    [Senate Hearing 110-329]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 110-329

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                       on

                               H.R. 3093/S. 1745

       AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE AND
       JUSTICE, SCIENCE, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING
                   SEPTEMBER 30, 2008, AND FOR OTHER PURPOSES

                                   __________

                            Department of Commerce
                             Department of Justice
                    Equal Employment Opportunity Commission
                 National Aeronautics and Space Administration
                          National Science Foundation
                           Nondepartmental Witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                   index.html

                                   __________

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                          COMMITTEE ON APPROPRIATIONS

                    ROBERT C. BYRD, West Virginia, Chairman
    DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
    PATRICK J. LEAHY, Vermont            TED STEVENS, Alaska
    TOM HARKIN, Iowa                     ARLEN SPECTER, Pennsylvania
    BARBARA A. MIKULSKI, Maryland        PETE V. DOMENICI, New Mexico
    HERB KOHL, Wisconsin                 CHRISTOPHER S. BOND, Missouri
    PATTY MURRAY, Washington             MITCH McCONNELL, Kentucky
    BYRON L. DORGAN, North Dakota        RICHARD C. SHELBY, Alabama
    DIANNE FEINSTEIN, California         JUDD GREGG, New Hampshire
    RICHARD J. DURBIN, Illinois          ROBERT F. BENNETT, Utah
    TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
    MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
    JACK REED, Rhode Island              SAM BROWNBACK, Kansas
    FRANK R. LAUTENBERG, New Jersey      WAYNE ALLARD, Colorado
    BEN NELSON, Nebraska                 LAMAR ALEXANDER, Tennessee

                        Charles Kieffer, Staff Director
                      Bruce Evans, Minority Staff Director
                                     ------

        Subcommittee on Commerce, Justice, Science, and Related Agencies

                    BARBARA A. MIKULSKI, Maryland, Chairman
    DANIEL K. INOUYE, Hawaii             RICHARD C. SHELBY, Alabama
    PATRICK J. LEAHY, Vermont            JUDD GREGG, New Hampshire
    HERB KOHL, Wisconsin                 TED STEVENS, Alaska
    TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
    BYRON L. DORGAN, North Dakota        MITCH McCONNELL, Kentucky
    DIANNE FEINSTEIN, California         KAY BAILEY HUTCHISON, Texas
    JACK REED, Rhode Island              SAM BROWNBACK, Kansas
    FRANK R. LAUTENBERG, New Jersey      LAMAR ALEXANDER, Tennessee
    ROBERT C. BYRD, West Virginia (ex    THAD COCHRAN, Mississippi (ex
        officio)                             officio)

                               Professional Staff
                                Gabrielle Batkin
                                 Erin Corcoran
                                 Kevin Kimball
                                 Douglas Disrud
                             Art Cameron (Minority)
                            Allen Cutler (Minority)
                           Goodloe Sutton (Minority)
                           Augusta Wilson (Minority)

                             Administrative Support
                                  Robert Rich

                                C O N T E N T S

                                  ----------

                            Thursday, March 1, 2007

                                                                       Page
    Department of Commerce:
        Office of the Secretary......................................     1
        National Institute of Standards and Technology...............    32
        U.S. Patent and Trademark Office.............................    40

                            Thursday, March 8, 2007

    Department of Commerce: National Oceanic and Atmospheric
      Administra-
      tion...........................................................   117
    National Science Foundation......................................   131

                            Thursday, March 15, 2007

    National Aeronautics and Space Administration....................   161

                            Thursday, April 19, 2007

    Department of Justice:
        Bureau of Alcohol, Tobacco, Firearms and Explosives..........   197
        Drug Enforcement Administration..............................   209
        United States Marshals Service...............................   226

                            Thursday, April 26, 2007

    Department of Justice: Federal Bureau of Investigation...........   295

                             Thursday, May 3, 2007

    Equal Employment Opportunity Commission..........................   343
    Nondepartmental Witnesses........................................   381

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                            THURSDAY, MARCH 1, 2007

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

                             DEPARTMENT OF COMMERCE

                            Office of the Secretary

    STATEMENT OF THE HONORABLE CARLOS M. GUTIERREZ,
                SECRETARY

                opening statement of senator barbara a. mikulski

        Senator Mikulski. Good morning, the Subcommittee on
    Commerce, Justice, Science, and Related Agencies will come to
    order. This is the first time in 13 years that I assume the
    chair of this subcommittee, and it's a great honor, and it's a
    bit of an emotional moment.
        In 1994, the power transferred to the other party, and in
    those 13 years, much has changed. Our economy has certainly
    changed, the challenges to our country have certainly changed,
    the jurisdiction and scope of this subcommittee has expanded.
        The one thing that will not change, is the enduring spirit
    of bipartisanship that has always been characteristic of this
    subcommittee, working as I did at VA/HUD, with Senator Bond,
    and last year with my esteemed colleague, Senator Shelby. We
    see ourselves as a partnership, on promoting what is right, and
    so this sense of cordiality, consultation, and civility will
    continue to be an enduring principle of this subcommittee.
        Just to outline a few of the priorities for this year, this
    subcommittee will focus on innovation, security, and
    accountability. When I look at the agencies in our
    jurisdiction, I see tremendous opportunities to promote
    innovation that creates jobs in our own country, makes our
    community more secure, while assuring accountability for the
    stewardship of the taxpayers.
        The funding that this subcommittee puts in the Federal
    checkbook, must meet the mission and mandate of each agency,
    and make a down payment on its priorities. The Commerce,
    Justice, Science Subcommittee is the innovation subcommittee.
    If America is going to be more competitive, we need to focus on
    funding and policies to develop new technologies, that lead to
    new products and new industries that create new jobs.
        It is not the role of this subcommittee to pick winners and
    losers. We are not an industry-controlled society. But it is to
    provide the basic and applied research that results in these
    new products and technology, and our agencies set the policies
    that will make sure that we have an innovation-friendly
    government.
        Over the next several weeks, we will initially focus on
    innovation. Then we will go to both Federal Bureau of
    Investigation (FBI) and law enforcement to focus on security.
    Underlying in all of the hearings will be questions related to
    accountability, and our stewardship of taxpayers dollars.
        We're looking at the National Science Foundation (NSF) that
    funds promising research and cultivates the next generation of
    science and engineers, particularly at the graduate level. The
    National Institute of Standards and Technology (NIST), that
    we're going to hear from later today, that funds new
    technologies, to make us more competitive. And, by the way,
    they win Nobel Prizes, too.
        The science at the National Aeronautics and Space
    Administration (NASA) and the National Oceanic and Atmospheric
    Administration (NOAA) help us better understand our planet and
    provides the scientific building blocks for innovation. Nothing
    gets kids more interested in science, like exploration and
    discovery in outer space, and the inner space in the ocean.
        We want to make sure, though, this--we have an innovation-
    friendly government. NIST sets measurements and standards that
    the private sector can rely on, and the world counts on. The
    U.S. Patent and Trademark Office protects our intellectual
    property, and the International Trade Administration (ITA)
    enforces our trade agreements.
        We also will be focusing on security, but that's for
    another day. This subcommittee will also be looking at
    accountability in terms of the expenditure of taxpayers
    dollars, and to make sure that, whether it's waste, or abuse,
    or poor performance, will not be tolerated. But today, we're
    going to kick off our innovation hearing with the Secretary of
    the Commerce Department, a long-advocate for America's role in
    international trade, promoting competitiveness, and encouraging
    innovation and technology.
        Later on, in the second panel, we'll be hearing from the
    Director of the National Institute of Standards and Technology
    and also the Director of the Patent Office.
        Today, I will want to know how the budget meets the
    Department of Commerce mission to foster, serve, and promote
    the Nation's economy, which is a little bit rockin' and rollin'
    today, but again, you know, we're a country of institutions,
    and innovation. I want to know how the budget will promote the
    mission, and how the Commerce Department will improve
    accountability.
        In the accountability areas, the three flashing lights we
    have are, the NOAA satellite program, also some issues that--
    the Patent Office, that I will raise from there, and also the
    managing of the 2010 census.
        But, today, we're very pleased to have the Secretary of
    Commerce, we want to hear what he has to say, we've enjoyed
    such a cordial relationship. He has been the President's link
    to the business community here, and to the growing
    international markets. So, we welcome him, and with that
    statement, I turn to my colleague, ranking member and,
    essentially, vice chairman, Senator Shelby.

                     statement of senator richard c. shelby

        Senator Shelby. Thank you, Senator Mikulski.
        As Senator Mikulski said, we've worked extremely well
    together, sharing many of the same goals and the expectations
    of the agencies that we oversee. We go back to our House days
    on the Energy and Commerce Committee, seems like yesterday, but
    it was more than that, I think Senator Mikulski would note.
        But I'm--Senator Mikulski, I'm pleased to serve beside you,
    once again on this subcommittee. I served as chairman, and now
    I serve as ranking, and you as chairman. Perhaps that'll change
    someday, but until it does change, we'll be working together
    either way.
        Today, I also welcome the Secretary of Commerce before the
    subcommittee as well as Dr. Jeffrey and Mr. Dudas. I look
    forward to learning more about how the 2008 budget request will
    improve the Department of Commerce, many important activities.
    The Nation, Mr. Secretary, relies heavily on the Department of
    Commerce that you head up, to maintain America's
    competitiveness within today's foreign marketplace, and to
    promote and to expand our international trade agreements.
        Through the programs of the Department of Commerce, the
    country is able to maintain high technical standards, as well
    as staying on the cutting edge of scientific research, all of
    which are fundamental, Mr. Secretary, to our Nation's
    leadership in the global market. You know this well.
        Overall, the Department of Commerce's budget request for
    2008 is $6.5 billion. This is an increase of $90.4 million from
    the funding level provided in the joint resolution for fiscal
    year 2007.
        Mr. Secretary, at this time, I want to also compliment you
    on how well your Department, through NOAA, continue to perform
    along the gulf coast in the wake of the devastating 2005
    hurricane season. Last year, the committee appropriated $150
    million in emergency supplemental funding through the
    Department to aid recovery efforts, which you needed. A portion
    of these funds went toward locating--and removing--marine
    debris deposited by the hurricanes. Fishing snags, and
    navigational hazards that halted maritime commerce, and pose a
    threat to the fishing industry of being removed.
        I've seen the images of salvage wreckage, which include
    fuel storage tanks, large trees, and even sunken barges. NOAA,
    with the help of partner agencies, is quickly and efficiently
    clearing obstructed shipping channels and fishing grounds,
    making the area safer, which is vital to the economies of
    Mississippi, Louisiana, and of course, my State of Alabama.
        I share Senator Mikulski's expectations for the Department
    of Commerce, particularly her emphasis on accountability. We
    have to be accountable. We will continue to monitor how the
    Department strengthens, and improves computer security to
    protect sensitive agency information, and we will continue our
    scrutiny on cost overruns and schedule delays which negatively
    impact NOAA's satellite program.
        The Department's request includes $1.2 billion for the
    Census Bureau, which--with nearly one-half of these funds
    directed toward the anticipation of the 2000 census--all comes
    under your jurisdiction.
        The decennial census, and the comprehensive collection of
    other surveys makes the Census Bureau a provider of fundamental
    data to Federal, State, and local governments, financial
    markets, and the public. These data sets are collected from a
    wide variety of sources, including businesses and citizens.
    Public trust, Mr. Secretary, in the security and
    confidentiality of this information is absolutely critical to
    the accuracy and the validity of the vital statistics published
    by your agency.
        There have been recent problems with the Department of
    Commerce and other Government agencies, of not having adequate
    security measures in place to protect personal data. Less than
    3 weeks ago, in my home State, Birmingham, Alabama, the
    Alabama--the Veterans Administration's employee laptop was
    stolen, it's all been in the news. It contained hundreds of
    thousands of records of personal information belonging to
    veterans. This is not under your jurisdiction, I know, but this
    is an incident, and that's unacceptable.
        I cannot emphasize how critical it is that the data be
    secure. The Census relies upon information from people
    divulging this data, and public trust in the security and
    confidentiality of the information being provided is absolutely
    crucial to the accuracy and validity of the vital statistics
    published by your agencies.
        The Department must never lose sight of the duty to protect
    the information it collects. I'm pleased to see the American
    Competitiveness Initiative, or ACI, has continued to receive
    support from the administration, through the National Institute
    of Standards and Technology budget request. ACI will keep the
    competitive edge that our Nation expects in the world economy
    through research and innovation, by focusing on the ingenuity
    of our people, and tying our capabilities to policies that will
    keep us at the forefront of scientific and technical
    advancement for generations to come.
        The collaboration of NIST and industry and academia is an
    excellent example of how this country can take advantage of
    these resources, and remain competitive in an increasingly
    challenging world. I believe that such collaboration can be
    seen in my home State of Alabama. NIST working with the
    University of Alabama at Birmingham is in early developmental
    stages for standards in research related to medical devices,
    for example. Such collaborations combine the expertise of our
    world-class research universities, with the needs of our
    Nation, and the end result is innovation and creative problem
    solving.
        I look forward to Dr. Jeffrey's testimony on how the work
    in NIST will continue to ensure the Nation's competitive edge.
        Mr. Secretary, I will also be interested in your comments
    about the rationale to exclude NOAA from ACI, something that I
    believe is a mistake. It seems logical to me that NOAA's vast
    research capabilities be utilized in these efforts. The
    strength of America's economy rests on our ability to innovate
    and to use the latest in technology, to solve the problems of
    today and preserve our economic and scientific leadership in
    the future.
        Certainly the activities of both NIST and NOAA will work to
    keep the Nation competitive, and inspire the next generation of
    scientists and researchers. I hope to learn more today, from
    Mr. Dudas, about how the U.S. Patent and Trademark Office
    intends to further protect American businesses in 2008 from
    theft and piracy.
        Intellectual property rights and its associated
    enforcement, continue to have an important impact on
    international trade, and the U.S. economy. Intellectual
    property-based industries in this country are one of the
    largest exporters in the global economy, as you know.
        Protecting the value of these rights is critical if we, as
    a Nation, are to continue being a world leader in innovation.
    Piracy of those rights costs the American economy and the
    American workers tens of billions of dollars each year.
        Mr. Secretary, we look forward to your testimony, and we
    appreciate your appearance here today.
        Senator Mikulski. Thank you very much, Senator Shelby.
        Just in terms of the rules of the subcommittee, we're going
    to recognize people in their order of arrival. And, if they
    have opening statements, we will put them in the record, or we
    ask that they incorporate them in their early questions, so we
    can move to the Secretary, and move to your questions.
        Mr. Secretary, would you proceed, and then we'll go to
    questions?
        Mr. Gutierrez. Thank you.
        Madam Chairman, and Senator Shelby and members of the
    subcommittee, I'm pleased to present President Bush's fiscal
    2008 $6.55 billion budget request for the Commerce Department.
    With your permission, I'd like to briefly discuss some key
    elements of our budget and programs, and submit my written
    testimony for the record.
        We believe this is a very disciplined budget. It is focused
    on the best use of taxpayer resources to advance America's
    economic and innovative leadership in an increasingly
    competitive world. So, we've had to make some choices regarding
    where we allocate the increases, and where we focus our time.
        Among the highlights of the increases are, $338 million for
    the Census Bureau to ramp up for 2010, and reevaluate data
    collection programs; $69 million for the National Institute of
    Standards and Technology to implement the second year of the
    President's American competitiveness initiative, and $123
    million for NOAA administration--for NOAA to fund high-priority
    oceans projects.
        Every agency in the Commerce Department is charged with the
    same critical mission--to promote American innovation and
    competitiveness, to create economic opportunities, and to
    improve the lives of the American people.
        I'd like to do something a little different this time,
    Madam Chairman, and that is to illustrate how Commerce agencies
    are fulfilling the mandate by developing, protecting,
    promoting, and strategically using innovative technologies,
    such as the global position system (GPS). I brought some
    examples here to show how new technology can be transferred to
    different bureaus within the agency, and I think it's also
    representative of how one technology for one given industry can
    be used in many industries around the country.
        As you know, the global positioning system technology is
    now so advanced, the device is as small as this cell phone. I
    actually have a GPS incorporated into the cell phone. GPS has
    multiple applications--the technology is used by governments,
    businesses, and individuals.
        The world's first atomic clock, which is the key innovation
    that enables GPS to work, was invented by scientists at the
    National Institute of Standards and Technology. This digital
    clock here, which is always exactly on time, contains
    technology that synchronizes with the NIST atomic clock. Its
    timing is extremely accurate, and it can adjust automatically
    for changes in daylight savings time.
        NIST is now pioneering new approaches to atomic
    timekeeping, such as the chip-scale atomic clock. We expect
    that chip-scale atomic clocks will soon be used in GPS
    receivers, cell phones, and other portable electronic devices,
    to greatly improve performance.
        Last year alone, the U.S. Patent and Trademark Office
    issued over 800 GPS-related patents. The Census Bureau is
    adopting GPS technology to collect street coordinates, and
    create a more accurate database for field personnel. It will be
    incorporating GPS-equipped handheld computers like this one
    into data collection operations during the 2010 census, to
    improve productivity, and reduce errors. Just as a matter of
    illustrating how advanced this is, in my previous role, our
    sales force had laptop computers, but they were very heavy, and
    very cumbersome. I find it today, it's actually quite light and
    very easy to hold up, so we continue to make great advances in
    this technology.
        Senator Mikulski. Excuse me, Mr. Secretary, that's what the
    census takers are going to have?
        Mr. Gutierrez. Yes.
        Senator Mikulski. So everything will--go ahead.
        Mr. Gutierrez. That's right. Whatever doesn't get sent
    through the mail, will be followed up using this handheld
    device. To get into it, they actually use their thumb, that
    protects the device from anyone else wanting to use it.
        Senator Mikulski. Could you, tell us then, what are the
    security measures? Because, we're not America's snoop, we're
    America's census takers.
        Mr. Gutierrez. Right.
        Senator Mikulski. How would it protect personal
    information?
        Mr. Gutierrez. Yes. This essentially will have a password
    and probably the most accurate device, which is a thumbprint
    for the specific enumerator.
        And if you'd like, I'll pass this onto you so you can take
    a look, why don't you just go ahead and give it to them. Thank
    you.
        Additionally, NOAA has created a network of GPS-tracking
    stations that makes available to the public minute measurements
    that are used to establish real estate boundaries, position
    bridges and roads, and do other geo-spatial work.
        The International Trade Administration (ITA) is working to
    remove trade barriers to increase export sales of innovative
    U.S. GPS technology, with NOAA and the National
    Telecommunications and Information Administration (NTIA). ITA
    is also taking the lead to ensure a level playing field for
    U.S. GPS manufacturers, as Europe enters the satellite
    navigation market.
        The Bureau of Industry and Security continues to monitor
    and control dual-use GPS technology, and export sales, to
    protect our national security while ensuring that America's GPS
    industry has access to open markets.
        Measuring the impact of our economy, of innovative R&D, and
    technologies like GPS to reflect new, 21st century realities,
    is now the subject of research by our Economics and Statistics
    Administration (ESA), in coordination with the private sector.
    This is an example of how we're thinking about technology, and
    an example of what we believe is success, to develop one
    technology that can be transferred quickly across many
    industries, so we can get the benefit across our economy.
        Madam Chairman, I use this GPS example to tell the story of
    the Commerce Department commitment to providing America's
    industries and workers with the services and tools needed to
    continue to make this the most competitive country in the
    world.
        The President's fiscal 2008 budget request for the
    Department is reflective of this commitment and more
    importantly, this commitment is behind where we have made
    decisions to allocate budget funds. It is carefully targeted to
    programs necessary to maintain our competitive edge in this
    very intense economy.

                               prepared statement

        I look forward to working with you to achieve this
    important goal, I thank you for giving me this opportunity to
    discuss the President's budget, and the role of the Commerce
    Department in advancing our Nation's economic strength. I feel
    very privileged to be able to represent the Department and the
    President at this very critical time in our history, and I'd be
    pleased to hear your comments and take any questions, thank
    you.
        [The statement follows:]

                 Prepared Statement of Hon. Carlos M. Gutierrez

        Madam Chairman and members of the subcommittee, I am pleased to
    appear before you today to present the President's budget request for
    the Department of Commerce. Our request of $6.55 billion in
    discretionary funds reflects a balance between the administration's
    commitment to promote and sustain economic growth, and the need to
    restrain discretionary Federal spending. Enactment of this budget will
    enable the Department to continue to support the innovative and
    entrepreneurial spirit of America and increase our competitiveness in
    the international marketplace.
        The President's fiscal year 2008 budget request of $3.82 billion
    for the National Oceanic and Atmospheric Administration (NOAA) reflects
    the administration's commitment to environmental stewardship. NOAA
    encompasses the National Weather Service, which provides critical
    observations, forecasts and warnings; the National Environmental
    Satellite, Data and Information Service, which provides timely global
    environmental satellite data; the National Marine Fisheries Service,
    which provides stewardship of the Nation's living marine resources and
    their habitat; the National Ocean Service, which measures and predicts
    coastal and ocean phenomena; the Office of Oceanic and Atmospheric
    Research, which provides research for understanding weather, climate,
    and ocean and coastal resources; and the Office of Marine and Aviation
    Operations, which operates a variety of aircraft and ships providing
    specialized support for NOAA's environmental and scientific missions.
        This budget request includes increases of $123 million for projects
    that will advance ocean science and research, protect and restore
    sensitive marine and coastal areas and ensure sustainable use of ocean
    resources. These initiatives will further the administration's
    commitment to make our oceans, coasts and Great Lakes cleaner,
    healthier and more productive, as reflected in the U.S. Ocean Action
    Plan and creation of a Cabinet-level Committee on Ocean Policy.
        The increases for ocean science and research include $20 million to
    implement the Ocean Research Priorities Plan, $16 million to support
    the Integrated Ocean Observing System, and $8 million to define the
    outer limits of the U.S. extended continental shelf.
        The increases to protect and restore coastal and marine areas
    include $8 million for management of the newly-designated Northwestern
    Hawaiian Islands Marine National Monument, $10 million for restoration
    of nearly 1,000 miles of habitat for the endangered Atlantic salmon in
    the Penobscot River watershed, $15 million for the Coastal and
    Estuarine Land Conservation Program, and $5 million for the
    implementation of coastal resource priorities identified by the Gulf
    Coast States.
        The increases for ensuring sustainable use of ocean resources
    include $20 million to improve fishery management, including $6.5
    million to implement the newly-reauthorized Magnuson-Stevens Act. An
    additional $3 million will support development of offshore aquaculture,
    for which the administration has proposed legislation to establish
    clear regulatory authority and permitting processes.
        The President's fiscal year 2008 budget also continues support for
    development and acquisition of geostationary and polar-orbiting weather
    satellites, for climate research programs, and for high priority
    weather forecasting endeavors including improvements to hurricane
    modeling and tsunami warning systems.
        The Economics and Statistics Administration (ESA) promotes the
    understanding of the U.S. economy and its competitive position. Under
    ESA's umbrella, the Bureau of Economic Analysis (BEA) provides key
    objective data, including the Gross Domestic Product, on the Nation's
    economic condition in a timely and cost-effective manner. The
    President's fiscal year 2008 budget requests $85 million for ESA
    Headquarters and BEA to provide statistics that are critical to public
    and private sector decision-making. This request includes an increase
    of $2 million to measure the impact of research and development along
    with other knowledge-based activities on economic growth.
        ESA's Census Bureau is the leading source of quality data regarding
    the Nation's population and economy, and the President's fiscal year
    2008 budget requests $1.23 billion in discretionary funds for the
    Census Bureau. This includes a program increase of $325 million for
    Periodic Censuses and Programs. Of this increase, the largest component
    is $281 million to continue reengineering the 2010 Decennial Census to
    reduce operational risk, to improve accuracy and relevance of data, and
    to contain total costs and provide for the 2008 Census Dress Rehearsal.
    Another program addition includes $43 million to support collecting and
    processing data from the 2007 Economic Census. Also included is an $8.1
    million initiative to provide quarterly and annual coverage of all 12
    service sectors, matching the coverage of the quinquennial Economic
    Census. This will greatly improve understanding and tracking of
    economic developments in the service sector, which currently accounts
    for 55 percent of Gross Domestic Product.
        The International Trade Administration (ITA) supports U.S.
    commercial interests at home and abroad by strengthening the
    competitiveness of American industries and workers, promoting
    international trade, opening foreign markets to U.S. businesses, and
    ensuring compliance with domestic and international trade laws and
    agreements. The President's fiscal year 2008 budget requests $412
    million for ITA to serve its goals, including an increase of $1.3
    million for monitoring and enforcement of compliance with Free Trade
    Agreements, concluding the Doha Round of World Trade Organization (WTO)
    negotiations and reducing market access barriers through relevant WTO
    committees.
        The Economic Development Administration (EDA) supports America's
    regions in their growth and success in the worldwide economy. The
    President's fiscal year 2008 budget requests $203 million for EDA to
    carry out its mission effectively.
        The Bureau of Industry and Security (BIS) regulates the export of
    sensitive goods and technologies to protect the security of the United
    States. The President's fiscal year 2008 budget requests $79 million to
    enable BIS to effectively carry out this mission. This request reflects
    greater efficiencies from the consolidation of administrative services
    and increased use of information technology in handling export
    applications, resulting in savings of $1.5 million from the President's
    fiscal year 2007 request adjusted for inflation.
        The Minority Business Development Agency (MBDA) focuses on
    accelerating the competitiveness and growth of minority-owned
    businesses by assisting with economic opportunities and capital access.
    The President's fiscal year 2008 budget requests $29 million to support
    MBDA's programs and expand the availability of services to minority
    business enterprises.
        The President's fiscal year 2008 budget request of $641 million for
    the National Institute of Standards and Technology (NIST), a part of
    the Technology Administration (TA), will advance measurement science,
    standards, and technology. NIST's activities provide key support for
    the administration's American Competitiveness Initiative. This budget
    request includes a $69 million increase for NIST laboratories, National
    Research Facilities, and Construction and Major Renovations. Of these
    funds, $47 million are proposed to support critical improvements to
    NIST's research laboratories in Boulder, Colorado and the NIST Center
    for Neutron Research in Gaithersburg, Maryland, while $22 million are
    proposed to support research programs in nanotechnology, quantum
    information science, climate change measurements and standards,
    disaster-resilience of structures and earthquake hazard reduction.
        The Under Secretary for Technology (TA/US) currently provides
    policy guidance to the Secretary of Commerce and the Technology
    Administration's component agencies (NIST and NTIS). Technology plays a
    critical role across every sector of the economy, and the promotion of
    technology in advancing America's competitiveness has become an
    integrated part of the mission across the bureaus of the Department. In
    keeping with this evolution, the President's fiscal year 2008 budget
    proposes to modernize the Department's approach to technology policy by
    elevating those activities to the secretarial level. This modernization
    includes the appointment of a senior advisor in the Department's Office
    of Policy and Strategic Planning who will chair a Department-wide
    Technology Council to coordinate technology policy activities across
    the Department in lieu of a stand-alone Technology Administration. The
    request of $1.6 million provides resources for the orderly transition
    of TA/US to the new coordinated structure.
        The National Technical Information Service (NTIS) collects and
    preserves scientific, technical, engineering and other business-related
    information from Federal and international sources and disseminates it
    to the American business and industrial research community. NTIS
    operates a revolving fund for the payment of all expenses incurred and
    does not receive appropriated funds.
        For the National Telecommunications and Information Administration
    (NTIA), the President's fiscal year 2008 budget request includes $19
    million in discretionary budget authority. During fiscal year 2008,
    NTIA estimates obligating $534 million from the Digital Television
    Transition and Public Safety Fund to support several programs created
    by the Deficit Reduction Act of 2005, most notably $426 million for the
    Digital-to-Analog Television Converter Box Program. Following enactment
    of the Call Home Act of 2006, up to $1 billion will be awarded in
    fiscal year 2007 to qualified applicants in the Public Safety
    Interoperable Communications Grant program, though outlays will
    continue over several fiscal years.
        Furthering the mission to promote the research, development, and
    application of new technologies by protecting inventors' rights to
    their intellectual property through the issuance of patents, the
    President's fiscal year 2008 budget requests $1.9 billion in spending
    authority for the U.S. Patent and Trademark Office (USPTO). The USPTO
    will use these funds to reduce application processing time and increase
    the quality of its products and services. This includes $36 million to
    hire new examiners to improve processing times and increase the quality
    of its services. Consistent with prior years, the administration
    proposes to fund the USPTO budget exclusively through offsetting fee
    collections. Fee collections for fiscal year 2008 are projected to
    cover the proposed increases.
        The USPTO, the National Intellectual Property Law Enforcement
    Coordination Council (NIPLECC), and ITA participate in the Strategy
    Targeting Organized Piracy (STOP!) initiative's goal of ending trade in
    counterfeit goods. This initiative places additional intellectual
    property experts in high priority markets, trains foreign government
    officials in intellectual property protection, and educates foreign
    publics about the importance of intellectual property. STOP! also
    provides resources for harmonizing patent laws, and for supporting the
    negotiation of intellectual property sections of free trade agreements.
        Today, I would like to show how diverse components of the
    Department contribute to innovation and competitiveness. Many people
    see the Department of Commerce as a conglomerate with diverse and
    distinct missions. While the Department's bureaus encompass broad, but
    distinct, areas of the American economy, their core mission is U.S.
    competitiveness.
        Innovation is essential to competing globally and enhancing our
    quality of life. This is increasingly important as political and
    technological changes open access to the global economy--creating both
    new markets and increased competition. The Department of Commerce is
    well positioned to help America address this challenge.
        There are many areas across the Department where we are working on
    different aspects of competitiveness. Technological innovation is one
    of this Nation's most significant competitive advantages. The
    Department promotes and protects technological innovation through the
    efforts of its bureaus. A prime example is Global Positioning System
    (GPS) technology. Highly accurate timekeeping is a crucial element of
    GPS. The Department's National Institute of Standards and Technology
    (NIST) invented the core GPS timekeeping technology--the world's first
    atomic clock--in 1949 and continues to make significant improvements in
    its accuracy.
        GPS is made up of more than two dozen satellites in medium Earth
    orbit, which transmit signals that allow GPS receivers to determine
    location, speed and direction. Since the launch of the first
    experimental satellite in 1978, GPS has become a vital tool to
    governments, businesses, and private citizens worldwide. Its navigation
    capabilities are indispensable not only to the airline and shipping
    industries, but also to many Americans who now have personal GPS
    devices that they use in their cars, on bikes, and while camping and
    hiking.
        As the timekeeping technology improves, so do the navigation
    capabilities of GPS, expanding its uses into more areas. Currently,
    NIST operates the world's best standard atomic clock, NIST-F1, with an
    accuracy equivalent to about one second in 70 million years. NIST
    scientists are developing new atomic clocks that will soon be accurate
    to one second in many billions of years. NIST also is pioneering new
    approaches to atomic timekeeping such as the chip-scale atomic clock,
    which could dramatically improve GPS receiver performance and impact
    many other technologies.
        In addition to developing technologies underlying GPS, the
    Department, through the United States Patent and Trade Office (USPTO),
    protects individual and corporate inventors of GPS technology. In
    exchange for this protection, inventors are required to share
    information about their inventions, allowing others to build upon them
    and create further innovations. Taking GPS as an example of how well
    the patent system encourages innovation, the USPTO issued over 800 GPS-
    related patents in 2006 alone.
        The Department, through the USPTO, also helps protect both GPS
    manufacturers and the public by registering trademarks. Manufacturers
    rely on trademark protection received from registering their trademarks
    with the USPTO to prevent others from marketing products under their
    good names. The public relies on trademarks as an assurance of the
    quality and source of the products they purchase.
        The Department understands that GPS and other technological
    innovations are critical to making the U.S. more globally competitive.
    As such, the International Trade Administration (ITA) works closely
    with the United States Trade Representative to develop Free Trade
    Agreements (FTA) that will eliminate duties on GPS receivers and
    transmitters in all FTA countries. This will expand opportunities for
    U.S. businesses, allowing them to export these GPS technologies to FTA
    countries duty-free. ITA, along with NOAA and NTIA, is also taking the
    lead in trade discussions with Europe to maintain a level playing field
    as Europe's upcoming Galileo system enters the satellite navigation
    market.
        Additionally, ITA's U.S. Commercial Service assisted iSECUREtrac
    Corp, based in Omaha, Nebraska, with a contract for the sale and
    installation of the first ever state-of-the-art Canadian-based GPS host
    monitoring system capable of serving the mission critical offender
    monitoring requirements of every Canadian Province.
        As trade barriers are reduced and technology transfer becomes more
    seamless across the globe, GPS technology is increasingly disseminated
    worldwide for both civilian and military use. The Department's Bureau
    of Industry and Security (BIS) oversees and implements regulations that
    clearly distinguish between military and civilian GPS user equipment to
    foster economic growth in the U.S. GPS manufacturing industry while
    protecting U.S. national security. These regulations define, identify,
    and distinguish military receivers, encryption devices, and GPS
    components with missile or certain defined airborne applications from
    their civilian counterparts. These controls have helped accelerate U.S.
    industry's exports to foreign GPS markets and have enabled the U.S. GPS
    manufacturing industry to retain a large share of those markets.
        Prior to September 1991, most GPS user equipment shipped abroad
    required individual validated licenses to ensure compliance with U.S.
    export control regulations. Under current regulations, civilian GPS
    receivers, other satellite equipment, and associated telecommunication
    equipment are allowed to be shipped, with certain restrictions, to most
    destinations without a license. However, BIS has implemented stringent
    regulatory controls to prevent transfer of GPS equipment to terrorist-
    supporting countries, as well as to those end users known to be
    involved in proliferation activities. These export license applications
    are closely scrutinized and vetted in an interagency review process
    coordinated by BIS.
        Beyond making GPS work better, helping facilitate the success of
    U.S. businesses in the global marketplace, and ensuring that the global
    spread of GPS technology will not endanger our national security, the
    Department utilizes advances in technology to significantly improve how
    we conduct business--making our processes more efficient. For example,
    the Census Bureau launched a reengineering effort in preparation for
    the 2010 Decennial Census that centered on using technology to improve
    processes and keep down overall lifecycle costs. GPS technology is
    critical to the success of this effort. The first step involves
    collecting the GPS coordinates of streets, county by county, across the
    Nation. This multi-year effort will be completed in 2008, giving the
    Census Bureau an accurate database for the country. This database, the
    Topologically Integrated Geographic Encoding and Referencing system
    (TIGER), will then allow personnel operating in the field to know their
    relative position--a critical aspect of finding the right housing unit.
        GPS-equipped handheld computers (HHCs) will be used for data
    collection in several major field operations during the 2010 Decennial
    Census. During the address canvassing operation, the HHCs will be used
    to record GPS coordinates for every structure, including newly
    identified addresses. Later, using GPS, the HHCs will enable staff to
    conduct data collection for the non-response follow-up operation, allow
    for the removal of late mail returns, and record daily payroll for all
    census enumerators. The use of GPS technology will result in improved
    productivity and reduced errors.
        The Economics and Statistics Administration is building measures of
    innovation in the economy generated by such technological advancements
    as the GPS-equipped HHCs. Similarly, the Bureau of Economic Analysis is
    refining its ability to measure the impact of research and development
    on the economy.
        In addition, NOAA uses GPS to navigate its fleet of ships; enforce
    fishery boundaries in open waters to prevent overfishing; survey the
    Nation's coastlines, waterways, and airport approaches; and make
    improved weather forecasts. NOAA also provides a public service to the
    Nation known as the National Continuously Operating Reference Station
    (CORS) network. The CORS network consists of over a thousand GPS
    tracking stations that enable users to refine GPS measurements down to
    the centimeter level, which is particularly important for measuring
    real estate boundaries, positioning bridges and roads, and doing other
    geospatial work.
                                   conclusion
        The Department of Commerce's development, promotion, and
    advancement of GPS technology demonstrates how the Department
    successfully encourages innovation to create economic growth without
    sacrificing our national safety. It also illustrates that Commerce is a
    diverse group of agencies, with varied expertise and differing needs,
    all engaged in a common commitment to keep the United States at the
    global forefront of competitiveness and innovation. This is the way we
    at the Department do business every day--working together, across
    disciplines, making real, positive, and sustained impacts on the
    American economy.
        The President's fiscal year 2008 budget effectively meets those
    needs, while exercising the fiscal restraint necessary to sustain our
    economic prosperity. I look forward to working with the committee to
    keep our Nation's economy growing and strong, and to promote and
    preserve the American people's entrepreneurial spirit.

        Senator Mikulski. Well, thank you very much, Mr. Secretary
    for that informative conversation and also bringing us in the
    real-world capability. And, of course, it would involve the
    Patent Office as well, because while people invent it, we gotta
    protect it, so others don't steal it.
        But, let me get right to the heart of my questions. As we
    look at the President's budget request of $6.5 billion, about
    one-half is in NOAA, and about one-third is in the Patent
    Office, the Patent Office about $1.9 billion--we'll round it
    off and say $2 billion--and there were other related agencies.

                              PROMOTING INNOVATION

        Let's go to your promotion of innovation, you meaning
    Commerce, and not you personally. How do you see, given that
    you have the major agencies of NIST, NOAA, the Patents and some
    other related agencies--where is it in your operation that
    says, we've got to promote innovation, and I'm going to stand
    sentry over it to make sure we're coming up with the kind of
    research ideas, and then as industry does what it does--which
    is invent--we protect them. Do you have a one-stop shop? How
    does this work?
        Mr. Gutierrez. Stepping back, the way we're thinking about
    it, is our whole economy is really a partnership between the
    private sector, the public sector, and academia. The private
    sector does about two-thirds of all the research and
    development (R&D) spending in the country, and that R&D in the
    private sector is very focused on the development side.
        The Government does about one-third, and of that one-third,
    its primary focus is on the ``R,'' the research side. We tend
    to do projects that are very long term in nature, that the
    private sector sometimes does not have the time or the
    resources, or the competitive environment to be able to take
    the time to look out 10 or 15 years.
        As we work on our technologies, we have to ensure that
    there's a customer on the other end. And that customer, of
    course, is the private sector. Dr. Jeffrey, I hope, will be
    talking about members of the private sector that work inside of
    NIST. And every time we open up a project in NIST, it starts
    out with members of the private sector who are interested in
    the developments of that project.
        As part of our overall system, we have to have a patent and
    trademark operation that responds to increasing demands of
    businesses, and increasing demands to be responsive to issue
    patents, and to issue trademarks and copyrights. In essence, we
    participate in the creation of the innovation, we coordinate
    very closely with the private sector, and then we enable that
    innovation by having an efficient Patent and Trademark Office.
    I would say innovation is embedded in every one of our bureaus.
        Senator Mikulski. But you have a coordinating council?
        Mr. Gutierrez. Yes, we do.
        Senator Mikulski. That you chair?
        Mr. Gutierrez. This is a new Technology Policy Council, as
    well as an Innovation Metrics Advisory Council, which we've
    just started.
        Senator Mikulski. Yeah, I've read about it in Technology
    News, I actually read these things. It's great.
        Mr. Gutierrez. We just had our first meeting, too.

