An increase in funding for 
the International Visitor program would allow the program to make an 
even greater impact on such key issues as regional security in 
Northeast Asia, counter-terrorism, international trade, and global 
health.
    Citizen exchanges continue to engage American citizens across the 
United States in productive international activities. In addition, 
these programs leverage their relatively modest federal dollars into 
significantly more funding through the participation of local 
communities, schools, businesses, and nongovernmental organizations. 
Increased funding for citizen exchanges would permit an expansion of 
these highly cost-effective activities, particularly in the critical 
area of capacity building in communities across the United States. To 
be globally competitive, American communities must be globally engaged, 
and this enhanced capacity will allow for more extensive connections 
and impact in support of U.S. interests in high priority countries 
around the world.

Exchanges with the countries of the former Soviet Union and Central 
        Europe
    As noted above, funding for exchange programs authorized by the FSA 
and SEED Acts was shifted to the CJS bill for the first time last year. 
The transfer has resulted in dramatic cuts for these programs, 
estimated to exceed 50 percent from previous levels.
    Exchanges under FSA and SEED provide opportunities to expose future 
leaders to American civil society and values, and foster personal and 
professional relationships between Americans and citizens of these 
developing regions. We must continue this engagement with future 
leaders of these important nations that are still emerging from decades 
of totalitarian leadership. The recent election of Georgian President 
Mikheil Saakashvili is a testament to the value of these programs. 
Saakashvili benefited from a Muskie/FSA Graduate Fellowship, earning an 
LL.M. degree from Columbia University in 1994. He also participated in 
a 1999 International Visitor exchange on ``Judicial Reform.'' Members 
of Saakashvili's cabinet are also alumni of U.S.-funded exchanges; for 
example, Irakli Rekhviashvili, a participant in the Eurasian 
Undergraduate Student Exchange Program, was recently appointed the 
Georgian Minister of Economy.
    While obstacles to exchange remain, interest in exchanges in the 
region continues to grow. In recent years, professional and collegiate-
level programs with these countries have attracted many more applicants 
than the programs can sustain. The Contemporary Issues Fellowship 
Program, targeting influential policymakers and mid-level 
professionals, receives nearly 1,300 applicants for 100 scholarships. 
The Future Leaders Exchange Program (FLEX) for high school students 
receives more than 50,000 applications for 1,300 slots.
    We hope the Subcommittee will agree that a reduction in these 
programs is unwise in a region 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.

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.
    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 ECA: Fulbright and Humphrey 
exchanges that will stimulate broader cultural understanding, joint 
research and teaching, and foster positive relationships with a new 
generation of leaders; the Partnerships for Learning Undergraduate 
Studies Program (PLUS), that allows undergraduates from the Islamic 
world to complete their B.A. degrees at U.S. universities; 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.
    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.
    Strengthening exchanges with the Islamic world has strong 
bipartisan support, evidenced by legislation sponsored in the 107th 
Congress by Senators Edward Kennedy and Richard Lugar, and 
Representatives Henry Hyde and Tom Lantos. These bills led to $20 
million in appropriations funding, some of which was used to fund what 
would become the Youth Exchange and Study Program (YES). YES has 
brought approximately 138 Muslim high school students to the United 
States for the 2003-2004 school year, and will bring an additional 365 
students next year. To build on the YES program's very successful 
beginning, the program requires a sustained funding commitment.

Conclusion
    We recognize that a meaningful and effective Islamic exchange 
initiative, restored funding for the FSA and SEED programs, and 
sufficient funding for robust traditional exchange programs will 
require a significant increase in the State Department exchanges 
budget. We believe that a $400 million funding level is necessary and 
appropriate given the importance of the tasks at hand.
    The U.S. exchange community stands ready to assist you in these 
efforts, and is grateful for your support.
                                 ______
                                 
           Prepared Statement of Sister Cities International

    On behalf of the 700 U.S. cities partnered with more than 1,700 
international cities in 122 countries, I want to thank the subcommittee 
for its continued support of international educational, cultural and 
development exchanges that continue to impact U.S. foreign policy goals 
throughout the world. Sister Cities International is a nonprofit, 
citizen diplomacy network that creates and strengthens partnerships 
between U.S. and international communities at the local level. Sister 
Cities International works to promote sustainable development, youth 
involvement, cultural understanding, and humanitarian assistance 
through citizen diplomacy. Citizen diplomacy is a peaceful way to 
promote American foreign policy by establishing links between people 
within the international community. Sister Cities International works 
to create citizen-to-citizen connections by promoting peace through 
mutual respect, understanding, and cooperation at the local, county and 
state level. I urge you to promote the ideals of citizen diplomacy by 
carefully considering the critical legislation currently before the 
subcommittee.
    In the two years since September 11, 2001, the need to eliminate 
global terror and institute avenues of intercultural understanding has 
grown. Today, citizen diplomacy programs hold the highest incentive for 
governments who are interested in establishing goodwill between states. 
International education and exchange programs are critical elements in 
the conduct of U.S. foreign policy and advance national security. The 
United States must make deliberate efforts to forge sustainable, 
mutually cooperative relationships between the United States and the 
Islamic world in order to rebuild global security. Sister Cities 
International is well positioned to play an integral role by supporting 
long-term community partnerships through reciprocal exchange programs.
    We believe that the Department of State, through the support and 
encouragement of the subcommittee and Congress, should be strategically 
investing in two key areas of international exchange: support for long-
term, ongoing programs such as Fulbright and the International Visitors 
Program and building the capacity of public-private partnerships like 
Sister Cities International. An investment in the capacity of 
organizations like Sister Cities International makes good fiscal sense, 
given the fact that Sister Cities International leverages significant 
non-federal, community-based resources in support of international 
exchange with the small amount of federal dollars we receive every 
year. Nevertheless, from 1995-2001, core funding from the Department of 
State's Bureau of Educational and Cultural Affairs (ECA) declined 
dramatically, reducing our efforts to reach out to many regions of the 
world. Without additional core resources, Sister Cities International 
will find it increasingly difficult to expand the number of 
partnerships between U.S. and international communities and promote 
active citizen involvement in international affairs.
    Annually, 6,750 to 13,300 citizen exchanges occur between sister 
city programs. With a federal investment of $370,440, each exchange 
costs the U.S. government approximately $25 to $50. Moving into our 
48th year as a leader in the citizen diplomacy arena, Sister Cities 
International pledged in 2002 to double the number of partnerships in 
underserved regions of the world over the next five years. New 
partnerships will be established in the Middle East, Africa, Eurasia, 
Latin America, and the Caribbean. However, this new endeavor can only 
be accomplished with increased core grant support. Therefore, Sister 
Cities International is working with key Congressional supporters on 
our first initiative to increase our core grant by $164,000 to $534,000 
for fiscal year 2005.
    An increase in Sister Cities International's core grant of $164,000 
will specifically lead to the following results:
  --Expansion the Sister Cities International network by 100 
        partnerships a year over three years.
  --An increase in the number of exchanges conducted under the Sister 
        Cities International umbrella by 3,000 over the three-year 
        period at a cost to the federal government of $55 per exchange.
  --Expansion of the network in underserved regions of the world, 
        focusing on Islamic countries, Africa, Central and Eastern 
        Europe, and Eurasia.
  --More capacity for local sister city partnerships to undertake 
        exchange programs focused on economic development, youth and 
        education, women in leadership, sustainable development, and 
        humanitarian assistance.
    The second initiative seeks to alleviate the tension between the 
United States and the Islamic World is the ``U.S.-Islamic Sister City 
Partnership Program.'' Currently, there are 62 United States-Islamic 
partnerships and with Congress' support, we hope to expand the number 
of United States-Islamic partnerships by 38 to 100 over the next two 
years. Through ``Islamic Friendship Grants,'' new and existing 
partnerships would receive $25,000 each to develop humanitarian 
assistance, international exchange, and community and economic 
development programs in the region. Each ``Islamic Friendship Grant'' 
will be leveraged at least one-to-one, bringing in an additional 
$25,000 in non-federal resources to each partnership, for an additional 
investment of $5 million. For this particular initiative, we are asking 
for $2.75 million through the expansion of the Islamic Exchange 
Initiative funded by Congress in the fiscal year 2002 Supplemental 
Appropriations.
    I want to thank the members of the subcommittee for their 
leadership and consideration of this important matter. Given the 
growing global challenges in which U.S. diplomacy is called upon to 
protect American national interests and security, now, more than ever, 
it is important to fully fund the International Affairs budget. 
Although the 150 account only reflects approximately one percent of the 
total federal budget, notwithstanding increases for the Millennium 
Challenge Account (MCA), HIV/AIDS, and illicit drugs, 58 percent of 
core mainline programs receive flat or decreased funding. Support for 
the 150 Account is crucial for improving America's image abroad and 
protecting our interests at home. I ask you to support the Presidential 
requests for funding for the 150 Account and our requests to increase 
funding for Sister Cities International.
    Sister city and other international exchange programs are time-
tested and uniquely cost effective. They help ensure a prosperous 
future for the United States and a more democratic world. Americans who 
participate in citizen diplomacy programs experience a profound change 
in the way they think about the world, leading to greater 
understanding, mutual respect and cooperation around the complex issues 
affecting our global community. This is the vision that drove President 
Dwight D. Eisenhower to establish our organization in 1956 and it 
remains the vision today by which we hope to promote peace--one 
individual, one community at a time.
                                 ______
                                 