                  PATENT AND TRADEMARK OFFICE REMEDIATION PLAN

        Senator Mikulski. Well, in--first of all, I think, I know
    Senator Shelby wants to talk about NOAA and why it wasn't in
    the President's competitive agenda, but I'm going to take up
    the issue of intellectual property, and then come back to NOAA
    and its satellites.
        When I read the inspector general's report of the commerce,
    it talked about the major challenges of the Department, and it
    said it was making improvement. But one of the things that it
    raises is the fact that we have to ensure that the Patent
    Office uses its authorities and flexibilities to achieve better
    results--and I would say money, too, because that goes with it.
        In the last 5 years, under Senator Gregg, Senator Hollings,
    and Senator Shelby, and now me--we've increased Patent Office
    by 50 percent. And you're close to $2 billion. Yet, there
    continues to be reports about the management issues, and I know
    we'll hear about it more in the testimony--the lack of
    effective strategies to communicate and collaborate with
    examiners, of course, the production quotas, which is the
    tremendous backlog, and the lack of ongoing technical training
    for examiners. I won't go through every item, but I commend to
    you the GAO report, and also the major challenges.
        Now, we want to hear from Mr. Dudas about this. I would
    like to have a remediation plan. And I'd like to have it from
    Mr. Dudas, as the Chief Executive in the agency, but I would
    also ask that you personally review that remediation plan, and
    get back to us in about 45 days. So, that when we do this
    year's appropriation, it is about money, it is about
    management, it is about leadership, and it's about protecting
    our ideas.
        So, if we could have a specific remediation plan that goes
    along with this, I think we would go a long way.
        Mr. Gutierrez. Yes, Madam Chairwoman, we will do that, and
    we will have a plan ready for your review. I think that's an
    excellent idea.
        [The information follows:]
            USPTO Report ``The Path to the Future, the Next Steps''
                                                             April 2007
                               executive summary
        Fiscal year 2006 was a record-breaking year for the USPTO. Our
    8,500 employees had the highest production, highest hiring, highest
    usage of electronic filing and electronic processing, highest number of
    examiners working from home and lowest error rate in history. While
    this is a source of pride, we all recognize that even more can and must
    be done. Below is a list of initiatives that are either in place, being
    piloted for implementation, or are planned for implementation as
    permanent improvements.
                               measures in place
    Pendency/Productivity
        The USPTO has built a performance-based culture.
        Hiring 1,200 new patent examiners per year (fiscal year 2006-2012).
        Improved Training for new patent examiners in a university-style
    environment.
        Accelerated Examination--a guaranteed complete patent examination
    in 12 months.
        Increased overtime authorization levels and a home office laptop
    program to increase morale and encourage productivity.
        Electronic Processing from start to finish.
        Work Sharing with foreign patent offices to decrease U.S.
    examiners' workload.
        Flat Goal pilot program to allow examiners more flexibility and an
    opportunity to earn increased bonuses for increased productivity.
        Early Interviews between applicants and examiners--speeds the
    process by focusing issues and minimizing misunderstandings.
    Human Resources
        Aggressive and Expanded Recruitment efforts targeting able
    candidates likely to succeed in an individualized, production-oriented
    environment.
        Higher Pay: Special pay rate for examiners; bonuses for higher
    production and quality; recruitment bonuses; and retention bonuses.
        Teleworking: The USPTO has the gold standard for federal
    teleworking. More than a thousand patent and trademark examiners are
    working from home with hundreds more added each year.
        Increased and better communication with employees through
    management training, employee training and communication initiatives.
                               measures proposed
        Applicant Quality Submissions aid and hasten examiner reviews.
        Public Review of published applications.
        Public Quality Submissions allow the public to comment on pending
    applications with more prior art, which results in quicker, higher
    quality examiner reviews.
        National Workforce so USPTO employees may ``work from anywhere'' in
    the United States.
        Alternative approaches to examination.
        University certification program to prepare students for examiner
    jobs at USPTO.
        The charts below illustrate the impact on the Pendency,
    Productivity, and Quality measures if the Proposed Applicant Quality
    Submissions are executed:

    ----------------------------------------------------------------------------------------------------------------
                               Fiscal year                               Pendency      Productivity       Quality
    ----------------------------------------------------------------------------------------------------------------
    2007............................................................            33.0            75.8            96.0
    2008............................................................            34.7            73.1            96.0
    2009............................................................            34.7            80.4            96.0
    2010............................................................            34.8            87.0            96.0
    2011............................................................            32.9            91.4            96.0
    2012............................................................            28.0            92.6            96.0
    ----------------------------------------------------------------------------------------------------------------

        As the chart above illustrates, in fiscal year 2006 the USPTO met
    90 percent of the performance goals established pursuant to the
    Government Performance and Results Act of 1993 (GPRA), providing its
    best record to date for achieving important measures of performance and
    results.
        This report lists and discusses our ongoing, planned, and
    envisioned initiatives intended to address the challenges facing the
    USPTO in terms of patent pendency, patent application backlog, and the
    effective recruitment, training and retention of patent examiners.
               addressing patent pendency and application backlog
    Hiring Patent Examiners
        With full access to our collected fees, the USPTO hired a record
    1,218 patent examiners in fiscal year 2006, exceeding our hiring goal
    by more than 200 examiners. The USPTO plans to hire 1,200 patent
    professionals a year in fiscal year 2007 through fiscal year 2012 for a
    gross total of at least 8,400 patent examiner new hires by end of year
    fiscal year 2012. After attrition, USPTO staffing increased by 683 in
    2006 and will increase by 3,900 over 2006-2012.
        While hiring a sufficiently qualified and productive patent corps
    is a critical factor in controlling pendency and reducing backlog, we
    recognize that hiring alone is simply not enough. Supplemental
    initiatives, including fuller participation by patent applicants as
    described below, will help us attain our long-term strategic goal of
    reducing patent pendency from the current 33 months to 28 months for
    final disposition, by 2012.
    Full Access to Fees
        We are thankful that the subcommittee and your House colleagues
    have ensured that our current fee schedule remains in effect for fiscal
    year 2007. We are also pleased that the fiscal year 2008 budget request
    gives the USPTO full access to the $1.9 billion in fees we expect to
    collect. This is the fourth consecutive year that the President's
    budget recommends full access to collected fees, and the USPTO
    appreciates the continued Congressional support for that funding level.
        The Administration is considering for submission to Congress draft
    legislation that will make permanent our current fee schedule. We look
    forward to working with the subcommittee toward enactment of
    appropriate legislation.
        Full access to user fees is needed to allow the USPTO to continue
    its successful model of disciplined focus on real measures that enhance
    quality and increase production, increase hiring and training, promote
    electronic filing and processing, provide telework opportunities for
    our employees, and improve intellectual property protection and
    enforcement domestically and abroad.
        Full access permits us to finance the initiatives--particularly
    initiatives requiring long-term planning and commitment--necessary to
    providing and maintaining reliable, functioning systems. Without
    Congressional support, we would not be able to function in a business-
    like manner and achieve these results.
    Electronic Filing and Processing
        The USPTO continues to promote electronic filing and processing of
    patent applications as a means of reducing paper-based inefficiencies.
    Patents implemented the Electronic Filing System-Web (EFS-Web), a user-
    friendly, Internet-based patent application and document submission
    program. Prior to fiscal year 2006, less than 2 percent of patent
    applications were filed electronically. After working with the public
    and introducing the much-improved EFS-Web system in late 2006, a total
    of 14 percent of patent applications were filed electronically in
    2006--with more than one-third being filed electronically in the last
    month of fiscal year 2006. We anticipate that electronic submission of
    new applications will grow to more than 50 percent in fiscal year 2007.
    We will work with our stakeholders to further promote electronic filing
    and interaction with patent applicants.
        We are developing the electronic Patent File Wrapper (PFW) that in
    conjunction with current Patent Automated Information Systems will
    allow for a fully automated, text-driven patent application processing
    system.
        Operating in today's wired world requires that the USPTO have full
    electronic processing that is safe, secure and continually available to
    employees, applicants and stakeholders. We will continue to work toward
    that goal.
    Innovative Processing
        The USPTO is developing and reviewing a variety of innovative
    patent processing initiatives including a new offering for the public
    called ``Accelerated Examination.'' Under this program, which began
    August 26, 2006, any applicant who wants or needs quick turnaround can
    obtain a patent determination within 12 months. In exchange for this
    quick turnaround, applicants must file a complete application, agree to
    interviews and accelerated response periods, must file and prosecute
    their application electronically and must provide more information
    about the invention to the USPTO in the form of a prior art examination
    support document. The first application to be completed under this
    program was filed on September 29, 2006, and the patent issued on March
    13, 2007 (less than 6 months from date of filing).
        The USPTO is also cooperating in a pilot program involving peer
    review of patent applications. Up to 250 applications, assigned to
    Technology Center 2100, which examines computer-related technologies,
    will voluntarily be placed, by the applicants, on a non-USPTO web site
    for an expanded and public review by a peer group of patent users,
    attorneys and academics. The pilot group of applications will include
    applications filed by small entity filers. The public group will
    determine and submit to the USPTO what they consider the best available
    and relevant prior art. The pilot will test whether this peer review
    can effectively identify prior art that might not otherwise be found by
    our examiners during the typical examination process. We will also make
    an evaluation as to whether this process results in measurable
    examination timesavings and quality improvements.
        We will continue to collaboratively work with our stakeholders to
    determine if there is some combination of examination alternatives to
    the current one-size-fits-all filing and examination process that would
    better meet applicants' needs while providing a more efficient use of
    USPTO examination resources.
        The USPTO, with the help of its Congressionally mandated Patent
    Public Advisory Committee (PPAC), is reaching out to the intellectual
    property community to seek their input on improvements to the patent
    system in all areas including, but not limited to, examination,
    prosecution, enforcement and levels of patenting. Through the PPAC, we
    anticipate an open dialogue with patent stakeholders and the public as
    to what the Office needs to do to best protect and encourage innovation
    in America. We are open to all possibilities from minor improvements to
    a dramatic overhaul of patent protection, if necessary. We are looking
    at a wide variety of alternative examination products from those
    needing statutory changes to those that can be implemented immediately
    under our existing authorities. We look forward to working with the
    Congress and the public to develop these possible alternative
    examination products that effectively and fairly balance the needs of
    the Office and the interests of the intellectual property community to
    provide a system that allows for maximum enforceability.
        Our long-term strategic goal is to reduce patent pendency from the
    current level of 33 months to 28 months for final disposition, by 2012.
    Metrics include reduction of the initial waiting time for patent
    applications (first-action pendency) in our most backlogged Technology
    Centers and successful implementation of various initiatives (such as
    Accelerated Examination) that ensure goal achievement by 2012.
        The USPTO is both implementing initiatives and exploring strategies
    that will reduce the backlog of unexamined patent applications and
    improve the timeliness of a patent examination.
    Applicant Quality Submissions
        By shining the light inward on the USPTO, we have had the
    opportunity to improve our system and offer applicants new
    alternatives. As policymakers, we must also analyze how the patent
    system can be improved from the outside in. Perhaps the most important
    element of ensuring that patent examinations are of the highest quality
    and completed as efficiently as possible is what the applicant files.
        The patent applicant has the most knowledge, the most opportunity,
    and the most to gain by providing the USPTO with the best possible
    information about his or her invention. Unfortunately, in many cases,
    applicants have expressed strong concerns about providing the USPTO
    with information about their applications. In some cases, applicants
    simply do not want to provide important information for fear that it
    will limit the scope of the patent they may receive (though such a
    limitation would be right under the facts and the law) or do not want
    to do the work associated with better defining their inventions. In
    some other cases, applicants or their attorneys recognize that
    providing information improves quality and timeliness but fear that the
    legal system unfairly punishes them with draconian penalties for
    innocently omitting information. The theory is that if one provides
    information, he or she must do so perfectly or potentially lose the
    patent; whereas, a failure to share any information carries no
    consequences.
        Quality absolutely begins with the application. Nobody knows more
    about the invention than the applicant. In the Accelerated Examination
    Program--where the first patent issued in less than six months--the
    applicant is required to submit to an interview and to provide a search
    and a support document. Our limited experience with this initiative is
    that both applicants and examiners believe that more written and oral
    information from applicants improves quality and timeliness.
        We would like to take the success of this model of applicant
    quality submissions to lower pendency, raise productivity and increase
    quality in all patent examinations. To that end, we believe that
    applicants should be given every opportunity and responsibility to
    provide more and better information to examiners about their
    inventions. For such a program to be successful, policymakers must work
    to ensure that more and better information does not become burdensome.
    Policymakers would also need to consider how the current doctrine of
    inequitable conduct may discourage applicants from fully and fairly
    sharing relevant information with the USPTO.
    Rule Making and Examination Reform
        We believe that to effectively address and control pendency, and
    reduce backlog, the USPTO needs to receive more and better-focused
    information from applicants themselves and from the public at large.
    The USPTO has proposed and will propose regulations and administrative
    changes governing submission of patent applications that will enable
    our examiners to make more efficient and informed patentability
    determinations.
        First, we have proposed limiting the number of continuing
    applications and continued examination requests to provide an incentive
    for applicants to focus their initial patent applications on their
    inventive contributions. Second, we have proposed to limit the number
    of claims that are initially examined in order to provide an incentive
    to focus the examination process. The first and second proposals have
    optional procedures which continue to provide an applicant flexibility
    where the applicant may need additional continuing applications or
    initially examined claims upon a showing of that need or by shouldering
    additional responsibilities. Numerous comments have been received in
    response to these proposals and are being carefully considered prior to
    promulgation of any final rule. In parallel, we have proposed revisions
    to our information disclosure requirements to focus our limited
    examination resources on prior art that is most relevant to the
    examination process. Additionally, we are considering a new practice
    change to require applicants to conduct a pre-examination search and
    provide to the Office prior to examination a report on why they believe
    that they are entitled to the claims presented in view of the
    information discovered during that search.
        Our hope is to achieve examination reform that creates better-
    focused examination and enhances information exchange between applicant
    and examiner. We look forward to working with the public and Congress
    to develop an enhanced examination system that effectively and fairly
    balances the needs of the Office and the interests of patent
    applicants, interested third parties and the general public.
    Public Quality Submissions
        While the USPTO currently has a procedure for submission of prior
    art after publication, which allows submission by third parties within
    two months of publication, the procedure does not allow explanations or
    other information about the patents or publications, absent express
    written consent of the applicant.
        We look forward to working with Congress to develop a submission
    procedure that effectively and fairly balances the interests of the
    patent applicant, interested third parties and the general public.
        We are also looking to provide assistance to the open source
    community in their development of an open source database to provide
    examiners with potential prior art.
    Work Sharing
        The USPTO continues to work with the world's major intellectual
    property offices to study, review and implement work-sharing efforts
    that promote examination efficiencies in each participating office. The
    USPTO launched a trial cooperation program with the Japan Patent Office
    (JPO) last summer to leverage fast-track patent examination procedures
    already available in both offices to obtain corresponding patents
    faster and more efficiently. It also permits each office to benefit
    from work previously done by the other office, in turn reducing
    examination workload and improving patent quality.
        This program is a significant first step in cooperative efforts to
    support United States and Japanese industries in their global patent
    prosecution activities and represents the first concrete implementation
    of a work-sharing arrangement between the USPTO and the JPO.
        The USPTO continues to have informal discussions on expanding the
    work-sharing program to other intellectual property offices, mainly in
    Australia, the United Kingdom, and Canada. The USPTO will continue its
    efforts in expanding this program and will develop a coordinated
    approach among the offices in order to streamline practices and
    procedures.
           addressing recruitment, training and retention challenges
    Making USPTO an ``Employer of Choice''
        Continuing to attract and retain the finest public servants is a
    growing challenge. Our employees are at the heart and soul of our
    intellectual property system, and we need to do everything we possibly
    can to ensure they have an environment of trust, respect and
    opportunity.
        The USPTO has developed and implemented a variety of workplace-
    friendly, family-friendly initiatives that have earned the USPTO
    recognition by Business Week magazine as one of the best places in
    America to launch a career and to round out one's career. The USPTO has
    also been lauded by Families magazine as one of the best places in the
    Washington area to work if you have a family. We will expand and
    improve our workplace offerings and attributes to promote the USPTO's
    image as an ``employer of choice.''
    Recruitment
        The USPTO's recruitment efforts are strong and nationwide in scope.
    Planning efforts have culminated in targeted TV, print, radio and
    Internet banner advertising, and developing a brand image, ``Examine
    the Possibilities''. Additionally, in 2004, the USPTO increased career
    and job fair participation and, in 2006, participated in over 180
    events throughout the country. Also, in 2006, a recruitment incentive
    (up to $9,900 per year for four years) was offered to computer and
    electrical engineers.
        A pre-employment compatibility assessment tool has been developed
    and is in use for all examiners applying through USA Staffing.
        We are exploring partnerships with universities to offer
    intellectual property courses to science and engineering students,
    develop an internship program, and train students in intellectual
    property to create a ready pool of potential examiner candidates.
    Internal Communication
        Consistent with recommendations made by the Government
    Accountability Office in 2005, the USPTO has implemented a wide variety
    of initiatives to address communication issues, including a pilot
    program for an Office of Internal Communications in October 2006.
        The Commissioner for Patents and Deputy Commissioners host regular
    Town Hall meetings with employees at all levels throughout the Patent
    organization. First line supervisors are required to hold regular
    employee meetings and are held accountable through their performance
    plans. In 2005, monthly meetings were instituted with Patent
    management, Administration management and patent union representatives,
    as well as quarterly Joint Labor Management meetings.
        In 2006, we also had the first ever Management Conference for all
    of the USPTO's managers, numbering over 500 employees. For two days,
    our managers attended sessions and collaborated on best practices of
    how to manage the highly skilled and dedicated workforce at the USPTO.
        On November 1, 2006, the USPTO held an agency-wide celebration
    event where management thanked and praised employees for their efforts
    in making 2006 a record-breaking year.
    Training and Development
        In fiscal year 2006, the USPTO implemented a university approach to
    training new examiners. The university method provides training to new
    examiners in a classroom setting for eight months, rather than using
    the traditional one-on-one training model. This allows us to deliver
    intensive training to the newly hired examiners, leaving more
    experienced examiners and supervisors to focus on quality examination
    and reducing the backlog. In fiscal year 2006, 123 examiners completed
    the university's eight-month program. So far in fiscal year 2007, a
    total of 303 new examiners completed the training, with an additional
    451 examiners slated to graduate by the end of the fiscal year. To
    date, 871 patent examiners are either in the Patent Academy or have
    completed the eight-month program.
        Patent examiner training programs have been enhanced to include
    eight hours of technical training. We will work to enhance the skill
    sets of examiners authorized to train others by providing formal
    training to all personnel who are responsible for training new
    examiners and reviewing their work.
        Sixty-six patent examiners currently participate in USPTO's law
    school tuition reimbursement program, with tuition assistance up to 24
    credits per fiscal year. In addition, tuition assistance up to $5,000
    per examiner per fiscal year is available for technical courses.
    Pay and Retention
        Last year, 60 percent of all patent examiners exceeded their goals
    in production and received a bonus for exceeding those goals. We are
    proud of their achievements. The average total compensation package
    (salary plus bonuses) for patent examiners is $99,000. While the U.S.
    Government's average pay grade is at the GS-8 level, the average at the
    USPTO is GS-11.
        All patent examiners received a 7 percent special pay rate increase
    in November 2006, making their total special pay rate a 10 percent
    increase.
        The USPTO expects to increase productivity in patents by offering
    examiners more opportunities to determine when and how they do their
    work, and achieve higher bonuses. The USPTO is piloting a voluntary
    flat goal program for patent examiners that builds upon the successful
    system in Trademarks and moves production away from an hourly-based
    system. Highlights of the program include awards of up to $5,000 per
    quarter; flexibility in where work is done; and a predetermined amount
    of work based on grade and docket.
        In 2006, USPTO management submitted proposals to patent union
    representatives for a new collective bargaining agreement that would
    replace a previous agreement negotiated in 1986. Proposals include
    enhanced patent examining monetary awards as well as a stand-alone
    quality award.
        Because more experienced examiners naturally are able to review
    cases faster, and in a more accurate manner, the USPTO has implemented
    a program of recruitment bonuses to hire and retain the talented
    engineers and scientists we need to examine our increasingly complex
    applications. We are reviewing other possible programs to help us
    compete with industry for professionals in the ``hot'' technology
    sectors. We want to be an ``employer of choice'' to the pool of tech
    professionals.
        The USPTO's fiscal year 2006 attrition rate was 10.6 percent--lower
    than comparable industry averages and a significant improvement over
    comparable past years. However, we believe we can further improve upon
    that number. The USPTO is reviewing additional incentive programs to
    recruit, retain and reward top performers. We will continue to become
    more flexible to enable us to attract and retain those top performers.
    USPTO Telework--the ``Gold Standard''
        As we hire over 1,200 patent examiners a year, much of our human
    capital focus is on recruitment, retention, a balancing of work/life
    issues, less commuter time and more productivity, and the need to more
    efficiently manage our space.
        In fiscal year 2006, a pioneer group of 500 patent examiners
    participated in the newly implemented Patent Hoteling Program (PHP).
    The PHP was developed using the very successful Trademarks telework
    program model. PHP is a voluntary program and provides patent examiners
    the ability to work from home with complete on-line access to USPTO
    resources. We will add 500 more examiners to the hoteling program each
    year for the next several years. The goal of the hoteling program is to
    change the boundaries of the old workplace patterns allowing for
    decreased commute time, a more efficient use of office space, and even
    a more balanced lifestyle for our employees. This all translates into
    increased employee productivity and satisfaction, as well as higher
    employee retention.
        Patents is also piloting a work-at-home program for technical
    support staff.
        On a more long-term basis, we hope to create a workplace where an
    examiner can be successful from anywhere. In this regard, three
    possibilities are being investigated: (1) expanding the successful
    Patents Hoteling Program (PHP) in such a way as to create a more
    nationwide workforce; (2) creating remote or regional offices, or brick
    and mortar presences, in different locations across the country,
    selected upon a variety of factors such as where pockets of technology
    may be concentrated or there is increased access to a suitable
    workforce for hire; and (3) a storefront approach which, in a sense, is
    a hybrid of possibilities (1) and (2). The storefront approach would
    potentially provide a small-scale brick and mortar presence, or node,
    which could then act as a support center for employees participating in
    an expanded hoteling program.
        With respect to expanding the current PHP program to create a truly
    nationwide workforce, the Office is currently engaged in conversation
    with Congress, OPM and GSA about addressing the present requirement
    that hoteling employees physically report into the Office at least one
    hour per week to maintain the Office as their official duty station.
    Round-trip commuting to the official duty station for an hour plus,
    which is the current requirement, results in a very unproductive day. A
    modification of this requirement would permit hoteling employees to
    relocate to geographic locations at further distances from the Office,
    thus enhancing the Office's ability to reach out to high quality talent
    pools and those individuals not interested in living in or financially
    unable to live in the Washington, D.C. metropolitan area. If the one-
    hour duty station requirement was lifted and USPTO was allowed a pilot
    or demonstration program, we would expect many retired patent examiners
    would consider working half-time or under the flat goal program. A
    further expansion on the second possibility (2) is that we might build,
    even locally, telework sites to provide employees with a brick and
    mortar presence to which to report, but one which may reduce or
    eliminate a great deal of their commuting time. The Office is open to
    all of these possibilities, or any combination thereof, as ways in
    which to better attract new employees, retain existing employees, and
    actively participate in e-government initiatives.
    Retirees
        The USPTO takes advantage of the knowledge and skills of retirees
    who have left the USPTO. The opportunities where this pool of
    candidates can help us are tremendous. While some retirees have
    returned as rehired annuitants, many opted to work for companies who
    have contracted with the USPTO in the areas of examiner training in the
    Patent Training Academy, help-desk service for our customers in our
    Inventors Assistance Center, and examiner recruiting. This has allowed
    the agency to free up valuable examiner resources to focus on patent
    examining.
        The flexible work arrangements that the USPTO provides are very
    attractive and accommodating to retirees' schedules. Also, we expect
    that our vision of a truly nationwide workforce will include
    opportunities for USPTO retirees--including possible half-time or flat
    goal programs for retirees. The BusinessWeek recognition of the USPTO
    as one of the best places in America to round out one's career should
    allow us to recruit retirees from other industries as well.
                                   conclusion
        This report has offered a comprehensive review of what has been
    done, what is in the process of being done, and what can still be done
    to further strengthen the patent system in the United States. While the
    Administration is committed to pursuing and improving upon its
    management initiatives and record level achievements in hiring, quality
    and production, electronic tools and teleworking, some of the key
    solutions to reduce pendency and optimize productivity and quality will
    require Congressional action.

        Senator Mikulski. And then we can match performance with
    money.
        Mr. Gutierrez. Yes.
        Senator Mikulski. It will be your plan?
        Mr. Gutierrez. Yes.
        Senator Mikulski. Senator Shelby.

                        GROSS DOMESTIC PRODUCT REVISION

        Senator Shelby. Thank you, Madam Chairman.
        Mr. Secretary, I understand--excuse me--that the announced
    quarterly gross domestic product (GDP) for the country
    contained a relatively large revision, we are all familiar with
    this, one-half of 1 percent downward from the amount estimated
    in January of this year. Such a revision has only occurred
    seven times in the last 30 years. While rare, this type of
    revision has impact on markets, and anticipate less volatility
    in the data released from the Bureau of Economic Analysis.
        What procedure does the economic--Bureau of Economic
    Analysis--have to help lessen the odds that similar revisions
    will occur again in the future? Or will not occur?
        Mr. Gutierrez. Yes, sir. Thank you.
        Senator Shelby. In other words, I know it's--you don't have
    all of the data and you're pushed to get it out.
        Mr. Gutierrez. Right.
        Senator Shelby. And you revise it with more accurate data.
        Mr. Gutierrez. Yes. Obviously it's a very complex set of
    sources that we have to be able to consolidate this one GDP
    number. I would say the one area that stood out as impacting
    that was the service industry. We know that we still have to
    make progress to be able to measure services, as well as we can
    measure manufacturing. We actually have $8 million in our 2008
    budget to be able to measure all service industries. We're not
    covering all services today.
        If I had to point to one thing, and there are many things,
    Senator Shelby, if I had to point to one thing that threw us
    off in that quarter, it was the service number. I think we can
    get better, and we need to get better, at measuring services,
    given that they're over two-thirds of our economy.
        Senator Shelby. You know, the Federal Reserve does a lot of
    measuring of our economy. Do you have an interoperable
    connection to the Federal Reserve on this? On the way you
    measure production and everything? You feed them things.
        Mr. Gutierrez. Yes, sir.
        Senator Shelby. I thought you did.
        Mr. Gutierrez. Yes, sir. We work very closely with them,
    with the Office of Economic Advisors, with Treasury and with
    Labor.

       NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION'S EXCLUSION FROM
                      AMERICAN COMPETITIVENESS INITIATIVE

        Senator Shelby. NOAA. Last year, Mr. Secretary, the
    President designated a National Institute of Standards and
    Technology, the National Science Foundation (NSF), and the
    Department of Energy's Office of Science as part of the
    American Competitive Initiative Act. However, NOAA was
    noticeably excluded from this program, and that's troubling. To
    me, NOAA stands out as an international leader in marine and
    atmospheric science, and as a cornerstone of our Nation's
    research community.
        NOAA's education and outreach activities appear to fall
    directly in line with ACI's educational goals. Given NOAA's
    diverse research--you're very familiar with it--and innovative
    technology, why was this agency not recognized as a candidate
    for the ACI Program, and does the Department intend to endorse
    NOAA in the future to become an ACI Program?
        Mr. Gutierrez. Thank you, Senator. I think that's an
    excellent question.
        Technically, it's not under the umbrella of the ACI, but we
    think about NOAA as very much part of our competitive
    advantage.
        Senator Shelby. I know that Senator Alexander is very
    involved in the competitiveness issue.
        Mr. Gutierrez. We do think about it as our competitive
    edge. We believe that the management of our coastal marine
    resources is a competitive advantage, as we look at the rest of
    the world, and how they do it. It may not be under the ACI
    umbrella, but we think about it as very much a part of our
    competitive advantage.

        NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, NATIONAL POLAR
              ORBITING OPERATIONAL ENVIRONMENTAL SATELLITE SYSTEM

        Senator Shelby. I hope you can get it under there, we'll
    have to see what happens.
        NOAA, again. Last year, the national polar orbiting
    operational environmental satellite system--pronounce it, what,
    NPOESS program--was scrutinized for its mismanagement and lack
    of oversight. Now that the Nunn-McCurdy process has subsided, I
    feel that the Departments of Defense and Commerce have
    genuinely strived to regain control of the program, hopefully.
        I'm still dismayed with the revised program plan. When I
    compare the new goals with the program's original prospects, I
    see that we've lost two of the six satellites, and 4 of the 13
    sensors package, while adding 4 years of delay. Not to mention,
    a cost increase of $4.1 billion. Why are we spending more
    money, perhaps, to receive an inferior product? And how have
    the ramifications for this particular program impacted the rest
    of your Department's overall acquisition and procurement
    activities, and to ensure that the taxpayers do not see a
    situation like this again? I know, it's a big-ticket item.
        Mr. Gutierrez. It is, Senator. And, I appreciate the
    question, this is a very important topic. Twenty-five percent
    is a tremendous overrun. Just so that you know, I have met with
    the chief executive officers (CEO) of Lockheed Martin and of
    Northrop Grumman as soon as we heard about this. I'd say two
    big things contributes to the overrun. One is the process of
    evaluating these bids. Too often, I think, we go to the lowest
    bid, and not necessarily understanding that that supplier can
    come back and increase the amount after we have approved it.
        Senator Shelby. It's not a good way to do business.
        Mr. Gutierrez. It's not.
        Senator Shelby. You were the CEO of a large company.
        Mr. Gutierrez. Absolutely. I used to have to go to my board
    for a 10 percent overrun. And, it was a very bad day, so this
    is a very bad day.
        Senator Shelby. Twenty-five percent overrun is----
        Mr. Gutierrez. Twenty-five percent.
        Senator Shelby [continuing]. Should be a wake-up call.
        Mr. Gutierrez. It's 25 percent, and as you say, the scope
    of what we thought we were getting has been reduced. We're
    getting less than what we thought we were buying at the
    beginning. It is absolutely not acceptable. A lot of it also
    goes to our processes. This is Air Force, NOAA and NASA working
    together. Too often, we have a handoff of individual project
    timelines to the other agency. We need to have someone managing
    the whole process. I think there's a lot that we can be doing,
    and we are doing. I get a briefing on this probably once a week
    from my Deputy, who is all over this. And we still have to stay
    very close, because I don't want to have another situation
    where I come back to you and say that the project is off course
    again. I can assure you that this is one of the items that
    rarely does the day go by that I don't think about this.
        Senator Shelby. If you put your background in business to
    this program, and other programs, you'll meet the
    accountability standard that Senator Mikulski talked about
    earlier.
        Mr. Gutierrez. Yes, Senator.
        Senator Shelby. Thank you, Madam Chairwoman.
        Senator Mikulski. I'm going to associate myself with the
    line of questioning of Senator Shelby. We're in absolute
    agreement on the fact that this has to be fixed.
        Senator Reed, Senator Alexander came first--I would like to
    turn to call upon Senator Alexander, noting that he has been
    truly one of the leaders in our bipartisan effort to create a
    framework for innovation, and implementing the National Academy
    of Science report, ``Rising Above the Gathering Storm.'' We're
    really happy to have him on the subcommittee.

                        AUGUSTINE REPORT ON IMMIGRATION

        Senator Alexander. Well, thank you Madam Chairman, and
    Senator Shelby. I'm glad to be here with you, especially
    because of that interest, and I want to thank Senator
    Mikulski--there was no more enthusiastic supporter for the
    Augustine report, and the work that we have done over the last
    2 years than she has been.
        And, Mr. Secretary, I want to ask you a question about
    competitiveness--and this also relates to some work the
    chairman's done over time.
        At the Oak Ridge National Laboratory, which has led our
    effort to help the United States capture the worldwide lead in
    computing, it has the largest new materials machine in the
    world, it's the world's largest energy laboratory, the top
    three people there all have green cards. Fifty of the 100
    American Nobel Prize winners in physics are immigrants, or are
    foreign-born. We have more than 500,000 foreign students at our
    colleges, universities--all of these people are helping create
    this incredible standard of living we have in this country,
    creating jobs for us.
        Now, when the Senate passed the immigration bill, which you
    are very much a part of these days, I know, from talking with
    you--we seemed to have a consensus that we ought to do what the
    Augustine report, the National Academy's report describes as,
    ``instituting new skills-based preferential immigration
    options.'' In other words, we've got 500,000 or 1 million
    people coming into this country legally every year, we may have
    that many illegally, if we secure the borders, that means we'll
    have 1 million or more people coming in every year, and I
    believe there's a consensus in the Senate that we ought to--
    that we ought to make sure that we make it easier for us to in-
    source brain power. We outsource jobs, we can in-source brain
    power.
        And, there were three provisions in the Senate-passed
    immigration bill to help do that, improving visa processing,
    giving a green card to doctorates, to foreign students who
    received their doctorates in science, technology, engineering,
    math, and if they had jobs, increasing the H1B visas for those
    sorts of people coming to our country. I think Senator Gregg
    also may have gotten onto the bill a provision that took a part
    of the visas that are in the lottery and made those more
    available.
        But, what I would like to do is ask you to comment on that,
    and to encourage you--since I know you're working on
    immigration, that with your background--both as a business
    leader, and someone who's, who I've heard speak eloquently
    about the importance of immigration to our country, and who
    understands it very, very, very, very well. I wonder if you can
    think of more ways, as we deal with immigration this year--more
    ways for us to institute skills-based preferences for people
    coming to our country that will increase our brain power
    advantage, which creates new jobs.
        Mr. Gutierrez. Yes, Senator, I think there's broad
    agreement on this. Many of the scientists who are driving
    Chinese innovations, and Chinese industries, as well as Indian
    industries were educated in the United States. We are giving
    these foreign scientists the best education you can get in the
    world, and then because they can't stay here, they have to go
    back home and compete against our companies.
        We have about 80,000 higher learning students from India
    and about 60,000 from China. Essentially, our quota just will
    not absorb all of them. So, the challenge here is to expand the
    quota, and be willing to give more green cards, and more
    residency status to these graduates. This is part of our
    comprehensive reform, this is the high-skilled portion of it
    that we don't talk that much about, but is perhaps just as
    important as anything else.
        Senator Alexander. Well, and, I guess the point of my
    question is, is to encourage you in it. Because, I know you're
    going to be in the middle of these debates and discussions, and
    I don't think it lacks for support in the Senate. We're for it,
    but we need some more creative ideas about how to do it.
    Sometimes ideas fail around here for lack of the idea.
        So, if you can suggest two or three other ways in the next
    few months that we could beef up whatever immigration bill
    passes, I'll bet you'd get a lot of support for that, and we
    need to do something about the provision in the law that makes
    a future Nobel Prize winner--American Nobel Prize winner--who
    starts out being born in India, today we make that person
    swear, before they come over here to get their graduate degree,
    that they're going home, when, in fact, it's in our interest
    for them to stay here. And, as we know, Chinese and Indian
    universities are now recruiting, back to their own
    universities, the best Chinese, Indian professors to help beef
    up their competitiveness efforts.
        Mr. Gutierrez. If I could add something, because I think
    you're touching on something very important.
        If we go back to, say, the last 50 years, some of our best
    scientists came to our country during World War II from Europe
    and they contributed immensely. We have the ability to bring
    the best brains in the world today, and we just can't let more
    time go by, because they want to do it, we can do it, there's
    no excuse for not doing it. So, I appreciate your leadership on
    this.
        Senator Alexander. Thank you, Madam Chairman. And, if I may
    say, Madam Chairman, I think if we put our minds to it, and
    we're creative, we could to any immigration bill that passes,
    more support for those bringing in people with those sorts of
    skills.
        Senator Mikulski. Mr. Gutierrez himself is an immigrant,
    and I bet when his family came here from Cuba, they didn't know
    that this was going to be a future entrepreneur that would be
    the Fortune 500 corporation, and lead a major Government
    agency, and had the ear of the President of the United States
    any time he wanted to. So, yes, immigration is a challenge.
        Senator Reed.

         MANUFACTURING EXTENSION PARTNERSHIP AND ECONOMIC DEVELOPMENT
                             ADMINISTRATION FUNDING

        Senator Reed. Thank you very much, Madam Chairman, and
    Senator Shelby.
        Mr. Secretary, welcome, thank you.
        The Department of Commerce plays a very critical role in my
    home State of Rhode Island, I was very pleased recently when
    Admiral Lautenbacher announced that NOAA was considering the
    home porting of the Okeanos Explorer--NOAA's first ship of
    ocean exploration--in Rhode Island. And I look forward to
    working with you and the admiral to ensure this effort is
    completed.
        There are two issues I'd like to address, first is a
    manufacturing extension partnership program (MEP)--I'm
    disappointed that a cut in the program is included in the
    budget. It's absolutely critical--we all say this,
    manufacturing is such an important part in not only the
    economy, but the fabric of every community in America, I think
    we have to do more.
        And second, with respect to the Economic Development
    Administration (EDA), the proposal for the second year in a row
    to transform core programs into a regional development account,
    funded at about $170 million, to support large regional-based
    development projects. It's my understanding that the existing
    EDA program has received very high marks from the Office of
    Management and Budget (OMB) and independent analysts for their
    assistance to local communities with respect to public works,
    and economic justice, technical assistance, and I'm just
    wondering why we would abandon a proven model, and adopt this
    regional approach--at least propose it.
        Mr. Gutierrez. Yes, Senator, we're obviously committed to
    it, and we're not thinking of abandoning it. We did have to
    decide strategically as to where we put the funds. Do we invest
    in high technology, basic research, and maintain those other
    programs, as you say, which are very important--especially
    EDA--where we believe we do invest to get a return? The balance
    we found was with $170 million, we are trying to be more
    efficient by having a regional development account, so we can
    continue to contribute to these communities, while at the same
    time, put money behind the long-term research.
        I understand your concern, and this is a topic that I knew
    would come up, because MEP and EDA are both areas that warrant
    much debate. But, it was a choice that we made and we felt that
    we were looking to the longer term.
        Senator Reed. Well, Mr. Secretary, one of our--my
    concerns--is that with a regional approach you lose focus, and
    there is the tendency, I think, to--in that respect--to see
    these accounts diminish, not expand. And I think we've got to
    expand these accounts for the reasons you've suggested.
        And one of the things that's a bit perplexing is that the
    EDA proposal attempts to cut $80 million this year. A year ago
    you were requesting a $40 million increase, which would suggest
    that you were very enthusiastic about EDA--what's changed?
        Mr. Gutierrez. Well, 2 years ago, you may recall, we were
    looking at strengthening America's communities initiative,
    which would have combined the block grant programs that are in
    Housing and Urban Development (HUD) with EDA, and so we are
    actually moving more money into this model.
        What we'd like to do is look at this regional development
    account idea, develop a plan to make it more efficient--not
    just for us, but for the users--and come back with a plan, and
    share how we believe we can make it work with $170 million. We
    wouldn't go ahead and execute this without at least coming back
    and talking with major stakeholders as yourself.
        [The information follows:]
        Meeting With Senator Reed's Staff on the Efficiency of Regional
                              Development Accounts
        Although nothing has been scheduled at this time, EDA will arrange
    for a meeting with Senator Reed's office to discuss the efficiency of
    Regional Development Accounts.