             Prepared Statement of Florida State University

    I am writing to tell you about two projects Florida State 
University is pursing through the Department of Justice. The first is a 
Juvenile Justice Education Program Model Study. The request is for $2.5 
million through the Juvenile Justice Programs Office, Part C. The 
second deals with Extreme Security for the Critical Infrastructure. The 
funding level is $2.5 million and is being requested through the Byrne 
Discretionary Grant Program.
    Mr. Chairman, I would like to thank you and the Members of the 
Subcommittee for this opportunity to present testimony before this 
Committee. I would like to take a moment to briefly acquaint you with 
Florida State University.
    Located in Tallahassee, Florida's capitol, FSU is a comprehensive 
Research I university with a rapidly growing research base. The 
University serves as a center for advanced graduate and professional 
studies, exemplary research, and top quality undergraduate programs. 
Faculty members at FSU maintain a strong commitment to quality in 
teaching, to performance of research and creative activities and have a 
strong commitment to public service. Among the current or former 
faculty are numerous recipients of national and international honors 
including Nobel laureates, Pulitzer Prize winners, and several members 
of the National Academy of Sciences. Our scientists and engineers do 
excellent research, have strong interdisciplinary interests, and often 
work closely with industrial partners in the commercialization of the 
results of their research. Florida State University had over $162 
million this past year in research awards.
    FSU recently initiated a new medical school, the first in the 
United States in over two decades. Our emphasis is on training students 
to become primary care physicians, with a particular focus on geriatric 
medicine--consistent with the demographics of our state.
    Florida State University attracts students from every county in 
Florida, every state in the nation, and more than 100 foreign 
countries. The University is committed to high admission standards that 
ensure quality in its student body, which currently includes some 345 
National Merit and National Achievement Scholars, as well as students 
with superior creative talent. We consistently rank in the top 25 among 
U.S. colleges and universities in attracting National Merit Scholars to 
our campus.
    At Florida State University, we are very proud of our successes as 
well as our emerging reputation as one of the nation's top public 
research universities.
    Mr. Chairman, let me tell you about a two projects we are pursuing 
this year through the Department of Justice. The first project is a 
Juvenile Justice Education Program Model Study.
    In 1996, the U.S. Department of Justice reported that the cost of 
criminal victimization in this country is $450 billion a year. Given 
that delinquent youth constitute a major part of the crime problem, 
such promising methods of crime reduction as providing delinquent youth 
high quality education that can serve as a positive turning point in 
their delinquent to adult crime life course should be vigorously 
pursued. This is the intent of the 2001 No Child Left Behind Act which 
mandates the receipt of ``best education'' services for the country's 
incarcerated delinquent youth to ensure their successful community 
reintegration following release from juvenile justice institutions.
    The USDOE as well as the U.S. Department of Justice's Office of 
Juvenile Justice and Delinquency Prevention and the American 
Correctional Association have recognized Florida's system of juvenile 
justice education as an exemplary state system. This recognition 
reflects Florida's commitment to accountability and its implementation 
of an approach to the identification and validation of best practices 
in juvenile justice education. In 1998, to fulfill this commitment, the 
Florida Department of Education awarded funding for the Juvenile 
Justice Educational Enhancement Program (JJEEP) to FSU's School of 
Criminology and Criminal Justice. During the subsequent years of 
JJEEP's operations, Florida's system of best practices and 
accountability have become recognized as a model for providing juvenile 
justice youth quality and accountable education services that embodies 
the major components of NCLB.
    During JJEEP's early years of implementing both best practices and 
an accountability system for Florida's juvenile justice education 
system, a number of implementation impediments were experienced and 
ultimately overcome. JJEEP's experiences in overcoming these 
implementation impediments should not be repeated but rather used to 
benefit other states as they attempt to successfully implement NCLB. 
Most importantly, JJEEP has conclusively documented that the receipt of 
best education practices as envisioned in NCLB well-served numerous 
Florida juvenile justice youth as they exited juvenile justice 
institutions and reentered their communities. With the successful 
nationwide implementation of NCLB, every juvenile justice student, 
regardless of state residence, will be able to receive accountable 
juvenile justice education best practices that increase the likelihood 
of their successful community reintegration and thereby reduce the 
incidence of crime, criminal victimization and associated costs.
    This project's methodology will be centered upon the development 
and maintenance of effective working partnerships in each state between 
those responsible for juvenile justice education, the national project 
staff, and USDOE. These partnerships will involve collaboration 
throughout all phases of the project to ensure consensus and 
appropriate implementation of the NCLB requirements. Following the 
initial assessment of each state's juvenile justice education system, 
the findings will be compared to Florida's system and experiences and 
the requirements of NCLB to develop each state's NCLB implementation 
plan. Moreover, and throughout the process, ongoing training, technical 
assistance, and evaluation will be provided to ensure successful 
implementation of the NCLB requirements in each state's juvenile 
justice education systems.
    We believe this is an outstanding program and will reap very 
positive outcomes for Florida and the Nation.
    The second project we are pursuing deals with Cybersecurity. The 
Cybersecurity Research Institute of Florida (CRIF) at Florida State 
University is seeking funding to support the implementation of extreme 
security through the development of a new model of a cybersecurity 
management infrastructure. Extreme security refers to protection 
against a previously unanticipated attack on cyberinfrastructure. The 
work will focus on the protection of the cybersecurity component of 
this critical infrastructure. The critical infrastructure can be 
identified as elements of the national/international infrastructure 
such as the national power or water system, the international 
telecommunication system, and the international banking system.
    CRIF is in a unique position to research and develop a 
cybersecurity protection model and management infrastructure through 
its links with: the Florida Cybersecurity Institute (FCI) which was 
recently established as a cooperative effort of Florida State 
University, the Florida Department of Law Enforcement, and the National 
White Collar Crime Center to conduct research and education activities 
in the areas of cybercrime; and the Security and Assurance in 
Information Technology Laboratory (SAIT) at Florida State University 
which was established in 1999 to promote research, education, and 
outreach.
    The Florida State University (FSU) has been designated as a Center 
of Academic Excellence in Information Assurance Education by the 
National Security Agency. Some of the world's top researchers in 
cryptography, information security, and infrastructure protection work 
in the Computer Science Department at FSU. Coupled with the 
relationships and contacts of the FCI founding partners in academia, 
government, and industry, CRIF is particularly capable of developing 
and implementing a comprehensive model for extreme cybersecurity.
    Our cybersecurity management model addresses such issues as cost of 
the system, the implementability of the model in the critical 
infrastructure, and definition of new risk models that focus on the 
types of extreme attacks previously discussed. Our goal is the 
survivability of the cybersecurity critical infrastructure under 
extreme conditions.
    CRIF will conduct research related to the development of the 
cybersecurity management model, and then implement it in one of the 
critical infrastructure environments--the banking system in the state 
of Florida. The banking system in Florida is a particularly important 
system as Florida is one of the states with the largest number of small 
businesses. These small businesses are notorious for not having 
technical assistance that larger companies use for cyberinfrastructure 
protection. If the banking system is disrupted for these small 
businesses, many would fail, having an incredibly negative effect on 
lives, livelihoods, and the State's short- and longer-term economy. 
This work will provide proof of concept of our approach to assist in 
protecting the cyberinfrastructure of the banking industry in Florida. 
We will develop a range of extreme security levels, based on costs and 
capabilities that can be incrementally implemented by the various 
critical infrastructure groups. Lessons learned could be transferred 
nationally.
    Mr. Chairman, these are just of couple of the many exciting 
activities going on at Florida State University that will make 
important contributions to solving some key concerns our nation faces 
today. Your support would be appreciated, and, again, thank you for an 
opportunity to present these views for your consideration.
                                 ______
                                 
 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 2005 funding request of $500,000 
from the National Oceanic and Atmospheric Administration (NOAA) for 
CCOS as part of a Federal match for the $9.4 million already 
contributed by California State and local agencies and the private 
sector. We greatly appreciate your past support for this study 
($500,000 in fiscal year 2001, $250,000 in fiscal year 2002, and 
$250,000 in fiscal year 2003) as it is necessary in order for the State 
of California to address the very significant challenges it faces as it 
seeks to comply with air pollution requirements of the federal Clean 
Air Act.
    Most of central California does not attain federal health-based 
standards for ozone and particulate matter. The San Joaquin Valley has 
recently requested redesignation to extreme and is committed to 
updating their 1-hour ozone State Implementation Plan (SIP) in 2004, 
based on new technical data. In addition, the San Joaquin Valley, 
Sacramento Valley, and San Francisco Bay Area exceed 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 (CCOS) is designed to enable 
central California to meet Clean Air Act requirements for ozone 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. This enabled leveraging 
of the efforts of the particulate matter study in that some equipment 
and personnel served dual functions to reduce the net cost. From a 
technical standpoint, carrying out both studies concurrently was a 
unique opportunity to address the integration of particulate matter and 
ozone control efforts. CCOS was also cost-effective since it builds on 
other successful efforts including the 1990 San Joaquin Valley Ozone 
Study.
    CCOS includes an ozone field 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 five main components: Designing the field 
study; conducting 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; and 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 
PM10/PM2.5 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 
$9.4 million for the field study. The federal government has 
contributed $4,874,000 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 $2.5 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).
    For fiscal year 2005, our Coalition is seeking funding of $500,000 
from the National Oceanic and Atmospheric Administration (NOAA). This 
request will be used to continue NOAA's involvement in developing 
meteorological simulations for CCOS episodes, which are also being used 
as inputs to SIP-related photochemical modeling. NOAA has a direct 
stake in the CCOS because the extensive meteorological data collected 
as part of the field study can be used by NOAA to improve its 
meteorological forecasting abilities, particularly by providing NOAA 
with a new database for use in the evaluation of U.S. western boundary 
conditions for weather forecasting models. As you know, NOAA is also at 
the scientific forefront of the development of meteorological models 
including the Weather Research and Forecasting (WRF) model that is 
viewed as a future replacement for the current Mesoscale Meteorology 
Model, Version 5 (MM5). Thus, NOAA's involvement in the CCOS would 
facilitate the use of CCOS measurements in the development of WRF. In 
addition, the CCOS includes atmospheric airflow research, and data were 
collected on sea breeze circulations, nocturnal jets and eddies, 
airflow bifurcation, convergence and divergence zones, up-slope and 
down-slope flows, and up-valley and down-valley airflows. This research 
provides fundamental data needed to understand airflows over complex 
terrain, and has national applicability.
    Thank you very much for your consideration of our request.

                      CURRENT CCOS STUDY SPONSORS

Private Sector
    Western States Petroleum Association
    Pacific Gas and Electric Company
    Electric Power Research Institute
    NISEI Farmers League and Agriculture
    Independent Oil Producers' Agency
    California Cotton Ginners and Growers Associations
Local Government
    San Joaquin Valley Unified Air Pollution Control District (on 
behalf of local cities and counties)
    Bay Area Air Quality Management District
    Sacramento Metro Air Quality Management District
    San Luis Obispo County Air Pollution Control District
    Mendocino County Air Pollution Control District
State Government
    California Air Resources Board
    California Energy Commission
Federal Government
    National Oceanic and Atmospheric Administration
    Environmental Protection Agency
    Department of Agriculture
    Department of Transportation
                                 ______
                                 
    Prepared Statement of the National American Indian Court Judges 
                              Association

    On behalf of the National American Indian Court Judges Association 
(NAICJA), I am pleased to submit this testimony on the proposed fiscal 
year 2005 budget for the Justice Department's Indian Country Law 
Enforcement Initiative and the Indian Tribal Justice Technical and 
Legal Assistance Act of 2000 (Public Law 106-559). We request $73.4 
million for Tribal Courts including $15 million for Indian Country Law 
Enforcement Initiative and $58.4 million in funding for the Indian 
Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 
106-559). In addition, we request full funding for the following areas 
or, at minimum, proportional increases in keeping with economic growth. 
Specifically, this includes:
  --Increase by $4.74 million Administration proposed cuts in Law 
        Enforcement under the COPS program in DOJ.
  --Increase by $7.59 million Administration proposed cuts in Tribal 
        Courts under DOJ.
  --Increase by $2 million Administration proposed cuts in BIA for 
        ``contract support costs'' to $135,314,000.
  --Increase by $2.46 million Administration proposed cuts in DOJ for 
        Indian Country Prison grants.
    The National American Indian Court Judges Association (NAICJA), 
www.naicja.com, was incorporated in 1969. NAICJA is the largest 
organization representing Tribal Judges and Tribal Courts in the United 
States. The mission of NAICJA is to strengthen and enhance all Tribal 
justice systems through improvement and development of Tribal Courts 
and Tribal Court Judges.