        Senator Reed. Well, Mr. Secretary, I was actually not
    impressed with the strengthening American communities approach,
    which would have put EDA proposals together with HUD funding.
    And, it looks like this budget--there's diminishing EDA, and
    the HUD budget, too, is being squeezed hard, which is not going
    to strengthen our communities. And, I think, when you go to a
    regional basis it's sort of a toss-up, who gets what, and
    again, I'm concerned--terribly concerned.
        So, I appreciate your willingness to talk about this, but
    this is something that is, again, I think we'll revisit this.
        I've mentioned before, my concerns about the manufacturing
    extension partnership centers. Dr. Jeffrey--Dr. Jeffrey will be
    testifying later, indicated there's going to be re-competition,
    because the proposed $46 million fiscal year 2008 is not
    sufficient to support the National budget? Or, that's a
    question I have--what is this re-competition about?
        Mr. Gutierrez. We haven't really honed in on re-competition
    as a solution. We obviously have to do a lot of thinking as to
    how to make the $46 million go as far as possible. Understand
    that that's one-third of the total amount; there's private
    sector and there's local money.
        But, we haven't recommended re-competition as the course of
    action. Again, we'd like to go back, think through this, and
    discuss it with you once we have a better plan in place.
        Senator Reed. Well, thank you, Mr. Secretary.
        Mr. Gutierrez. Thank you, sir.
        Senator Reed. Thank you, Madam Chair.
        Senator Mikulski. Senator Kohl.

                      MANUFACTURING EXTENSION PARTNERSHIP

        Senator Kohl. Thank you very much, Madam Chairman.
        I'm wanting, also, to discuss the manufacturing extension
    partnership account with you, Mr. Secretary. It's--and perhaps
    you're not fully familiar with it, because your job is so
    broad, so big, and has so many different pieces to it, and I
    can understand that.
        But, the manufacturing extension partnership has been a big
    success, at a relatively low cost, at preserving and creating
    more jobs in small and medium-sized manufacturing companies.
        I'm very familiar with it in my State because it's been a
    very active program, it's helped hundreds and hundreds of
    companies--many of whom I've visited--and gotten personal
    experience in seeing what they've done and listened to the
    accolades expressed by management, as well as those people who
    are MEP employees, go on to companies, seen what they've done,
    seen the results that they've produced in terms of increased
    efficiencies in these companies that have allowed these
    companies--in some cases--to come back from near bankruptcy.
    But, in many cases, just to continue to grow and produce sales
    and profits and employment. Our manufacturing jobs, which, of
    course, are critical and crucial for our economy. It's a
    success story, you know? It's something that I would hope that
    you would all talk about, and want to keep, at least at its
    present level of funding, which is $106 million, roughly $2
    million per State.
        And, as you indicate, it's complemented by State funding,
    as well as funding by the companies who use it. So, it's not
    one of these programs that we just sort of throw money at the
    wall, here at the Federal level, and hope that it may do some
    good--it is funded, as well, by the States, and the companies
    that use the service.
        I went to a company in Wisconsin over the weekend, by
    coincidence. And they're a company that is presently using the
    MEP program, and they just rave about how MEP has come in and
    helped them to improve the efficiency of their business.
        Now, in light of that, could you say something that would
    encourage us to believe that we're not going to have to go back
    to the mat again this year as we did last year and got the
    funding restored? Several of us Senators--and, you know, we
    got--it was cut last year and we got it restored to its funding
    level, and now here we come back this year, and it's cut in a
    similar fashion. And if we have to, you know, we'll fight like
    heck to get that funding back, and I hope, successfully. But,
    it would be nice if we wouldn't have to do that. And, you know,
    I'd just like to hear something from you.
        Mr. Gutierrez. I understand your concern, let me just say
    that. We're constantly faced--and we do go through this, pretty
    much, every year--we're constantly faced with the choice of
    where do we allocate the money. And we have been--especially
    over the last several years--moving more and more toward what
    we believe is the public sector's role, which is basic
    research.
        On the MEP, because we play a matchmaking-type of role, we
    try to pair up private sector needs with consultants, that
    perhaps we can continue to play that matchmaker role, more
    efficiently, more productively, without giving up on the
    program. We've got the network in place, that's not going to go
    away. So, we want to keep the program going, understand that it
    is operational in the sense that, these are companies that are
    up and running, working with consultants, trying to get better
    rates, trying to match up consultants that are more suited with
    specific companies.
        So, not giving up on the program, while being able to put
    more money behind the long-term research. As you know, when we
    make these choices, it never comes out perfectly, and there
    will be those who are not satisfied with that. But, that's sort
    of the thinking, and there's plenty of work that we need to do
    to get inside these offices and understand, how can we serve
    our customers with less money? My commitment to you is that I
    will do that and I will spend time on that, and try to stretch
    it out as much as possible.
        Senator Kohl. I'm listening, and I'm trying to understand
    and, you know, and you speak very clearly and directly, which I
    appreciate. But, here's a program that works, Mr. Secretary. It
    works. I'm, you know, sometimes we come to these sessions and
    you make out a budget and you try and cut the fat off the bone,
    which, you know--which, what we're all wanting to do, the
    programs that don't work very well. But, I have not heard you
    say--or anybody say--that this is not a program that works.
        And when you have a program that works at a relatively
    modest cost, particularly in keeping manufacturing from getting
    worse. Explain to me again, I mean, again--why try to knock
    this program off, you know, off its stool? It works. I'm
    familiar with it in my State and other States, and again--I
    don't just listen to some public relations (PR) people putting
    out a release, I've visited dozens and dozens of companies that
    have used the MEP program, and that it does work, in helping,
    and to become more efficient by bringing in--as you know--
    experts who are federally funded, at least, you know, they're
    Federal employees, but they also get paid by State and--and
    they come in and they do a job in making the company more
    efficient and more effective and more profitable.
        Well, I guess I'm--I don't want to, I don't want to ask you
    to repeat what you've already said. But I--I'm surprised.
    You're a person who comes from the world of business, and so do
    I. And, I know you're concerned about dollars, and dollars
    spent, and value return for dollars spent and how important
    that is. And, I can tell you, this is a really, really good
    program, and you need to be proud of it. And that's not to say,
    ``I'm proud of it, but I'm cutting its budget,'' because those
    things don't comport. If I'm proud of it, and it's a modestly
    funded program, then I'm not going to be cutting it.
        And, so somewhere in your Department, somebody's not very
    proud of it, and somebody thinks it's not a very good program.
    And, I'm here to tell you--from my experience and my knowledge
    of the program, Mr. Secretary, it is a good program. And it
    deserves your sweat and effort to keep it funded at its
    currently modest level.
        And with that, whatever you say, I will not respond and try
    to be critical, but I'd like to hear one last comment from you,
    and then I'll quit.
        Mr. Gutierrez. What I will say is there isn't a
    disagreement that there's a concept and an idea and a model
    that could work, and that has worked. We have examples of
    projects where there has been a success. Not all projects have
    been successful and, perhaps these are outside of your State,
    or in other parts of the country. Our challenge is to focus our
    money on those projects that are successful. We're trying to
    cut off the tail that isn't successful, and trying to get a lot
    better at putting the money behind those projects that do have
    a return.
        That's what I would do with the $46 million, as opposed to
    the $110 million, or $105 million. What we would try to do--is
    allocate the money to projects that do have a return, because
    there are some that don't. I think our challenge is to identify
    those, and we should have enough experience to have a better
    sense of which ones those are.
        I understand your concern. I don't think there's anything I
    could say to convince you, but we do think about these things,
    and we take up the challenge and we try to make the most of it.
        Senator Kohl. Thank you.
        Thank you, Madam Chair. Chairwoman.
        Senator Mikulski. Thank you very much, Senator Kohl. We
    appreciate the rigor of your questions, and you've expressed
    many of ours.
        Mr. Secretary, in the interest of your time and ours, we're
    not going to go to a second round of questions. We're going to
    submit them--ask our colleagues to submit them in writing. And
    we know that the international markets are rattled, and we have
    a second panel, and we want to continue before the noon hour.
        Colleagues will submit questions for the record, know that
    we will have ongoing concerns raised by members. NOAA--why
    isn't it in the competitive agenda? How we can put it in? How
    we can make sure the satellite program is back on track, the
    follow up on the patents, we'll be talking to Mr. Dudas in a
    minute or two, and then also, the census, because we're
    concerned about the security issues at the Census, and also the
    fact that as of this moment, the Director and the Deputy have
    resigned, and people are in an acting category. And, as we get
    ready for 2010, which is going to come so quickly, we've got to
    make sure that our census not only has the technology, but the
    leadership to do it.
        So, those would be the areas that I think we look forward
    to following up. So, thank you.
        Mr. Gutierrez. Thank you.
        Senator Mikulski. And, colleagues, we'll submit it for
    record.
        Thank you very much, Mr. Secretary.

                             CENSUS DEPUTY DIRECTOR

        Mr. Gutierrez. Madam Chair?
        Senator Mikulski. Yes, sir.
        Mr. Gutierrez. If I may?
        Senator Mikulski. Yes, sir.
        Mr. Gutierrez. We have named Jay Waite the permanent Deputy
    Director at Census. He is permanent, and we will bring the
    person who will be nominated for the Director job as soon as we
    have that person.
        Senator Mikulski. Well, we look forward to that and working
    with our authorizers for an expeditious confirmation. So that
    we're all going in the same direction.
        Mr. Gutierrez. Thank you.
        Senator Mikulski. Thank you very much, Mr. Secretary.
        Mr. Gutierrez. Thank you very much.
        Senator Mikulski. Until we meet again.
        Mr. Gutierrez. Thank you, thank you.

                 National Institute of Standards and Technology

    STATEMENT OF DR. WILLIAM JEFFREY, DIRECTOR
        Senator Mikulski. Now the Chair calls to the table, as our
    Secretary departs, the Director of NIST, Dr. Jeffrey. For the
    record, it is the National Institute of Standards and
    Technology, and also, Mr. Dudas, the head of the Patent Office.
        We're really glad to see both of you. As you can hear the
    things of the subcommittee, and the fact that we have such a
    bipartisan commitment to innovation, and you're, you're--you're
    part of the A-team on this. Both, what you provide in terms of
    research, and also service to the private sector, it's a unique
    way that this country operates, and then--that if we invent it,
    we gotta protect it. And you know the challenges there. So,
    ours is not meant to be a school-marmish hearing, but how do we
    get--help you get the results that our country really needs
    this minute?
        So, how about if we lead off with Dr. Jeffrey, and then,
    Mr. Dudas, we're going to turn to you, okay?
        Dr. Jeffrey. Thank you, Chairman Mikulski, Ranking Member
    Shelby, and members of the subcommittee.
        I am pleased to present the President's 2008 budget request
    for NIST. This is a strong budget that will further enhance our
    ability to support the measurement and standards needs of U.S.
    industry, and universities.
        NIST has a long history of being at the forefront of new
    innovations, through our measurements and standards. In 2003,
    the National Academy of Engineering identified the greatest
    engineering achievements of the 20th century. NIST measurements
    and standards were integral to the successful development and
    adoption of virtually every one. Nineteen retrospective studies
    of economic impact show that on average NIST labs generated a
    benefit to cost ration of 44:1 to the U.S. economy.
        The high rate of return results from the fact that new
    measurements or standards benefit entire industries, or sectors
    of the economy, as opposed to individual companies.
        For example, NIST researchers recently developed new
    measurement techniques that cut up to 80 percent of the cost
    and time for industry to develop advanced materials. As one
    industry scientist put it, ``NIST scientists are reawakening a
    major element of creativity that analytical science almost
    lost.''
        NIST also operates world-class user facilities. Last year
    approximately 2,000 researchers from 60 different industries
    leveraged the NIST Center for Neutron Research, or the NCNR. A
    National Academy of Sciences (NAS) report describes the NCNR's
    capability to image an operating fuel cell as ``a considerable
    achievement,'' and ``one of the most significant analytical
    advances in the fuel cell realized in decades.'' Industry
    scientists have stated that the research performed at the NCNR
    has allowed them to jump 5 years ahead in fuel cell
    development.
        To prepare for the future, NIST is working with industry to
    identify critical measurement barriers to innovation,
    evaluating its physical infrastructure, forming new and
    strengthening existing partnerships, and updating the ways it
    stimulates the knowledge transfer from its labs to industry and
    academia.
        The increased funding provided through the budget request
    will directly support innovative advances in broad sectors of
    the economy, as well as improve the safety and quality of life
    of our citizens.
        For example, the research initiatives will speed the
    development and foster the adoption of nano-technology
    products, and provide the physical measurements to ensure their
    safety, accelerate the revolutionary economic potential in
    exploiting unique properties of the quantum world, provide
    confidence and reduce uncertainty in measurements supporting
    global climate change models, reduce the risk to communities,
    as they encroach on hurricane-prone coasts and fire-prone wild
    land/urban interface regions, and enhance the safety of new and
    existing structures from the catastrophic impact of
    earthquakes.
        To meet the demands for measurements at ever-smaller
    scales, at faster rates, and with more accuracy, requires
    excellent laboratory and user facilities. The 2008 budget
    request, therefore, includes capacity and capability
    improvement at both our Boulder campus, and the NCNR.
        The budget request for MEP is identical to last year's
    request, and is a reduction of $58.3 million from the fiscal
    year 2006 enacted level. I recognize the difference in priority
    between the administration and Congress regarding the Federal
    funding level for the MEP program.
        One thing you can be absolutely certain of--regardless of
    the final appropriations, NIST will execute this program in the
    most effective manner possible, to support the Nation's small
    manufacturers.
        No funds for ATP are requested in the President's 2008
    budget. The 2006 enacted budget was consistent with the phase-
    out of the program. Since the 2007 full year continuing
    resolution, however, included funding for ATP, we will be
    initiating a new competition.
        In summary, recent NIST measurements and standards research
    have enabled innovations now embedded in the IPOD, body armor--
    saving the lives of domestic law enforcement officers and our
    service men and women overseas--and diagnostic screening
    devices for cancer patients, making their treatment more
    targeted and accurate. The results of NIST research can be
    found in virtually every manufacturing and service industry.

                               PREPARED STATEMENT

        For more than a century, NIST research has been critical to
    our Nation's competitiveness. The increased funding requested
    for NIST will directly support innovations in broad sectors of
    the economy that will, quite literally, define the 21st
    century.
        Thank you, and I'd be happy to answer any questions.
        Senator Mikulski. Thank you very much, Dr. Jeffrey, and we
    will be asking you questions.
        [The statement follows:]

                   Prepared Statement of Dr. William Jeffrey

        Madam Chair Mikulski, Ranking Member Shelby and members of the
    subcommittee, I am pleased to appear before you today to present the
    President's fiscal year 2008 budget request for the National Institute
    of Standards and Technology (NIST). This is a strong budget for NIST
    and it will further enhance NIST's ability to support the measurement
    and standards needs of U.S. industry and universities. The fiscal year
    2008 request of $640.7 million includes $594.4 million for NIST's core
    (encompassing NIST's research and facilities) and $46.3 million for the
    Hollings Manufacturing Extension Partnership. The budget for the NIST
    core represents an 11 percent increase over the President's fiscal year
    2007 request and a 21 percent increase over the fiscal year 2007
    continuing resolution (H.J. Res. 20) recently signed by the President
    (Public Law 110-5). This funding supports NIST's mission to promote
    U.S. innovation and industrial competitiveness by advancing measurement
    science, standards and technology in ways that enhance economic
    security and improve our quality of life.
    NIST's Impact on Innovation and the Economy
        NIST has a long history of being at the forefront of new
    innovations through our high-impact measurements and standards. In
    2003, the National Academy of Engineering identified 20 of the greatest
    engineering achievements of the 20th century--including automobiles,
    aircraft, lasers, computers, and the internet. NIST measurements and
    standards were integral to the successful development and adoption of
    virtually every one. Now NIST is paving the way for the greatest
    achievements of the 21st century which are still yet to be imagined.
        NIST's measurement science and standards form part of the
    foundation upon which innovation is built. Just as the Nation's
    physical infrastructure (e.g., roads or power grid) define the Nation's
    capacity to build and transport goods--the Nation has an innovation
    infrastructure which defines the Nation's capacity to innovate. And
    investment in long-term basic research like that done at NIST is an
    integral component of the innovation infrastructure. As stated in the
    National Academy of Sciences' Rising Above the Gathering Storm, ``The
    power of research is demonstrated not only by single innovations but by
    the ability to create entire new industries.''
        NIST researchers are world leaders in their fields. They frequently
    arrive at the ``cutting edge'' of science before anyone else. And once
    there, they partner with industry and academia to identify and overcome
    barriers that can slow or even halt the progress of new innovations.
    With the proposed fiscal year 2008 budget, NIST will continue
    developing the measurement and standards tools that enable U.S.
    industry to maintain and enhance our global economic competitiveness.
        NIST continues to meet the Nation's highest priorities by focusing
    on high impact research and investing in the capacity and capability of
    our user facilities and labs. This emphasis is validated by the high
    rate of return to the Nation that the NIST labs already have
    demonstrated. Nineteen retrospective studies of economic impact show
    that, on average, NIST labs generated a benefit-to-cost ratio of 44:1
    to the U.S. economy. The high rate of return results from the fact that
    new measurements or standards benefit entire industries or sectors of
    the economy--as opposed to individual companies.
        NIST supports U.S. innovation and economic competitiveness
    primarily through its measurements, standards, and national user
    facilities. Recent NIST successes highlight the importance of each of
    these critical components and illustrate how NIST's labs are able to
    return such a large benefit to the Nation:
        Measurements.--NIST researchers recently developed new measurement
    techniques that allow for rapid and cost-effective assessments of
    advanced materials that are used in a range of products from new
    detergents to improved adhesives for next-generation electronics.
    Previously, it could cost industry $20 million to develop and
    understand the characteristics of one new material. With this NIST
    measurement advance, the cost and time are estimated to have been cut
    by 80 percent. To facilitate the transfer of this technique to
    industry, NIST organized an open consortium now consisting of 23
    members that are learning to use and adapt these new measurement
    techniques. As a scientist from Honeywell International put it, ``. . .
    NIST offers an invaluable resource to show what can be done, and how to
    go about it. NIST Combinatorial Methods Center scientists are
    reawakening a major element of creativity that analytical science
    almost lost.''
        Standards.--Nanotechnology has the potential to revolutionize
    manufacturing. And one of the most promising nanomaterials is the
    carbon nanotube. Carbon nanotubes have unique electronic and mechanical
    properties that lend themselves to a variety of applications, ranging
    from the development of stronger and lighter materials to nanowires and
    transistors for miniature electronics. Regardless of the potential
    application, the quality of the materials is paramount. Unfortunately,
    current production techniques for carbon nanotubes result in products
    with high levels of uncertainty in their quality and uniformity. To
    address this concern, NIST is currently developing a carbon nanotube
    reference material. This reference material, when deployed, can be used
    by any nanotube manufacturer to validate their product's quality,
    purity, and consistency and accelerate the adoption of carbon nanotubes
    into more sophisticated devices.
        National User Facilities.--NIST operates world-class user
    facilities that benefit the entire U.S. research community. Last year,
    approximately 2,000 researchers from 60 different industries across the
    country leveraged the NIST Center for Neutron Research (NCNR). One
    recently developed application of the NCNR was to image the interior of
    operating fuel cells to help improve the efficiency and durability of
    these devices. Large and small companies involved in the manufacture or
    use of hydrogen fuel cells, including General Motors, Daimler-Chrysler,
    Dupont, and PlugPower, have benefited from this new capability. The
    NCNR is the premier facility in the world providing this capability. A
    National Academy of Sciences report describes the NIST efforts in
    regards to fuel cell technologies as ``. . . a considerable achievement
    and one of the most significant analytical advances in the membrane
    fuel cell realized in decades. The NIST facility offers the entire fuel
    cell community unique research opportunities that previously eluded
    them.'' Industry scientists have stated that the research performed at
    the NCNR has allowed them to jump 5 years ahead in terms of fuel cell
    development.
        The President recognized NIST's critical role for the Nation as
    part of the American Competitiveness Initiative (ACI). The ACI
    describes NIST as: ``. . . a high-leverage Federal research agency that
    performs high-impact basic research and supports the successful
    technical translation and everyday use of economically significant
    innovations.'' Under the ACI, overall funding for NIST's core, the
    National Science Foundation, and the Department of Energy's Office of
    Science is together slated to double by 2016.
    Preparing for the Future
        The 21st century will be defined by technology innovations that
    fundamentally change the products and services available, the way they
    are manufactured and provided, and the impact on our quality of life.
    These advances will arise from basic research now beginning in, for
    example, nanotechnology, quantum science, and alternative energies--all
    areas in which NIST has a strong and increasing focus with its
    investments.
        The goal of increasing physical sciences research at NIST (along
    with that supported by the National Science Foundation and the
    Department of Energy's Office of Science) provides a unique opportunity
    to strategically establish the programs, plans, and infrastructure that
    will more than double the impact that NIST has on the economy. To
    prepare for the future, NIST is working with industry to identify
    critical measurement barriers to innovation, evaluating the capacity
    and capability of NIST's physical infrastructure, forming new and
    strengthening existing partnerships, and updating the ways it
    stimulates the knowledge transfer from its labs to industry and
    academia.
        For example, over the past year, NIST worked with over 1,000
    experts from industry and universities to identify measurement barriers
    to innovation in a number of critical industry sectors. Over 700
    technical barriers were identified, analyzed, and documented in a
    report. NIST is now in the process of working with industry,
    universities, and other government agencies to address many of these
    identified barriers over the coming years.
        In terms of facilities, NIST has conducted a rigorous evaluation of
    its laboratory capacity and capabilities on its Boulder, Colorado,
    campus. This review found facilities' shortfalls in our ability to meet
    both current and projected industry and university needs in a number of
    important areas. Examples include the high-speed and high-frequency
    measurements required for electronics, defense, and homeland security;
    measurements and tests at the single atom level; and improved methods
    for measuring time, an area expected to vastly improve navigation and
    positioning systems. Each technical area was evaluated in terms of
    necessary laboratory conditions (to include stability of temperature,
    vibration, and humidity, as well as air cleanliness). As a result of
    this assessment, new laboratory space to meet the nation's needs well
    into the 21st century is proposed in the fiscal year 2008 budget
    (Boulder Building 1 Extension).
        NIST also serves industry and academia by being a steward of world-
    class user facilities. As part of the ACI, NIST identified two
    important opportunities first called out in the fiscal year 2007 budget
    and enhanced in the fiscal year 2008 budget--increased capacity and
    capability of the NIST Center for Neutron Research and creation of the
    NIST Center for Nanoscale Science and Technology. Both of these
    facilities are designed to stimulate progress in support of our
    Nation's economic competitiveness.
        The ACI provides NIST the opportunity to further promote U.S.
    innovation and industrial competitiveness. With focused, world-class
    research and facilities, NIST will have a greater impact on the 21st
    century economy than it did even over the past century.
    Fiscal Year 2008 President's Budget
        The increased funding provided through the fiscal year 2008 request
    will directly support innovative advances in broad sectors of the
    economy as well as improve the safety and quality of life for our
    citizens. The following table summarizes the proposed fiscal year 2008
    budget. In this table we show both the fiscal year 2007 President's
    budget and the fiscal year 2007 continuing resolution (Public Law 110-
    5) for comparisons as different baselines.

                               BUDGET SUMMARY SHOWING BOTH FISCAL YEAR 2007 PRESIDENT'S REQUEST AND PUBLIC LAW 110-5 AS BASELINES
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Fiscal Year 2007
                                                                   Fiscal Year 2007      Continuing     Fiscal Year 2008   Change Between    Change Between
                                                                      President's        Resolution        President's    Fiscal Year 2008  Fiscal Year 2008
                                                                        Request       (Public Law 110-       Request       and Fiscal Year   and Public Law
                                                                                           5) \1\                           2007 Request          110-5
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    STRS (Labs)..................................................             467.0              432.8             500.5             +33.5             +67.7
    CRF (Facilities).............................................              68.0               58.7              93.9             +25.9             +35.2
                                                                  ------------------------------------------------------------------------------------------
        Core Subtotal............................................             535.0              491.4             594.4             +59.4            +102.9
                                                                  ------------------------------------------------------------------------------------------
    ITS (MEP + ATP) Subtotal.....................................              46.3              183.6              46.3  ................            -137.3
                                                                  ------------------------------------------------------------------------------------------
        TOTAL....................................................             581.3              675.1             640.7             +59.4             -34.4
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Totals for fiscal year 2007 do not include the 50 percent of the pay raise that was included in Public Law 110-5.

        The fiscal year 2008 budget was formulated with the fiscal year
    2007 President's request as the baseline. Since Public Law 110-5
    provides a smaller budget for the NIST core (STRS and CRF) than the
    fiscal year 2007 President's request by $43.6 million, some proposed
    initiatives in fiscal year 2007 that will not receive full funding are
    implicitly contained within the President's fiscal year 2008 request.
    New initiatives and program increases are described in more detail
    below:
    Scientific and Technical Research Services (STRS)
                Enabling Nanotechnology From Discovery to Manufacture (+$6
                        Million)
        The potential market for products containing nanomaterials is
    estimated at over $1 trillion by 2015. Because of their small size--a
    thousand times thinner than a human hair--nanoscale products require
    entirely novel ways to characterize their physical properties and fully
    exploit their unique characteristics in the manufacture of new
    products.
        In fiscal year 2007, NIST began a major initiative to address the
    measurement barriers hindering rapid development of nanotechnologies. A
    new NIST Center for Nanoscale Science and Technology (CNST) has been
    established that combines both research and a state-of-the-art
    nanofabrication and nanometrology user facility.
        The research initiatives proposed in fiscal year 2008 will build on
    recent NIST advances by:
      --Developing ways to measure strength, stress, strain, optical, and
            electronic properties of nanostructures to improve processes
            and understanding of failure mechanisms;
      --Creating three-dimensional, high-resolution imaging methods that
            reveal details of structure, chemical composition, and
            manufacturing defects and allow researchers to view
            nanostructures as they interact with their environment;
      --Simulating nanoscale phenomena with computer models to allow
            economical development of production methods for complex
            nanodevices; and
      --Producing the measurement techniques required to address the
            interagency efforts to characterize nanotechnology impacts to
            our health, safety, and environment.
                Measurements and Standards for the Climate Change Science
                        Program (+$5 Million)
        The climate is changing. Determining how fast it is changing, and
    understanding the complex relationships between all the environmental
    variables is a critical objective of the U.S. Climate Change Science
    Program. Many different climate monitoring systems in space, in the
    air, and on the ground are currently monitoring solar output as well as
    trapped and reflected heat by the Earth's atmosphere. These systems are
    operated by many countries and research groups. Establishment of
    absolute calibration and standard references will allow accurate
    intercomparisons of these systems, will help identify small
    environmental changes occurring over many years, and will reduce
    uncertainties in the data input to global climate change models.
        With the proposed fiscal year 2008 funding, NIST will, working in
    coordination with other agencies, develop:
      --An international irradiance measurement scale to be used in
            rigorously calibrating satellite light intensity instruments
            prior to launch to ensure sufficient accuracy to allow valid
            comparisons among results from different instruments or from
            data sets taken over different periods of time;
      --New instrument design strategies and quality assurance programs to
            optimize accuracy and stability of satellite-based irradiance
            measurement systems;
      --Techniques for generating specific types of aerosols in the
            laboratory, measuring aerosol optical and physical properties,
            and for simulating aerosol properties that cannot yet be
            measured in the laboratory; and
      --A database of critically evaluated data on aerosol properties
            collected at NIST and elsewhere.
                Enabling Innovation Through Quantum Science (+$4 Million)
        Unlike the laws of physics that govern our ``every day'' world, the
    laws of physics that govern the quantum world of atoms, electrons, and
    light particles are fundamentally different. These quantum particles
    are able to interact in ways that according to human experience would
    seem impossible. For example, a quantum particle can actually be in two
    different places simultaneously.
        Conceptualizing these phenomena is difficult to say the least, but
    developing ways to exploit them for the development of technologically
    significant innovations is even more challenging. NIST, however, has
    world-class scientists who are leaders in the emerging field of quantum
    information science. Three NIST scientists have won Nobel Prizes in the
    last 10 years based on their work in this field. Many of the best minds
    in physics today believe that applications of quantum science will
    transform the 21st century just as integrated circuits and classical
    electronics revolutionized the 20th century.
        The proposed fiscal year 2008 initiative will build upon NIST's
    significant expertise in this area, and leverage the collaborations
    established in the recently created Joint Quantum Institute between the
    University of Maryland, NIST, and the National Security Agency. NIST
    proposes to accelerate the potential of the quantum world for enhancing
    our nation's competitiveness through research into:
      --Quantum ``wires'' that use ``teleportation'' techniques to reliably
            transport information between the components of a simple
            quantum computer;
      --Quantum memory analogous to the random access memory of today's
            computers to allow more complex logic operations;
      --Quantum conversion processes that transfer information from one
            form of quantum information to another (for example, ways to
            transfer information about the quantum characteristics of an
            atom to a photon); and
      --Quantum based measurement tools such as optical clocks and single
            electron counters.
                Disaster Resilient Structures and Communities (+$4 Million)
        The past few years have reminded us that both natural hazards--
    including extreme winds, storm surge, wildland fires, earthquakes, and
    tsunamis--as well as terrorist actions, are a continuing and
    significant threat to U.S. communities. The disaster resilience of our
    physical infrastructure and communities today is determined in large
    measure by the building codes, standards, and practices used when they
    were built. Many of these legacy codes, standards, and practices--which
    have evolved over several decades--are oversimplified and inconsistent
    with current risk assessments. As construction and rebuilding costs
    continue to rise, there is increasing recognition of the need to move
    from response and recovery to proactively identifying and mitigating
    hazards that pose the greatest threats.
        The proposed fiscal year 2008 initiative will, working in
    coordination with other agencies, develop:
      --Standard methods to predict losses, evaluate disaster resilience,
            and estimate cost-to-benefit of risk management strategies at
            the community and regional scales that local officials can use
            to evaluate and mitigate risks via land-use planning and
            practices;
      --Decision support tools to modernize codes, standards, and practices
            consistent with the risk;
      --A validated ``computational wind tunnel'' for predicting extreme
            wind effects on structures; and
      --Risk-based storm surge maps for the design of structures in coastal
            regions.
                National Earthquake Hazards Reduction (+$3.25 Million)
        Many earthquakes strike without warning. Within the United States,
    more than 75 million people are located in urban areas considered to be
    of moderate to high risk of earthquakes. Just the economic value of the
    physical structures within these regions--not including the potential
    loss of life and economic disruption--is valued at close to $8.6
    trillion. To address this threat Congress has provided longstanding
    support for the National Earthquake Hazards Reduction Program which
    NIST coordinates across the Federal government.
        This initiative will enhance the safety of:
      --New structures by establishing and promoting performance-based
            standards for entire building designs and by accelerating the
            adoption of basic research into the model building codes,
            standards, and practices; and
      --Existing structures through research on actual building performance
            in earthquakes; developing structural performance models and
            tools; and establishing cost-effective retrofit techniques for
            existing buildings.
    Construction of Research Facilities (CRF)
                Building 1 Extension (B1E)--Enabling Sustained Scientific
                        Advancement and Innovation (+$28 Million)
        When President Eisenhower dedicated the NIST facilities in Colorado
    in 1954, no one imagined that half a century later scientists would be
    manipulating matter atom-by-atom. Such technological advances require
    increasingly complex and difficult measurements--to be able to observe,
    characterize, and create structures at ever smaller spatial scales. As
    the structures shrink in size, small fluctuations in temperature,
    humidity, air quality, and vibration begin to distort the results. We
    are now at the point where laboratory conditions are inhibiting further
    advances in some of the most promising areas of research for the 21st
    century.
        The $28 million proposed in the fiscal year 2008 budget will
    leverage previously proposed funds ($10.1 million) in the fiscal year
    2007 budget to construct state-of-the-art laboratory space that will
    meet the stringent environmental conditions required for 21st century
    scientific advances. An additional $38.1 million will be needed in
    fiscal year 2009 to complete the project. With a total cost of $76.2
    million, the Building 1 Extension is the most cost-effective approach
    to enabling world-class measurement science in support of some of the
    country's most important economic sectors.
                NIST Center for Neutron Research (NCNR) Expansion and
                        Reliability Improvements (+$19 Million)
        The NCNR is widely regarded as the most scientifically-productive
    and cost-effective neutron facility in the United States, and serves
    more scientists and engineers than all other U.S. facilities combined.
    Neutron scattering techniques, in which beams of neutrons are used as
    probes to see the structure and movements of materials at the smallest
    scales are critical in a wide range of applications that will define
    the 21st century including nanotechnology, alternative energies, and
    understanding the structure of biological molecules. Because of the
    unique properties of neutrons for probing materials and their
    applications to some of the most advanced technologies, a significant
    shortage of neutron beam capacity and capability exists in the United
    States to satisfy the demands of industry and academia.
        This initiative begun in fiscal year 2007 is the second-year of a
    planned 5-year program to expand significantly the capacity and
    capabilities of the NCNR. The program includes the development of a new
    neutron cold source together with a new hall to house the guide tube,
    modernization of the control system, and five new world-class neutron
    instruments. The specific fiscal year 2008 funding will complete
    construction of the new guide hall.
    Industrial Technology Services
                Hollings Manufacturing Extension Partnership (MEP) ($46.3
                        Million--No Change from Fiscal Year 2007
                        President's Request; -$58.3 Million From Public Law
                        110-5)
        The MEP program is a partnership between the Federal Government and
    local officials to provide assistance to small and medium sized
    manufacturers around the country. Surveys taken of companies 1 year
    after receiving MEP assistance indicate a significant financial benefit
    accrued to the individual company.
        The Federal Government is an important partner in the MEP program.
    Specifically, the Federal Government:
      --Develops new services and programs in response to the evolving
            manufacturing environment and propagates them throughout the
            network;
      --Evaluates and ensures high-quality performance of every member of
            the network; and
      --Ensures that small manufacturers remain the focus of the effort.
        The above Federal role can be accomplished within the requested
    budget. The reduction of Federal funds to the local centers may have to
    be compensated through a combination of increased fees derived from the
    benefits accrued by individual companies and cost-savings in the
    operations of the centers.
                Advanced Technology Program (ATP) ($0--No Change From
                        Fiscal Year 2007 President's Request)
        No funds for ATP are requested in the President's fiscal year 2008
    budget. The fiscal year 2006 enacted budget and the 109th Congress'
    House mark and Senate Appropriations committee mark were consistent
    with the phase-out of the ATP program. The last new awards were made in
    2004 and sufficient funds were available in the carryover to complete
    all awards and provide government oversight.
        The fiscal year 2007 Continuing Resolution (Public Law 100-5)
    recently signed by the President included funding for the ATP program.
    NIST will work with Congress to ensure the funds are executed in the
    most effective manner to promote U.S. industry's competitiveness.
    Summary
        Measurements and standards are the bedrock upon which any economy
    stands. Our founding fathers recognized this. The Constitution assigns
    the Federal Government responsibility to both issue money and to ``fix
    the standards of weights and measures.'' The two are actually more
    similar than they might seem at first glance.
        All economic transactions rest fundamentally on trust--trust
    between two parties that a given amount of something is worth a given
    amount of something else. Helping to create that trust for innovative
    new technologies is the common theme that runs through all of NIST's
    proposed fiscal year 2008 research initiatives. Each helps build a
    missing or inadequate measurement base--a rigorous, accepted way of
    quantitatively describing something--that improves confidence in
    scientific results or improves the quality, reliability or safety of
    innovative products. Recent NIST measurements and standards research
    have enabled innovations now embedded in the iPod, body armor currently
    saving the lives of domestic law enforcement officers and our service
    men and women overseas, and in diagnostic screening devices for cancer
    patients making their treatment more targeted and accurate. The results
    of NIST research can be found in virtually every manufacturing and
    service industry.
        For nearly 106 years, NIST research has been critical to our
    Nation's current and future competitiveness. The increased funding in
    the President's fiscal year 2008 budget for the NIST core will directly
    support technological advances in broad sectors of the economy that
    will quite literally define the 21st century--as well as improve the
    safety and quality of life for all our citizens.

                        U.S. Patent and Trademark Office

    STATEMENT OF JON W. DUDAS, DIRECTOR
        Senator Mikulski. Mr. Dudas, why don't we welcome you, and
    look forward to hear from you and your protecting intellectual
    property.
        Mr. Dudas. Thank you, Madam Chairwoman.
        Thank you ranking member Shelby, and Senator Alexander.
        I appreciate this opportunity to share with you the things
    we're doing at the USPTO, and I also recognize I have a
    responsibility--and it's even clearer now--a responsibility to
    the employees of the USPTO to do a better job, not only talking
    about the challenges we face, but communicating the successes
    that our employees have had at the USPTO. So, I really do
    welcome this as an opportunity.
        And with that, I think I'll just cut to the chase and say,
    on behalf of the 8,500 of my colleagues at the USPTO, I'm truly
    proud to report that the women and the men of the USPTO
    delivered results in 2006 in, literally, record proportions.
    Last year, the USPTO set 11 all-time agency-wide records,
    including the highest quality in the history in trademarks, the
    second highest quality in history in patents, the highest
    production in history in both patents and trademarks, the
    highest hiring of examiners in history, in both patents and
    trademarks, the highest electronic processing, and electronic
    filing in history in both patents and trademarks, and allowing
    more examiners than ever before to work from home. Eighty-five
    percent of trademark examiners, and 500 new patent examiners
    were working from home last year.
        In 2006, we were also chosen by Business Week magazine as
    one of the best places in America to launch a career, and we
    were featured in Business Week magazine as a premier place to
    round out one's career. One of our examiners, who is 66 years
    old was featured in Business Week as, again, a place to round
    out your career.
        And USPTO examiners not only succeeded on behalf of the
    United States on protecting innovation, they succeeded
    personally and professionally. Sixty percent of all patent
    examiners, and 70 percent of all trademark examiners exceeded
    their goals in production and quality, or production or
    quality, and received an additional bonus for exceeding those
    goals.
        Thanks is owed, first and foremost, to these loyal and
    determined employees of the USPTO, and in our office hangs a
    banner, seven stories high, that says, ``Celebrating 2006, Our
    Record-Breaking Year.'' We held an 8,500 person, all-hands
    celebration, where senior executives served the rest of our
    colleagues a thank you lunch, a well-deserved thank you lunch,
    for breaking those records.
        Simply put, these results would not have been possible
    without this subcommittee allowing all innovators' fees to be
    used to fund determination of their innovations. The years 2005
    and 2006 were the first 2 years in more than 15 years, that the
    USPTO operated under full funding, and the difference has been
    dramatic. Since Congress passed the Government Performance and
    Results Act to hold Government agencies accountable and report
    their metrics, and hold them accountable, the USPTO, on
    average, had only met about 25 percent of their key goals.
        Under the Government Performance and Results Act, just last
    year, after full funding, an appropriate strategic plan, new
    methods in place, responding to some of the reports you've
    mentioned, we moved to 90 percent of our goals met. There's one
    we missed, we should meet it, we should be at 100 percent of
    our key goals, and our overall goals, we've met 94 percent of.
        In 2007, you again provided full funding, and we look
    forward to working with this subcommittee, to make this a
    permanent policy.
        This subcommittee has helped the USPTO come a long way, but
    as you point out, there are real challenges that lie ahead.
    Continuing to attract and retain the finest public servants is
    a growing challenge. Our employees are at the heart and soul of
    our intellectual property system, and we need to do everything
    we can possibly do to ensure they have an environment of
    respect, and an environment of opportunity.
        The Business Week magazine article I talked to before,
    reported that the most favored employers in the United States--
    not the average, but the most favored employers in America--are
    losing about one-third of their new hires within the first 3
    years of employment. The USPTO is experiencing similar
    attrition in the first 3 years. And with the record hiring we
    have done, that pushes our overall attrition to slightly above
    what the average has been. That's something we need to, again,
    focus more on, and I can share with you some of the things
    we're doing.
        The pendency of application also continues to be a
    challenge. Despite record-level hiring, and record-level
    production increases in both patents and trademarks last year--
    19 percent increase in trademarks, and a 17-percent increase in
    patents, in terms of production--and an already demanding
    environment for examiners, we continue to receive applications
    at a record that exceeds our capacity to examine. We've simply
    broken records in the number of applications we've received for
    over 20 years now.
        The answers there lie, in large part--and I think this is
    some of what we'll talk to you about in the plan--in asking for
    more and better information. Not just from our examiners--we
    recognize that the USPTO owes a whole lot, and that our
    examiners are the finest in the world--but we need to get more
    and better information from applicants themselves, and from the
    public at large. And those are some of the strategies that can
    increase productivity, and increase production.
        To that end, I'd like to share with you that we introduced
    a system of accelerated examination last year. Under this
    program, for those applicants--any applicant, any technology,
    from anywhere--who want quick turnaround, the USPTO now offers
    a complete examination within 12 months. An applicant can
    literally reduce their time to 12 months as of August 26, 2006.
        In exchange for this quick turnaround, we don't ask for a
    whole lot more money, but what we ask is that applicants file a
    complete application. That they give us meaningful and quick
    turnaround. That they file electronically, so things can be
    more efficient. And importantly, they give us search reports
    and information that will help our examiners become more
    efficient and more proficient.
        The first application to be completed under this program
    will issue this month, and it will issue in less than 6 months.
        Thank you, again, for this opportunity to discuss the
    progress the USPTO has made, and importantly, the challenges
    that we still face. I look forward to working with this
    subcommittee to make the best intellectual property system in
    the world even better.
        Please accept my invitation--if you have an opportunity--to
    come down and visit the USPTO, an open invitation to any and
    all of you to meet with the examiners, to share in the success.
    I can just tell you, anecdotally, the very best ideas we've had
    have come from opening communication more with employees, the
    people who are on the ground, doing the work, who have the very
    best ideas. And I think that's where you'll find the solutions
    that you're looking for.
        Thank you.