Justice Department Funding: Indian Country Law Enforcement Initiative 
        and Indian Tribal Justice Technical and Legal Assistance Act of 
        2000 (Public Law 106-559)
    $15 million for Indian Country Law Enforcement Initiative.--NAICJA 
strongly supports full funding for the Indian Country Law Enforcement 
Initiative. NAICJA would like to specifically emphasize our support for 
the funding of the Indian Tribal Court Fund at a level of at least $15 
million (Please note that this fund was formally authorized by the 
106th Congress--see Public Law 106-559, section 201). Through the 
increased funding for law enforcement under the Indian Country Law 
Enforcement Initiative, more police officers have been added throughout 
Indian Country. Without substantial additional funding, tribal courts 
will be unable to handle the increased caseloads generated by this 
increased law enforcement.
    $58.4 million in funding for the Indian Tribal Justice Technical 
and Legal Assistance Act of 2000 (Public Law 106-559).--When the 106th 
Congress enacted Public Law 106-559 in December 2000, it recognized the 
vital legal and technical assistance needs of tribal justice systems--
finding in part that ``there is both inadequate funding and inadequate 
coordinating mechanism to meet the technical and legal assistance needs 
of tribal justice systems and this lack of adequate technical and legal 
assistance funding impairs their operation'' and promised three grant 
programs to address these Congressional recognized needs. It is vital 
that Congress provide adequate funding for Public Law 106-559 (see the 
Act itself for more specific information). NAICJA strongly supports 
funding of Public Law 106-559 at the level of at least $58.4 million. 
Failure to provide this funding level would make the Indian Tribal 
Justice Technical and Legal Assistance Act of 2000 (Public Law 106-559) 
a hollow recognition of tribal justice systems needs without providing 
needed resources.
    We further express our concern with the Administration's fiscal 
year 2005 Budget proposals regarding Tribal Courts. Decreases in these 
areas will severely hinder effective law enforcement and Tribal Courts 
in Indian Country.
    We request full funding for the following areas or, at minimum, 
proportional increases in keeping with economic growth. Specifically, 
this includes: Cuts in Law Enforcement under the COPS program by $4.74 
million in DOJ; cuts in Tribal Courts under DOJ by $7.59 million; cuts 
in BIA for ``contract support costs'' by $2 million down to 
$133,314,000; and cuts in DOJ for Indian Country Prison grants by $2.46 
million.

                      IMPORTANCE OF TRIBAL COURTS

    Tribal justice systems are the primary and most appropriate 
institutions for maintaining order in Tribal communities.

    ``Tribal courts constitute the frontline tribal institutions that 
most often confront issues of self-determination and sovereignty, while 
at the same time they are charged with providing reliable and equitable 
adjudication in the many and increasingly diverse matters that come 
before them. In addition, they constitute a key tribal entity for 
advancing and protecting the rights of self-government. . . . Tribal 
courts are of growing significance in Indian Country.'' (Frank 
Pommersheim, Braid of Feathers: American Indian Law and Contemporary 
Tribal Law 57 (1995)).

    Tribal Courts must deal with the very same issues state and Federal 
courts confront in the criminal context, including, child sexual abuse, 
alcohol and substance abuse, gang violence and violence against women. 
Tribal Courts, however, must address these complex issues with far 
fewer financial resources than their Federal and state counterparts. 
Judicial training that addresses the existing problems in Indian 
Country, while also being culturally sensitive, is essential for Tribal 
Courts to be effective in deterring and solving crime in Indian 
communities.

              INADEQUATE FUNDING OF TRIBAL JUSTICE SYSTEMS

    There is no question that Tribal justice systems are, and 
historically have been, underfunded. The 1991 United States Civil 
Rights Commission found that ``the failure of the United States 
Government to provide proper funding for the operation of tribal 
judicial systems . . . has continued for more than 20 years.'' The 
Indian Civil Rights Act: A Report of the United States Civil Rights 
Commission, June 1991, p. 71. The Commission also noted that 
``[f]unding for tribal judicial systems may be further hampered in some 
instances by the pressures of competing priorities within a tribe.'' 
Moreover, they opined that ``If the United States Government is to live 
up to its trust obligations, it must assist tribal governments in their 
development . . .'' More than ten years ago, the Commission ``strongly 
support[ed] the pending and proposed congressional initiatives to 
authorize funding of tribal courts in an amount equal to that of an 
equivalent State court'' and was ``hopeful that this increased funding 
[would] allow for much needed increases in salaries for judges, the 
retention of law clerks for tribal judges, the funding of public 
defenders/defense counsel, and increased access to legal authorities.''
    With the passage of the Indian Tribal Justice Act, 25 U.S.C.  3601 
et seq. (the ``Act''), Congress found that ``[T]ribal justice systems 
are an essential part of tribal governments and serve as important 
forums for ensuring public health, safety and the political integrity 
of tribal governments.'' 25 U.S.C.  3601(5). Congress found that 
``tribal justice systems are inadequately funded, and the lack of 
adequate funding impairs their operation.'' 25 U.S.C.  3601(8). In 
order to remedy this lack of funding, the Act authorized appropriation 
of base funding support for tribal justice systems in the amount of 
$50,000,000 for each of the fiscal years 1994 through 2000. 25 U.S.C.  
3621(b). An additional $500,000 for each of the same fiscal years was 
authorized to be appropriated for the administration of Tribal Judicial 
Conferences for the ``development, enhancement and continuing operation 
of tribal justice systems . . .'' 25 U.S.C.  3614.
    Nine years after the Act was enacted into law, and even after 
reauthorization, no funding has been appropriated. Only minimal funds, 
at best, have been requested. Yet, even these minimal requests were 
deleted prior to passage. Even more appalling is the fact that BIA 
funding for Tribal Courts has actually substantially decreased 
following the enactment of the Indian Tribal Justice Act in 1993.

           BIA-DOJ INDIAN COUNTRY LAW ENFORCEMENT INITIATIVE

    Full funding is requested for the Joint BIA-DOJ Law Enforcement 
Initiative proposal to improve law enforcement in Indian Country. The 
Final Report of the Executive Committee for Indian Country Law 
Enforcement Improvements documents the ``stark contrast between public 
safety in Indian Country and the rest of the United States.'' (Final 
Report, p. 4.) ``While law enforcement resources have been increased 
and deployed throughout the United States, BIA resources actually have 
been reduced in Indian Country during the past few years.'' It is 
axiomatic that ``as a consequence of improvements to law enforcement 
services, a corresponding increase in funds is needed for judicial 
services, especially tribal courts.'' (Final Report, p. 8).
    The Initiative includes funding to continue the Department of 
Justice Indian Tribal Court Program. We urge the Committee to support 
full funding of the Tribal Court Program to assist in the development, 
enhancement and continued operation of tribal judicial systems. While 
funding has fallen far short of the $58 million in annual funding 
promised by the Indian Tribal Justice Act, the Initiative will fail 
without it. Without well-staffed, competent Tribal judiciaries to 
handle the influx of the new criminal prosecutions flowing from the Law 
Enforcement Initiative, the goal of providing service to 1.4 million 
Native Americans who live on or near Indian lands the same ``protection 
of their basic rights, a sense of justice, and freedom from fear'' 
enjoyed by Americans at large, will not be attained. (Final Report, p. 
4).

                               CONCLUSION

    Tribal justice systems are the primary and most appropriate 
institutions for maintaining order in tribal communities. They are key 
to Tribal economic development and self-sufficiency. Any serious 
attempt to fulfill the federal government's trust responsibility to 
Indian nations, must include increased funding and enhancement of 
Tribal justice systems.
    We welcome the opportunity to comment on the Justice Department's 
Budget Request for the fiscal year 2004 funding of the Indian Country 
Law Enforcement Initiative and the Indian Tribal Justice Technical and 
Legal Assistance Act of 2000 (Public Law 106-559).
    Please contact me at (715) 478-7255, or NAICJA Executive Director 
Chuck Robertson, at (605) 342-4804 or [email protected] with 
questions or comments. Thank you.
                                 ______
                                 
      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 2005. The American 
Sportfishing Association is a non-profit trade association whose 600 
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.

   NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION--NATIONAL MARINE 
                           FISHERIES SERVICE

    An important but often underrepresented NOAA constituency is the 
Nation's 34 million sportfishing anglers, who collectively provide 
billions of dollars in economic impact each year to the U.S. economy. 
The importance of adequately including this group and their activities 
in management decisions cannot be overstated.

Recreational Fisheries
    With over nine million participants and 91 million fishing days, 
saltwater recreational fishing is the fastest growing segment of 
sportfishing in the United States. NOAA-Fisheries has a responsibility 
to recreational anglers. Sportfishing in marine waters alone provides 
$8.1 billion in salaries and wages to nearly 300,000 wage earners in 
coastal areas. Good socio-economic information is critical for 
effective marine resources management efforts, and the ASA applauds the 
Administration's requested increase of $1,200,000 (for a total of $5.2 
million) for additional economic and social science research, data 
collection and analysis. But, the ASA asks Congress to require NOAA-
Fisheries to provide adequate data for sportfishing in marine waters 
and that an additional $1.7 million be provided for economic and social 
science research and data collection.

Stock Assessment and Monitoring
    Our nation's valuable marine fish resources are under intense 
pressure from coastal population growth, increasing fishing effort and 
accompanying declines in habitat quality. These pressures demand well-
documented information on marine fish stocks. NOAA-Fisheries has not 
fully demonstrated an ongoing and comprehensive commitment to 
modernization and improvement of fisheries stock assessment and 
management of marine systems. It will take a sustained commitment on 
the part of the Administration, Congress and partner agencies to ensure 
that these initiatives are in place, sustained and effective over the 
long-term.
    The ASA recognizes and supports the fiscal year 2005 President's 
budget request to increase funds for fisheries stock assessments, 
cooperative research, and management by $4 million to a total of $18.9 
million, but the NOAA-Fisheries stock assessment program needs to build 
to the $100 million level over the next five years if it is to be 
effective in providing data for proper management of marine stocks. The 
ASA recommends an additional $10 million to begin building this program 
to the necessary level.
    NOAA-Fisheries has developed successful joint programs in 
statistics, including the RecFIN, and ComFIN programs and, most 
recently, the Atlantic Coastal Cooperative Statistics Program. The ASA 
recommends that Congress fund GulFIN at $4.5 million and RecFIN at $3.9 
million, and urges NOAA-Fisheries to use the RecFIN funding for 
cooperative data collection for recreational fisheries consistent with 
statutory directives. The ASA is pleased with the President's request 
of $3.0 million for PacFIN, the proposed $6.7 million for the Alaska 
groundfish monitoring effort, and the recommended funding levels for 
AKFIN at $3.2 million.
    The ASA strongly urges Congress to address the statistics gaps on 
the Atlantic Coast by supporting the Atlantic Coastal Cooperative 
Statistics Program (ACCSP.) NOAA-Fisheries and the Atlantic states 
share a commitment through and Memorandum of Understanding to proceed 
with this program. The ASA urges Congress to appropriate the funds 
necessary for success by adding a $5 million appropriation in fiscal 
year 2005 for ``Fish Statistics--Atlantic States Marine Fisheries 
Commission'' as the ACCSP is fully prepared to utilize this amount 
immediately as stated in their planning document.
    Cooperative research programs, including the SEAMAP and MARFIN 
programs, support fishery-independent research on high priority 
species. MARFIN continues to provide funds for Congressionally mandated 
shrimp bycatch studies. SEAMAP is building a long-term fishery-
independent database needed for managing heavily exploited species and 
for identifying and protecting critical habitat. The ASA is concerned 
with the decline in funding for these critical information-gathering 
programs; therefore, the ASA recommends that the MARFIN competitive 
grant program be funded at $6.0 million (with $4 million for the 
Southeast and $2 million for the Northeast) and SEAMAP at $6.0 million.