                               PREPARED STATEMENT

        Senator Mikulski. Thank you very much, Mr. Dudas, and also
    Dr. Jeffrey.
        [The statement follows:]

                       Prepared Statement of Jon W. Dudas

        Chairwoman Mikulski, Ranking Member Shelby, and members of the
    subcommittee: Thank you for this opportunity to appear before you to
    discuss the United States Patent and Trademark Office's (USPTO)
    operations, programs and initiatives and the President's fiscal year
    2008 budget request to fund those efforts.
        I first want to take this opportunity to thank this subcommittee
    and your colleagues on the House side for ensuring that our current fee
    schedule remains in effect for fiscal year 2007. We look forward to
    working with you to make that fee schedule permanent.
        We are also pleased that the fiscal year 2008 budget request gives
    the USPTO full access to the $1.9 billion in fees we expect to collect.
    This is the fourth consecutive year that the President's budget
    recommends full access to collected fees, and we appreciate the
    continued congressional support for that funding level.
        Full access to user fees allows the USPTO to continue our
    successful model of disciplined focus on real measures that enhance
    quality and increase production, increase hiring and training, promote
    electronic filing and processing, provide telework opportunities for
    our employees and improve intellectual property protection and
    enforcement domestically and abroad.
        As we entered the 21st century, the USPTO faced a number of
    challenges, all of which are well known to the subcommittee. We did not
    have access to all of our fee collections, our workload in patents was
    growing at record and unanticipated rates, and there existed the
    perception that patent examiners did not produce high quality work
    while management ignored the growing backlog of patent cases and acted
    to erode employee morale. Indeed, 6 months before I entered the USPTO
    as the Deputy Under Secretary, this subcommittee had communicated its
    strong concerns with the agency in its report:

        ``The ability of the administration to formulate an adequate budget
    for the PTO is complicated by two factors. First, the agency
    historically has formulated an incremental budget based on the previous
    year's budget, and does not provide the committee with a thorough
    business plan that demonstrates how resources will be used and what
    results will obtain. Second, PTO management has not been sufficiently
    innovative. * * *  Finally, the committee lacks full confidence in the
    information provided to it by PTO management regarding its needs and
    performance.'' Senate Report 107-42.

        This subcommittee's concerns weighed heavily on the USPTO. As
    Deputy to Under Secretary Rogan, and upon assuming responsibility for
    the USPTO as Under Secretary in January 2004, I made commitments to the
    administration, the Congress, our stakeholders and my dedicated
    colleagues at the USPTO to address these issues. I made specific
    promises, namely, that: we would make quality our number one priority;
    we would control pendency by increasing production; we would ``hire
    more, train better, retain better and telecommute''; we would make
    patent processing fully electronic; we would protect the U.S.
    intellectual property system and American interests internationally;
    and we would reaffirm the USPTO's credibility within the administration
    and with the Congress.
        We made promises, and we have kept those promises. Thus, I am
    pleased to be able to share with you today the real, measurable
    successes the USPTO has achieved. The women and men of the USPTO, my
    colleagues, delivered results in record proportions in fiscal year
    2006. Last year, the USPTO set 11 all-time agency records, including:
    highest quality in history, highest production in history, highest
    hiring of examiners in history, highest electronic processing and
    electronic filing in history and allowing for more examiners than ever
    to work from home-saving them precious time and the rest of us space on
    the roads. In 2006, we were also chosen by Business Week magazine as
    one of the best places in America to launch a career. I can further
    promise you that the men and women of the USPTO will not rest on our
    accomplishments while we have so many things we still want to achieve.
        This subcommittee has made USPTO's recent successes possible. This
    is our third year operating under the new patent and trademark fee
    schedule, which provides funding appropriated by the subcommittee. The
    reliable fee schedule permits us to finance the initiatives--
    particularly initiatives requiring long-term planning and commitment--
    so necessary to providing and maintaining reliable, functioning
    systems. Without your support, we would not be able to function in a
    business-like manner and achieve these results.

         USPTO--Percent of Performance Goals Met Under the Government
                      Performance and Results Act of 1993

        Our success has been accomplished in the following manner. We have
    spent the last 4 years concentrating on meeting or exceeding objective
    measures, as required by the Government Performance and Results Act of
    1993 (See chart above).
        This requires continual assessments that identify system-wide
    process improvements. We use relevant metrics and measures to gauge
    progress and as early warning of deviations that indicate a need for
    process adjustment. Our record reflects the hard work and sound
    decisions of more than 8,000 USPTO employees. We are now seeing the
    results of their efforts.
    Quality
        We have focused our attention on improving quality. Public
    confidence in the quality of our patent grants and trademark
    registrations is critical. Confidence is earned, and we do not take it
    for granted. At the USPTO, we believe the essential components of
    quality are accuracy and consistency. We must ensure that allowed
    applications meet both statutory and regulatory standards, thus
    providing the certainty that enhances competition in the marketplace.
    We must not allow the need for timeliness to adversely impact the
    requirement for quality. Last year, despite receiving a record level of
    patent applications, we achieved the highest patent allowance
    compliance rate in nearly a quarter century at 96.5 percent. Our
    trademark organization had a final compliance rate of 96.4 percent--the
    best rate since we began measuring quality.
    Human Resources
        In September 2006, Business Week identified the USPTO as one of the
    best places in America to launch a career. The USPTO has also been
    lauded by Families magazine as one of the best places in the
    Washington, DC area to work if you have a family. These results are due
    in part to the fact that the USPTO seriously addressed the audit
    findings involving our past human resources practices.
        We are now attracting and hiring record numbers of employees--at a
    rate of 1,200 new patent examiners a year. We started a new, university
    style approach to training, which allows us to deliver intensive,
    balanced and long-term training to newly-hired examiners. We now offer
    bonuses to hire and retain talented engineers and scientists in certain
    critical fields.
        An achievement of which we are also proud is the number of patent
    examiners who have joined their trademark counterparts in working from
    home. Our 10 year old Telework program is the gold standard and has
    proven to be a key quality-of-life benefit for increasing employee
    morale and retention, and now 500 patent examiners per year have chosen
    this route.
        In 2006, we also had the first ever management conference for all
    of the USPTO's 800 managers. For 2 days, our managers attended seminars
    and collaborated on best practices of how to best manage the highly
    skilled and dedicated workforce at the USPTO. On November 1, 2006, we
    also held an agency-wide ``thank you'' event for all of the USPTO's
    8,000 plus employees. Senior executives served lunch and thanked our
    colleagues for making 2006 a record-breaking year. At the management
    level, we also have started to implement our long-term Strategic Human
    Capital Plan.
    Electronic Government
        Our commitment to e-Government has been unequivocal. In March 2006,
    we unveiled ``EFSWeb,'' the first-ever, user-friendly, Internet-based
    patent application and document submission system. Since last March,
    electronic filing of patent applications has skyrocketed from the 1
    percent rate of fiscal year 2005, to almost 40 percent filings today.
    In other words, in less than a year, almost 40 percent of our patent
    applications are now filed electronically, via the Internet. Last year,
    94 percent of trademark applications were filed electronically, and we
    recently celebrated receipt of electronic trademark application number
    1,000,000.
    International IP
        On the global level, we continue spreading the word about
    protecting and respecting intellectual property, both domestically and
    internationally. We are fully engaged in the Bush Administration's
    Strategy Targeting Organized Piracy (STOP!) in the fight against piracy
    and counterfeiting around the world. We hold intellectual property
    awareness conferences, with a focus on small-businesses, all around the
    country. More than 90 percent of the attendees have rated these
    programs as good or excellent, and it has been described by at least
    one participant as ``the best use of my taxpayer dollars.'' Some of our
    conferences focus exclusively on doing business in China, from an
    intellectual property perspective.
        The USPTO has the lead for the United States in discussions and
    negotiations to strengthen global intellectual property protection
    throughout the world. We operate the Global Intellectual Property
    Academy, which offers intensive patent, trademark, copyright and IP
    enforcement training for foreign government officials and private-
    sector representatives from around the world. Finally, we have placed
    intellectual property experts in Brazil, China, Egypt, India and
    Thailand, to advocate for improved intellectual property protection
    that benefits all, including our American businesses.
    Production and Productivity
        The rate of filing of applications in the United States continues
    to break records every year. The USPTO's core business continues to
    grow at a steady pace. In fiscal year 2006 we received 419,760 UPR
    (utility, plant and reissue) patent applications and expect an increase
    of 7 percent in fiscal year 2007 followed by an anticipated annual
    increase of 8 percent in fiscal year 2008 through fiscal year 2012. In
    the trademarks area, we received 354,775 applications and expect an
    increase of 6 percent in fiscal year 2007 followed by an 8 percent
    increase in fiscal year 2008. Trademark applications are anticipated to
    increase by 7 percent in fiscal year 2009 and increase 6 percent each
    year from fiscal year 2010 through fiscal year 2012.
        This is a strong sign of growing innovation and investment in the
    United States, but it also represents potential strains on the system.
    The USPTO has the highest productivity of any major IP office in the
    world. The USPTO processes and examines more patent applications and
    more trademark applications than any other office in the world. Based
    on the latest statistics, the USPTO also has the lowest pendency of any
    other major office in the world. In addition, 2006 was a record year
    for production--from 2005 to 2006 production increased 18 percent in
    trademarks and 16 percent in patents.
        Even with the success we have had increasing production and hiring,
    the volume of patent applications continues to outpace our capacity.
    Even with 1,200 new hires each year through 2012, pendency, which
    averages about 31 months now, will be nearly 39 months in 2012. Of
    course, hiring is critical--without that plan, pendency would be more
    than 50 months in 2012. However, as this subcommittee has noted, hiring
    alone is simply not enough. As a result, the USPTO's Strategic Plan
    released this year places a high emphasis on increasing productivity in
    the USPTO and in patent systems throughout the world by leveraging the
    work that is being done in other offices, by applicants themselves and
    from interested parties in the public.
        While increasing productivity, we must take into account the
    incredible demands placed upon our examiners to issue on the highest
    quality results in an increasingly demanding world. The inventions for
    which patent protection is sought are becoming more technically
    complex. Complex technologies take more time to examine and make up an
    ever-greater percentage of applications. For the average application,
    an examiner now has to review 50 percent more claims and 300 percent
    more background literature. At the same time, the mix of more
    experienced, more productive examiners to less experienced, less
    productive examiner varies every year, as does the production loss to
    train new examiners. For these reasons, patent productivity (the number
    of patent applications examined per examiner per year) has been
    steadily decreasing from 101 in 1993 to 78 in 2006.
        These are challenges that we can and will overcome. In trademarks,
    the USPTO increased productivity by 7 percent in fiscal year 2006 after
    negotiating a new performance plan. Although the trademark examiners
    union expressed good faith concerns that the vast majority of trademark
    examiners would fail under increased production and quality
    requirements, examiners flourished when given this opportunity to
    succeed--70 percent of trademark examiners earned a production bonus
    and the number of trademark examiners who received an ``Outstanding''
    or ``Commendable'' rating grew by nearly 10 percent.
        We are adopting a number of strategies in the patents area as well.
    The USPTO expects to increase productivity in patents by offering
    examiners more opportunities to determine their workload and achieve
    higher bonuses. The USPTO is piloting a voluntary flat goals program
    for patent examiners that builds upon the successful system in
    trademarks.
        We are trying a variety of innovations, including a new offering
    for the public, called ``Accelerated Examination.'' Under this program,
    which began August 26, 2006, for those applicants who need or want
    quick turn around, the USPTO offers a complete examination within 12
    months. In exchange for this quick turn around, applicants must file a
    complete application, agree to telephone interviews and accelerated
    response periods, must file and prosecute their application
    electronically and must provide more information about the application
    to the USPTO in the form of a search and a support document. The first
    application to be completed under this program was filed on September
    29, 2006 and will issue on March 13, 2007 (less than 6 months from date
    of filing).
        While the significant growth in patent and trademark applications
    indicates that innovation and entrepreneurship are alive and well, it
    presents our agency with a variety of challenges. We plan to use the
    following strategies to address these challenges which are included in
    USPTO's fiscal year 2008 budget request.
                Strategy #1: Hiring, Retention
        The USPTO hired a record 1,218 patent examiners in 2006, exceeding
    our hiring goal by more than 200 examiners. The USPTO plans to hire
    1,200 patent professionals a year in fiscal year 2007 through fiscal
    year 2012 for a total of at least 8,400 patent examiner new hires by
    end of year fiscal year 2012.
        Since more experienced examiners naturally are able to review cases
    faster, and in an excellent manner, the USPTO has implemented a program
    of recruitment bonuses to hire and retain the talented engineers and
    scientists we need to examine our increasingly complex applications. We
    are reviewing other possible programs to help us compete with industry
    for professionals in the ``hot'' technology sectors. We want to be an
    ``employer of choice'' to the pool of tech professionals.
                Strategy #2: Training
        In fiscal year 2006, the USPTO implemented a university approach to
    training new examiners. The university method provides training to new
    examiners in a classroom setting for 8 months, rather than using the
    traditional one-on-one training model. This allows us to deliver
    intensive training to the new hired examiners, leaving more experienced
    examiners and supervisors to focus on quality examination. In fiscal
    year 2006, 123 examiners completed the university's 8-month program. So
    far in fiscal year 2007, a total of 225 new examiners completed
    training, with an additional 293 examiners slated to graduate by the
    end of the fiscal year.
                Strategy #3: Quality Initiatives
        In fiscal year 2008 and beyond, patents will use a number of
    strategies to improve quality, such as:
      --leveraging the effectiveness of the Patent Training Academy to
            enhance examiner skills;
      --creating chief scientist positions;
      --designing and implementing a comprehensive quality system to
            collect and analyze all quality review information for
            consistency and to provide feedback and improved training;
      --offering a separate quality award that better recognizes the
            accomplishments of examiners who meet or exceed quality
            expectations;
      --conducting targeted reviews in problem areas which focus on
            examination processes or functions that show problematic
            trends; and
      --encouraging submissions of prior art by participating with a
            consortium of patent users, applicants, attorneys, and members
            of the academic community to build a system to actively solicit
            prior art.
        Trademarks will continue quality improvements by increasing the use
    of quality review findings, analyzing and incorporating the results in
    training, examination guidelines, policies and manuals. In addition,
    trademarks will create comprehensive new employee training programs,
    and explore the creation of web-based search tools, data mining, and
    automated preliminary searches so that examining attorneys can search
    more effectively.
                Strategy #4: E-Government
        The USPTO promotes electronic filing of applications. In fiscal
    year 2006, 94 percent percent of trademark applications and 14 percent
    of patent applications were filed electronically. Trademarks and patent
    programs estimate that rates of electronic submission of new
    applications will continue in fiscal year 2007, at 90 percent and 40
    percent respectively. In fiscal year 2008, patents expects to receive
    50 percent of all patent applications electronically, while trademarks
    will hold at approximately 90 percent or above of applications filed
    electronically.
        Trademarks is continuing to enhance electronic filing by expanding
    the number and type of transactions offered on-line and by offering
    reduced fees to any applicant who files a complete applications using
    the newer system, the Trademark Electronic Application System-Plus
    (TEAS-Plus).
        Patents implemented the Electronic Filing System-Web (EFS-Web), a
    user friendly, Internet-based patent application and document
    submission solution. This system dramatically increased the electronic
    filing of patent applications from 1.5 percent per month to 33 percent
    per month at the end of fiscal year 2006. This easy to use system will
    continue to encourage applicants to file electronically.
        Patents is developing the electronic Patent File Wrapper (PFW) as
    the solution to several business problems. PFW in conjunction with
    current Patent Automated Information Systems (AIS's) will allow for a
    fully automated, text-driven patent application processing system.
                Strategy #5: Telework
        In fiscal year 2006, a pioneer group of 500 patents examiners
    participated in the newly implemented Patent Hoteling Program (PHP).
    This voluntary program is designed to comply with congressional
    direction and build upon the lessons learned from the very successful
    Trademark Work-at-Home program. The PHP provides patent examiners the
    ability to work from home with complete on-line access to the USPTO
    resources. This concept allows participants to reserve time in
    designated shared ``hotel'' offices at the Carlyle Campus in
    Alexandria, Virginia. We plan to add 500 more examiners to the hoteling
    program in fiscal year 2007. The goal of the hoteling program is to
    change the boundaries of the old workplace patterns allowing for
    decreased commute time, greater control over workloads, and even a more
    balanced lifestyle for our employees. This all translates into
    increased employee productivity and satisfaction, as well as higher
    employee retention. On a more long-term basis, we hope to create a
    workplace that can be anywhere, any time. Patents will also pilot a
    work-at-home program for technical support staff.
        In 2006, Trademark's Work-at-Home program for examining attorneys
    received the ``Telework Program with Maximum Impact on Government
    Award'' from the Telework Exchange. The Trademark Work-at-Home program
    is considered a ``best practice'' because of its success in addressing
    budgetary, space, retention, recruitment, and job satisfaction issues.
    During 2006, trademarks expanded this program to include 85 percent of
    all eligible employees.
                Strategy #6: International
        With substantial congressional support, the USPTO has significantly
    expanded its efforts to strengthen intellectual property (IP) rights
    protection globally. As part of the Bush Administration's Strategy
    Targeting Organized Piracy (STOP!) initiative and the National
    Intellectual Property Law Enforcement Coordination Council (NIPLECC),
    the USPTO worked with other U.S. Government agencies to fight piracy
    and counterfeiting around the world. We collaborate on IP training,
    advocating progress in IP-related norm-setting bodies (e.g.,
    intergovernmental organizations such as World Intellectual Property
    Organization (WIPO)), and enforcement efforts with our colleagues in
    the Departments of Commerce, Justice, and State; the Department of
    Homeland Security's Customs and Border Protection; the Copyright
    Office; and the Office of the United States Trade Representative
    (USTR).
        As part of STOP! the USPTO continues a communications campaign to
    educate small businesses about protecting their IP in the United States
    and abroad. Small business conferences are offered throughout the
    country and other USPTO conferences focus exclusively on the IP
    challenges of doing business in China. The USPTO continues to staff the
    STOP! Hotline, which lets callers receive information on IP rights and
    enforcement from our attorneys with regional and subject matter
    experts. In 2006, the hotline received 1,460 phone calls from people
    across America with a range of IP questions--an increase of 52 percent
    over 2005.
        To strengthen global IP protection, the USPTO represented the
    United States in discussions and negotiations at the WIPO throughout
    2006. Most notably, the USPTO led a delegation to the WIPO Diplomatic
    Conference, which culminated in the adoption of the Singapore Treaty on
    the Law of Trademarks. The new treaty will help trademark owners around
    the world file applications and renew registrations with fewer
    formality requirements.
        The USPTO has promoted IP protection in China. Through the Joint
    Commission on Commerce and Trade and its Intellectual Property Rights
    Working Group, the USPTO and USTR have negotiated commitments from the
    Chinese Government to reduce counterfeiting and piracy.
        The USPTO has established the Global Intellectual Property Academy
    and has conducted IP rights programs for foreign government officials
    and private sector representatives around the world. Additionally, we
    have placed IP experts in Brazil, China, Egypt, India, Thailand, and
    Geneva to advocate improved IP protection for American businesses and
    to coordinate training to help stop piracy and counterfeiting abroad.
                Strategy #7: Business Continuity/Disaster Recovery
        The USPTO Business Continuity Program/Disaster Recovery Program is
    committed to ensuring protection of USPTO data and systems from damage
    or unavailability in the event of a disaster or prolonged outage. The
    USPTO is operating both the patent and trademark production pipelines
    in a predominantly electronic environment and is dependent on automated
    systems to support the end-to-end processing of patent and trademark
    applications. As such, the continuing operations of the USPTO are at an
    increased risk should catastrophe strike the single data center prior
    to the full deployment of disaster recovery services. We are
    undertaking a phased implementation for deploying dual, load balanced
    data centers that would enable us to protect our mission critical
    patent and trademark data.
        The USPTO's Business Continuity Program completion timeline will
    occur in five major phases. As part of phase one, in 2007 the USPTO
    will establish an off-site data ``bunker,'' far enough away from our
    current data center to prevent a disaster from affecting both sites.
    Phase two will begin with the establishment of a ``warm site'' that can
    be activated in the event of a disaster at the primary data center.
    Future phases will provide distributed processing, load balancing, and
    automatic fail over for both core and non-core systems.
    Conclusion
        Intellectual property rights is a critical aspect of how nations
    protect and promote innovation and global competitiveness. The United
    States represents the gold standard for intellectual property
    protection, and the USPTO is the most productive and most respected
    intellectual property office in the world. However, because
    intellectual property protection is so fundamental to our Nation's
    economic growth, being the best is not enough. We must be perfect.
    Despite the challenges, we at the USPTO strive to get it perfect, and
    we look forward to working with the subcommittee to ensure that we do.
        Thank you.

               PTO deg.PATENT APPLICATIONS AND PENDENCY

        Senator Mikulski. I have visited NIST, and I've been
    inspired. I've seen the hydrocarbon car and rode around in it
    and looked at how you've examined building properties after
    what happened at the World Trade Center, so not only do we
    prevent an attack on us again, but that our buildings will be
    safer and more secure.
        Let me now go to patents, and then I'll come back to you,
    Dr. Jeffrey.
        The protection of our intellectual property is an obsession
    with me. Because if we invent it, and all that goes into it,
    that's how we're going to compete in the world. My question to
    you, Mr. Dudas--and thank you for your energetic testimony--how
    many patents do you receive a year, and what is the nature of
    the backlog? I understand it's called ``pendency.''
        Mr. Dudas. Pendency is the amount of time it takes for an
    application from the time it's filed until the time it's
    completed, and the backlog is literally the number of
    applications that are waiting in line.
        Senator Mikulski. Okay, well, tell me how many do you get?
        Mr. Dudas. Yes, we are now receiving----
        Senator Mikulski. What is the backlog, and what is the
    pendency?
        Mr. Dudas. Yes, the number of applications we receive is
    growing every year, this year we anticipate 440,000 new patent
    applications--largest in the world--which is a good news in
    terms of innovation. 440,000 applications, and we're
    experiencing growth right now of about 8 percent--many
    countries are wanting to file more, and certainly Americans are
    filing more.
        Senator Mikulski. So, we have to be clear that it is not
    only inventors and entrepreneurs of the United States of
    America that file with you. But they file with you from around
    the world.
        Mr. Dudas. Absolutely.
        Senator Mikulski. And, I understand one of the largest
    countries is South Korea.
        Mr. Dudas. South Korea is one of the fastest growing
    countries. It is not right now one of the largest, but it is
    the fastest growing.
        Senator Mikulski. But you have 400,000 applicants a year,
    of pretty techno stuff.
        Mr. Dudas. Absolutely.
        Senator Mikulski. Okay, and what is the backlog?
        Mr. Dudas. The backlog is 700,000 patent applications
    waiting in line.
        Senator Mikulski. And how long is the timeframe?
        Mr. Dudas. The average across the board is 31 months--and
    it is growing because that backlog is, you know, I just call it
    ``deficit examining''--more applications coming in, even with
    record hiring. So 700,000 applications, it's 31.1 months right
    now, on average--but that's a little misleading, let me tell
    you, to say ``on average'' because we have some areas--in the
    mechanical arts, for instance--maybe relatively simple
    inventions that are only taking 14 months. That's wonderful,
    but on the other hand, we have some areas--like the electrical
    arts--where you see a lot of the high technology, unfortunately
    where you see the short life cycle, that could take 5 or 6
    years. And this is exactly why we are introducing concepts like
    accelerated examination.
        Senator Mikulski. Well, then, let me go to these questions.
    You've read the Government Accountability Office (GAO) report,
    you're obviously there, and we're glad about the recognition in
    Business Week. But my concerns relate to ongoing communication.
        Mr. Dudas. Right.
        Senator Mikulski. And the issues related to improving
    technical education of staff. You're hiring people that are hot
    tickets in the marketplace.
        Mr. Dudas. Right.
        Senator Mikulski. These are intellectual property lawyers,
    paralegals, support staff--they're hot.
        Mr. Dudas. Right, very.
        Senator Mikulski. And, in some instances, they also have to
    have security clearances.
        Mr. Dudas. Right, absolutely.
        Senator Mikulski. And we understand the dynamic in that.
        Mr. Dudas. Right, they all have to be American citizens, as
    well.
        Senator Mikulski. So, could you--one of the things I noted
    in your prepared remarks that you submitted, that you want to
    retain, you don't want to keep training the new.
        Mr. Dudas. Right.

      PTO deg.PATENT AND TRADEMARK OFFICE RETENTION AND TRAINING

        Senator Mikulski. And we support that. Could you tell us
    what you're doing in the area, both of retention, and providing
    and cracking this whole issue of ongoing technical training.
    There are people, when I talk to Nobel Prize winners that have
    worked, who were civil servants, both at NASA and NIST, they
    said they liked working for the Federal Government because it
    was mission, it wasn't money, it was purpose. And, they also
    worked with the best colleagues in the world, and they had the
    opportunity for their own intellectual expansion. For us, for
    them to stay fresh, both technically, and fresh in terms of
    enthusiasm for the job, and a desire to stay.
        Could you talk, then, about your retention techniques, and
    the opportunity for them to get ongoing education.
        Mr. Dudas. Absolutely.
        Senator Mikulski. And do you need something from us?
        Mr. Dudas. I'll report what you have, and quite honestly,
    we're looking for guidance from anywhere and everywhere we can
    get it, but I will tell you that I think we've done a number of
    things.
        First and foremost, what you talked about--what do people
    want today? They're called the ``millennial,'' I'm not a
    millennial, the millennial generation, but many of the people
    we hire today, they care about Government service, they want to
    be valued--money matters, but that's not the number one thing
    that attracts them, and we try to address that, as well.
        And you talked about training, and making sure you show
    value. Of course, we have a challenge, because we are a
    performance-based organization, people do have to work hard in
    our office, but there's a number of things that we've done.
        First and foremost, we've changed the way we train. Instead
    of having examiners come in and train for 2 to 3 weeks and then
    have a mentor approach, we've actually started a Patent
    Examiner Training Academy, where they come in for 8 months, we
    give extended-term training, so we can get a greater level of
    consistency, it allows for more teamwork, it allows for people
    to get to know the office better, and more consistency. That is
    something that we needed to do, both because we thought it was
    a best practice, and because of the amount we were hiring. It
    turns out it has been a good practice.
        Senator Mikulski. That's when they come in. What about
    training for them while they're there? In other words, say
    they've worked for 3 years, and they want to get refreshed and
    renewed----
        Mr. Dudas. Yes, absolutely.
        Senator Mikulski. Both intellectually, and professionally.
        Mr. Dudas. Absolutely.
        Senator Mikulski They need to know the new stuff and the
    new bus.
        Mr. Dudas. Absolutely. One of the things we've done, is
    beef up on allowing examiners to take time and use money to get
    external training. And we're doing more internal training as
    well. So, for instance, an examiner can have an opportunity to
    have their legal degree paid for. If they want to get education
    outside, they can get a legal degree outside the office and the
    office will pay for it. In addition to that, any training they
    want to get that's related to their field, outside the office,
    PTO will pay up to $10,000.
        Last year we had the first-ever managers training
    conference, where we worked with managers, we got all of the
    managers out, 2 days away from the office, to talk to them
    about how they can train better, how they can resolve conflicts
    better, how they can listen and communicate better with
    examiners. Now we're also developing the different kinds of
    training programs we can offer. We already offer several
    through the office, and through the Federal Government. But,
    how do we tailor it specifically for those examiners who've
    been there for a long time?
        Another program that we think is very important for
    retention is teleworking. Five hundred examiners were given the
    opportunity to work from home last year, and 500 more patent
    examiners this year. Giving the examiners the opportunity to
    have the flexibility to determine what they think is the best
    work environment for themselves. We've found that that has been
    an incredible boost for morale. Teleworking also gives people
    more time with their families, but also more time to increase
    their production, if they want to do that.
        Senator Mikulski. Well, my time has expired, I will turn to
    Senator Shelby. But, Dr. Jeffrey, you won't leave without a
    question from me.
        I think that's exciting--no, go ahead, go ahead. Senator
    Shelby, you go right ahead.
        Senator Shelby. Thank you.

             NIST deg.AMERICAN COMPETITIVENESS INITIATIVE

        Dr. Jeffrey, I'll start with you, if I could.
        The National Institute of Standards and Technology. Last
    year, we've been talking about, the President announced the
    American competitiveness initiative--investments are made in
    federally funded research to ensure that the country has a
    technologically skilled workforce. The National Institute of
    Standards and Technology is one agency designated to lead this
    initiative.
        Dr. Jeffrey, how has the American competitiveness
    initiative improved your portfolio in NIST?
        Dr. Jeffrey. Thank you very much, Senator.
        The ACI was an absolutely tremendous boost to NIST's
    ability to do its mission. NIST stimulates innovation and
    competitiveness through measurements and standards,
    specifically to help support U.S. industry in terms of their
    competitiveness, and also improving the quality of life.
        The ACI finding will help us in a number of areas. For
    example, it helps us to accelerate the development and adoption
    of absolutely groundbreaking, and economically significant
    technologies. Like, for example, nano-technology, which is
    estimated to, perhaps, be a $1 trillion industry in 10 years.
    Also, in support of our energy independence through advancing
    the hydrogen economy and biofuels work.
        It also supports the technical infrastructure that industry
    needs for the measurements like the work at the NIST Center for
    Neutron Research (NCNR), and the new NIST Center for Nano-Scale
    Science Technology. Bottom line is the ACI substantially
    enhances NIST's capacity and capability to meet our mission.

            NIST deg.DISASTER RESILIENT STRUCTURES STUDIES

        Senator Shelby. I'm also pleased to see that the budget
    request includes an increase of funding for improving disaster-
    resilient structures in communities. Results from these studies
    are expected to influence building codes and construction
    practices along the gulf coast, which need updating to match
    current risk assessments.
        How are you planning to coordinate with gulf coast
    communities and State agencies to implement any results from
    this program? As you know, continued construction--costs
    continue to rise in the gulf coast as a result of rebuilding
    from the 2005 hurricane. What part of this program explores how
    safer construction could actually become more cost-effective
    than current practices? Looking at the whole picture.
        Dr. Jeffrey. Thank you, Senator.
        We're very excited by the programs and new initiatives that
    we put in in the 2008 budget. To answer the first question
    ``how we're going to coordinate''. After Hurricanes Katrina and
    Rita, NIST did an assessment--Lessons Learned in the Gulf Coast
    Region. At that point we worked very closely with a lot of
    State and local officials who were responsible for enacting and
    enforcing the building codes. We have a good working
    relationship with them, as well as the construction industry
    down there.
        Just like that, we will continue to work with the State and
    local officials and with the local industry building officials
    as the results from these new initiatives come forward. We'll
    also continue to work with the National Building Codes and
    Standards, to make sure that the lessons get adopted in there.
        To answer the second question, which is how do we ensure
    the cost effectiveness, the whole crux of that program, the
    whole goal is to find a way of balancing the risk and the cost.
    So the overall programs focus on exactly that goal. There are
    actually three ways that we're going to be doing that. One is
    in the focus on the building codes and standards on the local
    risk assessment. It matters--whether you're a block away from
    the ocean, versus 1 mile away from the ocean, and that needs to
    be included when one looks at the risk assessment, and what the
    building codes should be.
        Second, we're emphasizing performance of the building
    codes, as opposed to individual components, that way, it's very
    prescriptive right now. What you want to do is look at the
    performance in the entire structure.
        And last, to really foster the adoption of new construction
    techniques and materials that are at lower costs, that can help
    provide greater security and risk assessment.

                  PTO deg.INTELLECTUAL PROPERTY THEFT

        Senator Shelby. Secretary Dudas, what are you doing at the
    U.S. Patent and Trademark Office to curb intellectual property
    theft, and strengthen both domestic and international
    protection of these rights?
        Mr. Dudas. Thanks for asking that question.
        We are working both internationally and domestically.
    First, while training small businesses in the United States, we
    came to the conclusion we can't just issue patents and
    registered trademarks, we need to educate businesses. So, we
    have seminars throughout the country training small businesses.
        First, on intellectual property generally, second on how to
    do business in China, particularly, because it's such a hot
    area and there's such a problem there.

             PTO deg.INTELLECTUAL PROPERTY LAW ENFORCEMENT

        Senator Shelby. What about enforcement?
        Mr. Dudas. Enforcement, we are not police.
        Senator Shelby. We know that. But you aid in the----
        Mr. Dudas [continuing]. Absolutely. We're the advisors to
    the rest of the administration on free trade agreements, we
    work very closely with the Departments of Justice and Customs
    and Homeland Security, and we are often on the front lines. We
    place people in China, Brazil, India, Russia, who work with
    custom officials and others. And we also have a Global
    Intellectual Property Training Academy where we train hundreds
    of officials from foreign governments. We bring them here,
    they're Supreme Court justices, customs officials, and train
    them here in the United States.
        Senator Shelby. Absolutely. How large of a role does lax
    enforcement--lax enforcement--of patents and copyrights
    agreements, internationally play in violating intellectual
    property rights? In other words, if you don't enforce what you
    have.
        Mr. Dudas. Right.
        Senator Shelby. Or if you don't try to enforce it, if
    you're not diligent, you're not on top of things--what do you
    have, right?
        Mr. Dudas. Right. Lax enforcement, I think, is the number
    one problem for intellectual property rights. Many nations have
    put laws into place that might comply, but if you don't enforce
    them, you have nothing. Sometimes shaking a stick at other
    nations, and telling them why it's critical, and we do that
    through a variety of ways--but also, educating their officials
    in why it's in their interest, as well as the United States.

              PTO deg.COST OF INTELLECTUAL PROPERTY THEFT

        Senator Shelby. Well, what's the estimated cost impact in
    the United States, to the U.S. economy in terms of money and
    jobs that can be attributed to the theft of U.S. intellectual
    property?
        Mr. Dudas. We've seen estimates as high as $250 billion.
        Senator Shelby. Say that again, for the record, two
    hundred----
        Mr. Dudas. $250 billion.
        Senator Shelby. $250 billion of lost money, it's jobs, is
    it not?
        Mr. Dudas. And the estimates of up to 750,000 jobs just
    from intellectual property theft.
        Senator Shelby. Do you have the coordination of the other
    agencies to enforce our copyrights?
        Mr. Dudas. I think we do, and----
        Senator Shelby. Is it working pretty well?
        Mr. Dudas. At the Presidential level, they pull together
    nine different departments and agencies, targeting organized
    piracy. We now see the President raising, as he has been for
    some years, the issue with world leaders, and we've seen real
    results because of that. The Department of Justice had a
    copyright takedown in 10 different countries because of
    international cooperation.

                  PTO deg.PATENT EXAMINATION QUALITY

        Senator Shelby. The quality of patent examination is
    central to ensuring that we have strong, enforceable patents,
    otherwise they challenge, and say there's absolutely nothing to
    that, you know, that's in the marketplace, everybody knows it.
    What are you doing to ensure the quality of the patent
    examination? You talked about the applications with Senator
    Mikulski, and the backlog, but you know, you don't want to run
    in and do something too hastily.
        Mr. Dudas. Right.
        Senator Shelby. Because, otherwise you--the quality's not
    there.
        Mr. Dudas. You're 100 percent right that there is tension
    between productivity and quality, and we have to be fair to the
    examiners. I will tell you, our number one goal was to make
    certain we improved certainty and quality in the system.
        The first thing we do is hire the best and the brightest,
    the most dedicated people.
        Senator Shelby. How do you do that, and compete in the
    marketplace, this is very important for a governmental agency
    that we fund to do that?
        Mr. Dudas. Hiring 1,200 examiners has been an incredible
    challenge, to hire the best and the brightest. We've judged by
    grade point averages, and where people are coming from. Quite
    honestly, I think the reason we've been successful in this
    model, is because we do offer what Senator Mikulski mentioned,
    which is Government service. You take a constitutional oath to
    come to our office.
        Senator Shelby. They're not doing it for money.
        Mr. Dudas. They're not doing it for money.
        Senator Shelby. But also, intellectual challenges in there.
        Mr. Dudas. The intellectual challenges in our office are
    absolutely one huge challenge for us. They do become valuable,
    because they are so intelligent coming in, and the skills they
    learn at the Patent and Trademark Office make them valuable in
    other ways. But, we actually have a team that measures,
    separate team that measures randomly, quality of examiners,
    randomly 6 to 18 different cases. We've beefed up that, in
    terms of how many cases we look at.
        Senator Shelby. You have production goals, but at the same
    time, it can't just be numbers, it's got to be quality.
        Mr. Dudas. Right, we have production goals and quality
    goals, and there are no bonuses--you cannot get a bonus until
    you've met your quality goal. At least met your goal for
    quality.
        Senator Shelby. The worst thing you could do is allow a
    patent for something that, isn't, perhaps not patentable, just
    to meet a goal or a deadline, is that correct?
        Mr. Dudas. You're absolutely right that quality has to be
    first and foremost. And that's why, probably, the thing we are
    proudest of is that we drove our error rate down to the lowest
    it's been in history in trademarks, and second lowest in
    history of patents.
        Senator Shelby. The chairman has indulged me, if I have one
    more question, Madam Chairman?

               PTO deg.HUMAN CAPITAL MANAGEMENT REVIEWS

        Mr. Dudas, over the past 7 years, independent audit in
    agencies such as Government Accountability Office, OPM and the
    inspector general have reviewed your office management of human
    capital. What has been the result of these numerous audits, and
    do you believe that your agency is aggressively implemented the
    recommendation of these reviews, can you--and can you provide
    specific improvements that has shown in the area of human
    capital management?
        Mr. Dudas. Absolutely.
        Senator Shelby. So much of what you're doing is dealing
    with people, but people with high intellectual capacity.
        Mr. Dudas. Right. First, to answer your question directly,
    I am certain that we're aggressively implementing the
    recommendations in these studies, and I will give you
    specifics, but I want to point out--I think you're 100 percent
    right--we have some of the smartest people there are, and
    they're at the cutting edge of technology. I'm always humbled
    when I sit down and talk to a Ph.D. in biotechnology in our
    office to try to learn something specifically about a case.
        And, I will tell you, first and foremost, when we look at
    the Federal human capital survey, what our employees----
        Senator Shelby. You got a lot of Phi Beta Kappas over
    there?
        Mr. Dudas. We've got a lot of Phi Beta Kappas, yes.
        And when we look to our employees themselves, and look at
    the results we have--and quite honestly, anecdotally, from me
    walking around in the gym, and the preschool, and walking
    around, just talking to examiners--what we do incredibly well
    is measure. We give people the expectations they need and they
    believe they're promoted for the right reasons.
        What we're not doing well enough, and what we're focused on
    now, is letting people feel they have creativity and innovation
    in what they're doing. Because this production environment and
    the metrics environment is a challenge to that.
        And, so we've done a number of things. We've established an
    Office of Internal Communications, focused only on how we
    communicate with others. I've called in our management team, we
    actually changed some of our management team, because we wanted
    to make certain that we're communicating better, and we wanted
    to make certain our senior managers did communicate better. So
    our Commissioners of Patents and Trademarks have brown bag
    lunches at least every month. Sometimes it's little things,
    like going to retirement parties, speaking to examiners, 500 or
    600 at a time. The Patent Training Academy brings in classes of
    about 120 examiners at a time. Either I, or the Deputy and the
    Commissioner will meet with them two or three times, to make
    certain we're letting them know what's going on. And certainly,
    most importantly, open to the different questions.
        But on the more administrative side, we have a human
    capital plan that we put in place and the Human Capital Council
    that we've put in place. The question is, what are the results?
    So, certainly, long term, I think administratively we've made a
    big difference. I will tell you some of the results, I think,
    we've gotten this year.
        Being able to hire 1,200 examiners, and have a high-quality
    class is something that, quite honestly, we were intimidated
    by, because a number of Senators, a number of Members said,
    ``You simply can't do it.'' Our original goal was 750, and then
    we did 875, and then we raised the goal to 1,000, and we did
    1,219. And now we feel comfortable and confident that we can do
    this with 1,200 folks. So, I think, just having an operation
    that can hire 25 percent of your workforce every year is a
    testament to what our human capital plan has put in place so
    far.
        Although money is not the most important thing, we
    recognize we need to be competitive. We were able to get both
    retention and recruitment bonuses adopted through the Office of
    Personnel Management, as well as an across-the-board pay raise
    of 7 percent for all patent examiners, both in the same year,
    to say, ``Listen, we have to be able to recruit on this
    basis.''

        PTO deg.RELATIONSHIP WITH FOOD AND DRUG ADMINISTRATION

        Senator Shelby. What kind of relationship do you have with
    the Federal Drug Administration?
        Mr. Dudas. Food and Drug Administration?
        Senator Shelby. Food and Drug----
        Mr. Dudas. It's more administrative than anything else. Our
    policy folks get together and talk, but certainly we have an
    administrative relationship in that certain pharmaceutical and
    agricultural products----
        Senator Shelby. Right.
        Mr. Dudas. Have an administrative way of getting a term
    extension. It's mostly a ministerial task at the Patent and
    Trademark Office.
        Senator Shelby. Because they patent.
        Mr. Dudas. What happens is that the Food and Drug
    Administration or Agriculture has to approve a certain product,
    so they're not allowed to get to the market----
        Senator Shelby. Absolutely, it's safety.
        Mr. Dudas. Yeah, exactly, the Hatch-Waxman law allows for
    some extensions. So, we have a relationship in that we
    communicate with them, so we understand----
        Senator Shelby. Sure.
        Mr. Dudas. But, really it's more administrative.
        Senator Shelby. Okay.
        Thank you for your indulgence, Madam Chairman.
        Senator Mikulski. Well, Senator Shelby, those were
    excellent questions, and certainly reflect my own thinking.
        I just wanted to close the loop for the purposes of this
    hearing on the patent issue. I think what we're saying is, that
    what we want is the PTO to really function in the way I think
    you and we would like it to be. There have been a series of
    issues that have been raised, and there are numerous reports,
    and that you have raised internally. We know that there's been
    legislation that took the PTO from kind of a 1950's Government
    thinking--when Rubric's quoting in 50's and 60's technology--to
    a performance-based agency in a new world order. Not only a new
    economy. And, therefore, we're very conscious in performance-
    base with benchmarks, and metrics, these things are important.
        All of this is important, but ultimately, it's those
    employees who feel that they are on solid ground, and they want
    to either make it a career, or they want to make it a long
    enough of a career to make what we invest in them worthwhile.
    That's really our question. Because we know, in the
    marketplace, they'll move out. But you will always need a cadre
    of civil servants that are there. So, this is why we'll come
    back to you in terms of what I raise with both Secretary Dudas
    and Gutierrez, you've heard what we've raised, no surprises,
    and no spring hazing--we wanted that remediation plan. So,
    let's get this remediation plan. You know what the challenges
    are, and what we think we can do this year, and what we can do
    subsequently.
        We're also aware of the international challenges--not only
    the number of countries that are applying and--because they
    want our intellectual property so they can come into our
    market. We're the gold standard. You are, like FDA, the gold
    standard.
        And, what we're very impressed by the National Intellectual
    Property Law Enforcement Coordinating Council. I've read their
    most recent report, and Senator Shelby, I know you've traveled
    the world on security matters, both as intel chair, and
    actually of this subcommittee, which--you get high marks for
    training Government officials in other countries to enforcement
    issues, educating foreign publics about intellectual property,
    the group called STOP.
        So, that's a whole other area we could follow up on. But,
    we want to be sure, as we go ahead in this year's
    appropriation, you can meet some of those international
    challenges, as well as being flooded with patents. So, we're
    going to come back to you.

       NIST deg.NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY
            FUNDING INCREASE FOR AMERICAN COMPETITIVENESS INITIATIVE

        But, Dr. Jeffrey, let me go over to you, I mean, we're very
    impressed that the President's budget increased funding for
    NIST, particularly in the laboratory and some construction
    accounts, however we're concerned that it was paid for out of
    ATP and the manufacturing extension program.
        But, if we could come back to you being in the
    competitiveness agenda--what do you think are the three kinds
    of most robust things that you want to do with this new money,
    and is this--does it go to the horizon, or does it take us over
    the horizon? And also, looking at both innovation and then, to
    the extent that you can testify publicly, its link to security?
        Dr. Jeffrey. Absolutely. The three overriding things that
    we need to do at NIST to ensure that we're providing the
    support in industry and academia that we need to do, is one, we
    need to absolutely ensure that our basic core competencies are
    strong, and that we're meeting the needs of industry today, and
    as we look forward to the future. And there's a number of areas
    that some of the funding under ACI is going in to strengthen.
        It's no secret that the NIST funding has--over the last,
    essentially, two decades, not really kept pace with the needs
    that were arising. And so we've eaten into our seed corn. This,
    now, fixes that.
        Second, we need to look at was the future to those areas
    that are going to be absolutely critical for industry and
    universities. Nano-technology is a great example. That's going
    to be an incredible disruptive and important economic impact.
    It's estimated that up to 15 percent of all manufactured goods
    in 10 years is going to include nano-technology. We need to be
    there and ready for them.
        And the third area is that we have to ensure that we have
    the facilities capabilities to make these kind of measurements.
    And that also, if I could almost follow on to the last of the
    questioning, is critical to being able to attract and retain
    the best and the brightest scientists. They have to be able to
    have the kinds of facilities necessary to do the job, and
    that's why you also see an important component on the
    facilities, and in our budget.

           NIST deg.CENTER FOR NANO-SCALE SCIENCE TECHNOLOGY

        Senator Mikulski. Well, we appreciate that, and if I could
    go right to nano-technology in a question.
        As I understand it, this is $6 million for enabling nano-
    tech from discovery to manufacturer. At this center, do you,
    have you developed an operating business plan for moving ahead
    with this, because there's some question about the user
    facility.
        Dr. Jeffrey. Absolutely, the Center for Nano-Scale Science
    Technology is sort of a two-pronged program. One is, as a
    national user facility, and the other is as a research
    facility. That was created in the 2007 President's budget and
    is now being expanded in 2008. We are in the process of
    completing all of policy documents and all of the business
    models for that. I was, quite frankly, slowed down a bit
    because of the continuing resolution, until that was resolved,
    and thanks to a lot of the support of the people here and on
    the House side, we've had sufficient funding in the continuing
    resolution to now move forward.
        So, we expect to have all of the documents done, and open
    for business, essentially, May of this year.

                  NIST deg.SAFETY OF NANO-TECHNOLOGY

        Senator Mikulski. Well, that sounds good. One last question
    about nano-tech.
        One of the issues that is raised is, that--is nano-tech
    safe? Because they're such mini-, micro-particles, I don't even
    have--they're nano-particles, which means they're sub-mini-
    micro-particles. But there's a lot of question, as you know,
    about the safety of them. Is part of your ongoing research and
    standards is, the flashing yellow lights around the impact of
    health, the part of the NIST effort?
        Dr. Jeffrey. Excellent question, Senator.
        NIST is taking very seriously the issues of safety in nano-
    technology. And we're working with other agencies to make sure
    that we have good answers for the general public, because the
    worst thing that can happen is, either an actual
    environmental----
        Senator Mikulski. But are you doing it?
        Dr. Jeffrey. The role that NIST plays is on the
    measurements and characterization of the nano-technology that
    gets, that one can then determine the health impacts.
        I'll give you an example, a concrete example. Carbon nano-
    tubes, which are one of the essential building blocks of nano-
    technology--we received a sample of carbon nano-tubes from
    industry to characterize it. We found that 60 percent--six-zero
    percent--of the atoms were not carbon, they were heavy metals.
        Senator Mikulski. Oh, gosh.
        Dr. Jeffrey. There were catalysts that were used, thereby
    contaminating the sample. So, when one, then goes to NIH or
    others to look at the toxicity, are you measuring the toxicity
    of the carbon nano-tube? Or the toxicity of the heavy metals?
        So, NIST is working very closely to characterize materials,
    to purify the materials, to ensure that we've got the
    measurements that we can then apply, working closely, and we
    are working closely and collaboratively with NIH, with FDA and
    with others, to have that collusive approach. We provide the
    measurements characterizations, they supply the medical
    implications.
        Senator Mikulski. That's fantastic.
        We also are very heartened by the fact that you are one of
    the lead agencies in dealing with the climate crisis, when
    measurements and standards for climate change science, as well
    as the practical things like the national earthquake hazard
    reduction program.

     NIST deg.EFFECTIVENESS OF MANUFACTURING EXTENSION PARTNERSHIP

        We won't go into that now, but here's the question--you
    hear our colleagues here raising questions about manufacturing
    extension. And then you've also heard on the floor, challenges
    to ATP, is it corporate welfare, whose time has come and gone.
    What are your comments about ATP and MEP? We're going to be on
    pressure from one group of Senators who want to save ATP and
    another group of Senators who want to tank it. And then, of
    course, there's enthusiastic support for MEP. And, I think,
    well-warranted--the support is not, again, it's not about pork,
    but in their community it's been, it's brought the beef.
        Dr. Jeffrey. Thank you. Let me take the last part first, on
    MEP, as the Secretary testified to, the administration
    recognizes the effectiveness of MEP, it is an effective
    program, it's been measured and rated by OMB as an effective
    program. The issue is one of prioritizations in the tight
    budget climate. Our core competencies and concentration is on
    the measurements and standards that impact entire industries,
    and opposed to individual companies one at a time. And, in a
    tough budget climate, those prioritizations had to be made.
        On ATP, there is a lot of disagreement as to where the
    appropriate role is for the Federal Government to be investing.
    One thing, I think, is fairly clear, though, is that there is
    friction between the basic scientific discoveries, and when it
    ends up in the marketplace.
        And, there are a number of different ways that one can look
    at trying to minimize that friction, and make it easier to
    increase the efficiency by which a scientific discovery is able
    to get commercialized. And I think we need to be open in
    looking at all sorts of different models and policy options to
    try to help and make that the most efficient. Because, the
    faster we can get those discoveries to market, the better the
    advantage we will have in the global economy.
        Senator Mikulski. Well, that's exactly right, and you're
    working to develop those standards and so on, and that's the
    heart and soul of a patent process--not only what is it and
    what does it do, but how do you kind of measure it, or certain
    metrics, not only measurement, to identify it, et cetera.
        Well, our time is really up.
        Senator Shelby. I just wanted to----
        Senator Mikulski. Yes, we could go on all day, and I hope
    one day to visit you, and of course, visit you, Dr. Jeffrey,
    and perhaps we could go together, but Senator Shelby?
        Senator Shelby. I would like to go sometime, and I don't
    know if I'd understand everything they were doing, but I'd be
    fascinated.
        Senator Mikulski. Me too.

      NIST deg.NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY'S
                          COLLABORATION WITH INDUSTRY

        Senator Shelby. Dr. Jeffrey, in your testimony, you
    mentioned the recent advancements, I'm picking up on Senator--
    in nano-technology, and how your agency is developing a method
    for testing the quality of nano-tube material.
        Besides testing the tubes, what other ways does NIST plan
    to interact with the industry? Particularly, with the
    manufacturing of more efficient fuel cells, and creating
    baseline standards for the use of nano-particles within the
    medical industry.
        Dr. Jeffrey. Thank you very much. There's a number of
    different areas where we've been reaching out to industry. One
    of the beauties of NIST, which is almost unique among the
    Federal Science and Technology Enterprise, is the close
    collaboration that we have with industry. Where they are not
    just customers, they are partners.
        I believe Secretary Gutierrez made a reference that we have
    about 1,500 technical Government employees, but we have about
    2,800 technical private sector people from industry and
    academia, literally coming to the NIST campus and working side
    by side, so it's a very close collaboration.
        In terms of some of the specifics, I'll give this as an
    example. We actually just completed a study, it's called An
    Assessment of the U.S. Measurement System, where we actually
    looked at----
        Senator Shelby. What are the results of the study?
        Dr. Jeffrey. Well, the results are that we're trying to
    identify measurement barriers to innovation. This is to help us
    in our strategic planning process, as well as to reach out to
    other parts of the Federal Government, where they have
    measurement needs. We identified 723 measurement barriers to
    innovation that were in 11 different industry sectors--
    including ones that you described. One of the things that we're
    now doing, now that we have--this is the first cut--it's
    fascinating reading, sir, we'll be glad to provide copies. But
    one of the things that we're now doing is, essentially, a deep
    dive into this, and looking at--as opposed to 723 separate
    measurement needs, are there systemic issues that we can attack
    that would be the highest priority that we can then, really
    make the biggest difference on.
        And, so we're working very closely with the universities
    and I'm very proud to say we hosted a set of universities from
    Alabama up on the NIST campus, specifically looking at some of
    the health impacts on the new technology, and looking broadly
    at reaching out and forming partnerships. I was very impressed
    with what I saw.
        Senator Shelby. This is very promising. It's a different
    field from anybody could imagine other than the lab 25 years
    ago, is that right?
        Dr. Jeffrey. Absolutely. This is an entirely new area. One
    of the things to put this into perspective, when we talk about
    nano-technology, and mini-micro and going all the way down. We
    have a beautiful picture that we captured of a carbon nano-
    tube, again, it's sort of a basic building block--on the hair
    of the leg of an ant.
        Senator Shelby. It's so small, it's hard for us to imagine,
    isn't it?
        Dr. Jeffrey. Yeah, absolutely.
        Senator Shelby. We talked about miniaturization of
    everything, but then, this has gone a quantum leap, has it not?
        Dr. Jeffrey. Absolutely. We are literally talking about a
    few atoms. It's really where the action is occurring.
        Senator Shelby. Thank you, Madam Chairman.
        Senator Mikulski. Well, thank you. And, we want to thank
    our panelists, and I think this has been a very, a very robust
    hearing. And we've gotten the subcommittee off to a good start,
    we thank you for your service, and we look forward to working
    with you now, as we go through the appropriation process.

                         ADDITIONAL COMMITTEE QUESTIONS

        If there are no further questions, Senators may submit
    additional questions for the subcommittee's official record. We
    request the Department's responses in 30 days.
        [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 Barbara A. Mikulski
                      departmental management wcf and a&r
        Question. Please provide the WCF bill breakout (including the A&R)
    by bureaus for fiscal year 2001-2007. Also provide the estimated WCF
    bill (including A&R) for each of the bureaus in the fiscal year 2008
    request.
        Answer. The requested information follows.

                                                   ATTACHMENT 1.--ADVANCES & REIMBURSEMENTS SUMMARY BY BUREAU
                                                                    [In thousands of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Fiscal year--
                                                                     ---------------------------------------------------------------------------------------
                                 Bureau                                                                                                    2007       2008
                                                                         2001       2002       2003       2004       2005       2006     estimate   estimate
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    OFFICE OF THE SECRETARY--SALARIES & EXPENSES....................      4,201      4,333      3,873      2,690      5,094      4,306      4,820      4,931
    INTERNATIONAL TRADE ADMINISTRATION..............................     15,351     15,202     15,454     12,901     13,910     12,510     13,319     13,622
    ECONOMIC DEVELOPMENT ADMINISTRATION.............................      1,376      1,411      1,370      1,230      1,298      1,372      1,613      1,647
    NATIONAL TELECOMMUNICATIONS AND INFO ADMIN......................      2,608      2,650      2,579      2,027      2,431      2,387      2,582      2,641
    NATIONAL TECHNICAL INFORMATION SERVICE..........................        282         32         76        211         85        129        143        145
    BUREAU OF THE CENSUS............................................      1,703      2,261      1,367      1,540      1,503      3,210      4,873      4,956
    ECONOMIC AND STATISTICAL ANALYSIS...............................      1,109      1,135      1,128        901      1,195        882      1,058      1,081
    NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION.................      4,805      4,047      3,810      4,062      3,938      5,420      7,155      7,290
    NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY..................      1,042        825        778        988        910      1,002      1,451      1,476
    MINORITY BUSINESS DEVELOPMENT AGENCY............................        786        797        849        602        709        703        777        795
    BUREAU OF INDUSTRY AND SECURITY.................................      3,643      3,735      3,662      3,061      3,487      3,243      3,550      3,630
    TECHNOLOGY ADMINISTRATION.......................................        929        937        932        775        660        423        277        283
    OFFICE OF INSPECTOR GENERAL.....................................      1,350      1,373      1,126        999      1,163      1,130      1,142      1,169
    OFFICE OF COMPUTER SERVICES.....................................        419        425        309        266        269        268        276        282
    OFFICE OF THE SECRETARY--WORKING CAPITAL FUND...................      6,813      7,076      6,813      5,338      6,066      5,661      5,918      6,057
                                                                     ---------------------------------------------------------------------------------------
          SUBTOTAL BY BUREAU........................................     46,417     46,239     44,126     37,591     42,718     42,646     48,954     50,005
                                                                     =======================================================================================
    PATENT AND TRADEMARK OFFICE.....................................      1,248      1,107        825      1,133      1,135      2,517      2,610      2,655
                                                                     =======================================================================================
          TOTAL A&R.................................................     47,665     47,346     44,951     38,724     43,853     45,163     51,564     52,660
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    NOTE: Fiscal years 2001-2002 represents the operating plan for the year.

                                                 ATTACHMENT 1A.--WORKING CAPITAL FUND BILLINGS SUMMARY BY BUREAU
                                                                    [In thousands of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Fiscal year--
                                                                     ---------------------------------------------------------------------------------------
                                 Bureau                                                                                                    2007
                                                                         2001       2002       2003       2004       2005       2006    operating     2008
                                                                       actuals    actuals    actuals    actuals    actuals    actuals      plan     estimate
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    OFFICE OF THE SECRETARY.........................................      6,810      6,419      6,873      7,966      8,906      8,551     10,142     10,923
    INTERNATIONAL TRADE ADMINISTRATION..............................     16,997     18,905     20,673     24,356     26,886     27,688     29,801     31,306
    ECONOMIC DEVELOPMENT ADMINISTRATION.............................      1,193      1,409      1,419      2,029      1,983      2,519      2,161      2,582
    NATIONAL TELECOMMUNICATIONS AND INFO ADMIN......................      2,385      2,456      2,629      3,188      3,294      3,346      3,643      4,153
    NATIONAL TECHNICAL INFORMATION SERVICE..........................        407        554        556        516        515        461        487        563
    BUREAU OF THE CENSUS............................................     22,073     20,609     21,712     21,345     23,249     23,263     22,601     25,531
    ECONOMIC AND STATISTICAL ANALYSIS...............................      1,779      2,140      2,127      2,215      2,542      2,608      2,564      3,058
    NATIONAL OCEANIC AND ATMOSPHERIC ADMIN..........................     29,680     31,270     32,712     36,164     39,546     33,306     36,206     35,165
    NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY..................      7,482      9,317      9,858      9,798     10,527      9,616      9,339     11,496
    MINORITY BUSINESS DEVELOPMENT AGENCY............................      1,213      1,203      1,439      1,468      2,024      1,866      1,928      2,384
    BUREAU OF INDUSTRY AND SECURITY.................................      4,578      4,827      5,628      6,725      6,797      7,223      7,604      8,717
    TECHNOLOGY ADMINISTRATION.......................................        630        665        552        900        939        724        613      1,100
    OFFICE OF INSPECTOR GENERAL.....................................        967      1,057      1,054      1,359      1,531      1,621      1,700      1,874
    OFFICE OF COMPUTER SERVICES.....................................        261        355        266        326        274        231        245        331
                                                                     ---------------------------------------------------------------------------------------
          SUBTOTAL BY BUREAU........................................     96,455    101,186    107,498    118,355    129,013    123,023    129,034    139,183
                                                                     =======================================================================================
    PATENT AND TRADEMARK OFFICE.....................................      6,052      3,559      3,015      2,964      2,808      3,507      2,929      2,555
    OTHER AGENCIES \1\..............................................      8,593      8,762      9,666      1,067        997        714        517      1,086
                                                                     =======================================================================================
          TOTAL.....................................................    111,100    113,507    120,179    122,386    132,818    127,244    132,480    142,824
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ DOC Federal Credit Union, White House Visitor Center, National Aquarium, National Indian Gaming Comm. and FAA.

        Question. Please provide a breakout of ATBs (adjustments to base)
    by bureau for WCF payments, any E-Government initiatives and for the
    Commerce Business System.
        Answer. The requested information follows.

                                   ATTACHMENT 2.--DEPARTMENTAL MANAGEMENT--WORKING CAPITAL FUND FISCAL YEAR 2008 BUDGET SUBMISSION--ATBS & PROGRAM INCREASES BY BUREAU
                                                                                        [In thousands of dollars]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       WIGS PAY
                                                         CSRS        FERS         TSP        FICA        BAND      GSA RENT    PRINTING     HEALTH      GPL ADJ    PER DIEM    COMP DAY      POSTG
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    O/S.............................................          -4           7           2           7  ..........          32           1          23          72           1          53           2
    ITA.............................................          -8          13           2          13  ..........          64           1          47         177          11         105           2
    EDA.............................................          -1           1  ..........           1  ..........           6  ..........           4          14  ..........          10  ..........
    NTIA............................................          -1           1  ..........           1  ..........           8  ..........           4          27  ..........          11  ..........
    NTIS............................................  ..........  ..........  ..........  ..........  ..........  ..........  ..........           1           3  ..........           2  ..........
    CENSUS..........................................          -7          11           2          10  ..........          38           1          38         136           4          87  ..........
    ESA/BEA.........................................          -1           1  ..........           1  ..........           6  ..........           4          13  ..........          10  ..........
    NOAA............................................         -10          16           3          15  ..........          63           2          56         183           8         131           1
    NIST............................................          -3           5           1           5  ..........          16           1          18          40           2          43  ..........
    PTO.............................................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
    MBDA............................................          -1           1  ..........           1  ..........           4  ..........           3           9  ..........           8  ..........
    BIS.............................................          -2           4           1           3  ..........          18  ..........          12          34           1          29  ..........
    TA..............................................  ..........  ..........  ..........  ..........  ..........           2  ..........           1           6  ..........           3  ..........
    OS--IG..........................................  ..........           1  ..........           1  ..........           4  ..........           2          14  ..........           4  ..........
    OCS.............................................  ..........  ..........  ..........  ..........  ..........           1  ..........           1           3  ..........           3  ..........
    OTHER...........................................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
    LESS ABSORBED...................................         -38          61          11          58  ..........         262           6         214         731          27         499           5
                                                     -----------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL.....................................         -38          61          11          58  ..........         262           6         214         731          27         499           5
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

         ATTACHMENT 2.--DEPARTMENTAL MANAGEMENT--WORKING CAPITAL FUND FISCAL YEAR 2008 BUDGET SUBMISSION--ATBS & PROGRAM INCREASES BY BUREAU--CONTINUED
                                                                    [In thousands of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       SUBTOTAL
                                       EMP COMP       CBS        STEAM       PEPCO      GENERAL    2008 PAY    2007 PAY    TOTAL WCF    PROGRAM    TOTAL TO
                                                   DECREASE                ELECTRIC      ATBS        RAISE       RAISE        ATB      INCREASE     BUREAUS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    O/S.............................  ..........          -8          41          97         326         156          39         521  ..........         521
    ITA.............................  ..........         -48         138         329         846         302          75       1,223  ..........       1,223
    EDA.............................  ..........          -6          13          30          72          30           7         109  ..........         109
    NTIA............................  ..........          -4          27          64         138          31           8         177  ..........         177
    NTIS............................  ..........          -8  ..........  ..........          -2           5           1           4  ..........           4
    CENSUS..........................  ..........        -160  ..........  ..........         160         250          62         472  ..........         472
    ESA/BEA.........................  ..........         -10          10          23          57          30           7          94  ..........          94
    NOAA............................  ..........        -278          23          54         267         379          94         740  ..........         740
    NIST............................  ..........         -70           1           2          61         123          30         214  ..........         214
    PTO.............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
    MBDA............................  ..........          -3           7          18          47          23           6          76  ..........          76
    BIS.............................  ..........          -8          37          89         218          83          21         322  ..........         322
    TA..............................  ..........          -1           7          17          35           7           2          44  ..........          44
    OS--IG..........................  ..........          -4          13          33          68          13           3          84  ..........          84
    OCS.............................  ..........  ..........  ..........  ..........           8           7           2          17  ..........          17
    OTHER...........................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
    LESS ABSORBED...................  ..........        -608         317         756       2,301       1,439         357       4,097  ..........       4,097
                                     -----------------------------------------------------------------------------------------------------------------------
          TOTAL.....................  ..........        -608         317         756       2,301       1,439         357       4,097  ..........       4,097
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. Please provide a complete cost breakout for the
    development of CAMS/CBS by fiscal year since inception. Cost should
    capture: all contract costs; all Commerce staff assigned to central
    coordinating offices; all detailed staff from bureaus to central
    office; all staff costs for staff that primarily worked on CAMS/CBS.
        Answer. Attachment 3 provides a complete cost breakout for the
    development of the Commerce Administrative Management System/Commerce
    Business System (CAMS/CBS) from fiscal year 1999 to 2003. Upon full
    bureau implementation at the end of fiscal year 2003, CAMS/CBS has been
    in operational maintenance and support status.

                                                                                      ATTACHMENT 3.--CAMS/CBS COSTS
                                                                                        [In thousands of dollars]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Fiscal Years--
                                           ---------------------------------------------------------------------------------------------------------------------------------------------------------
                                               1999       2000       2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011       2012
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Fiscal Year Total.....................     27,275     33,465     41,952     46,195     36,469     35,221     34,729     35,967     38,125     38,638     39,313     39,986     40,655     40,100
    Labor.................................     23,195     28,620     36,000     39,731     31,123     30,030     29,480     30,393     31,335     31,385     31,980     32,557     33,048     32,341
        Government........................      9,561     11,731     12,009     12,354     12,784     12,346     12,474     12,814     13,238     16,281     17,418     17,895     18,110     18,320
        Contractor........................     13,634     16,889     23,991     27,377     18,339     17,684     17,006     17,579     18,097     15,104     14,562     14,662     14,938     14,021
    Other Costs...........................      4,080      4,845      5,952      6,464      5,346      5,191      5,249      5,574      6,790      7,253      7,333      7,429      7,607      7,759
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Note: No staff were detailed from the bureaus to the central office.

        Question. Please provide any estimated out-year costs associated
    with CAMS/CBS development.
        Answer. Since fiscal year 2004, CAMS/CBS development costs have
    been for technical migrations to keep current with Oracle forms and
    database applications to ensure information technology audit
    compliancy. There have been no application functionality developments
    except in non-compliance situations when dictated by new and/or changes
    in Federal policy or regulations.
        Question. Please provide the latest FAIR Act inventory along with
    the status of any on-going or planned A-76 competitions.
        Answer. The Department of Commerce has initiated a streamlined
    competitive sourcing competition for their Office of Photographic
    Services. A decision is expected to be announced by the Department by
    April 2007. No additional competitions are planned at this stage. The
    last OMB-approved inventory (fiscal year 2005) is attachment 4. We
    expect to have our fiscal year 2006 inventory approved and released by
    OMB in the next few weeks and will notify Congress at that time. There
    has been no substantial change between the 2005 and 2006 inventories.
        The link to the website is: http://oamweb.osec.doc.gov/
    CS_doc_inventories.html