Habitat Loss
    The Administration has proposed the elimination of several habitat-
related programs including important work being carried out on the 
Charleston Bump. The Charleston Bump is an important nursery habitat 
for Atlantic Highly Migratory Fish species (HMS), and the ASA supports 
continuation of this program at fiscal year 2004 levels.
    The ASA supports the fiscal year 2005 request of $13.2 million for 
Fisheries Habitat Restoration. This program provides funding to 
foundations that awards grants to restore fish habitat. Specifically, 
the ASA is pleased with the $1.5 million increase for the Community-
based Restoration Program (CRP) that has funded over 800 vitally 
important restoration projects that entail volunteers and educational 
opportunities to promote stewardship and public involvement. The ASA 
recommends an additional $2 million for CRP grants that are regularly 
matched by a 3-5 ratio and completed by many groups including regional 
or national partners, non-profit organizations, communities, and 
industry.

Interagency Efforts
    The ASA strongly recommends that Congress appropriate $10.0 million 
for the Atlantic Coastal Fisheries Cooperative Management Act. It 
provides the Atlantic States Marine Fisheries Commission with the 
financial resources to carry out their Congressional mandates and the 
program continues to accomplish goals, such as the continuing successes 
in striped bass and weakfish management.
    The ASA urges Congress to appropriate adequate funding for all 
cooperative programs with state agencies, including ESA Section 6 
cooperative programs and to implement restoration programs under the 
authority granted in the Endangered Species Act. These agreements would 
provide funding on a matching basis to accomplish conservation 
activities and to protect candidate species at risk of extinction. It 
is essential to protect the species important to recreational anglers 
and to sustain populations through sound management. The ASA recommends 
an additional $4 million be included in the fiscal year 2005 
appropriation to provide funding for cooperative agreements with states 
to enhance the states' roles under the Endangered Species Act.
    Addressing the significant shortfalls in financial assistance to 
accomplish mandated and timely fisheries management needs is critical 
to allow for implementation of the Magnuson-Stevens Fisheries 
Conservation and Management Act. The ASA supports the additional 
$800,000 in funding for NOAA-Fisheries Regional Fishery Management 
Councils that will allow the Councils to provide a more timely response 
to regional problems as fishing pressures continue to grow in many 
areas.
    Reliable fishery statistics provide the foundation upon which all 
fishery management decisions are based. State participation in the 
development and implementation of fishery statistics programs is 
critical to ensure the validity, comparability, and usefulness of data. 
The States and NOAA-Fisheries are each authorized to collect and 
interpret statistics for marine fisheries. Therefore, it is essential 
that States and the Interstate Marine Fisheries Commissions participate 
in cooperative statistics programs.

Other NOAA-Fisheries Issues
    The ASA is pleased with the increase of $10.9 million for the 
Pacific Coastal Salmon Recovery Fund and the inclusion the state of 
Idaho for salmon funding. We urge the Subcommittee to support funding 
for this program that is essential to recovery efforts of endangered 
and at-risk salmon species that are so critically important to the 
Pacific Northwest. The Pacific Coastal salmon fisheries provide 
outstanding opportunities for recreational anglers and the ASA 
appreciates all efforts designated to restore these recreational 
species.
    The ASA is concerned over the continuing low level of funding for 
implementation of the Anadromous Fisheries Act. The Anadromous 
Fisheries Act budget line has traditionally been used to fund 
activities that cannot be supported through other federal and state 
funds, and the fisheries management community has been unable to 
adequately address the needs of most anadromous fish stocks. Therefore, 
the ASA urges Congress to fund the Anadromous Fisheries Act grants to 
States at $8.0 million.
    The ASA strongly recommends that Congress appropriate $30 million 
for cooperative law enforcement arrangements with the states for fiscal 
year 2005. Additionally, the ASA urges Congress to insist that NOAA-
Fisheries work with the Department of Justice to streamline the 
reimbursement process to states prosecuting federal fisheries 
violations, as was intended by Congress.

Other National Oceanic and Atmospheric Administration (NOAA) Programs
    The ASA urges Congress to aggressively support the development of 
new technologies to help address critical marine resource issues. 
Several ongoing efforts, including the Hollings Marine Laboratory (HML) 
and the Fish Cooperative Institute, are funded through the Oceanic and 
Coastal Research line of the National Ocean Service budget. The ASA is 
pleased with the Administration's recognition of this important work in 
marine environmental health and the included funding level of $4.0 
million for the HML and $0.750 for the Fish Cooperative Institute.
    The National Estuarine Research Reserve (NERR) and Coastal Zone 
Management (CZM) programs are two highly successful examples of state-
federal partnership efforts to improve the quality of our natural 
resources. The ASA is pleased with the proposed $16.4 million for NERR 
operations as well as with the Administration's request of $7.25 
million for construction of research and educational facilities at NERR 
sites. Additionally, the ASA is pleased that the Administration 
recognizes the efforts of coastal states to address issues ranging from 
public access to non-point source pollution to development and urban 
sprawl. Increased development continues to have detrimental impacts on 
the quality of life in our communities, and states and local 
communities are in the best position to develop sound solutions to 
these pressures. Therefore, the ASA strongly urges Congress to support 
the nation's coastal zone management enterprise at a level of $85 
million for Coastal Zone Management grants to help states and local 
communities work to improve the quality of our coastal natural 
environment.
    The ASA is pleased with the Administration's acknowledgement of the 
problems posed by pfiesteria and other harmful algal blooms. However, 
the ASA is concerned over the proposed termination of work carried out 
in concert with the states. The Administration has proposed to 
terminate the $600,000 for pfiesteria work being carried out by the 
South Carolina Harmful Algal Bloom Task Force. This effort is 
especially important in evaluating the risks of harmful algal blooms in 
tidal-dominated high flow systems, and the ASA urges Congress to 
restore funding for this effort.
                                 ______
                                 
 Prepared Statement of the American Council of Young Political Leaders

    Mr. Chairman, distinguished members of the Subcommittee on 
Commerce, Justice, and State, the Judiciary and Related Agencies, 
ladies and gentlemen:
    The American Council of Young Political Leaders (ACYPL) welcomes 
this opportunity to present testimony as you consider the U.S. 
Department of State's fiscal year 2005 appropriations for cultural and 
educational exchange programs. My name is Brad Minnick, and as the 
ACYPL's executive director, I oversee nearly 30 annual exchange 
programs funded in part by a core grant from the State Department's 
Bureau of Educational and Cultural Affairs (ECA). Today I offer some 
perspectives about the value of exchanges like ours against the 
backdrop of global terrorism and rising anti-Americanism around the 
world. In my view, citizen exchanges are a critical component in the 
war against terrorism and the promotion of democratic ideals.
Background and History of ACYPL
    Since its founding in 1966 as an outgrowth of the Fulbright-Hays 
Act, ACYPL has introduced nearly 6,500 select emerging leaders from 
around the globe to international diplomacy and to each other. ACYPL 
prepares in-depth study tours for young leaders, aged between 25 and 40 
years old, to give them much-needed international exposure early in 
their political careers. U.S. participants travel overseas to study the 
political system and culture of another nation. Reciprocal visits bring 
young leaders here from abroad for an introduction to American 
democracy and culture and our federalist form of government.
    We target young politicians likely to assume future positions of 
responsibility and leadership. Here at home, our delegates are 
typically state legislators, mayors, city council members and other 
state and local elected officials. Many have never before traveled 
outside the United States.
    ACYPL programs are strictly bipartisan; our delegates are drawn 
from all 50 states and equally from both major political parties. We 
take particular care in putting together our delegations to demonstrate 
to the world that this nation has diverse opinions, cultures, 
ethnicities, religions, and politics. Similarly, ACYPL's overseas 
delegations are chosen by our partners and U.S. Embassies abroad to 
represent the political and cultural diversity of their home countries.
    Here in the United States ACYPL can claim nearly 40 sitting members 
of Congress among its distinguished alumni; six sitting state 
governors; several current and former Cabinet secretaries and many 
leaders in business, finance, community affairs, and education. 
Overseas, our distinguished alumni include prime ministers, cabinet 
officers, ambassadors and parliamentarians. The current Hungarian prime 
minister and the current Hungarian ambassador to the United States were 
roommates on an ACYPL exchange in 1983.