                                                                                              ATTACHMENT 4
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                 Total CY                  Reim CY
     Seq. No.        Agency/Bureau                                                  Department/Agency/Bureau Title                                                 FTEs     Dir CY FTEs      FTEs
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Department of Agriculture:
      05060003 005-03                     Office of the Secretary..........................................................................................           87           87  ...........
      05060004 005-04                     Executive Operations.............................................................................................        3,376          390        2,986
      05060005 005-07                     Office of Civil Rights...........................................................................................          191          181           10
      05060006 005-05                     Departmental Administration......................................................................................          394          327           67
      05060007 005-06                     Office of Communications.........................................................................................           90           90  ...........
      05060008 005-08                     Office of the Inspector General..................................................................................          721          721  ...........
      05060010 005-10                     Office of the General Counsel....................................................................................          330          321            9
      05060013 005-13                     Economic Research Service........................................................................................          455          452            3
      05060015 005-15                     National Agricultural Statistics Service.........................................................................        1,366        1,260          106
      05060018 005-18                     Agricultural Research Service....................................................................................        8,794        8,598          196
      05060020 005-20                     Cooperative State Research, Education, and Extension Service.....................................................          451          442            9
      05060032 005-32                     Animal and Plant Health Inspection Service.......................................................................        6,761        5,928          833
      05060035 005-35                     Food Safety and Inspection Service...............................................................................        9,761        9,525          236
      05060037 005-37                     Grain Inspection, Packers and Stockyards Administration..........................................................          725          338          387
      05060045 005-45                     Agricultural Marketing Service...................................................................................        3,455        2,344        1,111
      05060047 005-47                     Risk Management Agency...........................................................................................          568          568  ...........
      05060049 005-49                     Farm Service Agency..............................................................................................        5,498        2,134        3,364
      05060053 005-53                     Natural Resources Conservation Service...........................................................................       13,627       12,488        1,139
      05060055 005-55                     Rural Development................................................................................................        6,872        1,686        5,186
      05060068 005-68                     Foreign Agricultural Service.....................................................................................        1,002          812          190
      05060084 005-84                     Food and Nutrition Service.......................................................................................        1,488        1,488  ...........
      05060096 005-96                     Forest Service...................................................................................................       37,298       35,414        1,884
                                                                                                                                                            ----------------------------------------
      050600ZZ                              Total, Department of Agriculture...............................................................................      103,310       85,594       17,716
                                                                                                                                                            ========================================
                                      Department of Commerce:
      05061005 006-05                     Departmental Management..........................................................................................        1,134          363          771
      05061006 006-06                     Economic Development Administration..............................................................................          247          240            7
      05061008 006-07                     Bureau of the Census.............................................................................................        9,401        6,659        2,742
      05061009 006-08                     Economic and Statistical Analysis................................................................................          552          525           27
      05061025 006-25                     International Trade Administration...............................................................................        2,602        2,553           49
      05061030 006-30                     Bureau of Industry and Security..................................................................................          418          414            4
      05061040 006-40                     Minority Business Development Agency.............................................................................          115          115  ...........
      05061048 006-48                     National Oceanic and Atmospheric Administration..................................................................       12,634       11,769          865
      05061051 006-51                     U.S. Patent and Trademark Office.................................................................................        7,198  ...........        7,198
      05061053 006-53                     Technology Administration........................................................................................           31           30            1
      05061054 006-54                     National Technical Information Service...........................................................................          200  ...........          200
      05061055 006-55                     National Institute of Standards and Technology...................................................................        3,028        2,334          694
      05061060 006-60                     National Telecommunications and Information Administration.......................................................          295          128          167
                                                                                                                                                            ----------------------------------------
      050610ZZ                              Total, Department of Commerce..................................................................................       37,855       25,130       12,725
                                                                                                                                                            ========================================
                                      Department of Defense--Military:
      05062010 007-10                     Operation and Maintenance........................................................................................      433,191      353,892       79,299
      05062020 007-20                     Research, Development, Test, and Evaluation......................................................................       26,823       14,717       12,106
      05062025 007-25                     Military Construction............................................................................................        7,893        1,962        5,931
      05062030 007-30                     Family Housing...................................................................................................        2,030        2,021            9
      05062040 007-40                     Revolving and Management Funds...................................................................................      189,952  ...........      189,952
                                                                                                                                                            ----------------------------------------
      050620ZZ                              Total, Department of Defense--Military.........................................................................      659,889      372,592      287,297
                                                                                                                                                            ========================================
                                      Department of Education:
      05072030 018-30                     Office of Vocational and Adult Education.........................................................................           20           20  ...........
      05072040 018-40                     Office of Postsecondary Education................................................................................            5            5  ...........
      05072045 018-45                     Federal Student Aid..............................................................................................        1,140        1,140  ...........
      05072050 018-50                     Institute of Education Sciences..................................................................................           16           16  ...........
      05072080 018-80                     Departmental Management..........................................................................................        3,273        3,273  ...........
                                                                                                                                                            ----------------------------------------
      050720ZZ                              Total, Department of Education.................................................................................        4,454        4,454  ...........
                                                                                                                                                            ========================================
                                      Department of Energy:
      05073005 019-05                     National Nuclear Security Administration.........................................................................        2,543        2,543  ...........
      05073010 019-10                     Environmental and Other Defense Activities.......................................................................        2,566        2,566  ...........
      05073020 019-20                     Energy Programs..................................................................................................        4,660        3,373        1,287
      05073050 019-50                     Power Marketing Administration...................................................................................        4,711        1,264        3,447
      05073060 019-60                     Departmental Administration......................................................................................        1,442        1,442  ...........
                                                                                                                                                            ----------------------------------------
      050730ZZ                              Total, Department of Energy....................................................................................       15,922       11,188        4,734
                                                                                                                                                            ========================================
                                      Department of Health and Human Services:
      05074010 009-10                     Food and Drug Administration.....................................................................................        9,696        7,957        1,739
      05074015 009-15                     Health Resources and Services Administration.....................................................................        1,590        1,445          145
      05074017 009-17                     Indian Health Services...........................................................................................       13,950        8,909        5,041
      05074020 009-20                     Centers for Disease Control and Prevention.......................................................................        7,917        6,683        1,234
      05074025 009-25                     National Institutes of Health....................................................................................       17,106       11,875        5,231
      05074030 009-30                     Substance Abuse and Mental Health Services Administration........................................................          508          466           42
      05074033 009-33                     Agency for Healthcare Research and Quality.......................................................................          286  ...........          286
      05074038 009-38                     Centers for Medicare and Medicaid Services.......................................................................        4,852        4,780           72
      05074070 009-70                     Administration for Children and Families.........................................................................        1,382        1,382  ...........
      05074075 009-75                     Administration on Aging..........................................................................................          126          119            7
      05074090 009-90                     Departmental Management..........................................................................................        1,896        1,400          496
      05074091 009-91                     Program Support Center...........................................................................................        1,491           37        1,454
      05074092 009-92                     Office of the Inspector General..................................................................................        1,506          278        1,228
                                                                                                                                                            ----------------------------------------
      050740ZZ                              Total, Department of Health and Human Services.................................................................       62,306       45,331       16,975
                                                                                                                                                            ========================================
                                      Department of Homeland Security:
      05074510 024-10                     Departmental Management..........................................................................................          905          903            2
      05074520 024-20                     Office of the Inspector General..................................................................................          502          502  ...........
      05074530 024-30                     Citizenship and Immigration Services.............................................................................       10,052       10,052  ...........
      05074540 024-40                     United States Secret Service.....................................................................................        6,516        6,516  ...........
      05074550 024-50                     Border and Transportation Security...............................................................................      112,932      105,441        7,491
      05074560 024-60                     United States Coast Guard........................................................................................        7,036        6,274          762
      05074570 024-70                     Emergency Preparedness and Response..............................................................................        4,792        4,374          418
      05074580 024-80                     Science and Technology...........................................................................................          320          320  ...........
      05074590 024-90                     Information Analysis and Infrastructure Protection...............................................................          803          803  ...........
                                                                                                                                                            ----------------------------------------
      050745ZZ                              Total, Department of Homeland Security.........................................................................      143,858      135,185        8,673
                                                                                                                                                            ========================================
      05075035 025-35                 Department of Housing and Urban Development: Management and Administration...........................................       10,028        5,372        4,656
                                                                                                                                                            ========================================
                                      Department of the Interior:
      05076004 010-04                     Bureau of Land Management........................................................................................       11,065       10,691          374
      05076006 010-06                     Minerals Management Service......................................................................................        1,763        1,632          131
      05076008 010-08                     Office of Surface Mining Reclamation and Enforcement.............................................................          580          577            3
      05076010 010-10                     Bureau of Reclamation............................................................................................        5,757        3,087        2,670
      05076011 010-11                     Central Utah Project.............................................................................................           17           17  ...........
      05076012 010-12                     United States Geological Survey..................................................................................        8,950        6,007        2,943
      05076018 010-18                     United States Fish and Wildlife Service..........................................................................        9,378        8,605          773
      05076024 010-24                     National Park Service............................................................................................       20,671       19,983          688
      05076076 010-76                     Bureau of Indian Affairs.........................................................................................        9,605        8,901          704
      05076084 010-84                     Departmental Management..........................................................................................        1,810          479        1,331
      05076085 010-85                     Insular Affairs..................................................................................................           40           40  ...........
      05076086 010-86                     Office of the Solicitor..........................................................................................          422          366           56
      05076087 010-88                     Office of Inspector General......................................................................................          270          270  ...........
      05076088 010-91                     Natural Resources Damage Assessment and Restoration..............................................................            6            6  ...........
      05076089 010-90                     Office of Special Trustee for American Indians...................................................................          581          581  ...........
      05076092 010-92                     National Indian Gaming Commission................................................................................           81           81  ...........
                                                                                                                                                            ----------------------------------------
      050760ZZ                              Total, Department of the Interior..............................................................................       70,996       61,323        9,673
                                                                                                                                                            ========================================
                                      Department of Justice:
      05077003 011-03                     General Administration...........................................................................................        3,645        2,805          840
      05077004 011-04                     United States Parole Commission..................................................................................          104          104  ...........
      05077005 011-05                     Legal Activities and U.S. Marshals...............................................................................       22,694       19,159        3,535
      05077010 011-10                     Federal Bureau of Investigation..................................................................................       31,939       29,081        2,858
      05077012 011-12                     Drug Enforcement Administration..................................................................................       10,644        9,189        1,455
      05077014 011-14                     Bureau of Alcohol, Tobacco, Firearms, and Explosives.............................................................        4,940        4,885           55
      05077020 011-20                     Federal Prison System............................................................................................       41,565       38,466        3,099
      05077021 011-21                     Office of Justice Programs.......................................................................................          964          947           17
                                                                                                                                                            ----------------------------------------
      050770ZZ                              Total, Department of Justice...................................................................................      116,495      104,636       11,859
                                                                                                                                                            ========================================
                                      Department of Labor:
      05078005 012-05                     Employment and Training Administration...........................................................................        1,209        1,206            3
      05078011 012-11                     Employee Benefits Security Administration........................................................................          887          887  ...........
      05078012 012-12                     Pension Benefit Guaranty Corporation.............................................................................          806  ...........          806
      05078015 012-15                     Employment Standards Administration..............................................................................        4,120        3,992          128
      05078018 012-18                     Occupational Safety and Health Administration....................................................................        2,208        2,203            5
      05078019 012-19                     Mine Safety and Health Administration............................................................................        2,187        2,187  ...........
      05078020 012-20                     Bureau of Labor Statistics.......................................................................................        2,475        2,445           30
      05078025 012-25                     Departmental Management..........................................................................................        2,884        2,181          703
                                                                                                                                                            ----------------------------------------
      050780ZZ                              Total, Department of Labor.....................................................................................       16,776       15,101        1,675
                                                                                                                                                            ========================================
                                      Department of State:
      05079005 014-05                     Administration of Foreign Affairs................................................................................       29,685       18,895       10,790
      05079015 014-15                     International Commissions........................................................................................          307          273           34
      05079025 014-25                     Other............................................................................................................          292          292  ...........
                                                                                                                                                            ----------------------------------------
      050790ZZ                              Total, Department of State.....................................................................................       30,284       19,460       10,824
                                                                                                                                                            ========================================
                                      Department of Transportation:
      05080004 021-04                     Office of the Secretary..........................................................................................          868          596          272
      05080012 021-12                     Federal Aviation Administration..................................................................................       47,659       46,307        1,352
      05080015 021-15                     Federal Highway Administration...................................................................................        3,133        3,104           29
      05080017 021-17                     Federal Motor Carrier Safety Administration......................................................................        1,098        1,046           52
      05080018 021-18                     National Highway Traffic Safety Administration...................................................................          673          673  ...........
      05080027 021-27                     Federal Railroad Administration..................................................................................          827          827  ...........
      05080036 021-36                     Federal Transit Administration...................................................................................          527          527  ...........
      05080040 021-40                     Saint Lawrence Seaway Development Corporation....................................................................          157  ...........          157
      05080050 021-50                     Pipeline and Hazardous Materials Safety Administration...........................................................          415          384           31
      05080053 021-53                     Research and Innovative Technology Administration................................................................          620           21          599
      05080056 021-56                     Office of Inspector General......................................................................................          430          372           58
      05080061 021-61                     Surface Transportation Board.....................................................................................          150          141            9
      05080070 021-70                     Maritime Administration..........................................................................................          827          462          365
                                                                                                                                                            ----------------------------------------
      050800ZZ                              Total, Department of Transportation............................................................................       57,384       54,460        2,924
                                                                                                                                                            ========================================
                                      Department of the Treasury:
      05081005 015-05                     Departmental Offices.............................................................................................        3,035        2,016        1,019
      05081006 015-04                     Financial Crimes Enforcement Network.............................................................................          309          309  ...........
      05081010 015-10                     Financial Management Service.....................................................................................        2,134        2,044           90
      05081013 015-13                     Alcohol and Tobacco Tax and Trade Bureau.........................................................................          559          544           15
      05081020 015-20                     Bureau of Engraving and Printing.................................................................................        2,400  ...........        2,400
      05081025 015-25                     United States Mint...............................................................................................        2,108  ...........        2,108
      05081035 015-35                     Bureau of the Public Debt........................................................................................        1,318        1,301           17
      05081045 015-45                     Internal Revenue Service.........................................................................................       97,440       96,434        1,006
      05081057 015-57                     Comptroller of the Currency......................................................................................        2,791  ...........        2,791
      05081058 015-58                     Office of Thrift Supervision.....................................................................................          920  ...........          920
                                                                                                                                                            ----------------------------------------
      050810ZZ                              Total, Department of the Treasury..............................................................................      113,014      102,648       10,366
                                                                                                                                                            ========================================
                                      Department of Veterans Affairs:
      05082015 029-15                     Medical Programs.................................................................................................      203,112      197,758        5,354
      05082025 029-25                     Benefits Programs................................................................................................       14,296       13,482          814
      05082040 029-40                     Departmental Administration......................................................................................        4,447        2,516        1,931
                                                                                                                                                            ----------------------------------------
      050820ZZ                              Total, Department of Veterans Affairs..........................................................................      221,855      213,756        8,099
                                                                                                                                                            ========================================
                                      Major Independents:
      07082500 202-00                     Corps of Engineers--Civil Works..................................................................................       23,522       22,422        1,100
                                                                                                                                                            ========================================
                                          Other Defense Civil Programs:
      07082615 200-15                         American Battle Monuments Commission.........................................................................          390          390  ...........
      07082620 200-20                         Armed Forces Retirement Home.................................................................................          485          485  ...........
      07082625 200-25                         Cemeterial Expenses..........................................................................................          100          100  ...........
      07082645 200-45                         Selective Service System.....................................................................................          154          154  ...........
                                                                                                                                                            ----------------------------------------
      070826ZZ                                  Total, Other Defense Civil Programs........................................................................        1,129        1,129  ...........
                                                                                                                                                            ========================================
      07083000 020-00                     Environmental Protection Agency..................................................................................       17,635       17,166          469
      07083200 100-00                     Executive Office of the President................................................................................        1,832        1,831            1
                                                                                                                                                            ========================================
                                          General Services Administration:
      07084005 023-05                         Real Property Activities.....................................................................................        5,759  ...........        5,759
      07084010 023-10                         Supply and Technology Activities.............................................................................        4,533           61        4,472
      07084030 023-30                         General Activities...........................................................................................        2,443          956        1,487
                                                                                                                                                            ----------------------------------------
      070840ZZ                                  Total, General Services Administration.....................................................................       12,735        1,017       11,718
                                                                                                                                                            ========================================
                                          International Assistance Programs:
      07084503 184-03                         Millennium Challenge Corporation.............................................................................          133          133  ...........
      07084515 184-15                         Agency for International Development.........................................................................        2,337        2,211          126
      07084520 184-20                         Overseas Private Investment Corporation......................................................................          225          225  ...........
      07084525 184-25                         Trade and Development Agency.................................................................................           50           50  ...........
      07084535 184-35                         Peace Corps..................................................................................................        1,171        1,168            3
      07084540 184-40                         Inter-American Foundation....................................................................................           47           47  ...........
      07084550 184-50                         African Development Foundation...............................................................................           32           32  ...........
                                                                                                                                                            ----------------------------------------
      070845ZZ                                  Total, International Assistance Programs...................................................................        3,995        3,866          129
                                                                                                                                                            ========================================
      07085000 026-00                     National Aeronautics and Space Administration....................................................................       19,440       19,271          169
      07085200 422-00                     National Science Foundation......................................................................................        1,301        1,301  ...........
      07086000 027-00                     Office of Personnel Management...................................................................................        4,097          990        3,107
      07087000 028-00                     Small Business Administration....................................................................................        4,189        4,178           11
      07090000 016-00                     Social Security Administration...................................................................................       64,205       63,405          800
                                      Other Independents:
      08106000 306-00                     Advisory Council on Historic Preservation........................................................................           45           35           10
      08109000 309-00                     Appalachian Regional Commission..................................................................................           11           11  ...........
      08110000 310-00                     Architectural and Transportation Barriers Compliance Board.......................................................           30           30  ...........
      08113000 313-00                     Barry Goldwater Scholarship and Excellence in Education Foun.....................................................            2            2  ...........
      08114500 514-00                     Broadcasting Board of Governors..................................................................................        2,341        2,341  ...........
      08116500 510-00                     Chemical Safety and Hazard Investigation Board...................................................................           42           42  ...........
      08118500 465-00                     Christopher Columbus Fellowship Foundation.......................................................................            1            1  ...........
      08123000 323-00                     Commission of Fine Arts..........................................................................................           10           10  ...........
      08126000 326-00                     Commission on Civil Rights.......................................................................................           60           60  ...........
      08137000 338-00                     Committee for Purchase from People Who Are Blind or Severely.....................................................           29           29  ...........
      08138000 339-00                     Commodity Futures Trading Commission.............................................................................          491          491  ...........
      08142000 343-00                     Consumer Product Safety Commission...............................................................................          471          471  ...........
      08142500 485-00                     Corporation for National and Community Service...................................................................          589          589  ...........
      08145000 511-00                     Court Services and Offender Supervision Agency for the Distr.....................................................        1,390        1,390  ...........
      08146000 347-00                     Defense Nuclear Facilities Safety Board..........................................................................          100          100  ...........
      08146200 517-00                     Delta Regional Authority.........................................................................................            3            3  ...........
      08146500 513-00                     Denali Commission................................................................................................           12           12  ...........
      08148500 525-00                     Election Assistance Commission...................................................................................           23           23  ...........
      08149000 350-00                     Equal Employment Opportunity Commission..........................................................................        2,441        2,421           20
      08150000 351-00                     Export-Import Bank of the United States..........................................................................          420          420  ...........
      08151000 352-00                     Farm Credit Administration.......................................................................................          294  ...........          294
      08154000 355-00                     Farm Credit System Insurance Corporation.........................................................................           10           10  ...........
      08155000 356-00                     Federal Communications Commission................................................................................        1,999           21        1,978
                                                                                                                                                            ========================================
                                          Federal Deposit Insurance Corporation:
      08156010 357-10                         Bank Insurance...............................................................................................        4,223        4,223  ...........
      08156020 357-20                         Savings Association Insurance................................................................................          619          619  ...........
      08156030 357-30                         FSLIC Resolution.............................................................................................          228          228  ...........
      08156040 357-40                         FDIC--Office of Inspector General............................................................................          160          160  ...........
                                                                                                                                                            ----------------------------------------
      081560ZZ                                  Total, Federal Deposit Insurance Corporation...............................................................        5,230        5,230  ...........
                                                                                                                                                            ========================================
      08159000 360-00                     Federal Election Commission......................................................................................          391          391  ...........
      08161000 362-00                     Federal Financial Institutions Examination Council Appraisal.....................................................            7            7  ...........
      08163000 364-00                     Federal Housing Finance Board....................................................................................          146  ...........          146
      08164000 365-00                     Federal Labor Relations Authority................................................................................          175          175  ...........
      08165000 366-00                     Federal Maritime Commission......................................................................................          133          133  ...........
      08166000 367-00                     Federal Mediation and Conciliation Service.......................................................................          285          276            9
      08167000 368-00                     Federal Mine Safety and Health Review Commission.................................................................           45           45  ...........
      08168000 369-00                     Federal Retirement Thrift Investment Board.......................................................................          101          101  ...........
      08169000 370-00                     Federal Trade Commission.........................................................................................        1,080          430          650
      08171000 372-00                     Harry S. Truman Scholarship Foundation...........................................................................            5            5  ...........
      08173500 467-00                     Intelligence Community Management Account........................................................................          318          318  ...........
      08177000 378-00                     International Trade Commission...................................................................................          380          380  ...........
      08180000 381-00                     James Madison Memorial Fellowship Foundation.....................................................................            6            6  ...........
      08181000 382-00                     Japan-United States Friendship Commission........................................................................            6            6  ...........
      08186000 387-00                     Marine Mammal Commission.........................................................................................           11           11  ...........
      08188000 389-00                     Merit Systems Protection Board...................................................................................          228          202           26
      08188500 487-00                     Morris K. Udall Scholarship and Excellence in National Envir.....................................................           29           29  ...........
      08192000 393-00                     National Archives and Records Administration.....................................................................        2,870        1,459        1,411
      08193000 394-00                     National Capital Planning Commission.............................................................................           57           57  ...........
      08199000 400-00                     National Commission on Libraries and Information Science.........................................................            6            6  ...........
      08212000 413-00                     National Council on Disability...................................................................................           14           14  ...........
      08214000 415-00                     National Credit Union Administration.............................................................................          963            2          961
      08216000 417-00                     National Endowment for the Arts..................................................................................          160          160  ...........
      08217000 418-00                     National Endowment for the Humanities............................................................................          175          170            5
      08217500 474-00                     Institute of Museum and Library Services.........................................................................           57           57  ...........
      08219000 420-00                     National Labor Relations Board...................................................................................        1,865        1,865  ...........
      08220000 421-00                     National Mediation Board.........................................................................................           52           52  ...........
      08223000 424-00                     National Transportation Safety Board.............................................................................          416          416  ...........
      08228000 429-00                     Nuclear Regulatory Commission....................................................................................        3,125        3,108           17
      08230000 431-00                     Nuclear Waste Technical Review Board.............................................................................           18           18  ...........
      08231000 432-00                     Occupational Safety and Health Review Commission.................................................................           69           69  ...........
      08233000 434-00                     Office of Government Ethics......................................................................................           80           80  ...........
      08234000 435-00                     Office of Navajo and Hopi Indian Relocation......................................................................           51           51  ...........
      08235000 436-00                     Office of Special Counsel........................................................................................          113          113  ...........
      08240000 512-00                     Presidio Trust...................................................................................................          307  ...........          307
      08245000 446-00                     Railroad Retirement Board........................................................................................        1,025          975           50
      08248000 449-00                     Securities and Exchange Commission...............................................................................        3,933        3,932            1
      08251000 452-00                     Smithsonian Institution..........................................................................................        5,577        5,577  ...........
      08254000 455-00                     Tennessee Valley Authority.......................................................................................       12,019  ...........       12,019
      08254600 345-00                     United States Court of Appeals for Veterans Claims...............................................................           98           98  ...........
      08255000 456-00                     United States Holocaust Memorial Museum..........................................................................          248          248  ...........
                                                                                                                                                            ----------------------------------------
      99999999                              Report Total...................................................................................................    1,871,194    1,427,590      443,604
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. Please provide a funding estimate for the DOC portion of
    the HCHB renovation by fiscal year for the project.
        Answer. The Department is requesting $4.3 million for its portion
    of the HCHB renovation in fiscal year 2008. The total estimated cost
    for the Department is $21.6 million, through 2020.
        Question. Please provide an itemized listing of the $4.3 million
    requested for HCHB renovation.
        Answer. The itemized listing of the $4.3 million requested for HCHB
    renovation follows:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Relocation and Planning.................................        $156,000
    DOC Construction Costs..................................       1,441,000
    Equipment and Furniture.................................       2,117,000
    Security................................................          56,000
    IT......................................................         530,000
                                                             ---------------
          Total.............................................       4,300,000
    ------------------------------------------------------------------------

        Question. How much does DOC spend on maintenance of the HCHB? What
    is the source of those funds? Does GSA provide any funding to support
    HCHB maintenance?
        Answer. DOC spent approximately $12,413,000 for maintenance of the
    HCHB in fiscal year 2006. The source of funds is from the HCHB tenants
    through the Departmental Management's Working Capital Fund. GSA does
    not provide any funding to support HCHB maintenance.
                    departmental management--media questions
        Question. We understand that Commerce has been revising its over 20
    year old communications policy for the last few months. What is the
    status of the policy and when can we expect it to be released and
    implemented?
        Answer. On March 29, the Department released its new public
    communication policy, following three separate rounds of internal input
    from our employees, in particular our scientists, on the draft policy.
    The policy will take effect on May 14, following a 45 day time period
    to conduct training and outreach sessions with employees.
        Question. What steps will the Department take to ensure that all
    staff are informed of and understand how to implement the policy?
        Answer. We have publicly released the policy along with
    ``Frequently Asked Question'' document, and placed both on our website.
    We are providing a 45 day window of time before the policy takes effect
    in order to conduct training and outreach sessions with current
    employees. We are also considering ways to require annual ``refresher''
    sessions as well as to require training for new employees.
        Question. Will the revised policy include language to specifically
    address recent concerns raised by scientists regarding interference
    with the dissemination of their research results?
        Answer. Yes, the new policy provides a series of clear principles
    which reiterate the Department's support for the open exchange of
    scientific ideas, information, and research. The policy also
    specifically provides for Fundamental Research Communications (a
    communications ``carve-out'' for scientific research), a series of best
    practices for public affairs employees, and provides operating units
    with the flexibility to use existing, or issue new, guidance regarding
    the implementation of the new policy (as long as it is consistent with
    the Department policy).
        Question. Specifically, will the new policy define the types of
    media contacts, press releases, presentations, or other documents that
    would be subject to the policy?
        Answer. Yes, the policy provides clear definitions of what types of
    documents are covered by the policy.
        Question. Describe situations, if any, in which prior approval is
    required for press releases and media interviews.
        Answer. Yes, the policy describes the situations, if applicable,
    which require prior approval for press releases and media interviews.
        Question. If prior approval is required, describe the specific
    process for approving press releases and media interviews.
        Answer. The Department's policy provides an overall conceptual
    framework for public communications, and set general Department-wide
    guidelines. Because the 13 agencies within the Department are so
    diverse, the new policy will provide operating units the flexibility to
    continue to set more specific procedures, which must be consistent with
    the overall Department policy.
        Question. Explicitly delegate authority to approve releases or
    interviews of a time sensitive nature or local interest to appropriate
    levels within the Commerce agencies.
        Answer. Yes, the new policy explicitly delegates authority to
    approve releases or interviews of a time sensitive or local interest to
    appropriate levels within the Commerce agencies.
        Question. Affirm that scientists can express personal views and
    share those views with the media as long as they declare them to be
    their own.
        Answer. Yes, the policy specifically includes a section explaining
    how employees may communicate their personal views with an appropriate
    disclaimer.
        Question. Define the role of the Office of Public Affairs office
    with regard to facilitating the dissemination of research.
        Answer. Yes, the new policy defines the role of the Office of
    Public Affairs with regard to facilitating the dissemination of
    research. Each operating unit will have the flexibility to continue to
    use existing or issue new guidance regarding the implementation and
    interpretation of the policy, which must comport with the overall
    Department policy.
        Question. Delineate a process to resolve disputes regarding
    dissemination of research.
        Answer. Yes, the new policy delineates a process to resolve
    disputes regarding dissemination of research.
                             special bill language
        Question. Please provide an explanation/background of each of the
    provisions within the Commerce portion of the appropriations bill. For
    example, under ITA there is the following provision, ``purchase or
    construction of temporary demountable exhibition structures for use
    abroad.'' Why is special language required? Isn't this a ``necessary''
    expense?
    Census Bureau (Account: PC&P)
        ``: Provided, That none of the funds provided in this or any other
    Act for any fiscal year may be used for the collection of Census data
    on race identification that does not include `some other race' as a
    category.''
        Census was considering eliminating the ``Some Other Race'' category
    on the questionnaire and putting the Hispanic check box at the top of
    the list. Congress opposed that option out of concern that it would
    deter Hispanics' self-identification of those who did not also fit into
    any of the standard race categories, thereby possibly under recording
    Hispanic populations.
    Departmental Management (Account: S&E)
        ``For expenses necessary for the departmental management of the
    Department of Commerce provided for by law, including not to exceed
    $5,000 for official entertainment, $47,466,000: Provided, That not to
    exceed 11 full-time equivalents and $1,490,000 shall be expended for
    the legislative affairs function of the Department.''
        Appropriated funds may not be used for entertainment expenses
    except when specifically authorized by law. This provision authorizes
    the Secretary to use up to $5,000 from appropriated funds for
    entertaining foreign dignitaries and U.S. citizens who are involved in
    activities of interest to the Department.
        Congress added language imposing a ceiling on the legislative
    affairs function of the Department was included beginning in the fiscal
    year 2004 Appropriations Act.
    International Trade Administration
        ``For necessary expenses for international trade activities of the
    Department of Commerce provided for by law, and for engaging in trade
    promotional activities abroad, including expenses of grants and
    cooperative agreements for the purpose of promoting exports of United
    States firms, without regard to the provisions of law set forth in 44
    U.S.C. 3702 and 3703;''
        44 U.S.C. 3702 specifies that an executive department may not
    publish or pay for advertisements without written authority from the
    head of that department.
        The nature of ITA's overseas exhibition program requires maximum
    flexibility in advertising requirements since exhibitions may be
    changed, added, or canceled. When such changes take place,
    advertisements must be placed as soon as possible to inform the local
    business community. This exception from 44 U.S.C. 3702 will provide the
    flexibility, which is required to effectively advertise for these
    exhibitions.
        44 U.S.C. 3703 stipulates that prices paid for advertising may not
    exceed the commercial rates charged to private individuals, with the
    usual discounts. Since the United States Government does not have
    sovereign status in other countries and is charged commercial rates
    without the discounts required by 44 U.S.C. 3703, this exception is
    necessary to permit contracting in a manner which conforms to the
    realities of foreign advertising markets.
        ``full medical coverage for dependent members of immediate families
    of employees stationed overseas and employees temporarily posted
    overseas;''
        This language permits the International Trade Administration to
    extend to certain of its overseas employees the same benefits afforded
    domestically employed Federal employees and employees of ITA's Foreign
    Commercial Service in equivalent positions overseas.
        ``travel and transportation of employees of the United States and
    Foreign Commercial Service between two points abroad, without regard to
    49 U.S.C. 40118;''
        49 U.S.C.  40118(d) exempts State and USAID officials from the
    requirement that government travel between two points outside the
    United States be accomplished by U.S. air carrier. This phrase
    clarifies that U.S. and Foreign Commercial Service officers are
    included in the exemption, notwithstanding a Comptroller General
    decision to the contrary. This exemption is necessary and appropriate
    in that most of the travel undertaken by U.S. and Foreign Commercial
    Service officers occurs abroad, where U.S. air carriers are generally
    not reasonably available.
        ``employment of Americans and aliens by contract for services;''
        44 CG 761, OPM guidance, and House Report 89-188 have concluded
    that Federal agencies must have specific authority to employ personnel
    by contract. In order to present its overseas exhibitions, ITA often
    requires the use of narrators, demonstrators, receptionists, clerical,
    and facilities maintenance personnel who speak the language of the host
    country; are familiar with local practices and procedures; or who only
    need to be employed for a short period of time. In addition, in some
    cases, it is more advantageous to employ U.S. citizens in the host
    country (generally members of an employee's family) because they have
    greater familiarity with American methods and, therefore, require less
    effort to train.
        ``rental of space abroad for periods not exceeding 10 years, and
    expenses of alteration, repair, or improvement;''
        Buildings, pavilions, and space in such structures must be rented
    for overseas exhibitions. However, rental terms are typically set by
    schedules established by fair authorities and are not negotiated or
    established competitively. In addition, organizers may limit the build-
    out to approved contractors at scheduled prices. This phrase clarifies
    that ITA may enter into leases for real property and make such
    improvements as are necessary without limitation.
        ``purchase or construction of temporary demountable exhibition
    structures for use abroad;''
        40 U.S.C. 601 prohibits the construction of public buildings except
    by the Administrator of the General Services Administration. Authority
    to purchase or construct such demountable structures is necessary to
    allow ITA to present exhibitions overseas when permanent exhibition
    facilities are not available.
        ``payment of tort claims, in the manner authorized in the first
    paragraph of 28 U.S.C. 2672 when such claims arise in foreign
    countries;''
        28 U.S.C. 2672 provides for settlement of tort claims for monetary
    damages of $25,000 or less against the Unites States by the head of
    each federal agency for loss of property or personal injury or death
    caused by a negligent or wrongful act or omission of any employee of
    the Government while acting within the scope of his employment in
    circumstances where the United States, if a private person, would be
    liable under local law. However, 28 U.S.C. 2680 exempts the settlement
    of tort claims which arise abroad from the provisions of 28 U.S.C.
    2672. The language exempts ITA from 22 U.S.C. 2680 and covers the
    settlement of tort claims against the United States, which arise in
    connection with the ITA's trade promotion activities abroad.
        ``not to exceed $327,000 for official representation expenses
    abroad;''
        Appropriated Funds are generally not available for official
    representation, absent specific statutory authority. This gives ITA the
    authority to spend up to $327,000 on official representation abroad.
        ``purchase of passenger motor vehicles for official use abroad, not
    to exceed $45,000 per vehicle; obtaining insurance on official motor
    vehicles, and rental of tie lines;''
        Per 31 U.S.C. 1343, an appropriation may be expended to purchase
    passenger motor vehicles only as specifically authorized by law and
    places certain limitations on the total cost of such vehicles. The
    annual appropriations act sets the general limits on the total cost of
    the vehicles. This language provides ITA with the authority to exceed
    the general amount (up to $45,000) so that it can purchase vehicles
    abroad.
        ``$406,925,000, to remain available until September 30, 2007, of
    which $8,000,000 is to be derived from fees to be retained and used by
    the International Trade Administration, notwithstanding 31 U.S.C.
    3302''
        Per 31 U.S.C. 3302, agencies may not retain or use fees unless
    specifically authorized by law. This language provides ITA the
    necessary authorization to use these collections to offset its
    appropriation.
        ``That negotiations shall be conducted within the World Trade
    Organization to recognize the right of members to distribute monies
    collected from antidumping and countervailing duties:''
        This language added by Congress directed ITA to work with USTR to
    continue negotiations with the WTO regarding the ``Byrd Amendment''. In
    2003, the WTO ruled the Continued Dumping and Subsidy Offset Act of
    2000 or ``CDSOA'' (Byrd Amendment), which provides for the distribution
    of duties to the domestic parties that supported the petition under
    certain circumstance, was not in compliance.
        When the President signed the Deficit Reduction Act of 2005 on
    February 8, 2006, legislation was enacted that will bring the United
    States into compliance with the WTO Dispute Settlement Body ruling on
    the Byrd Amendment--the legislation repeals the Byrd Amendment for
    entries made on or after October 1, 2007.
        ``: Provided further, That the provisions of the first sentence of
    section 105(f) and all of section 108(c) of the Mutual Educational and
    Cultural Exchange Act of 1961 (22 U.S.C. 2455(f) and 2458(c)) shall
    apply in carrying out these activities without regard to section 5412
    of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.
    4912);''
        Having the references to 22 U.S.C. 2245(f) and 2458(c) in the
    annual appropriations act permits the International Trade
    Administration (ITA) to accept, retain, and expend or otherwise utilize
    contributions of funds, property, and services from foreign
    governments, international organizations and private individuals,
    firms, associations, agencies and other groups for the purposes of
    furthering ITA's mission as generally defined in the annual
    appropriations act, namely trade promotion and international trade
    activities. Among other activities, ITA relies on this authority to
    charge, retain, and expend fees for export promotion services
    benefiting individual U.S. exporters.
        15 U.S.C. 4912 states that the Secretary shall provide reasonable
    public services and access (including electronic access) to any
    information maintained as part of the National Trade Data Bank and may
    charge reasonable fees consistent with section 552 of title 5 (the
    Freedom of Information Act, which includes specific provisions
    regarding fees to be assessed under that Act). Authorizing ITA to carry
    out these activities without regard to 15 U.S.C. 4912 allows ITA to
    charge other than the public services and access fees for export
    promotion services, even when such services rely on or incorporate data
    contained in the National Trade Data Bank.
        ``and that for the purpose of this Act, contributions under the
    provisions of the Mutual Educational and Cultural Exchange Act shall
    include payment for assessments for services provided as part of these
    activities.''
        This provision was added in 1990 to clarify a question pending at
    the time with GAO concerning whether ITA's authority to accept
    contributions under MECEA was limited to voluntary gifts. This
    explicitly gives ITA the authority to accept contributions as
    assessments or fees as well as gifts.
        ``Provided further, That the International Trade Administration
    shall be exempt from the requirements of Circular A-25 (or any
    successor administrative regulation or policy) issued by the Office of
    Management and Budget:''
        This language, inserted by Congress, increases the flexibility that
    ITA has in the establishment of prices and fees for services beyond
    that allowed by OMB Circular A-25.
        ``: Provided further, That negotiations shall be conducted within
    the World Trade Organization consistent with the negotiating objectives
    contained in the Trade Act of 2002, Public Law 107-210.''
        The principle textile and apparel negotiating objectives handed to
    the U.S. government in the Trade Act of 2002 are as follows:
        (16) Textile Negotiations.--The principle negotiating objectives of
    the United States with respect to trade in textiles and apparel
    articles are to obtain competitive opportunities for United States
    exports of textiles and apparel in foreign markets substantially
    equivalent to the competitive opportunities afforded foreign exports in
    United States markets and to achieve fairer and more open conditions of
    trade in textiles and apparel.
    United States Patent and Trademark Office
        ``Provided further, That not less than 657 full-time equivalents,
    690 positions and $85,017,000 shall be for the examination of trademark
    applications; and not less than 5,810 full-time equivalents, 6,241
    positions and $906,142,000 shall be for the examination and searching
    of patent applications: Provided further, That not more than 265 full-
    time equivalents, 272 positions and $37,490,000 shall be for the Office
    of the General Counsel: Provided further, That not more than 82 full-
    time equivalents, 83 positions and $25,393,000 shall be for the Office
    of the Administrator for External Affairs:''
        Congress wanted to ensure that the core examination functions were
    properly staffed and funded.
        ``Provided further, That any deviation from the full-time
    equivalent, position, and funding designations set forth in the
    preceding four provisos shall be subject to the procedures set forth in
    section 605 of this Act:''
        This reprogramming provision was added after fiscal year 2005
    because the floors and ceilings are statutory and Congress had to give
    us a legal way of reprogramming if we weren't going to hit our levels.
    When we tried to reprogram in fiscal year 2005, staff pointed out that
    it was the law that we hit the levels specified, neither they nor we
    had any discretion in the matter.
        ``Provided further, That from amounts provided herein, not to
    exceed $1,000 shall be made available in fiscal year 2006 for official
    reception and representation expenses: Provided further, That
    notwithstanding section 1353 of title 31, United States Code, no
    employee of the United States Patent and Trademark Office may accept
    payment or reimbursement from a non-Federal entity for travel,
    subsistence, or related expenses for the purpose of enabling an
    employee to attend and participate in a convention, conference, or
    meeting when the entity offering payment or reimbursement is a person
    or corporation subject to regulation by the Office, or represents a
    person or corporation subject to regulation by the Office, unless the
    person or corporation is an organization exempt from taxation pursuant
    to section 501(c)(3) of the Internal Revenue Code of 1986:''
        Appropriators were concerned that PTO officials had been accepting
    invitational travel, usually from non-profits but occasionally from
    other entities. This also ended the invitational examiner education
    program.
        ``: Provided further, That in fiscal year 2006, from the amounts
    made available for `Salaries and Expenses' for the United States Patent
    and Trademark Office (PTO), the amounts necessary to pay: (1) the
    difference between the percentage of basic pay contributed by the PTO
    and employees under section 8334(a) of title 5, United States Code, and
    the normal cost percentage (as defined by section 8331(17) of that
    title) of basic pay, of employees subject to subchapter III of chapter
    83 of that title; and (2) the present value of the otherwise unfunded
    accruing costs, as determined by the Office of Personnel Management, of
    post-retirement life insurance and post-retirement health benefits
    coverage for all PTO employees, shall be transferred to the Civil
    Service Retirement and Disability Fund, the Employees Life Insurance
    Fund, and the Employees Health Benefits Fund, as appropriate, and shall
    be available for the authorized purposes of those accounts.''
        OPM had been paying certain amounts on behalf of USPTO for CSRS
    retirement, health insurance, and life insurance. Because PTO is fully-
    user fee funded, the Administration proposed that USPTO should pay the
    full costs of its employees' benefits.
    Bureau of Industry and Security
        ``That the provisions of the first sentence of section 105(f) and
    all of section 108(c) of the Mutual Educational and Cultural Exchange
    Act of 1961 (22 U.S.C. 2455(f) and 2458(c)) shall apply in carrying out
    these activities''
        The MECEA language is intended to allow BIS to receive and retain
    the funds it receives from attendees at BIS export training programs,
    such as Update. Without this language, all money received from
    attendees would have to be deposited in Treasury.
    National Telecommunications and Information Administration
        ``: Provided, That notwithstanding 31 U.S.C. 1535(d), the Secretary
    of Commerce shall charge Federal agencies for costs incurred in
    spectrum management, analysis and operations, and related services and
    such fees shall be retained and used as offsetting collections for
    costs of such spectrum services, to remain available until expended.''
        In 1996, Congress asked NTIA to investigate the feasibility of
    charging federal agencies for spectrum management services. NTIA
    proposed to Congress that each agency be charged in proportion to its
    use of the spectrum, using a simple fee-per-assignment formula. As a
    result, Congress enacted language in the fiscal year 1996
    appropriation, Public Law 104-134, which authorized the Secretary of
    Commerce to charge federal agencies for spectrum management, analysis,
    operations, and related services to cover spectrum management costs.
        Because NTIA experienced significant difficulties collecting fees
    from multiple federal agencies, Congress subsequently enacted
    additional language in the fiscal year 1997 appropriation, Public Law
    104-208, which authorized the Secretary of Commerce to charge fees, but
    also specified that the federal agencies shall pay the fees charged by
    NTIA for spectrum management costs or they would have to cease using
    the spectrum.
        Through NTIA's annual appropriation, Congress has enacted this
    authority each fiscal year. Currently, NTIA uses this authority to
    collect 80 percent of its costs for spectrum management services each
    fiscal year. The specific legislative language is necessary to permit
    NTIA to continue to collect spectrum management fees without the
    particular requirements of the Economy Act (31 U.S.C. 1535(d)) being
    imposed on the transfer of funds and to prevent the expiration of funds
    transferred from other agencies for NTIA's ongoing spectrum management
    services.
        ``: Provided further, That the Secretary of Commerce is authorized
    to retain and use as offsetting collections all funds transferred, or
    previously transferred, from other Government agencies for all costs
    incurred in telecommunications research, engineering, and related
    activities by the Institute for Telecommunication Sciences of NTIA, in
    furtherance of its assigned functions under this paragraph, and such
    funds received from other Government agencies shall remain available
    until expended.''
        NTIA's laboratory in Boulder, Colorado, the Institute of
    Telecommunication Sciences, (ITS) performs spectrum-related research
    and analysis for other federal agencies on a reimbursable basis. Due to
    the nature of this work, which involves projects that do not fit into a
    fiscal year timetable, it is necessary for NTIA to ensure that the
    funds transferred from other agencies for this reimbursable work do not
    expire at the fiscal year's end. Frequently, projects and related
    funding need to be carried over into the next fiscal year. Therefore,
    NTIA continues to need authorization to prevent the expiration of funds
    transferred from other agencies for ITS reimbursable projects.
    Currently, ITS reimbursable projects constitute about 60 percent of its
    annual budget.
    Operations Research and Facilities
        ``Provided, That fees and donations received by the National Ocean
    Service for the management of national marine sanctuaries may be
    retained and used for the salaries and expenses associated with those
    activities, notwithstanding 31 U.S.C. 3302:''
        Per 31 U.S.C. 3302, fees and donations are not available to be
    retained and used by agencies without specific authority.
        ``Provided further, That in addition, $3,000,000 shall be derived
    by transfer from the fund entitled `Coastal Zone Management' and in
    addition $67,000,000 shall be derived by transfer from the fund
    entitled `Promote and Develop Fishery Products and Research Pertaining
    to American Fisheries':''
        This language transfers funds from special NOAA accounts to
    Operations, Research, and Facilities account (ORF) to partially offset
    the appropriation.
        $67 million was transferred from the Promote and Develop account to
    the ORF account. The Promote and Develop account is funded by a thirty
    percent levy on imported fish product duties and transferred from the
    Department of Agriculture to the Promote and Develop American Fishery
    Products account.
        $3 million was transferred from the Coastal Zone Management Fund.
    This fund was established by the Costal Zone Act Reauthorization
    Amendments of 1990 (CZARA). The fund consists of loan repayments from
    the former Coastal energy Impact Program. The proceeds are to be used
    to offset the Operations, Research, and Facilities account for the
    costs of implementing the Coastal Zone Management Act of 1972, as
    amended.
        ``Provided further, That no general administrative charge shall be
    applied against an assigned activity included in this Act or the report
    accompanying this Act:''
        This proviso is included to forestall NOAA from paying for general
    administration via a tax on the line offices and specific projects
    contained in the report language.
        ``Provided further, That the total amount available for the
    National Oceanic and Atmospheric Administration corporate services
    administrative support costs shall not exceed $179,036,000:''
        This proviso strengthens the previous proviso and puts a hard cap
    on NOAA administration costs.
        ``Provided further, That payments of funds made available under
    this heading to the Department of Commerce Working Capital Fund
    including Department of Commerce General Counsel legal services shall
    not exceed $34,000,000:''
        This proviso is included to limit the Department's assessment of
    NOAA for Working Capital Fund costs.
        ``Provided further, That any deviation from the amounts designated
    for specific activities in the report accompanying this Act, or any use
    of deobligated balances of funds provided under this heading in
    previous years, shall be subject to the procedures set forth in section
    605 of this Act:''
        This strengthens the force of the report language by requiring a
    notification to the Appropriations Committees if NOAA deviates from it,
    and increases oversight of spending from deobligations by requiring
    notification as well.
        ``Provided further, That grants to States pursuant to sections 306
    and 306A of the Coastal Zone Management Act of 1972, as amended, shall
    not exceed $2,000,000, unless funds provided for `Coastal Zone
    Management Grants' exceed funds provided in the previous fiscal year:''
        This language requires NOAA to divide up CZM grants fairly equally
    between the states (by formula), protecting states with small
    coastlines and preventing states with long coastlines (CA, AK, FL) from
    receiving the bulk of the grant funds.
        ``Provided further, That if funds provided for `Coastal Zone
    Management Grants' exceed funds provided in the previous fiscal year,
    then no State shall receive more than 5 percent or less than 1 percent
    of the additional funds:''
        This language was inserted to ensure that if more funds were
    available for CZM than in the prior year, all participating states
    would benefit.
        ``Provided further, That the personnel management demonstration
    project established at the National Oceanic and Atmospheric
    Administration pursuant to 5 U.S.C. 4703 may be expanded by 3,500 full-
    time positions to include up to 6,925 full-time positions and may be
    extended indefinitely:''
        This language expanded the scope of the payroll demonstration
    project.
        ``Provided further, That the Administrator of the National Oceanic
    and Atmospheric Administration may engage in formal and informal
    education activities, including primary and secondary education,
    related to the agency's mission goals:''
        This provides specific authorization for NOAA to engage in
    educational activities.
        ``: Provided further, That, in accordance with the Federal Credit
    Reform Act of 1990 (2 U.S.C. 611 et seq.), within funds appropriated
    under this heading, $2,000,000 shall remain available until expended,
    for the cost of loans under section 211(e) of title II of division C of
    Public Law 105-277, such loans to have terms of up to 30 years and to
    be available for use in any of the Bering Sea and Aleutian Islands
    fisheries.''
        This language provided a $2 million subsidy to cover the costs
    associated with a $200 million loan to the Community Develop Quota
    fisheries in the Bering Sea and Aleutian Islands. These loans have
    terms of up to 30 years.
    Procurement, Acquisition and Construction
        ``Provided, That of the amounts provided for the National Polar-
    orbiting Operational Environmental Satellite System, funds shall only
    be made available on a dollar for dollar matching basis with funds
    provided for the same purpose by the Department of Defense:''
        This proviso was included because of concern that DOD would shift
    costs to NOAA by under funding their portion of the project.
        ``Provided further, That except to the extent expressly prohibited
    by any other law, the Department of Defense may delegate procurement
    functions related to the National Polar-orbiting Operational
    Environmental Satellite System to officials of the Department of
    Commerce pursuant to section 2311 of title 10, United States Code:''
        Air Force officials asserted that NOAA officials could not perform
    certain procurement functions because they were not authorized to do
    so. This proviso was included to satisfy the need for authorization.
        ``Provided further, That any deviation from the amounts designated
    for specific activities in the report accompanying this Act, or any use
    of deobligated balances of funds provided under this heading in
    previous years, shall be subject to the procedures set forth in section
    605 of this Act:''
        This strengthens the force of the report language by requiring a
    notification to the Appropriations Committees if NOAA deviates from it,
    and increases oversight of spending from deobligations by requiring
    notification as well.
        ``Provided further, That beginning in fiscal year 2007 and for each
    fiscal year thereafter, the Secretary of Commerce shall include in the
    budget justification materials that the Secretary submits to Congress
    in support of the Department of Commerce budget (as submitted with the
    budget of the President under section 1105(a) of title 31, United
    States Code) an estimate for each National Oceanic and Atmospheric
    Administration procurement, acquisition and construction program having
    a total multiyear program cost of more than $5,000,000 and an estimate
    of the budgetary requirements for each such program for each of the
    five subsequent fiscal years:''
        This proviso was added by Congress and requires five years of
    outyear projections for programs with total costs of $5 million or
    more.
        ``Provided further, That subject to amounts provided in advance in
    appropriations Acts, the Secretary of Commerce is authorized to enter
    into a lease with The Regents of the University of California for land
    at the San Diego Campus in La Jolla for a term not less than 55
    years:''
        NOAA is seeking to replace its Southwest Fisheries Science
    Laboratory at La Jolla, CA, because it sits at the edge of a cliff that
    is receding. Because the University of California offered suitable land
    nearby but required a long-term lease, NOAA needed specific
    authorization to enter into a lease of more than 20 years in order to
    consider the offer.
        ``: Provided further, That funds appropriated for the construction
    of the National Oceanic and Atmospheric Administration Pacific Regional
    Center are an additional increment in the incremental funding planned
    for the Center, and may be expended incrementally, through multi-year
    contracts for construction and related activities, provided that
    obligations under any such multi-year contract shall be subject to the
    availability of appropriations.''
        This provides NOAA greater flexibility in spending the funds for
    the Pacific Regional Center. Usually, NOAA would require appropriations
    in an amount that would build or buy something that would be useful
    even without further appropriation. However, even the major increments
    for this project are substantially in excess of the amounts provided to
    date. Without this authorization, NOAA would not be able to spend the
    funds appropriated, and they would expire unused.
    Fisheries Finance Program Account
        ``Provided, That such costs, including the cost of modifying such
    loans, shall be as defined in the Federal Credit Reform Act of 1990:''
        Loans given out under the Fisheries Finance Program are to use
    accounting principles specified under the Federal Credit Reform Act of
    1990.
        ``Provided further, That these funds are only available to
    subsidize gross obligations for the principal amount of direct loans
    not to exceed $5,000,000 for Individual Fishing Quota loans, and not to
    exceed $59,000,000 for traditional direct loans, of which $19,000,000
    may be used for direct loans to the United States menhaden fishery:''
        Provides loan authority for two loan programs.
        Direct loan authority of $5 million was given for Individual
    Fishing Quota (IFQ). These loans provide fishery wide financing to ease
    the transition to sustainable fisheries through its fishing capacity
    reduction programs and provides financial assistance in the form of
    loans to fishermen who fish from small vessels and entry level
    fishermen to promote stability and reduce consolidation in already
    rationalized fisheries.
        Provides direct loan authority of $59 million was given for
    Traditional Direct loans. Traditional Direct Loans are available to
    U.S. citizens who otherwise qualify for financing or refinancing the
    construction, reconstruction, reconditioning, and in some cases, the
    purchasing of fishing vessels, shoreside processing, aquaculture, and
    mariculture facilities. Language was also included directing that of
    the $59 million in traditional loans, priority should be given to
    providing $19 million in direct loans to the menhaden fishery.
        ``: Provided further, That none of the funds made available under
    this heading may be used for direct loans for any new fishing vessel
    that will increase the harvesting capacity in any United States
    fishery.''
        This proviso makes it unlawful for a fisherman to use Fisheries
    Finance Program loans to modify or replace a fishing vessel such that
    it would materially increase the harvesting capacity of the fishery.
    This language prevents fisheries finance program loans from
    contributing to over-fishing.
                      economic development representative
        Question. The Economic Development Representative (EDR) that
    services Maryland has been vacant for well over a year. When will this
    vacancy be filled? If not, please explain.
        Answer. The Economic Development Administration (EDA) has initiated
    the competitive civil service recruitment process to fill the vacant
    Economic Development Representative (EDR) position in the Maryland/West
    Virginia office. This office is to be located in West Virginia but
    would have convenient access to Maryland. EDA currently has five vacant
    EDR positions nationwide. Recruitment is currently underway to fill the
    three vacancies located in Maryland/West Virginia, Minnesota, and
    Missouri. EDA anticipates the recruitment process to fill the other two
    vacancies will begin sometime in April.
                           unobligated balance levels
        Question. Please provide unobligated balance levels for the S&E
    appropriation and the Economic Development Assistance Program
    appropriation for fiscal years 2001 through 2006.
        Answer. The following unobligated balance levels are provided for
    the S&E appropriation and the Economic Development Assistance Program
    appropriation for fiscal years 2001 through 2006. The EDAP balances
    primarily consist of deobligations of prior year obligations, and were
    re-obligated against new projects in subsequent years.