A Model for Experience and Understanding
    ACYPL is but one of many international organizations actively 
engaged in citizen diplomacy. Why are we unique and why are we 
effective?
    ACYPL is cost-efficient. For practically every dollar we receive in 
federal funding, we turn it into at least two dollars through cost-
share, in-kind contributions and outside fundraising. Overall, we will 
leverage nearly 160 percent of our base federal grant in corporate and 
private funding support this year--a $1.2 million return on a federal 
investment of $800,000.
    ACYPL exchanges are bilateral. Appearing recently before the House 
Appropriations Subcommittee on Commerce, Justice, and State, Ambassador 
Edward Djerejian noted that ``the most effective programs of public 
diplomacy--the ones most likely to endure and have long-term impact--
are those that are mutually beneficial . . .'' We host the same number 
of delegates from each country that we send to those countries. Our in-
country counterpart organizations willingly organize and underwrite the 
visits of our American delegates because we reciprocate.
    We focus only on emerging political leaders. We believe 
passionately in the need to identify, educate and introduce to each 
other tomorrow's global leaders today. Through familiarity and 
relationships comes knowledge and understanding. The earlier in one's 
political career we can make these connections, the better.
    As Assistant Secretary of State Patricia de Stacy Harrison is fond 
of saying, ``if you don't go, you don't know.'' ACYPL brings young 
leaders here to see for themselves the multicultural, pluralistic 
nation of friendly and generous people that is the United States. A 
delegation from Indonesia visiting Dearborn, Michigan was shocked to 
see that Muslims here not only worship openly but are assimilated into 
the fabric of American society. A Chinese delegation didn't know until 
they met him that a Chinese-American could be and was elected one of 
our nation's 50 governors.
    American delegates make similar discoveries. Delegates to India and 
Tanzania had never before seen such rampant poverty. Through their 
meetings in Egypt, Jordan and Morocco delegates experienced first-hand 
the intensity of anti-American sentiment among young adults. Delegates 
in Vietnam saw the deep bitterness many government officials still hold 
over the ``American war.'' In Australia delegates learned about the 
true strength and history of our alliance.
    ACYPL continues to engage its alumni. We view the initial exchange 
as only the beginning of our delegates' experience as citizen 
diplomats. And we tap these well connected alumni at home and abroad to 
give current delegates access to leaders at the highest levels of 
government. A recent Chinese delegation learned about the rule of law 
directly from Supreme Court Justice Sandra Day O'Connor and White House 
Counsel Alberto Gonzales, who is himself an alumnus of ACYPL. 
Palestinian delegates quizzed Ambassador Dennis Ross and Secretary of 
State Colin Powell about Middle East peace. Israelis met with former 
Defense Secretary William Perry. In Jordan, U.S. delegates met with 
King Abdullah; in Romania they talked NATO membership with Prime 
Minister Nastase and Foreign Minister Geoana; in Uruguay, delegates 
questioned President Battle about Iraq and international cooperation in 
the war on terrorism.
    Many alumni can testify about the deep impact the program had on 
them as they rose through the ranks to their current position of 
national or international leadership. The phrase most frequently used 
in describing their ACYPL experience is ``life-changing.'' Here is a 
typical comment from our delegate evaluations: ``As a state legislator, 
I was never focused on foreign issues before this trip. This trip and 
access to the political leaders has opened my eyes forever on our 
responsibility as a nation.'' Said a recent foreign delegate: ``I have 
come to realize that actually I know less about the United States than 
I thought I did before going on this trip.'' Another wrote that going 
forward ``I'll be able to avoid the fallacy of oversimplifying 
America.''
    U.S. Embassies abroad widely speak of the positive results ACYPL 
visits generate. For example, a recent delegation spent time in 
Malaysia, ACYPL's first visit there in over 10 years, where they were 
introduced to some of the new political leadership elected just one 
week before the delegates' arrival. We were told that this could not 
have been a better time for the ACYPL delegation to come to Malaysia 
because the visit allowed Embassy staff to meet many key contacts in 
the major political parties, government officials and non-governmental 
organizations for the first time. One notable contact was with the 
executive director and secretary of the International Movement of 
Muslim Youth (ABIM), based in Malaysia, who attended the ACYPL 
welcoming reception hosted by the Embassy's deputy chief of mission. 
This was the first time ABIM had ever accepted an Embassy invitation to 
any event, and the occasion allowed Embassy staff and the ABIM to 
discuss how they could work together in the future in places like Iraq.

Why Exchanges Are Needed
    Current events around the world speak of the tragedy of the 
increasing lack of understanding between the United States and some of 
its traditional allies; it also speaks volumes to the deeply-rooted 
mistrust of the United States felt by millions around the globe. 
Citizen-to-citizen exchanges offer unique opportunities for learning 
from one another about commonly-shared solutions to problems, as well 
as about different perspectives on forms of government and the 
aspirations other nations have for their citizens. This is especially 
true when it applies to emerging democracies, post-conflict nations, or 
in countries where the United States has a critical focus.
    Worldwide, ACYPL has succeeded in addressing immediate national 
public diplomacy interests. When U.S. relations with the People's 
Republic of China were normalized in 1979, ACYPL was one of the first 
exchange programs established between our two nations. This year we are 
celebrating the 25th anniversary of the first ACYPL visit to mainland 
China. We are proud to be in the vanguard of exchange programs that 
seek to promote peace, reconciliation, and friendship among former 
adversaries.
    Our experience with China illustrates the benefits that come when 
exchanges are sustainable over a quarter of a century. Since 1979 
nearly 400 young leaders on both sides have gained valuable 
understanding about the other; indeed, many of these alumni have risen 
to high levels of leadership in both countries. This exchange never 
fell victim to the ebb and flow of funding or of relations between our 
two governments, even during Tiananmen Square or the downing of a U.S. 
Air Force plane over Hainan Island. I remember vividly arriving in 
Beijing as an ACYPL delegate myself the day martial law was declared in 
1989. Despite the Tiananmen Square protests, both nations agreed our 
visit should proceed. It was an experience I shall never forget.
    With regard to public diplomacy in the Middle East and other areas 
of focus by the State Department, ACYPL has strengthened its exchanges 
to promote current priorities. While 25 percent of State Department 
funding for exchanges this year will go to programs in the Middle East 
and South Asia, fully 37 percent of ACYPL's exchanges in 2004 are with 
nations with predominant Muslim populations. We have already brought to 
the United States approximately 100 delegates from the Near East. 
Recent inbound exchanges have included parliamentarians from Indonesia, 
where it has been stated in a September 2003 General Accounting Office 
report that only 15 percent of Indonesians view the United State 
favorably. We are also hosting Egyptian parliamentary staffers who are 
witnessing first-hand how representative government works in the U.S. 
Congress; and later this summer a delegation from Jordan (where only 1 
percent view the United States favorably, according the same GAO 
report) will visit schools, citizen groups, and local legislators to 
learn about a civil society. We feel these visits offer more than just 
education, but an opportunity to expose mutual misconceptions; create 
goodwill that promotes understanding and dialogue; and engage young 
leaders in public diplomacy efforts with lasting results.

Where We Are Today and Challenges for the Future
    Unfortunately, like many of our exchange program colleagues, ACYPL 
does not have the resources to conduct and maintain exchanges worldwide 
on the scale appropriate for the world's only super power. America's 
national leaders agree on the value of educational and cultural 
exchanges, yet those of us who organize these exchanges typically 
operate on shoestring budgets. The United States spends less than one 
percent of the annual Defense budget on all of its public diplomacy 
programs combined. Because resources are so limited, my organization 
must constantly choose between maintaining existing relationships or 
establishing new ones. We cannot do both under existing funding.
    The international exchange community understands the severe budget 
pressures facing this subcommittee. But we also understand what America 
gains from these exchanges. Government-to-government dialogue and 
military strength can only reach so far and do so much. Public 
diplomacy efforts underscore or compliment government-to-government 
achievements while imparting personal experience and developing mutual 
understanding among future leaders. Yet, without sustained or new 
funding for programs like ours, progress towards impressing upon other 
nations the blessings of democracy and freedom cannot be made fully; 
nor will we reach those who need to hear our message the most. Indeed, 
as Ambassador Djerejian notes in Changing Minds, Winning Peace, ``the 
importance of public diplomacy in meeting the strategic challenge that 
America faces in the Arab and Muslim world requires a dramatic increase 
in funding.''
    Our organization could facilitate exchanges with 100 emerging young 
political leaders in Afghanistan and/or Iraq that focus on democracy, 
rule of law, openness in government, civil society, women's rights, and 
the importance of public service for $600,000. We could double the 
number of countries we exchange with for $2 million. With $300,000 more 
we could add enhanced follow-on activities and better communicate with 
our global alumni.
    Thank you for this opportunity to share my thoughts about why 
public diplomacy programs like ours must be strengthened in a post 9/11 
world. As you deliberate how best to allocate limited resources I 
encourage you to consider the important role that ACYPL and its sister 
exchange organizations can play in fostering improved understanding 
among emerging leaders, combating global terrorism and changing 
perceptions abroad about America. Thank you.
                                 ______
                                 
     Prepared Statement of the National Center for Victims of Crime

    The National Center for Victims of Crime submits this testimony to 
urge members of the Subcommittee on Commerce, Justice, State and the 
Judiciary to approve the President's budget request and release $675 
million from the Victims of Crime Act (VOCA) Fund for fiscal year 2005. 
In addition, we urge Subcommittee members to prevent the creation of 
additional earmarks from the VOCA Fund and to discontinue the use of 
earmarks from the VOCA Fund for federal positions.
    The National Center for Victims of Crime is the leading resource 
and advocacy organization for victims of crime. From our work with 
crime victims and service providers across the country, we are well 
acquainted with the funding needs of those who assist victims of crime. 
Since our 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 8,300 
crime victim service providers in our referral network, we stay 
informed 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 regional 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.

About the VOCA Fund
    The VOCA Fund was created twenty years ago to provide ongoing 
federal support for state and local crime victim programs. It is funded 
by criminal fines and penalties imposed on federal offenders. Since 
fiscal year 2000, the VOCA Fund has carried over money from year to 
year, with each year's VOCA Fund disbursement reflecting a cap on the 
amount of money released from the Fund. The bulk of the funds are 
distributed each year by formula grants to the states to fund: (a) 
crime victim compensation programs, which pay many of the out-of-pocket 
expenses incurred by victims; and (b) crime victim assistance. The VOCA 
Assistance funding supports rape crisis centers, domestic violence 
shelters, victim assistants in law enforcement and prosecutor offices, 
and other direct services for victims of crime.

VOCA funding for victim assistance has decreased since fiscal year 2002
    For the last two years, a cursory look at the federal 
appropriations might indicate that VOCA funding for victim services has 
increased. In fact, it has fallen since fiscal year 2002. The decrease 
in VOCA funding for victim assistance has resulted from changes in the 
statutory formula for disbursement of VOCA dollars and from the 
disproportionate impact of the budgetary rescission on VOCA assistance 
spending. While the total VOCA disbursement has increased, from $550 
million in fiscal year 2002 to $625 million in fiscal year 2004, VOCA 
assistance spending has dropped in that time, from $383 million in 
fiscal year 2002 to approximately $356 million in fiscal year 2004. 
This seven percent decrease has had a significant impact on rape crisis 
centers, homicide survivor groups, and victim/witness programs that are 
already suffering steep declines in support from states and private 
funders.
    Under the terms of the VOCA statute (42 U.S.C.  10601), there are 
certain set asides for federal programs that are funded according to 
their need. These programs are victim/witness coordinators in the 
offices of U.S. Attorneys, victim assistants in FBI field offices, and 
the federal automated victim notification system. Another set aside 
exists for children's justice programs. From the remaining VOCA 
dollars, five percent is allocated to the Office for Victims of Crime 
for additional federal programs and for national-scope projects. 
Payouts from the VOCA Fund to state crime victim compensation programs 
are then made, based on a partial reimbursement of each state payments 
to victims. The amount of funds remaining becomes that year's VOCA 
assistance figure. Thus, any change in earmarks from the fund or in the 
needs of the funded federal programs, any reduction in overall VOCA 
spending, and any budgetary rescission, disproportionately impacts VOCA 
assistance spending.