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                    Fiscal year \1\                     S&E          EDAP
    ------------------------------------------------------------------------
    2001..........................................          240       63,777
    2002..........................................           42       11,902
    2003..........................................          338       14,826
    2004..........................................      \2\ 912       15,355
    2005..........................................           20       10,965
    2006..........................................       \3\ 96       10,757
    ------------------------------------------------------------------------
    \1\ Balances were for year end for each year.
    \2\ Balance due to EOY DOD reimbursable credit.
    \3\ As corrected.

                    economic development administration cut
        Question. What will be the consequence of an $80 million cut in EDA
    grants? How many fewer projects will be funded? How many communities
    will not receive assistance?
        Answer. We believe the President's budget balances competing
    priorities and provides sufficient resources for the agency to
    accomplish its mission. A funding level of $170 million will provide
    60-65 public works-type grants and 25 economic adjustment-type
    construction grants, which will generate 19,000 new higher-skill jobs.
    EDA will focus these resources on the Nation's most distressed
    communities. EDA fiscal year 2006 and fiscal year 2007 funding levels
    supported approximately 140 investments.
                               staffing breakout
        Question. Please provide a staffing breakout (including
    contractors) at headquarters and at each of the regional offices as of
    the end of each fiscal year (2001-2006) as well as a current breakout
    as of the latest pay period. Provide staffing levels by appointment,
    grade, and position.
        Answer. Attachment 5 lists on-board staffing, including
    contractors, at headquarters and each regional office at the end of
    each fiscal year, and the current staffing, including appointment,
    grade and position.

              ATTACHMENT 5.--ECONOMIC DEVELOPMENT ADMINISTRATION STAFFING CHART AS OF 3/20/2007--EMPLOYEES
    ----------------------------------------------------------------------------------------------------------------
                   Office                                  Positions                       Appointment       Grade
    ----------------------------------------------------------------------------------------------------------------
    Office of the Assistant Secretary...  Assistant Secretary........................  Political.........    ( \1\ )
    Office of the Assistant Secretary...  DAS for Economic Development...............  Political.........    ( \2\ )
    Office of the Assistant Secretary...  Senior Advisor to Assistant Secretary......  Political.........    ( \2\ )
    Office of the Assistant Secretary...  Special Advisor............................  Political.........         11
    Office of the Assistant Secretary...  Confidential Assistant.....................  Political.........         11
    Office of the Assistant Secretary...  Secretary..................................  Career............         10
    Office of Chief Counsel.............  Chief Counsel..............................  Career............         15
    Office of Chief Counsel.............  Attorney Advisor...........................  Career............         14
    Office of Chief Counsel.............  Attorney Advisor...........................  Career............         14
    Office of Chief Counsel.............  Paralegal..................................  Career............         12
    Office of Chief Counsel.............  Administrative Assistant...................  Career............          8
    Office of Management Services.......  CFO/DAS for Management Services............  Career............    ( \2\ )
    Office of Management Services.......  Secretary..................................  Career............          8
    Office of Management Services.......  Program Analyst--PMF.......................  Career............         12
    Office of Management Services.......  Deputy CFO/Director Administration &         Career............         15
                                           Support Svs Div.
    Office of Management Services.......  Human Resources............................  Career............         15
    Office of Management Services.......  Management Analyst.........................  Career............         14
    Office of Management Services.......  Management Analyst.........................  Career............         13
    Office of Management Services.......  Management Analyst.........................  Career............         13
    Office of Management Services.......  Financial Analyst..........................  Career............         14
    Office of Management Services.......  Accountant.................................  Career............         14
    Office of Management Services.......  Accountant.................................  Career............         13
    Office of Management Services.......  Director, Budgeting & Performance            Career............         15
                                           Evaluation Division.
    Office of Management Services.......  Senior Program Analyst.....................  Career............         14
    Office of Management Services.......  Program Analyst............................  Career............         13
    Office of Management Services.......  Program Analyst............................  Career............         13
    Office of Management Services.......  Program Analyst............................  Career............          7
    Office of Management Services.......  Grant Specialist--PMF......................  Career............         11
    Office of Management Services.......  Budget Analyst.............................  Career............         13
    Office of Information Technology....  Chief Information Officer..................  Career............         15
    Office of Information Technology....  Information Tech Specialist................  Career............         14
    Office of Information Technology....  Information Tech Specialist................  Career............         13
    Office of Information Technology....  Information Tech Specialist................  Career............         11
    Office of Information Technology....  Information Tech Specialist................  Career............          7
    Office of External Affairs and        DAS for External Affairs and Communications  Political.........    ( \2\ )
     Communications.
    Office of External Affairs and        Secretary..................................  Career............          8
     Communications.
    Office of External Affairs and        Director, Public Affairs...................  Political.........         15
     Communications.
    Office of External Affairs and        Web Master.................................  Career............         13
     Communications.
    Office of External Affairs and        Senior Public Affairs Specialist...........  Career............         13
     Communications.
    Office of External Affairs and        Public Affairs Specialist..................  Career............         12
     Communications.
    Office of External Affairs and        Prog Comm Specialist Team Leader...........  Career............         15
     Communications.
    Office of External Affairs and        Management Analyst.........................  Career............         13
     Communications.
    Office of External Affairs and        Intergovernmental Affairs Specialist.......  Career............         13
     Communications.
    Office of External Affairs and        Investment Information Specialist..........  Career............         12
     Communications.
    Office of External Affairs and        Comm & Cong Liaison Spec...................  Career............         12
     Communications.
    Office of External Affairs and        Investment Information Specialist..........  Career............         12
     Communications.
    Office of External Affairs and        Program Communications Asst................  Career............          7
     Communications.
    Atlanta Regional Office.............  Regional Director..........................  Career............    ( \2\ )
    Atlanta Regional Office.............  EDR/Kentucky...............................  Career............         13
    Atlanta Regional Office.............  EDR/Mississippi............................  Career............         13
    Atlanta Regional Office.............  Administrative Officer.....................  Career............         12
    Atlanta Regional Office.............  Econ Dev Prog Spec.........................  Career............         12
    Atlanta Regional Office.............  Econ Dev Prog Spec.........................  Career............         12
    Atlanta Regional Office.............  Econ Dev Assistant.........................  Career............          6
    Atlanta Regional Office.............  Civil Engineer.............................  Career............         14
    Atlanta Regional Office.............  Civil Engineer.............................  Career............         13
    Atlanta Regional Office.............  IT Specialist..............................  Career............         12
    Atlanta Regional Office.............  Project Manager............................  Career............         12
    Atlanta Regional Office.............  Chief, Public Works & Econ Adjust..........  Career............         14
    Atlanta Regional Office.............  Program Specialist.........................  Career............         12
    Atlanta Regional Office.............  Program Specialist.........................  Career............         12
    Atlanta Regional Office.............  Program Specialist.........................  Career............         12
    Atlanta Regional Office.............  Econ Dev Prog Spec.........................  Career............         11
    Atlanta Regional Office.............  Regional Counsel...........................  Career............         15
    Atlanta Regional Office.............  Econ Dev Prog Spec.........................  Career............         12
    Atlanta Regional Office.............  Secretary O/A..............................  Career............          6
    Austin Regional Office..............  Regional Director..........................  Career............    ( \2\ )
    Austin Regional Office..............  Regional Counsel...........................  Career............         15
    Austin Regional Office..............  Environmental Specialist...................  Career............         13
    Austin Regional Office..............  Area Director..............................  Career............         14
    Austin Regional Office..............  EDR/Louisiana..............................  Career............         13
    Austin Regional Office..............  Senior Program Specialist..................  Career............         13
    Austin Regional Office..............  Econ Dev Prog Specialist...................  Career............         12
    Austin Regional Office..............  Mgmt Analyst...............................  Career............         12
    Austin Regional Office..............  Area Director..............................  Career............         14
    Austin Regional Office..............  Civil Engineer.............................  Career............         13
    Austin Regional Office..............  Civil Engineer.............................  Career............         13
    Austin Regional Office..............  OPCS Officer...............................  Career............         12
    Austin Regional Office..............  Office Tech/Office Auto....................  Career............          5
    Austin Regional Office..............  Area Director..............................  Career............         14
    Austin Regional Office..............  EDR--Arkansas..............................  Career............         13
    Austin Regional Office..............  Econ Dev Prog Specialist...................  Career............         12
    Austin Regional Office..............  Econ Dev Prog Specialist...................  Career............         12
    Austin Regional Office..............  Econ Dev Prog Specialist...................  Career............         12
    Chicago Regional Office.............  Regional Director..........................  Career............    ( \2\ )
    Chicago Regional Office.............  Regional Counsel...........................  Career............         15
    Chicago Regional Office.............  EDR/Ohio/Indiana...........................  Career............         13
    Chicago Regional Office.............  EEO Specialist.............................  Career............         13
    Chicago Regional Office.............  Econ Dev Prog Specialist...................  Career............          9
    Chicago Regional Office.............  Supv Program Specialist....................  Career............         14
    Chicago Regional Office.............  Engineer...................................  Career............         13
    Chicago Regional Office.............  EA Program Specialist......................  Career............         12
    Chicago Regional Office.............  PW Program Specialist......................  Career............         12
    Chicago Regional Office.............  PW Program Specialist......................  Career............         12
    Chicago Regional Office.............  Supervisory Econ Dev Prog Spec.............  Career............         14
    Chicago Regional Office.............  Engineer...................................  Career............         13
    Chicago Regional Office.............  EA Program Specialist......................  Career............         12
    Chicago Regional Office.............  OPCS Officer...............................  Career............         14
    Chicago Regional Office.............  Administrative Officer.....................  Career............         12
    Chicago Regional Office.............  Secretary..................................  Career............          6
    Chicago Regional Office.............  Secretary..................................  Career............          6
    Chicago Regional Office.............  Coordinator................................  Career............         14
    Denver Regional Office..............  Regional Director..........................  Career............    ( \2\ )
    Denver Regional Office..............  Regional Counsel...........................  Career............         15
    Denver Regional Office..............  Civil Engineer.............................  Career............         13
    Denver Regional Office..............  OPCS Officer/Computer Spec.................  Career............         12
    Denver Regional Office..............  Admin Officer..............................  Career............         12
    Denver Regional Office..............  Program Specialist.........................  Career............         12
    Denver Regional Office..............  Program Specialist.........................  Career............         11
    Denver Regional Office..............  Community Planner..........................  Career............         13
    Denver Regional Office..............  East Team Leader...........................  Career............         14
    Denver Regional Office..............  Program Specialist.........................  Career............         13
    Denver Regional Office..............  EDR Colorado/Kansas........................  Career............         13
    Denver Regional Office..............  EDR Iowa/Nebraska..........................  Career............         13
    Denver Regional Office..............  EDR Montana/Utah...........................  Career............         13
    Denver Regional Office..............  West Team Leader...........................  Career............         14
    Denver Regional Office..............  Program Specialist.........................  Career............         13
    Philadelphia Regional Office........  Regional Counsel...........................  Career............         15
    Philadelphia Regional Office........  Environmental Officer......................  Career............         13
    Philadelphia Regional Office........  General Attorney...........................  Career............         14
    Philadelphia Regional Office........  Administrative Officer.....................  Career............         12
    Philadelphia Regional Office........  Adm Support Assistant......................  Career............          5
    Philadelphia Regional Office........  EDR New York/VT............................  Career............         13
    Philadelphia Regional Office........  Chief, Planning Technical Asst.............  Career............         14
    Philadelphia Regional Office........  Community Planner..........................  Career............         13
    Philadelphia Regional Office........  Community Planner..........................  Career............         12
    Philadelphia Regional Office........  Community Planner..........................  Career............         12
    Philadelphia Regional Office........  Chief, Pubic Works.........................  Career............         14
    Philadelphia Regional Office........  Civil Engineer.............................  Career............         13
    Philadelphia Regional Office........  Sr. Program Specialist.....................  Career............         13
    Philadelphia Regional Office........  Civil Engineer.............................  Career............         13
    Philadelphia Regional Office........  Civil Engineer.............................  Career............         13
    Philadelphia Regional Office........  Public Works Program Spec..................  Career............         12
    Philadelphia Regional Office........  Econ Dev Prog Spec.........................  Career............         12
    Philadelphia Regional Office........  Program Specialist.........................  Career............          9
    Philadelphia Regional Office........  Chief, Economic Adjustment.................  Career............         14
    Philadelphia Regional Office........  Sr.Program Specialist (Financial Analyst)..  Career............         13
    Philadelphia Regional Office........  Program Specialist.........................  Career............         13
    Philadelphia Regional Office........  Program Specialist.........................  Career............         12
    Seattle Regional Office.............  Regional Director..........................  Career............    ( \2\ )
    Seattle Regional Office.............  Regional Counsel...........................  Career............         15
    Seattle Regional Office.............  EEO/Civil Rights...........................  Career............         13
    Seattle Regional Office.............  Administrative Officer.....................  Career............         12
    Seattle Regional Office.............  Computer Specialist........................  Career............         11
    Seattle Regional Office.............  EDR Alaska.................................  Career............         13
    Seattle Regional Office.............  Economic Development Specialist............  Career............         11
    Seattle Regional Office.............  Chief, Economic Adjustment.................  Career............         14
    Seattle Regional Office.............  Economic Adjustment Specialist.............  Career............         12
    Seattle Regional Office.............  EDR/Oregon, Northern Cal...................  Career............         14
    Seattle Regional Office.............  EDR Pacific Islands........................  Career............         13
    Seattle Regional Office.............  EDR/Idaho and Nevada.......................  Career............         13
    Seattle Regional Office.............  EDR/Central, Bay, CA.......................  Career............         13
    Seattle Regional Office.............  EDR/Southern California....................  Career............         13
    Seattle Regional Office.............  EDR/Arizona................................  Career............         13
    Seattle Regional Office.............  Supv Community Planner.....................  Career............         14
    Seattle Regional Office.............  Civil Engineer.............................  Career............         13
    Seattle Regional Office.............  Civil Engineer.............................  Career............         13
    Seattle Regional Office.............  Civil Engineer.............................  Career............         13
    Seattle Regional Office.............  Public Works Specialist....................  Career............         12
    Seattle Regional Office.............  Public Works Specialist....................  Career............         12
    Seattle Regional Office.............  Public Works Specialist....................  Career............         12
                                                                                                          ----------
          Total.........................  ...........................................  ..................        161
    ----------------------------------------------------------------------------------------------------------------
    \1\ EX.
    \2\ SES.

             ATTACHMENT 5.--ECONOMIC DEVELOPMENT ADMINISTRATION STAFFING CHART AS OF 3/20/2007--CONTRACTORS
    ----------------------------------------------------------------------------------------------------------------
                   Office                              Positions                       Funded by             Number
    ----------------------------------------------------------------------------------------------------------------
    Office of Management Services.......  Accounting Technician.............  S&E........................          2
    Office of Management Services.......  Human Resources \1\...............  S&E........................          2
    Office of Information Technology....  Information Technology............  S&E........................          7
                                                                                                          ----------
          Total contractors funded by     ..................................  ...........................         11
           S&E funds.
                                                                                                          ==========
    Contractors Funded by Other Sources
     of Funds:
        Seattle Regional Office.........  Community Planner.................  DOD Reimb Funds............          1
        Seattle Regional Office.........  Administrative Assistant..........  DOD Reimb Funds............          1
        Seattle Regional Office.........  Civil Engineer....................  DOD Reimb Funds............          1
        Seattle Regional Office.........  Program Specialist................  DOD Reimb Funds............          1
        Seattle Regional Office.........  Environ Protection Specialist.....  DOD Reimb Funds............          1
                                                                                                          ----------
          Total Other Fund Sources......  ..................................  ...........................          5
    ----------------------------------------------------------------------------------------------------------------
    \1\ HR services previously provided under a cross-servicing agreement with ITA.

                  esa headquarters staffing and funding levels
        Question. Please provide a staffing and funding breakout for ESA
    Headquarters for fiscal year 2005, fiscal year 2006, fiscal year 2007
    CR.
        Answer. All ESA headquarters' appropriated staffing and funding are
    identified in the Economics and Statistical Analysis budget under the
    ``Policy Support'' heading.

    ----------------------------------------------------------------------------------------------------------------
                                                      Fiscal Year 2005      Fiscal Year 2006      Fiscal Year 2007
                                                           Actual                Actual                Enacted
                   ESA Headquarters                -----------------------------------------------------------------
                                                    Personnel    Amount   Personnel    Amount   Personnel    Amount
    ----------------------------------------------------------------------------------------------------------------
    Positions/Budget Authority....................         34     $6,316         23     $3,975         23     $3,975
    FTE/Obligations...............................         39      6,398         18      3,480    ( \1\ )    ( \1\ )
    ----------------------------------------------------------------------------------------------------------------
    \1\ TBD.

                        dynamics of economic well-being
        Question. Will there be a gap in continuity between the start of
    the Dynamics of Economic Well-Being and the end of the SIPP? If so, how
    long?
        Answer. The Budget provides $15.9 million (an increase of $6.7
    million over the 2007 Budget) to continue the development of the new
    Dynamics of Economic Well-being System (DEWS). However, to ensure
    Census can focus its efforts and be successful at fielding the new
    survey in 2009, the Budget does not include funding to continue SIPP
    data collection in 2008. Therefore there will be a short ``data gap''
    between ending the SIPP and beginning of DEWS.
        Data collection will end for SIPP in September 2007. We will have
    full data through May, partial data through August, and no data from
    September through December 2007. The first DEWS data collection will
    provide data for calendar year 2008. It should be noted that there have
    been gaps in the SIPP series before. For example, to enable the Census
    Bureau to initiate a new panel in February 2001 and process data more
    recently collected, data collected from February to September 2000 were
    never released and data from October 2000 to January 2001 were never
    collected. Based on those experiences and consultations with some of
    our Federal agency partners, we believe that a similar data gap between
    SIPP and DEWS should not hamper program evaluation or modeling.
                        improved measurement of services
        Question. Please provide the complete funding requirements for the
    ``Improved Measurement of Services'' including any out-year
    requirements.
        Answer. The Improved Measurement of Services initiative request for
    fiscal year 2008 is $8,118,000. We expect that a similar amount will be
    needed in the out-years, with adjustments for inflationary cost
    increases and other technical adjustments to base, providing for the
    continued quarterly and annual collection and dissemination of service
    industry data.
                            ita export fee increase
        Question. The budget request proposes to double a fee that the
    Subcommittee has rejected the last two years. Will the fee increase be
    a disincentive for exports at the very time we are trying to encourage
    them?
        Please provide a schedule of current fees vs. those proposed under
    the request.
        Answer. In 2006, ITA was involved with over 12,000 export success
    stories. Overall, exports from the United States are up over 2005. In
    fiscal year 2006, ITA assumed that it would collect $8 million in fees.
    ITA actually collected $7.9 million. We believe these fees could be
    managed better to free-up funding for ITA activities that provide the
    greatest benefit to the nation as a whole. ITA believes its services
    are important for potential exporters and will continue to contribute
    to the export boom.
        ITA is working toward developing a fee setting strategy that will
    recover a slightly larger share of costs from companies that can afford
    it, while still encouraging SMEs to participate in the export market.
    The proposed fees will cover approximately 5 percent of the costs of
    the U.S. and Foreign Commercial Service (an increase from 3 percent in
    fiscal year 2007), and only about 3 percent of ITA's overall costs. The
    fees are targeted at services that provide benefits for specific firms,
    such as International Partner Searches, and Gold Key services. These
    services are most similar to those provided by private consulting
    firms.
        In addition, ITA is developing novel partnerships with companies
    such as FED-Ex and E-BAY, to name a couple, to expand the number of
    SMEs that export and those that export to more the one country. For
    example, FedEx is helping ITA to identify and inform U.S. exporters to
    Mexico about new business opportunities in Central America, which have
    come about as a result of recent Free Trade Agreements that the United
    States has signed with these countries. These private sector partners
    join ITA's traditional interagency partners, such as SBA, the Export-
    Import Bank, the Overseas Private Investment Corporation, and state and
    local governments in an effort to educate, inform and assist companies.
    These partnerships help achieve the government's and the private
    partners' goals of expanding foreign sales.
        Below is a schedule of current fees. There are no proposed fees at
    this time.

    ------------------------------------------------------------------------
                                                        Current Fees
    ------------------------------------------------------------------------
                     Products

    Business Facilitation Service.............  Variable depending on
                                                 company requirements
    BuyUSA.gov Business Service Provider......  International $150-$500
                                                Domestic $250
                                                Free for U.S. Companies
    Commercial News USA.......................  Revenue comes from
                                                 advertising
    Customized Market Research................  Variable depending on
                                                 company requirements
    Featured US Exporters (FUSE)..............  $25-50
    Gold Key--1st day.........................  $685-$770 \1\
    Gold Key--each additional day.............  $320-$385 \1\
    International Company Profile (ICP).......  $520-$810 \1\
    International Partner Search (IPS)........  $500-$790 \1\
    Platinum Key Service......................  Variable depending on
                                                 company requirements

                      Events

    Catalog Event/PLC.........................  $450 and $650
    Certified Trade Mission...................  Variable depending on
                                                 company requirements
    International Buyer Program...............  $8,000
    Seminar-Webinar...........................  Variable
    Trade Fair................................  Variable depending on trade
                                                 fair expenses and company
                                                 requirements
    Trade Mission.............................  Variable depending on
                                                 company requirements
    Trade Promotion Event.....................  Variable depending on
                                                 company requirements
    Single Company Promotion..................  Variable depending on
                                                 company requirements
    Certified Trade Fairs.....................  $1,750
    ------------------------------------------------------------------------
    \1\ The range of user fees charged for certain services reflects
      variations in the cost of doing business in different markets.

                          ita chinese subsidy programs
        Question. Please provide a funding summary of efforts to identify
    and analyze Chinese subsidy programs.
        Answer. While ITA records maintain cost information for overall
    China enforcement efforts, it does not record separately its activities
    with respect to China subsidies for financial purposes. We can
    reasonably estimate that, between efforts in Washington, DC, and ITA's
    foreign offices in Asia, particularly Beijing, ITA devoted well over
    $1,000,000 to research, monitoring, consultation and advocacy regarding
    China subsidy issues during fiscal year 2006. During fiscal year 2007,
    we estimate that this amount could reach somewhere in the range of
    $1,500,000.
                         ita assistant secretary status
        Question. What is the status of the A/S for Manufacturing vacancy?
        Answer. We are working closely with Personnel at the White House on
    this appointment and are making good progress. We are committed to
    filling this position as quickly as possible.
                      funding for noaa education programs
        Question. Secretary Gutierrez, a few weeks ago you invited me to
    attend an event at a local Maryland high school to visit with students
    participating in the FIRST Robotics competition. From the interest you
    have shown in this program I know that you are keenly aware of the fact
    that we need to engage our young people I math and science programs.
        What is the rationale for cutting the NOAA education programs by 50
    percent?
        Does the Department of Commerce believe in the NOAA education
    mission?
        Answer. NOAA's fiscal year 2008 budget maintains NOAA's education
    spending at the fiscal year 2007 President's request level. The
    Department of Commerce strongly believes in NOAA's educational mission
    and we believe that NOAA can make considerable progress toward its goal
    of developing an ocean literate population at the requested funding
    level. In order to produce a society well versed in ocean-related
    issues, it is vital that NOAA establishes a strong foundation of
    knowledgeable students who will later move into the general population.
    The programs included in the fiscal year 2008 budget (see Table 1) all
    contribute to this goal.

      TABLE 1.--EDUCATION PROGRAMS INCLUDED IN PRESIDENT'S FISCAL YEAR 2008
                                 BUDGET REQUEST
    ------------------------------------------------------------------------
                                                                Fiscal Year
                                                                   2008
                             Program                            President's
                                                                  Request
    ------------------------------------------------------------------------
    Educational Partnership Program.........................     $14,261,000
    Hollings Scholarship....................................       3,700,000
    JASON...................................................       1,000,000
    Nancy Foster Scholarship................................         400,000
                                                             ---------------
          Total.............................................      19,361,000
    ------------------------------------------------------------------------