The importance of VOCA funding to state and local victim services
    VOCA assistance money provides the crucial federal support for core 
services to crime victims. Through the VOCA fund, the federal 
government supports services for survivors of homicide victims and for 
victims of assault, robbery, gang violence, hate and bias crimes, 
intoxicated drivers, bank robbery, fraud, elder abuse, child abuse and 
neglect, domestic violence, and sexual assault. VOCA assistance dollars 
fund services that help victims in the immediate aftermath of crime, 
including accompaniment to hospitals for examination; hotline 
counseling; emergency food, clothing and transportation; replacing or 
repairing broken locks; filing restraining orders; and more. This 
program also funds assistance as victims move through the criminal 
justice system, including notification of court proceedings, 
transportation to court, help completing a victim impact statement, 
notification about the release or escape of the offender, and 
assistance in seeking restitution.
    Organizations receiving VOCA assistance grants include sexual 
assault and rape treatment centers, domestic violence programs and 
shelters, child abuse programs, centers for missing children, mental 
health services, and other community-based victim coalitions and 
support organizations including those who serve homicide survivors. 
Also funded are victim service programs operated by other types of 
organizations, including criminal justice agencies, faith-based 
organizations, emergency medical facilities, and others.

The need far outpaces the funds
    Victims from around the country call our toll-free Helpline, 
looking for the assistance that can help them rebuild their lives. Too 
often we have had to tell rural domestic violence victims that the 
closest services are 200 miles away, to tell mothers of sexual abuse 
victims that they will have to drive over an hour to get to special 
children's services, and to tell rape victims that there are no longer 
services in their county and they will have to call the state coalition 
for help. Immigrant victims find there are no service providers with 
available interpreters; victims with disabilities can't locate 
specialized services. Because the recent decrease in federal funding 
follows decreases in state and private giving, any additional cuts come 
at the expense of core services to victims.
  --Service providers tell us they have long waiting lists for services 
        that victims need immediately. When a teenage sexual assault 
        victim turns to a rape crisis center, telling her she can come 
        back in three months isn't good enough.
  --Program directors tell us they have had to chose between retaining 
        a volunteer coordinator who can provide the necessary 
        professional oversight to volunteers who inform victims about 
        their rights and assist them as they apply for compensation, 
        and a counselor who can provide in-depth counseling and group 
        therapy.
  --Programs that formerly served multiple counties through satellite 
        offices have had to contract their services to a single 
        location. Not only does this change directly affect the 
        accessibility of their services, but it also means a lessening 
        of ties to others in the community who can collaborate to 
        respond to victims.
  --Programs that have spent years making inroads into immigrant 
        communities are now faced with discontinuing their services 
        because they can no longer afford bilingual advocates.
  --Services for ``secondary'' victims have been cut. While service 
        providers understand the need to provide services to children 
        of domestic violence victims, to non-offending mothers in cases 
        of child sexual abuse, and to family members of victims of 
        other violent crime, the combined budget cuts have often 
        resulted in eliminating those services.
  --As programs have had to cut back, they report that experienced but 
        overworked staff are leaving the field. Where new staff have 
        been hired, directors report a lack of funding to train them.
    Victim service providers understand the needs in their community. 
With additional funding, they could increase their community 
collaborations to reach out to underserved victims, including elderly 
victims, teen victims, immigrant victims, victims with disabilities, 
and victims in rural areas. They can also expand their core services to 
meet the needs of those victims of crime, to help them rebuild their 
lives. They also report a need for funding for technology that can 
increase their efficiency and effectiveness--such as automated victim 
notification systems, databases to enable service providers to 
coordinate their efforts for a single victim, and Web technology to 
improve their outreach to the community.

There must be no additional earmarks from VOCA
    Finally, while our first priority is to see the cap on the VOCA 
Fund raised to $675 million for fiscal year 2005, we also urge you to 
prevent the creation of additional earmarks from the VOCA Fund, even 
for projects that serve crime victims. VOCA formula grants are designed 
to let each state fund victim services based on the needs and strategic 
plans of that state. Money from the general VOCA Fund must not be set 
aside for additional specific purposes.
    We also urge that earmarks for federal positions from the VOCA Fund 
be discontinued. 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 
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. Moreover, because of the statutory 
construction of those earmarks, they are immune from any budgetary 
actions that restrict VOCA spending overall, and so are 
disproportionately favored.
    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 approving the President's 
budget request of $675 million for VOCA and holding fast against 
pressure to earmark the Fund.
                                 ______
                                 
    Prepared Statement of the Great Lakes Indian Fish and Wildlife 
                               Commission

    Summary of GLIFWC's Fiscal Year 2005 Testimony.--The Commission 
requests that Congress restore funding for the COPS Tribal Resources 
Grant Program to $40 million in fiscal year 2005 in the Department of 
Justice. The Administration is proposing to reduce funding for this 
essential program to $20 million.
    Disclosure of DOJ Grants Contracted.--The Commission is an 
intertribal organization which, under the direction of its member 
tribes, implements federal court orders governing tribal harvests of 
off-reservation natural resources and the formation of conservation 
partnerships to protect and enhance natural resources within the 1836, 
1837, and 1842 ceded territories. Under COPS Tribal Resources Grant 
Program, the Commission contracted:
  --$172,924 in fiscal year 2000 for the purposes of replacing obsolete 
        radio equipment and to improve the capacity of GLIFWC's 
        officers to provide emergency services throughout the Chippewa 
        ceded territories;
  --$292,190 in fiscal year 2001 for the purposes of replacing obsolete 
        patrol vehicles (boats, ATVs, and snowmobiles), purchasing 
        portable defibrillators, and training GLIFWC officers;
  --$302,488 in fiscal year 2002 for the purposes of replacing obsolete 
        patrol vehicles (ATVs and snowmobiles), improving officer 
        safety (in-car video cameras), increasing computer 
        capabilities, and expanding training of GLIFWC officers in 
        interagency emergency response; and
  --$280,164 in fiscal year 2003 for the purposes of hiring 3 
        additional officers, providing basic recruit training, and 
        supplying standard issue items.
    Ceded Territory Treaty Rights and GLIFWC'S Role.--GLIFWC was 
established in 1984 as a ``tribal organization'' within the meaning of 
the Indian Self-Determination Act (Public Law 93-638). It exercises 
authority delegated by its member tribes to implement federal court 
orders and various interjurisdictional agreements related to their 
treaty rights. GLIFWC assists its member tribes in: securing and 
implementing treaty guaranteed rights to hunt, fish, and gather in 
Chippewa treaty ceded territories; and cooperatively managing and 
protecting ceded territory natural resources and their habitats.
    For the past 19 years, Congress and Administrations have funded 
GLIFWC through the BIA, Department of Justice and other agencies to 
meet specific federal obligations under: (a) a number of U.S./Chippewa 
treaties; (b) the federal trust responsibility; (c) the Indian Self-
Determination Act, the Clean Water Act, and other legislation; and (d) 
various court decisions, including a 1999 U.S. Supreme Court case, 
affirming the treaty rights of GLIFWC's member Tribes. GLIFWC serves as 
a cost efficient agency to conserve natural resources, to effectively 
regulate harvests of natural resources shared among treaty signatory 
tribes, to develop cooperative partnerships with other government 
agencies, educational institutions, and non-governmental organizations, 
and to work with its member tribes to protect and conserve ceded 
territory natural resources.
    Under the direction of its member tribes, GLIFWC operates a ceded 
territory hunting, fishing, and gathering rights protection/
implementation program through its staff of biologists, scientists, 
technicians, conservation enforcement officers, and public information 
specialists.
    Community-based Policing.--GLIFWC's officers carry out their duties 
through a community-based policing program. The underlying premise is 
that effective detection and deterrence of illegal activities, as well 
as education of the regulated constituents, are best accomplished if 
the officers live and work within tribal communities that they 
primarily serve. The officers are based in 10 satellite offices located 
on the reservations of the following member tribes: In Wisconsin--Bad 
River, Lac Courte Oreilles, Lac du Flambeau, Red Cliff, Sokaogon 
Chippewa (Mole Lake) and St. Croix; in Minnesota--Mille Lacs; and in 
Michigan--Bay Mills, Keweenaw Bay and Lac Vieux Desert.
    Interaction With Law Enforcement Agencies.--GLIFWC's officers are 
integral members of regional emergency services networks in Minnesota, 
Michigan and Wisconsin. They not only enforce the tribes' conservation 
codes, but are fully certified officers who work cooperatively with 
surrounding authorities when they detect violations of state or federal 
criminal and conservation laws. They also are certified medical 
emergency first responders, including CPR, and in the use of 
defibrillators, and are trained in search and rescue, particularly in 
cold water rescue techniques. When a crime is in progress or 
emergencies occur, local, state, and federal law enforcement agencies 
look to GLIFWC's officers as part of the mutual assistance networks of 
the ceded territories. This network includes the Wisconsin Department 
of Natural Resources, Minnesota Department of Natural Resources, 
Michigan Department of Natural Resources, U.S. Coast Guard, USDA-Forest 
Service, State Patrol and Police, county sheriffs departments, 
municipal police forces, fire departments and emergency medical 
services.
    GLIFWC Programs Currently Funded by DOJ.--GLIFWC recognizes that 
adequate communications, training, and equipment are essential both for 
the safety of its officers and for the role that GLIFWC's officers play 
in the proper functioning of interjurisdictional emergency mutual 
assistance networks in the ceded territories. GLIFWC's COPS grants for 
the past four years have provided a critical foundation for achieving 
these goals. Significant accomplishments with Tribal Resources Grant 
Program funds include:
  --Improved Radio Communications and Increased Officer Safety.--GLIFWC 
        replaced obsolete radio equipment to improve the capacity of 
        officers to provide emergency services throughout the Chippewa 
        ceded territories. GLIFWC also used COPS funding to provide 
        each officer a bullet-proof vest, night vision equipment, and 
        in-car videos to increase officer safety.
  --Emergency Response Equipment and Training.--Each GLIFWC officer has 
        completed certification as a First Responder and in the use of 
        life saving portable defibrillators. In 2003, GLIFWC officers 
        carried First Responder kits and portable defibrillators during 
        their patrol of 275,257 miles throughout the ceded territories. 
        In remote, rural areas the ability of GLIFWC officers to 
        respond to emergencies provides critical support of mutual aid 
        agreements with federal, state, and local law enforcement 
        agencies.
  --Ice Rescue Capabilities.--Each GLIFWC officer was certified in ice 
        rescue techniques and provided a Coast Guard approved ice 
        rescue suit. In addition, each of GLIFWC's 10 reservation 
        satellite offices was provided a snowmobile and an ice rescue 
        sled to participate in interagency ice rescue operations with 
        county sheriffs departments and local fire departments.
  --Wilderness Search and Rescue Capabilities.--Each GLIFWC officer 
        completed Wilderness Search and Rescue training. The COPS 
        Tribal Resources Grant Program also enabled GLIFWC to replace 
        many vehicles that were purchased over a decade ago including 
        10 ATV's and 16 patrol boats and the GPS navigation system on 
        its 25 foot Lake Superior Patrol Boat. These vehicles are used 
        for field patrol, cooperative law enforcement activities, and 
        emergency response in the 1837 and 1842 Chippewa Ceded 
        Territories. GLIFWC officers also utilize these vehicles for 
        boater, ATV, and snowmobile safety classes taught on 
        Reservations as part of the Commission's Community Policing 
        Strategy.
  --Hire, train, and supply 3 additional officers.--Funding has been 
        contracted to provide 3 additional officers to ensure tribes 
        are able to meet obligations to both enforce off-reservation 
        conservation codes and effectively participate in the myriad of 
        mutual assistance networks located throughout a vast region 
        covering 60,000 square miles.
    Consistent with numerous other federal court rulings on the 
Chippewa treaties, the United States Supreme Court recently affirmed 
the existence of the Chippewa's treaty-guaranteed usufructuary rights 
(Minnesota v. Mille Lacs Band, Case No. 97-1337, March 24, 1999). As 
tribes have re-affirmed rights to harvest resources in the 1837 ceded 
territory of Minnesota, workloads have increased. This expanded 
workload, combined with staff shortages would have limited GLIFWC's 
effective participation in regional emergency services networks in 
Minnesota, Michigan and Wisconsin. The effectiveness of these mutual 
assistance networks is more critical than ever given: National homeland 
security concerns; State and local governmental fiscal shortfalls; and 
staffing shortages experienced by local police, fire, and ambulance 
departments due to the call up of National Guard and military reserve 
units.
    Examples of the types of assistance provided by GLIFWC officers are 
provided below: as trained first responders, GLIFWC officers routinely 
respond to, and often are the first to arrive at, snowmobile accidents, 
heart attacks, hunting accidents, and automobile accidents (throughout 
the ceded territories); search and rescue for lost hunters, fishermen, 
hikers, children, and elderly (Sawyer, Ashland, Bayfield, Burnett, and 
Forest counties in Wisconsin and Baraga, Chippewa, and Gogebic counties 
in Michigan); being among the first to arrive on the scene where 
officers from other agencies have been shot (Bayfield, Burnett, and 
Polk counties in Wisconsin) and responding to weapons incidents 
(Ashland, Burnett, Sawyer, and Vilas counties in Wisconsin); assist 
with drowning incidents (St. Croix River on the Minnesota/Wisconsin 
border, Sawyer county in Wisconsin, Gogebic county in Michigan) and 
searching for lost airplanes (Ashland, Forest and Washburn counties in 
Wisconsin); organize and participate in rescues of ice fishermen on 
Lake Superior (Ashland and Bayfield counties in Wisconsin) and 
assisting with Lake Superior boat rescues (Baraga county in Michigan 
and with the U.S. Coast Guard in other parts of western Lake Superior); 
and assist sheriffs departments with natural disasters (e.g. floods in 
Ashland County and a tornado in Siren, Wisconsin).
    Simply put, adding three additional officer positions will not only 
assist GLIFWC in meeting its obligations to enforce tribal off-
reservation codes, but it will enhance intergovernmental efforts to 
protect public safety and welfare throughout the region by the states 
of Wisconsin, Minnesota, and Michigan.
                                 ______
                                 
     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 regarding 
the 2005 fiscal year funding request for the Department of State and 
its programs.
    Our country is facing the most serious threat to its well-being 
since the Cold War. Foreign Service personnel are working long hours, 
in difficult circumstances with uncommon courage, to advance our 
bilateral and multilateral relationships, fight the battle against 
international terrorism, stop the flow of illegal drugs, uncover 
international crime and illegal financing networks, and work for the 
kind of development that will remove safe havens for international 
terrorists. On July 1, the State Department will take on a task that 
may reverberate for decades in the Middle East. The United States will 
be turning over sovereignty to the Iraqi people and the Department of 
State will be establishing one of the largest diplomatic missions in 
its history. The United States will become a partner with the Iraqi 
people in bringing peace and justice to their wartorn nation.
    As the United States takes on these ever-expanding diplomatic 
responsibilities, this Subcommittee's actions are vital to their 
success. Your decisions determine whether we will have the resources 
necessary to support the foreign affairs infrastructure and many of the 
tools of diplomacy needed to implement our foreign policy.
    The Subcommittee's and the Congress' past support of the 
Administration's request in meeting staffing needs, improving 
information technology systems, making 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. For over three years, the 
Secretary has successfully served our Nation and the President as both 
his principal foreign policy advisor and as the effective and inspiring 
CEO of the Department of State.

                     PERSONNEL FUNDING REQUIREMENTS

    With the fiscal year 2004 funding, the Department completed its 
three-year Diplomatic Readiness Initiative (DRI) and by September 2004 
will have hired 1,158 new employees above attrition into the Foreign 
and Civil Services. Because of DRI, the majority of the Department's 
long vacant overseas positions will be filled. Further, the Department 
will be able to staff new operations in Iraq and Afghanistan, and in 
new offices like MEPI and HIV/AIDS without ``robbing Peter to pay 
Paul'' as had been the practice.
    However, the 1,158 additional Foreign and Civil Service personnel 
target was chosen prior to the changes in the world brought about by 
the September 11, 2001, attacks on the United States. When the numbers 
were selected, it was a different time and a different world. For 
fiscal year 2005 the Administration has requested an additional $76 
million to fund 317 new positions which would include 183 individuals 
for new staffing requirements, 63 positions for the Consular Associates 
Replacement Program, and 71 new security positions.
    AFSA supports this additional personnel request. Through 
reprioritization, DRI allowed the Department to meet unforeseen 
demands. However, this reprioritization also meant that current needs 
are not being met. The additional personnel ``float'' that was needed 
so that training could take place or positions will be covered while 
our personnel move from one post to another, take home leave, or the 
myriad other reasons for people to be in motion has not materialized. 
This personnel float must be replaced. Also additional security 
staffing is required to meet an increasingly dangerous world. Last 
year, Mr. Chairman, the Foreign Service experienced the most mandatory 
evacuations of posts than ever before, and we do not see this trend 
abating soon.
    Without the additional requested funding for staffing, the gains 
made by DRI could be lost. With the lack of appropriate funding in the 
decade of the 1990s, our foreign affairs infrastructure fell into a 
state of near crisis. This cannot be allowed to happen again, and we 
urge the Congress to meet the Administration's personnel request.
    There is one other matter in terms of the funding request that AFSA 
wishes to call to the Subcommittee's attention. In the State Department 
authorization bill, there is a provision in the House and Senate bills 
that would increase the hardship and danger pay differentials from a 
maximum of 25 percent to 35 percent. AFSA requests that if this 
increase is authorized, sufficient funding be included in this 
appropriations bill to accommodate this increase in differentials. The 
world has become a much more dangerous and difficult place to live. An 
increasing number of posts have hit the maximum but there still is a 
difference of ``worse and worst'' among these posts. An increase in the 
differential would help acknowledge the greater hardship that is 
required to live in the worst posts.

            PERSONNEL ISSUES FOR SUBCOMMITTEE CONSIDERATION

    Mr. Chairman, there is another issue to be considered is the 
treatment of our personnel. The Foreign Service is very fortunate in 
that we continue to attract from the best and brightest of our nation. 
Today, because of DRI and increased funding, hiring finally has began 
to increase. Currently nearly one-third of the State Department's 
Foreign Service has been hired since 1998, which creates a new dynamic 
for our institution. We ask for the Congress' attention in this matter 
because it can create personnel problems that work against retention 
and the morale of the Foreign Service.
    The newer members of the Foreign Service have much in common with 
their older colleagues. They, too, are the best that our nation has to 
offer. They, too, are hard working, dedicated, patriotic individuals 
who are willing to serve in dangerous and remote places. But one major 
difference is the importance of the spouse and family concerns in their 
consideration of their employment satisfaction level. In line with 
societal trends, our new Foreign Service members are marrying well-
educated, career oriented spouses. These spouses do not see themselves 
continually sacrificing their career and serving as part of a ``two-
fer'' couple. For many, spousal employment options and the attitudes of 
the spouse constitute the single most important factor in determining 
both mobility of the Foreign Service members and whether a person will 
make the Foreign Service a career. The efforts made by the Department 
in this area are noteworthy, but the problems have yet to be solved. 
AFSA urges the Committee to work with the Department in seeking ways to 
improve the career opportunities and the personal satisfaction of 
spouses for the long-term health of the Foreign Service.
    Another issue that should be addressed revolves around training and 
the per diem provided. As DRI concept continues to succeed and more 
individuals take additional training to learn new skills regarding 
their next assignment or to learn new hard language skills, AFSA 
believes that the per diem levels provided for those assigned to 
training need to be revised. Current allowances do not accommodate 
increased cost of living in the Washington, D.C. metropolitan area. 
AFSA asks that the Subcommittee provide funding to the Department of 
State so that appropriate support levels for those in long-term 
training can be provided.

                            EMBASSY SECURITY

    Mr. Chairman, AFSA continues to thank both the Congress and the 
Department of State for the impressive work they have been doing 
together in improving the security of our posts and missions abroad 
since the U.S. embassy bombings in East Africa in 1998.
    When Secretary Powell testified before this Subcommittee on March 
25, he discussed the vast improvements being made in terms of embassy 
security brought on by changes in management. He testified that at the 
beginning of this Administration, one new secure embassy was being 
built each year. Today, the Department is building 10 new secure 
embassy compounds a year. Moreover, the embassy's program costs have 
been reduced by 20 percent.
    However, the threats to Americans and the historic number of 
mandatory evacuations of our posts and missions abroad last year both 
attest to the need to continue our efforts in this area. It must be 
remembered that 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 that:

    ``. . . 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.''

    Mr. Chairman, the Foreign Service does not seek hilltop fortresses. 
Such would be counterproductive to our purpose for being in a country. 
We accept that dangers are part of our profession. But we also expect 
that our government, should 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.
    In this regard, we are aware of the proposed Capital Security Cost 
Sharing (CSCS) program to help provide additional funding to increase 
the speed in which secure embassy compounds can be built. Given the 
situation in the world today, no one can argue against building secure 
facilities faster. However, we wish to express our hope that the 
participating departments and agencies will be provided additional 
funding to meet the additional CSCS building costs. It is our concern 
that the mission that overseas staff were doing would be lost due to a 
strictly budget driven decision.

                              SOFT TARGETS

    Mr. Chairman, for the past few years, AFSA expressed its concerns 
to this Subcommittee regarding the lack of attention the Department of 
State seemed to give to the protection of soft targets. We have always 
been appreciative of your and the Subcommittee's efforts to direct the 
Department's attention to that area. As you know, this was a particular 
concern to the Foreign Service because we believed that the term ``soft 
targets'' was nothing more than a euphemism for attacks against our 
spouses and children as we try and lead a somewhat normal life of going 
to school, to church, and on other family outings.
    It was thus particularly gratifying when the Secretary said to this 
Subcommittee:

    ``Our budget request also, I might say, touches on physical 
security improvements to those soft targets in our missions: schools, 
recreational facilities. And you know that we have an extensive plan to 
go after this soft targeting possibility, providing physical security 
improvements to overseas schools attended by dependents of government 
employees and other citizens. Our 2005 request includes $27 million for 
this effort, including $10 million for the schools, $5 million to 
improve security at employee association facilities, and $12 million 
for residential security upgrades. Protection of Americans living and 
working overseas is one of our highest priorities.''

      PAY DISPARITIES BETWEEN SERVICE OVERSEAS AND SERVICE AT HOME

    Finally Mr. Chairman, we wish to bring to your attention a concern 
that grows each year and seriously damages the morale of those in the 
Foreign Service. Because of prohibitions in the Federal Employees Pay 
Comparability Act, federal employees under Title V cannot receive 
locality pay when they go abroad. This means that currently when a 
member of the Foreign Service is posted abroad, that person will take a 
13 percent cut in base pay. Further, because of the ``rest of U.S. 
concept'' in locality pay, there is no federal employee of the same 
grade serving in the United States who will receive less than 8 percent 
more than a member of the Foreign Service member posted abroad.
    This difference has devalued the concept of differentials for 
serving in hardship and danger posts, it devalues the concept of equal 
pay for equal work, and it harms the individual because it affects the 
amount a person serving abroad can contribute to his or her retirement.
    There are now several pay disparities afflicting a member of the 
Foreign Service serving abroad caused by locality pay. Two people of 
the same rank, one serving in Washington and the other serving abroad, 
will have a difference of more than 13 percent because of locality pay. 
Since the adjustments in pay procedures for the Senior Executive 
Service and the Senior Foreign Service, due to personnel changes in 
last year's Defense Authorization bill, a member of the Senior Foreign 
Service will receive 13 percent more than a colleague at the same post 
but who is not at the Senior level. Finally, it is our understanding 
those in this nation's intelligence services receive an overseas 
adjustment similar to locality pay.
    Mr. Chairman, AFSA believes the current situation needs to be 
corrected, and we will seek that end. The laws will have to be changed, 
but when that happens, we urge this Subcommittee to provide the 
necessary funds to eliminate this pay disparity.

                               CONCLUSION

    Again, Mr. Chairman and members of the Subcommittee, thank you for 
the opportunity to share the views of the American Foreign Service 
Association.
    Ultimately, our security cannot be won on the battlefield alone. 
Rather, it will turn on our ability to make foreign governments, 
international organizations, and the people of the world understand the 
threats that confront all of us and then face those threats with us. In 
the long run, our best defense will be convincing others to work toward 
an international society that is tolerant and just, as well as vigilant 
against common threats. This is the work of diplomacy, and we trust 
that you and your subcommittee will want to assign our diplomatic 
efforts the same strategic priority and funding that is assigned to 
this nation's military efforts.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Alliance for International Educational and Cultural Exchange, 
  Prepared Statement of..........................................   198
American Council of Young Political Leaders, Prepared Statement 
  of.............................................................   210
American Foreign Service Association, Prepared Statement of......   217
American Museum of Natural History, Prepared Statement of........   167
American Sportfishing Association, Prepared Statement of.........   208
Association for Enterprise Opportunity, Prepared Statement of....   172
Association of Small Business Development Centers, Prepared 
  Statement of...................................................   193

Byrd, Senator Robert C., U.S. Senator From West Virginia, 
  Questions Submitted by.........................................    49

California Industry and Government Central California Ozone Study 
  (CCOS) Coalition, Prepared Statement of........................   204
Campbell, Senator Ben Nighthorse, U.S. Senator From Colorado, 
  Questions Submitted by.........................................    40
Confederated Tribes of the Warm Springs Reservation of Oregon, 
  Prepared Statement of..........................................   189
Consortium for Oceanographic Research and Education (CORE), 
  Prepared Statement of..........................................   174

Domenici, Senator Pete V., U.S. Senator From New Mexico, 
  Questions Submitted by.........................................    39
Doris Day Animal League, Prepared Statement of...................   196

Ekstrand, Laurie E., Director, Homeland Security and Justice 
  Issues, Government Accountability Office.......................    84
    Prepared Statement of........................................    86
Evans, Hon. Donald L., Secretary, Office of the Secretary, 
  Department of Commerce.........................................     1
    Prepared Statement of........................................     5

Fine, Glenn A., Inspector General, Department of Justice.........    74
    Prepared Statement of........................................    76
Florida State University, Prepared Statement of..................   202

Great Lakes Indian Fish and Wildlife Commission, Prepared 
  Statement of...................................................   215
Gregg, Senator Judd, U.S. Senator From New Hampshire:
    Opening Remarks of...........................................    53
    Questions Submitted by.......................................    28

Hite, Randolph, Director, Information Technology Architecture and 
  Systems Issues, Government Accountability Office...............    84
Hollings, Senator Ernest F., U.S. Senator From South Carolina, 
  Questions Submitted by.........................................    41

Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions 
  Submitted by...................................................    41
Institute of Makers of Explosives, Prepared Statement of.........   186

Kerr, Honorable Jimmie, Pinal County Supervisor, Prepared 
  Statement of...................................................   182
Kohl, Senator Herb, U.S. Senator From Wisconsin, Questions 
  Submitted by...................................................    47

Leahy, Senator Patrick J., U.S. Senator From Vermont:
    Prepared Statement of........................................     1
    Questions Submitted by.......................................    44

Marine Fish Conservation Network, Prepared Statement of..........   181
Mueller, Robert S., III, Federal Bureau of Investigation, 
  Department of Justice..........................................    53
    Prepared Statement of........................................    57

National American Indian Court Judges Association, Prepared 
  Statement of...................................................   205
National Association of State Universities and Land-Grant 
  Colleges (NASULGC), Prepared Statements of...................170, 174
National Association of University Fisheries and Wildlife 
  Programs, Prepared Statement of................................   176
National Center for Victims of Crime, Prepared Statement of......   213
National Federation of Community Broadcasters, Prepared Statement 
  of.............................................................   180

Powell, Colin L., Secretary of State, Office of the Secretary, 
  Department of State............................................   119
    Prepared Statement of........................................   126

Regional Information Sharing Systems (RISS) Program, Prepared 
  Statement of...................................................   183

Sister Cities International, Prepared Statement of...............   200
Stevens, Senator Ted, U.S. Senator From Alaska, Questions 
  Submitted by...................................................    38


The Asia Foundation, Prepared Statement of.......................   190
The Ocean Conservancy, Prepared Statement of.....................   177

University Corporation for Atmospheric Research (UCAR), Prepared 
  Statement of...................................................   170


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

                                                                   Page

Additional Committee Questions...................................    28
Advanced Technology Program and Homeland Security Technologies...    29
American Jobs....................................................    11
Assistance to Alaska Fishermen...................................14, 38
Assistant Secretary for Manufacturing and Services...............    10
BIS Mission and Activities.......................................    37
Budget Choices...................................................20, 26
Climate Change Programs..........................................    41
Climate Change Research Initiative...............................    22
Crab Rationalization Program.....................................    14
    And Ocean Policy.............................................    38
DOC Manufacturing Report.........................................     9
Emergency Steel Guarantee Loan Program...........................    49
Exporting of Jobs................................................    26
Focus on Creating Jobs...........................................    17
Funding for Census Programs......................................    35
Global Climate Change............................................    23
ITA Reorganization...............................................    39
    And Collaboration With USTR..................................    31
Infrastructure Protection........................................    30
International Trade Administration Reorganization................     9
International Travel to the United States........................    43
Iraq Reconstruction..............................................    32
Job Losses in Wisconsin..........................................    47
Long-term Plan for Spectrum Management...........................    30
MEP Funding and Recompetition....................................    47
Manufacturing Extension Partnership......................12, 19, 25, 44
NIST/Manufacturing Extension Partnership.........................    29
NOAA:
    Funding......................................................    39
    N-Prime Satellite............................................     8
    NIST Boulder Campus..........................................    40
    Space Initiatives............................................    28
National Sea Grant Program.......................................    46
New Assistant Secretary of Manufacturing.........................    49
Ocean Programs...................................................    27
Oceans Policy Commission.........................................    15
PTFP Grants......................................................    30
PTO:
    Funding and Reduced Pendancy.................................    35
    Hiring Plan for 900 New Staff................................    25
    Increase.....................................................    24
Participation in Commodity Prices................................    39
Patent and Trade Complaints and Backlog..........................    49
Patriotism.......................................................    16
President's Economic Report......................................    16
Public Telecommunications Facilities Program.....................    41
Section 201 Duties and Steel Imports.............................    50
Support for MEP..................................................    21
Taking PTO Off Budget............................................    36
Tourism..........................................................    24
    Industry.....................................................    23
Trade Deficit....................................................    19
2010 Decennial Census and American Community Survey..............    33
U.S. Dumping Laws................................................    51
U.S. Economy.....................................................    16
WTO Ruling on Continued Dumping and Subsidy Offset Act...........    50

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

Additional OIG Reviews in the FBI................................    81
Counterterrorism Agents..........................................    70
Duplication of Efforts/Terrorist Explosive Device Analytical 
  Center.........................................................    65
Enterprise Architecture..........................................   109
Explosives.......................................................    63
FBI Culture......................................................    59
Federal Bureau of Investigation/Drug Enforcement Administration 
  Relationship...................................................   110
IDENT:
    System.......................................................    72
    IAFIS Integration............................................   112
Information Technology...........................................56, 58
Language Translation.............................................    72
Legat Program....................................................   114
Linguists........................................................   115
Management.......................................................    56
Possible Integration of X-Base Into TEDAC........................    66
Summary of TOPOFF 2 After-Action Report..........................    69
TOPOFF...........................................................    68
Terrorist Screening Center.......................................    64
The Trilogy Project..............................................    77
Training.........................................................55, 57
Transportation Security..........................................    63
Trilogy Program..................................................    59
Virtual Case File Contract.......................................   111

                          DEPARTMENT OF STATE

                        Office of the Secretary

Afghanistan Over Iraq............................................   144
Armed Services Will not Give Money...............................   140
Caring for the World's Most Vulnerable People....................   132
Charles Taylor Before Tribunal...................................   156
Clarke Lacking...................................................   141
Clarke and State Connection......................................   141
Department of Defense Sharing With State.........................   139
Failure of Clinton Administration With Terrorism.................   135
Funding for the Coalition Provisional Authority Post-July........   149
Funds From the Department of Defense.............................   139
Hmong Refugees in Laos...........................................   153
Iraq Reconstruction, Cost of.....................................   159
Israel Fence Status and Cost and Israel-Palestinian Conflict.....   161
Keeping Americans Safe at Home and Abroad........................   133
MOX Program; Status of Liability With Russia.....................   160
Mideast-West Dialogue............................................   157
Money to Afghanistan.............................................   142
Our New Approach to Global Prosperity............................   131
Putting More Aid in Afghanistan..................................   143
Readiness of Iraqi Self-defense Forces...........................   150
Secretary Witness Clarke.........................................   142
State Budget in Iraq.............................................   139
Terrorism--High Priority.........................................   136
Transfer.........................................................   140
Update on Iraq and Afghanistan...................................   137
Who Pays the Coalition Provisional Authority.....................   139
Why Does the Department of Defense Fund the Coalition Provisional 
  Authority......................................................   145
Winning the War on Terrorism.....................................   127

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