        Examples of each of these successful NOAA programs are highlighted
    below:
        The JASON Project uses multimedia tools and cutting-edge technology
    to engage middle-school students in scientific research and expeditions
    led by leading scientists. Dr. Bob Ballard has transmitted his
    discoveries to millions of students in classrooms around the country,
    via satellite and internet broadcasts. The JASON Project also provides
    on-site and on-line teacher professional development supported by the
    National Science Teachers Association and the U.S. Department of
    Education's Star Schools Program.
        NOAA's Educational Partnership Program began in 2001 and provides
    financial assistance, on a competitive basis, to Minority Serving
    Institutions (MSIs) to increase programs and opportunities for students
    to be trained and graduate in sciences that directly support NOAA's
    mission. The program consists of four core components: Cooperative
    Science Centers, Environmental Entrepreneurship Program, Graduate
    Sciences Program and the Undergraduate Scholarship Program.
      --Five Cooperative Science Centers have been designated at MSIs with
            graduate degree programs in NOAA-related sciences. To date,
            NOAA has provided formal training and research opportunities
            for 2,050 students at these centers. External teams of
            scientists have reviewed the centers to determine the
            effectiveness of student recruitment, training and graduation.
            Program statistics have consistently exceeded performance
            measures with over 383 students graduating with bachelors and
            advanced degrees in NOAA-related sciences. Of those students,
            33 have received Ph.D.'s and 105 students have been awarded
            Masters Degrees. Another 94 Ph.D. candidates and 126 Masters
            candidates are expected to receive advanced degrees within the
            next three to five years.
      --The Environmental Entrepreneurship Program provides financial
            assistance to increase the number of students at MSIs who are
            proficient in both environmental studies and business
            enterprises. The Program facilitates linkages between MSIs,
            NOAA and the private sector.
      --The Undergraduate Scholarship Program has trained 84 students
            majoring in NOAA-related sciences at MSIs. Of these, 69
            students have completed the program and 15 are finishing their
            second year of training. Twenty-eight of the students that have
            completed the program have been accepted into graduate
            programs.
      --The Graduate Sciences Program offers training and work experience
            to exceptional female and minority students pursuing advanced
            degrees in the environmental sciences. After completing the
            program, participants commit to employment at NOAA based upon
            the length of their training. To date, the Graduate Sciences
            program has hired 32 graduates as NOAA scientists.
        The Dr. Nancy Foster Scholarship Program, named in honor of the
    late distinguished NOAA scientist and Assistant Administrator,
    recognizes outstanding scholarship and encourages independent graduate
    level research--particularly by female and minority students--in
    oceanography, marine biology and maritime archaeology. Congress
    authorized the Program, as described in the National Marine Sanctuaries
    Amendments Act of 2000, soon after Dr. Foster's death in June 2000, as
    a means of honoring her life's work and contribution to the Nation. To
    date, 22 students have received scholarships, 18 of whom are women.
        The Ernest F. Hollings Scholars Program recruits and prepares
    students for public service careers with NOAA and other natural
    resource and science agencies as well as for careers as teachers and
    educators in oceanic and atmospheric science. Last year, the first
    Hollings Scholars successfully participated in summer internships with
    NOAA labs and facilities. The Hollings Scholarship Program currently
    funds more than 100 students in ocean and atmospheric sciences, math,
    computer science, social science and education.
        As indicated above, the Department supports education programs at
    NOAA and is requesting over $19 million in fiscal year 2008 for
    education programs and activities.
                        united states pto patent backlog
        Question. What is the current backlog of patents?
        Answer. The backlog (cases that have not been examined) of patent
    applications at the beginning of fiscal year 2007 was 701,000. As noted
    in the 2007-2012 Strategic Plan, the rate at which patent applications
    are being filed has increased beyond the rate at which the USPTO is
    presently able to examine them. It is possible that this backlog could
    approach 1.4 million by 2012.
        We are currently employing the following strategies to address
    backlogs:
      --Enhance recruitment to hire 1,200 new patent examiners a year for
            an extended period of time, including examiners with degrees
            and/or experience in areas of emerging technologies.
      --Expand telework and explore establishing regional USPTO office.
      --Competitively source PCT Chapter 1 applications, freeing examiners
            to focus on national cases.
      --Explore examination reform through the rule making process to
            create better-focused examination and enhance information
            exchange between applicant and examiner.
                   long-term metric/goal for patent pendency
        Question. What is the agency's long-term metric/goal for patent
    pendency?
        Answer. Our long-term, strategic goal for patent pendency \1\ is 28
    months to final disposition, by 2012.
    ---------------------------------------------------------------------------
        \1\ Patent pendency is the amount of time a patent application is
    waiting (in queue) before a patent is issued or the application is
    abandoned.
    ---------------------------------------------------------------------------
        Metrics include reduction of the initial waiting time for patent
    applications in our most backlogged Technology Centers and successful
    implementation of various initiatives that ensure goal achievement by
    2012.
        The USPTO is both implementing initiatives and exploring strategies
    that will reduce the backlog of unexamined patent applications and
    improve the timeliness of a patent examination.
        An important set of options--important because they would have a
    significant, long-lasting positive effect on timeliness of patent
    examination--might require legislation. Therefore, we are grateful to
    the Subcommittee for its interest in the topic of patent pendency, as
    we believe faster processing of patent applications is crucial to
    America's Competitiveness.
                                 retention rate
        Question. What is the current staff retention rate?
        Answer. The USPTO typically reports an attrition rate rather than a
    retention rate. In 2006 the USPTO's examining staff had an attrition
    rate of 10.6 percent. In contrast, the U.S. Department of Labor, Bureau
    of Labor Statistics reported a total government separation rate of 16.9
    percent for 2006.
                          increase examiner retention
        Question. Beyond recruitment and retention bonuses, how is PTO
    working to increase examiner retention?
        Answer. In addition to providing eligible examiners a market-driven
    recruitment bonus for up to four years with a condition of employment
    agreement, the USPTO has identified a number of initiatives that would
    improve retention:
      --The Office is forming teams of hiring coordinators with specialized
            technology-specific and human resources and recruiting skills
            to attract candidates for hard to fill examining positions,
            particularly those most likely to stay at the USPTO.
      --Another way of attracting candidates who most likely would remain
            at the USPTO is to use personal interaction at college and
            regional job fairs to educate candidates about the exact nature
            of the job.
      --The on-going Patent Hoteling Program (PHP), which was launched in
            2006 with 500 examiners, will be expanded by 500 examiners a
            year through fiscal year 2010.
          --PH is a voluntary program whereby participants can remotely
                access USPTO automated system, on-line resources, and other
                information from an alternative worksite. They also can
                remotely reserve office space one day per week in a ``hotel
                office suite'' located at USPTO headquarters to conduct in-
                person business activities.
      --On a more long-term basis, we hope to create, with Congressional
            support and legislative authority, a workplace that can be
            anywhere. In this regard, three possibilities are being
            investigated by Patents: (1) expanding the successful Patents
            Hoteling Program (PHP) in such a way as to create a more
            nationwide workforce; (2) creating remote or regional offices,
            or brick and mortar presences, in different locations across
            the country selected upon a variety of factors such as where
            pockets of technology may be concentrated or there is increased
            access to a suitable workforce for hire; and (3) a storefront
            approach which in a sense is a hybrid of the possibilities (1)
            and (2). The storefront approach would potentially provide a
            small-scale brick and mortar presence, or node, which could
            then act as a support center for employees participating in an
            expanded hoteling program.
      --The USPTO plans a multi-pronged approach to provide enhanced
            training programs for patent employees--both new employees and
            mid-career and senior examiners.
      --The Office also plans to develop alternatives to the current
            performance and bonus systems, for example, the Patent Flat
            Goal pilot program, which is designed to improve flexibility as
            to when and where examiners perform their work.
      --Patent examiners received a 7 percent special pay rate increase in
            November 2006.
      --In 2006, USPTO management submitted proposals to patent union
            representatives for a new collective bargaining agreement that
            would replace a previous agreement negotiated in 1986.
            Proposals include enhanced patent examining monetary awards and
            production activities, as well as a stand-alone quality award.
           timeline for achieving strategic plan goals and objectives
        Question. In December, PTO submitted its latest 5-year strategic
    plan to OMB. The plan lists four goals: Optimizing Patent Quality and
    Timeliness; Optimizing Trademark Quality and Timeliness; Improving
    Intellectual Property Protection; and Achieve Organizational
    Excellence.
        What is your timeline for achieving the goals and objectives of the
    plan?
        Answer. The 2007-2012 Strategic Plan proposes consideration of
    substantial changes for patents, trademarks, intellectual policy and
    management that will better position the USPTO and its users for future
    growth and complexity. The Plan also documents our belief that
    partnership with stakeholders is crucial to defining, in a
    collaborative manner, solutions that will benefit the entire IP system.
        The Strategic Plan specifically identifies and describes more than
    60 initiatives for achieving the goals and objectives in the Strategic
    Plan. Some of these initiatives already are under way or have specific
    timeframes, while others commit us to continue researching and
    exploring options to solve specific problems.
      --For example, one alternative that is under way is the Patent Flat
            Goal pilot program. This pilot is designed to improve
            flexibility as to when and where examiners perform their work.
      --Another example is the initiative to competitively source Patent
            Cooperation Treaty (PCT) Chapter I applications. As an
            International Searching Authority under the PCT, the USPTO is
            obligated to perform this search function. By competitively
            sourcing this function, the USPTO will redirect patent examiner
            resources back to the examination of U.S. applications. Two
            contracts were awarded last fiscal year to initiate this
            program. In addition, the USPTO entered into agreements with IP
            Australia to perform search and examination work on PCT
            applications. Initially, the USPTO expects to competitively
            source up to 15,000 Chapter I applications.
      --In addition, we have identified a broad objective to explore the
            development of alternative approaches to patent examination in
            collaboration with stakeholders.
      --The USPTO is planning a pilot program for peer review of patent
            applications. Up to 250 applicants whose applications are in
            the computer architecture, software and information security
            technologies will be able to voluntarily place their
            applications on a non-USPTO web site for public review by a
            peer group of patent users, attorneys and academics. This peer
            group will determine and submit to the USPTO what they consider
            the best available and relevant prior art. The pilot will test
            whether this peer review can effectively identify prior art
            that might not otherwise be found by our examiners during the
            typical examination process. We will also make an evaluation as
            to whether this process results in measurable examination
            timesaving and quality improvement.
      --We also are developing a plan to reach out to the entire patent
            community to ensure their ideas are adequately represented and
            considered. The Patent Public Advisory Committee (PPAC) would
            assist in this process by gathering information and making
            recommendations to improve the patent system to the USPTO. A
            proposed process has been developed for gathering input and
            proposals for improving the patent examination system by
            bringing together the diverse external patent community to
            identify patent examination products or services that may
            result in the more efficient use of examination resources. The
            process would strive to identify a wide range of ideas from
            those needing statutory changes to those that can be
            implemented immediately under our existing authorities.
      --The USPTO is developing and reviewing a variety of innovative
            patent processing initiatives including a new offering for the
            public called ``Accelerated Examination.'' Under this program,
            which began August 26, 2006, for those applicants who need or
            want quick turn around, the USPTO offers a complete examination
            within 12 months. In exchange for this quick turn around,
            applicants must file a complete application, agree to
            interviews and accelerated response periods, must file and
            prosecute their application electronically and must provide
            more information about the application to the USPTO in the form
            of an examination support document. The first application to be
            completed under this program was filed on September 29, 2006
            and issued on March 13, 2007 (less than 6 months from date of
            filing).
      --We believe that to effectively address and control pendency and
            reduce backlog, the USPTO needs to receive more and better
            focused information from applicants themselves and from the
            public at large. The USPTO has proposed and will propose
            regulations and administrative changes governing submission of
            patent applications that will enable our examiners to make more
            efficient and informed determinations.
      --First, we have proposed limiting the number of continuing
            applications and continued examination requests to provide an
            incentive for applicants to focus their initial patent
            applications on their inventive contributions.
      --Second, we have proposed to limit the number of claims that are
            initially examined in order to provide an incentive to focus
            the examination process.
      --The first and second proposals have optional procedures which
            continue to provide an applicant flexibility where the
            applicant may need additional continuing applications or
            initially examined claims upon a showing of that need or by
            shouldering additional responsibilities. In parallel we have
            proposed revisions to our information disclosure requirements
            to focus our limited examination recourses on prior art that is
            most relevant to the examination process. Additionally we are
            considering a new practice change to require applicants to
            conduct a pre-examination search and provide an explanation as
            to why they believe that they are entitled to a patent in view
            of the information discovered during the pre-examination
            search.
      --Our hope is to achieve examination reform that creates better-
            focused examination and enhances information exchange between
            applicant and examiner. We look forward to working with the
            public and Congress to develop an enhanced examination system
            that effectively and fairly balances the needs of the Office
            and the interests of the patent applicants, interested third
            parties and the general public.
      --While the USPTO currently has a procedure for submission of prior
            art after publication, which allows submission by third parties
            within two months of publication, the procedure does not allow
            explanations or other information about the patents or
            publications absent express written consent of the applicant.
            We encourage consideration of a change to the statute governing
            this procedure to allow filing of relevant information by third
            parties after pre-grant publication. Such a change would allow
            those interested parties to explain why the prior art would
            have a negative impact on the patentability of the claims. This
            process, which would provide the examiner with information he
            or she might not otherwise obtain, should result in a more
            efficient examination process and a higher quality, more
            reliable patent. Putting the best and most complete information
            before our examiners, as early in the examination process as
            possible, is beneficial to the legitimate interests of all
            interested parties and stakeholders.
      --We look forward to working with Congress to develop a submission
            procedure that effectively and fairly balances the interests of
            the patent applicant, interested third parties and the general
            public.
      --We are also looking to provide assistance to the open source
            community in their development of an open source database to
            provide examiners with potential prior art.
      --Trademarks expects to achieve 3-month first action pendency by 2008
            and maintain it thereafter. Trademarks also expects to reduce
            disposal pendency to 16 months by 2009 and maintain it. Our
            challenge will be to maintain performance goals given the
            uncertainties of filings and funding. The Strategic Plan
            addresses improvements in the criteria used to define quality
            as well as expanding quality assessments throughout the office.
        In conclusion, we consider the Strategic Plan to be a work in
    progress, and we will refine and update it regularly to adjust to
    changing conditions and to incorporate the best thinking of the
    intellectual property community and beyond. Our budget and performance
    plan that is submitted to the Congress each year will document key
    measurements and yearly milestones to justify full funding for the
    Office in achieving our strategic goals.
                           patent examination quality
        Question. How does the PTO measure patent examination quality?
        Answer. Quality begins with the fundamentals--a high-performing
    workforce that is properly trained and given the tools and information
    technology systems needed to accomplish the job. Furthermore, the USPTO
    monitors quality quite precisely by measuring:
      --In-process compliance with published statutory, regulatory, and
            practice standards;
      --End-of-process compliance with these same standards.
        These parameters are measured by performing a review of
    statistically significant random samplings of examiners' work products.
        Since we put additional quality initiatives in place in 2003, our
    compliance rates have increased.
        In fiscal year 2006, we achieved a 96.5 percent patent allowance
    compliance \2\ rate the highest in 25 years, while receiving a
    historically high number of patent applications (419,760).
    ---------------------------------------------------------------------------
        \2\ Compliance rate is the percentage of applications allowed by
    patent examiners with no errors after being reviewed by the Office of
    Patent Quality Assurance.
    ---------------------------------------------------------------------------
                  work with user community to evaluate quality
        Question. Is the PTO working with the user community to evaluate
    whether the right measures are being used to evaluate quality?
        Answer. As part of the 2007-2012 Strategic Plan, we will continue
    to work with all interested parties to find new ways to improve and
    measure quality even more effectively.
        The USPTO plans to keep developing appropriate measures of patent
    quality and related performance targets given the current patent
    examination system. We will engage the patent community about
    developing objective review criteria that can be applied in all review
    processes. By doing this, we will create more consistent and credible
    measurements of quality.
          technology administration staffing and unobligated balances
        Question. Please provide the current on-board staffing levels for
    TA.
        Answer. As of March 14, 2007, the on-board staffing levels for TA
    are 7 consisting of 6 full-time permanent employees and 1 excepted
    service employee.
        Question. Please provide the fiscal year 2006 end-of-year
    unobligated balance for TA.
        Answer. The fiscal year 2006 end-of-year unobligated balance for TA
    was $443,000.
                               mep funding levels
        Question. Please provide the analysis behind the $46.3 million
    funding level request for the MEP?
        Answer. We believe that the proposed budget would achieve these
    specific Federal objectives:
      --Ensure that MEP continues to develop and provide all the centers
            up-to-date skills and techniques;
      --Ensure standards of quality are met and maintained at every center
            receiving Federal funding; and
      --Ensure that centers focus on offering services to the small
            manufacturers in their areas, rather than large firms.
        In a tight budget environment, we need to ensure that we are
    funding the highest priority programs. The President's request for the
    National Institute of Standards and Technology (NIST) will ensure that
    funding goes to basic research--especially in the areas of physical
    sciences, engineering, computing, and nanotechnology--that is vital to
    the Nation's innovation enterprise and manufacturing. NIST meets these
    priorities by focusing on high impact research and investing in the
    capacity of NIST's user facilities and labs. This emphasis is validated
    by the high rate of return to the Nation that the NIST labs already
    have demonstrated. Nineteen retrospective studies of economic impact
    show that, on average, NIST labs generated a benefit-to-cost ratio of
    44:1 to the U.S. economy. The high rate of return results from the fact
    that new measurements or standards benefit entire industries or sectors
    of the economy--as opposed to individual companies. The MEP program is
    just one method by which NIST supports small manufacturers. NIST
    laboratory activities are geared to enhancing the Nation's
    manufacturing base, provide more of a true public good, and are a
    better use of scarce Federal funding.
        The fiscal year 2008 budget request would encourage MEP Centers to
    be more efficient by reducing their overhead costs, including marketing
    costs. Given the benefits reported by MEP clients, centers could also
    ask MEP clients to cover more of the cost of the services through
    increased fees.
        Question. How would NIST implement the program at $46.3 million?
        Answer. The MEP Director will work with the centers to develop
    options that consider each center's customer base, constraints, and
    opportunities. Actions taken by any center or group of centers will be
    assessed against their ability to maintain support to the small
    manufacturers. MEP will work with the centers to examine alternatives
    and optimize the best plan for operating at the $46.3 million level
    that ensures the maximum benefit to small manufacturers.
                         ntia's appropriation language
        Question. Please provide a brief summary of the status of each of
    the mandatory spending programs funded through the Digital Television
    Transition and Public Safety Fund.
        Answer. The Deficit Reduction Act of 2005, Public Law 109-171,
    (Act) provides borrowing authority for four programs that are the
    current focus of the Department of Commerce's National
    Telecommunications and Information Administration (NTIA).
    Digital-to-Analog Converter Box Program (Sec. 3005 of the Act)
        Congress directed NTIA to implement and administer a program
    through which eligible U.S. households may obtain up to two coupons of
    $40 each to be applied towards the purchase of digital-to-analog
    television converters. NTIA issued its Final Rule to implement the
    Coupon Program on March 9, 2007. The rule, which is available on NTIA's
    website at www.ntia.doc.gov, describes how consumers may obtain and use
    coupons, outlines retailer participation, and provides detailed
    specifications for manufacturers who wish to produce converters to be
    eligible for purchase with coupons.
        NTIA held a public meeting on March 19 to review the Final Rule in
    detail and to answer any questions. The meeting was the first of
    several periodic meetings NTIA will hold to communicate with the public
    and leverage a wide range of private sector, nonprofit, and
    governmental partners in disseminating information about the Coupon
    Program and the digital transition.
        NTIA intends to enter into a contract for services to administer
    the Coupon Program through a separate program acquisition. On July 31,
    2006, NTIA issued a Request for Information to initiate market research
    for the contract. Interested vendors attended an Industry Day on August
    11, 2006, and submitted information to NTIA on September 15, 2006. NTIA
    released the Request for Proposals (``RFP'') on March 13, 2007. NTIA
    held a Bidder's Conference on March 26, 2007. Offerors will respond to
    this RFP by April 30, 2007. The procurement schedule anticipates that a
    contract will be awarded by August/September 2007 and the period of
    performance will start some months later.
        The voluntary participation of consumer electronics retailers and
    manufacturers is crucial to the success of the Coupon Program. Business
    considerations, however, will ultimately guide the retailers and
    manufacturers in deciding whether they will produce and market
    converter boxes through the Coupon Program. NTIA, through its rules and
    administration of the program, is making every effort to encourage
    participation and support from these industries.
        NTIA has taken suggestions from manufacturers and broadcasters to
    establish technical specifications for converters that will ensure the
    availability of low-cost, reliable converters based on today's state of
    the art technology. NTIA set minimum specifications and features for
    converters that are ``required'' but also identified features and
    specifications that are ``permitted.'' Pursuant to the statute, NTIA's
    Final Rule also provides examples of ``disqualifying'' features such as
    built-in DVD capability.
        NTIA has addressed retailers' concerns about a range of topics such
    as the timing of payments to reimburse them for coupon redemption,
    requirements for stocking and managing converter inventory, training
    requirements, and promotion and marketing of converters. NTIA's
    retailer certification program will minimize incidents of waste, fraud
    and abuse. Retailers will be part of the Federal Government's Central
    Contractor Registry (www.ccr.gov) and will agree to have electronic
    systems in place to track coupon redemption activity. NTIA will provide
    training materials for retailers and maintain lists of certified
    retailers.
        NTIA's consumer education efforts will succeed only with the help
    of the broadcasters, consumer electronics manufacturers and retailers,
    and several key consumer and public outreach organizations. NTIA is a
    key participant in the Digital Television Transition Coalition
    (www.dtvtransition.org) which was recently launched to ensure that no
    consumer is left without broadcast television due to a lack of
    information about the transition. NTIA will work with intermediary
    groups representing vulnerable populations--rural residents,
    economically disadvantaged, minorities and seniors--to get the word out
    through broadcast stations, newspapers, advertisements, the Internet
    and other outlets that serve these communities. NTIA will also work
    with other agencies, such as Food Stamps, SSI, and Veterans Affairs--as
    well as state, county and local associations--to reach consumers
    directly through mail stuffers alerting households to the Coupon
    Program.
    Public Safety Interoperable Communications Grant Program (Sec. 3006 of
            the Act)
        The Act establishes a $1 billion grant program to assist public
    safety agencies in the acquisition of, deployment of, or training for
    the use of interoperable communications systems that utilize, or enable
    interoperability with communications systems that can utilize,
    reallocated pubic safety spectrum in the 700 MHz band for radio
    communications. NTIA does not view this language to limit the grant
    funds only to 700 MHz systems investments. Rather, NTIA is committed to
    exploring the use of all available technologies to advance overall
    public safety interoperability, as long as those technologies will
    enable first responders to interoperate with the 700 MHz bands in the
    future. The Call Home Act of 2006 directs NTIA, in consultation with
    DHS, to award the grants no later than September 30, 2007.
        On February 16, 2007, the Department of Homeland Security (DHS)
    Office of Grants and Training and NTIA signed a Memorandum of
    Understanding (MOU) through which DHS will provide NTIA with grants
    administrative services to assist in the administration of the Public
    Safety Interoperability Communications (PSIC) Grant Program. The
    program schedule has been developed to meet the statutory requirements
    and deadlines as well as to create an effective PSIC Grant Program.
        The Program will make grants to eligible public safety agencies
    through the State Administrative Agencies in the 56 States and
    Territories. In mid-July 2007, PSIC grant awards will be made and
    jointly announced by NTIA and DHS, and the grant guidance, application
    kits, and eligibility requirements will be released. PSIC funds will be
    allocated using a modified version of the DHS risk methodology.
        Up to five percent of the total grant for each State and Territory
    will be disbursed to ensure that their Statewide Interoperable
    Communications Plans (Statewide Plans) include consideration of PSIC
    requirements. No later than November 2007, States and Territories will
    submit their final Statewide Plans and an investment justification
    outlining how the PSIC funds will be used to meet the PSIC requirements
    consistent with their Statewide Plans. Once the Statewide Plans,
    applications and investment justifications are reviewed and approved,
    the PSIC funds will be disbursed to States and Territories to pass
    through to eligible public safety agencies. Projects must be completed
    by September 30, 2010.
        The PSIC Grant Program will be designed to complement funds that
    have been awarded through other grant programs--such as the Homeland
    Security Grant Program and the Infrastructure Protection Program--that
    include interoperable communications funds. The program guidance and
    application process will emphasize leveraging grants, contracts or
    state/local budgets to build and sustain intrastate and interstate
    regional capabilities and identified needs.
    New York City 911 Digital Transition (Sec. 3007of the Act)
        The Act directs NTIA to reimburse the Metropolitan Television
    Alliance (MTVA) up to $30 million for costs associated with the digital
    television transition. MTVA, a consortium of New York City area
    television stations, formed when the television stations' digital and
    analog transmission facilities were destroyed in the collapse of the
    North Tower of the World Trade Center. This funding will assist MTVA in
    the design and deployment of a temporary digital television broadcast
    system to ensure that, until a permanent facility atop the Freedom
    Tower is constructed, the stations can provide digital television
    service to the New York City area.
        NTIA has been working with MTVA since June 2006 in the preparation
    of an application for this funding and to ensure that MTVA will be able
    to comply with federal funding requirements. The application process
    has been completed and the grant was announced on March 21 2007. NTIA
    is awarding $7,855,000 for fiscal year 2007 to MTVA for the first phase
    of the project that will design and test the technology for a
    distributed transmission system at three of five sites in the New York
    City metropolitan area. Based on the results of these test sites, MTVA
    anticipates requesting $21,645,000 for reimbursement in fiscal year
    2008 to complete the full 20-site system in the New York City
    metropolitan area. This will ensure operation prior to the digital
    television transition deadline of February 17, 2009.
    Low-Power Television and Translator Digital-to-Analog Conversion (Sec.
            3008 of the Act)
        The Act establishes a $10 million program to compensate each low-
    power television station for the purchase of digital-to-analog
    conversion equipment to enable the conversion of an incoming digital
    signal from its corresponding full-power television station to analog
    format for transmission on the low-power station's analog channel.
    Funds are to be made available to these organizations in fiscal year
    2008. Approximately 10,000 facilities are eligible for this support.
        NTIA plans to work closely with the low-power television and
    translator communities to ensure that this $10 million program
    effectively assists these communities as the February 2009 deadline
    approaches. NTIA is currently reviewing technical issues necessary to
    draft program guidance and application guidelines, which it expects to
    issue later this year.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy
                    ita western hemisphere travel initiative
        Question. I have serious reservations with the manner in which the
    Departments of Homeland Security (DHS) and State (State) have pushed
    forward with implementation of the Western Hemisphere Travel Initiative
    (WHTI) before the necessary technology installation, infrastructure
    upgrades, and training takes place at our border stations. If these
    critical features of the deployment are not in place, I am afraid we
    will see severe delays at our border and law-abiding citizens from the
    United States, Canada, and Mexico will have great difficulty moving
    between our countries. Most importantly, a hasty implementation without
    assurances that the technology to be used is truly effective will
    result in a less secure border.
        Since Canada is such an important trading partner and friendly
    neighbor to the United States, it clearly is in the best interest of
    both of our countries to keep those relations as positive and
    productive as possible. To that end, we all know that there is a
    dynamic relationship between commerce and security, and we constantly
    need to balance the two.
        Has your agency conducted or been asked to conduct any economic
    impact analysis for how WHTI is going to affect communities along our
    Northern Border?
        If not, could you please provide for the Subcommittee your best
    estimate as to the economic impact that the WHTI would have on (a) the
    states along the Northern Border, and (b) the U.S. economy?
        Answer. While Commerce has not conducted, nor has it been asked to
    conduct, an analysis of WHTI's regional or national economic impact,
    the following data is provided for consideration.
        Currently, Canadian and Mexican travel to the USA has a dramatic
    impact on the country. In 2006, Canada became the second largest market
    for U.S. travel exports ($13.5 billion). Canada is still the largest
    generator of arrivals to the United States, with 16 million visitors
    staying one night or longer.
        Mexico is the fourth largest travel export market for the United
    States ($9.2 billion), and the second largest visitor market for the
    USA, setting records for arrivals and travel exports in 2004-2006.
    Since 2000, Canada and Mexico have been the only countries to post
    increases in arrivals among the top six arrival markets for the
    country.
        Commerce is working with the Departments of Homeland Security and
    State and with the industry to try to minimize any negative impact WHTI
    may have in travel and tourism. For example, discussions have taken
    place on developing a pass card between the USA and Canada; the
    passport requirement was changed to exempt children under 16; and a
    communication effort was implemented by industry and DHS to inform
    travelers of the WHTI changes.
        As the U.S. Government moves into the second wave of implementation
    (land border and cruise), Commerce will work closely with the
    Department of Homeland Security to ensure clear communications with
    potential travelers. Travel flows between the countries will continue
    to be reported on a monthly basis by Commerce's Office of Travel and
    Tourism Industries.
                      western hemisphere travel initiative
        Question. I was troubled to learn that the DHS may have prematurely
    endorsed one PASS Card technology over another without first securing
    the required National Institute of Standards and Technology (NIST)
    certification of the card architecture and then notifying Congress. The
    law clearly states that the NIST must certify, prior to implementation,
    ``that the Departments of Homeland Security and State have selected a
    card architecture that meets or exceeds International Organization for
    Standardization security standards and meets or exceeds best available
    practices for protection of personal identification documents.'' By
    unilaterally moving forward with vicinity-read technology, the DHS
    would be choosing an insecure technology that has not been proven
    effective at ensuring privacy protection, and it would be necessitating
    the installation of new technological infrastructure at every U.S. land
    and sea port of entry.
        Has NIST begun its analysis into the WHTI-related technology
    issues, as called for in the fiscal year 2007 Homeland Security
    Appropriations Bill?
        Answer. After passage of the statute (Public Law 109-295), NIST
    immediately began to work with the Departments of State and Homeland
    Security in order to identify appropriate standards and best available
    practices that relate to the security aspects of the card architecture,
    for the technology chosen jointly by State and DHS. NIST has engaged in
    extensive discussions with the technical staff of those departments,
    and has provided a set of requirements for certifying the security of
    the PASS Card architecture.
        Question. If so, when do you estimate the NIST will complete its
    analysis?
        Answer. NIST has advised State and DHS that certification would be
    done within four weeks of receiving the draft Request for Proposal
    (RFP) from State, and prior to the release of the final RFP. This is to
    ensure that the RFP accurately reflects the set of requirements
    identified by NIST so that the selected card architecture meets or
    exceeds International Organization for Standardization (ISO) security
    standards and meets or exceeds best available practices for protection
    of personal identification documents. This commitment presumes that
    State and DHS continue to work with NIST in their drafting of the RFP.
    That has been the case to date.
        Question. Once complete, how does your agency plan to release and
    certify the results?
        Answer. Certification by NIST would be by a letter from the NIST
    Director to the appropriate individual(s) at State and/or DHS noting
    that the test protocols in the RFP verify that the card architecture
    meets or exceeds ISO security standards and meets or exceeds best
    available practices for protection of personal identification documents
    for the chosen technology.
        Question. Do you see a difference between NIST certifying the
    procurement of the technology and certifying the feasibility of the
    technology? If so, please explain.
        Answer. NIST will be neither certifying the procurement of the
    technology nor the feasibility of the technology. Our certification
    will be focused on the specification of the statute: that NIST certify
    that DHS and State ``have selected a card architecture that meets of
    exceeds International Organization for Standardization (ISO) security
    standards and meets or exceeds best available practices for protection
    of personal identification documents.'' We will be conducting this
    certification via ensuring that the set of requirements identified by
    NIST in compliance with the statute are embodied in the Request for
    Proposals that define the compliance requirements for industry.
        Question. Have you or employees in your agency been under any
    pressure to reach a preordained conclusion or hurried certification in
    this matter?
        Answer. NIST has not been under any pressure to reach a pre-
    ordained conclusion or hurried certification.
                                  mep program
        Question. I understand that the National Institute of Standards and
    Technology (NIST) recently announced its intention to re-compete the
    MEP system beginning in April 2007, and then quickly drew back that
    proposal. I strongly disagree with any re-competition proposal because
    of the disruption it would cause to the national MEP infrastructure and
    the good work accomplished daily by the Vermont Manufacturing Extension
    Center. On top of that, the President's request of $46.3 million is not
    an appropriate level of funding for this valuable program dedicated to
    serving our nation's smaller manufacturers.
        For the past six years, a bipartisan majority of the Congress has
    fully supported the MEP program despite the annual ritual of deep cuts
    proposed by the President. This support stems from the successful
    performance demonstrated by centers nationwide in ensuring the
    sustainability of our domestic small manufacturing industry and its
    high-quality jobs.
        With the fiscal year 2008 congressional budget and appropriations
    processes just beginning, I believe it would be inappropriate for the
    Bush administration to disrupt, re-compete, or restructure the MEP
    program based on its own proposed budget proposal for the coming year.
    On top of that, any such actions during fiscal year 2007 would be
    inconsistent with Congress' intention for those funds.
        In light of the recent announcement by the NIST that it will not
    re-compete the program in April, I ask the following questions of
    Secretary Gutierrez and Director Jeffrey:
        What factors, considerations, or conversations made you change your
    mind in the eleven days that passed between your February 15 re-
    competition announcement and your February 26 announcement that the re-
    competition would cease?
        Answer. The proposed re-competition was intended as a contingency
    to ensure the strongest network possible regardless of final
    appropriations. To conduct such a competition would take approximately
    5-6 months, which is why we initially looked towards late spring of
    2007 to initiate the process. This would provide us the necessary data
    to make informed decisions at the beginning of fiscal year 2008--once
    the fiscal year 2008 enacted budget was known. Based upon inputs from
    the MEP Center Directors, Congressional Members and Staff, and others
    it became clear that the process of the re-competition would be
    disruptive to current Center operations. We, therefore, decided not to
    hold this re-competition.
        Question. This is not the first time you have tried to re-compete
    the MEP program, as you attempted to mount a re-competition less than
    three years ago.
        Now that you have changed course again, can you assure us that you
    will not attempt a re-competition for a third time in 2008? If you
    cannot make this affirmation, under what circumstances, and with what
    policy objectives, can you envision proceeding down the re-competition
    path again?
        Answer. We cannot make that definitive affirmation. The goal of MEP
    is to support the Nation's small manufacturers. The MEP program will
    therefore examine all possible alternatives to most effectively achieve
    that goal given any enacted budget level.
        Question. In your written testimony, you state, ``The reduction of
    Federal funds to the local centers may have to be compensated through a
    combination of increased fees derived from the benefits accrued by
    individual companies and cost-savings in the operations of the
    centers.''
        Please explain what data or reports you have to support that
    increased fees from the benefits accrued by companies and cost savings
    in the operation of the centers are possible.
        Answer. The annual reported benefits by manufacturing clients of
    the MEP Centers conducted through an independent survey demonstrates a
    significant level of cost savings and efficiency improvements for the
    MEP clients. For example, the latest MEP client survey results
    (released January 2007 and reflecting fiscal year 2005 benefits)
    demonstrate that MEP helped 16,448 clients create and retain 53,000
    jobs; increase and retain sales of nearly $6.3 billion; and generated
    cost savings of just over $1.3 billion (both recurring and non-
    recurring). These impacts resulting in reduced costs and potentially
    increased profits for the client could be used to support increased
    fees for future services. With increased revenues streams from client
    fees, MEP centers may offset, in whole or in part, the reduction in
    Federal funds.
        Question. I understand that you may be considering the creation of
    regional innovation centers across the country.
        Are you considering this idea? If so, how do you envision the
    constitution of these centers? What role would the MEP play in this
    plan?
        Answer. MEP has no plans to develop regional innovation centers.
        Question. Has the NIST consulted with its state partners to ensure
    that state governments, which provide cost share to these programs, are
    comfortable with their state resources being used across state
    boundaries? If so, please describe the reaction of these state
    partners.
        Answer. MEP has no plans to develop regional innovation centers.
    MEP routinely consults with its state partners on programs priorities
    and alignment with state initiatives.
        Question. The MEP system is an effective, economic development
    program that has generated results, created and retained jobs, and
    leveraged local partnerships. In fiscal year 2005 alone, as a direct
    result of MEP services, clients reported more than $6.25 billion in new
    and retained sales, $1.304 billion in cost savings, $2.248 billion in
    client investment in modernization, 17,453 jobs created, and 35,766
    jobs retained. Thus, it appears that MEP returns far exceed the initial
    investment.
        What is your plan for building on this proven resource to produce
    even greater results for American manufacturers and workers?
        Answer. MEP will build upon our foundation of process improvements
    with clients to develop innovation and growth services that will
    position U.S. manufacturers to meet the increasing demands of the
    global marketplace. A key focus will be providing manufacturers with
    access to the technologies needed for the development of new processes
    and innovative products.
        We also will focus on supplier development since small
    manufacturers are such a crucial part of the supply chain.
        Question. It is no secret that one of the biggest challenges facing
    small American manufacturers is competition from low-cost overseas
    producers. As large Original Equipment Manufacturers seek the best,
    fastest, and cheapest suppliers, they are increasingly looking
    overseas. Even our major defense contractors are purchasing more from
    overseas suppliers, putting our Nation in the position of depending on
    parts from other countries to equip our troops.
        Have you contemplated using the MEP system to strengthen our
    domestic suppliers so that we can preserve jobs in the United States
    and keep more defense suppliers in this country? If not, would you
    consider undertaking that evaluation?
        Answer. MEP has already been working with domestic defense
    suppliers and manufacturers by providing technical assistance and
    training to improve productivity, reduce costs, and develop a highly-
    skilled workforce. The small manufacturers that MEP Centers have worked
    with are crucial to a robust defense supply chain. The strengthening of
    this supply chain should help keep critical defense supply and
    manufacturing jobs in the United States.
        Specific projects within the aerospace and ship building industries
    have resulted in connecting small machining companies with Defense
    acquisition opportunities and creating groups of engineering and
    manufacturing companies that work collaboratively to supply critical
    defense equipment and parts.
                                     ______

                    Questions Submitted by Senator Herb Kohl
                             mep defense suppliers
        Question. It is no secret that the biggest challenge facing small
    American manufacturers is competition from low-cost overseas
    manufacturers. As large manufacturers seek the best, fastest, and
    cheapest suppliers, they are increasingly looking overseas. With great
    success, the Wisconsin MEP center has worked with large manufacturers
    like Oshkosh Truck, Harley Davidson and John Deere on a supplier
    development model to keep jobs at home.
        So far, the Wisconsin MEP has trained MEP centers in sixteen
    states, proving there is a strong need for this training nationally.
        Mr. Jeffrey, can you develop a plan based on the Wisconsin model
    for using the MEP system to strengthen our domestic suppliers so that
    we can preserve jobs in the United States and keep more suppliers in
    this country?
        Answer. The Wisconsin MEP Supplier Development model addresses
    several components of the supply chain issues faced by manufacturers.
    The Wisconsin model and the positive impacts realized by manufacturers
    have been presented at several MEP quarterly meetings making more
    centers aware of the approach. Within the past year, fifteen other MEP
    Centers have participated in or employed the model assisting 123 small
    and medium-sized suppliers in states, such as Illinois, Indiana, Iowa,
    Missouri, Minnesota, Ohio, Pennsylvania, and Texas.
                              mep and energy costs
        Question. When I talk to manufacturers in Wisconsin, they tell me
    the same thing I am sure you are hearing across the Nation: energy
    costs are killing them. In the 2005 Energy bill, I inserted language
    into the Energy bill that directs the Small Business Administration to
    work with you and the MEP program to improve energy efficiency for
    small businesses, including manufacturers.
        Can you update me on what is going on with this program?
        Answer. Building upon existing relationships and contacts with
    other Federal agencies, NIST MEP has offered the assistance of the
    national network to educate manufacturers and better implement energy
    management approaches as described in the Energy Policy Act of 2005.
        NIST MEP has coordinated with the Small Business Administration
    (SBA) Small Business Development Center, the Department of Energy (DOE)
    Industrial Technologies Program and the Environmental Protection Agency
    (EPA) Partnership Programs on the HVAC Maintenance Consumer Education
    Program.
        NIST MEP is also developing a comprehensive energy awareness and
    implementation program with manufacturers that will result in increased
    energy efficiency, reduced business and operations costs, waste
    reduction, and new technology adoption.
        MEP has also teamed with the EPA through the Green Supplier
    Network--a collaborative venture among industry, the EPA, and MEP--to
    help suppliers learn ways to save money, optimize resource use, and
    eliminate waste through on-site technical reviews. This will help
    reduce the negative impact that manufacturing suppliers have on the
    environment.
        DOE's Industrial Assessment Centers (IAC) are sharing their energy
    assessment expertise and tools with MEP, which in turn help small
    manufacturers on the HVAC Maintenance Consumer Education Program and
    other similar energy conservation related efforts.
        MEP and SBA have developed a joint-teaming delivery system that
    provides small businesses with access to Lean implementation tools to
    improve business operations and reduce operating costs contributing to
    energy conservation.
        In a broader context, MEP has taken the lead in organizing the
    Interagency Network of Enterprise Assistance Providers (INEAP)--a
    network of Federal government agencies and programs including EPA, SBA
    and DOE's IACs--that addresses issues that facilitate the success of
    small businesses and smaller manufacturers.
                                     ______

                    Questions Submitted by Senator Jack Reed
                   survey of income and program participation
        Question. The President's budget for last year proposed eliminating
    the Survey of Income and Program Participation (the SIPP) but according
    to many experts it failed to provide an adequate plan for maintaining
    the kind of longitudinal data that CBO and others have used to analyze
    income volatility. What is being done to make sure that we continue to
    collect data that allows us to examine the impact of a wide variety of
    government programs over time?
        Answer. Census is continuously consulting with major SIPP
    stakeholders to assure that the new Dynamics of Well-being System
    (DEWS) will continue to supply the data needed to meet the goals of the
    current SIPP as well as the goals of monitoring a changing economy. The
    overall goal of the DEWS is to reengineer the current SIPP to construct
    a streamlined system that can provide similar information at a reduced
    cost, with improved data quality, improved timeliness, and improved
    data accessibility. While the lag between data collection and release
    decreases over time within a SIPP Panel, at the beginning of a panel
    the lag between data collection and release can be as long as three
    years. By contrast, we anticipate being able to release data from DEWS
    within one year of their collection.
        The system will be able to generate data that can be used, in part,
    as SIPP data have been used, to provide accurate and comprehensive
    information about the income and program participation of individuals
    and households in the United States. The DEWS will provide a nationally
    representative sample that can be used to evaluate the annual and sub-
    annual dynamics of income, the movements into and out of government
    transfer programs, the effect on family and social context of
    individuals and households, and the interaction among these items. The
    longitudinal nature of SIPP will be retained in DEWS as a critical
    aspect of its value to many major stakeholders. The three year panel
    length planned for the first Panel of DEWS is the minimum length of
    time major stakeholders, including CBO, felt necessary for their
    longitudinal analysis.
        Question. Is there sufficient funding in the budget to prevent a
    ``data gap'' between ending the SIPP and the new Dynamics of Economic
    Well-being System (DEWS)? Will we be able to compare data historically
    between the two surveys?
        Answer. The Budget provides $15.9 million (an increase of $6.7
    million over the 2007 Budget) to continue the development of the new
    Dynamics of Economic Well-being System (DEWS). However, to ensure
    Census can focus its efforts and be successful at fielding the new
    survey in 2009, the Budget does not include funding to continue SIPP
    data collection in 2008. Therefore, there will be a short ``data gap''
    between ending the SIPP and beginning of DEWS.
        Data collection will end for SIPP in September 2007. We will have
    full data through May, partial data through August, and no data from
    September through December 2007. The first DEWS data collection will
    provide data for calendar year 2008. It should be noted that there have
    been gaps in the SIPP series before. For example to enable the Census
    Bureau to initiate a new panel in February 2001 and process data more
    recently collected, data collected from February to September 2000 were
    never released and data from October 2000 to January 2001 were never
    collected. Based on those experiences and consultations with our
    Federal agency partners, we believe that a similar data gap between
    SIPP and DEWS will not hamper program evaluation or modeling. Unless
    the two surveys are conducted for the same time period, a complete
    evaluation of the impact of any differences in the two surveys on the
    same estimates will not be possible.
        Question. Has Census done any kind of systematic analysis of
    whether we are producing and maintaining the data we need to understand
    the important changes that have been taking place in the economy so
    that we can adequately answer the kinds of questions that keep coming
    up about the extent of income volatility or the impact of outsourcing
    or globalization on the quality of jobs?
        Answer. Census is continuously consulting with major SIPP
    stakeholders to assure that the new Dynamics of Well-being System
    (DEWS) will continue to supply the data needed to meet the goals of the
    current SIPP as well as the goals of monitoring a changing economy. The
    DEWS will provide a nationally representative sample that can be used
    to evaluate the annual and sub-annual dynamics of income, the movements
    into and out of government transfer programs, the effect on family and
    social context of individuals and households, and the interaction among
    these items. Labor force participation is integral to measuring these
    concepts, and in evaluating and modeling the effects of programs on
    these estimates. DEWS will continue to provide the same general labor
    force information historically provided by SIPP. As far as we know,
    however, SIPP has never been used to specifically evaluate the impact
    of outsourcing or globalization on the quality of jobs.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                               ita trade act 2002
        Question. The Trade Act of 2002 requires that the Bush
    Administration reserve the U.S. trade laws. I understand that, in prior
    appearances before the Congress, namely before the Senate Finance
    Committee, you advised Senator Rockefeller that you would ``vigorously
    defend and enforce our existing trade remedy laws, and implement those
    laws as intended to stop dumped or subsidized goods from injuring U.S.
    industries.''
        While the United States has made some submissions in the Rules
    negotiations in the past two years, with the exception of papers on
    causation, expanding prohibited subsidies, and the proposal on
    perishable and seasonal agricultural products, most proposals either
    simply seek to codify existing U.S. practice, or improve transparency
    and processes abroad.
        Consequently, would you please identify for the Committee (1) each
    WTO dispute over the past five years in which U.S. trade remedy laws
    have been challenged and in which the WTO has issued a determination
    adverse to the United States; and (2) what specific proposals to
    correct those erroneous determinations have been submitted by the
    United States in the Rules negotiations in either 2005 or 2006. If no
    specific proposals have been submitted by the United States in the last
    two years, please identify when such proposals will be submitted,
    consistent with the Congressional mandate contained in the Trade Act of
    2002.
        Answer. There have been numerous WTO disputes over the last 5 years
    in which the U.S. trade remedy decisions have been challenged. In
    response, we have pursued an aggressive strategy in the WTO Rules
    Negotiations of defending our trade remedy regime, targeting the unfair
    trade practices of others, and improving transparency and due process
    in trade remedy proceedings so that U.S. producers and exporters are
    fairly treated. We continue to follow the basic principles that we laid
    out early in the Rules negotiations, namely to seek to: (1) maintain
    the strength and effectiveness of the trade laws; (2) enhance
    transparency and due process requirements; (3) enhance disciplines on
    trade distorting practices that lead to unfair trade; and (4) ensure
    that dispute settlement panels and the Appellate Body do not impose
    obligations that are not clearly contained in the Agreements.
        As of July 2006, when the formal negotiations were suspended, the
    U.S. negotiating team advanced proposals to address many of the Rules
    issues that are negotiating ``priorities'' for our domestic industry
    and Congress. These include such areas as facts available, causation,
    and the all-others rate, where we are seeking to correct the
    substantive results of certain disputes that we think were incorrectly
    decided by WTO panels. Some of the other proposals advanced include
    circumvention, new shippers, and perishable seasonal agriculture, all
    of which are priorities identified by the domestic industry and
    Congress.
        This Administration is committed to strong enforcement of our trade
    laws, and fulfilling our TPA obligations. The Administration will
    continue to consult closely with the Congress as the negotiations
    proceed.
                  continued dumping subsidy offset act of 2000
        Question. The Administration previously recognized that the WTO
    decision on the Continued Dumping and Subsidy Offset Act of 2000 or
    ``CDSOA,'' also known as the Byrd Amendment trade law, incorrectly
    imposed obligations on the United States by prohibiting the
    distribution of monies collected as antidumping and countervailing
    duties on unfairly traded U.S. imports. Congress repeatedly called for
    negotiations in the Doha Round to address this issue, not only in
    letters sent to the Administration, but also in legislation signed into
    law. Further, report language accompanying a series of Consolidated
    Appropriations Acts directed the Administration to report to the
    Appropriations Committee every 60 days on the status of those
    negotiations. I understand that Commerce Department officials have a
    very important role in such negotiations, as do USTR negotiators. By
    law, the Administration has been directed to negotiate a solution to
    this trade dispute.
        In April 2004, the United States did submit a proposal in the Rules
    negotiations to recognize ``the right of Members to distribute monies
    collected from antidumping and countervailing duties.'' And, while
    undergoing your confirmation process, you explained that the Department
    of Commerce and the Office of the U.S. Trade Representative were
    consulting to ensure proper implementation of the requirements of U.S.
    law regarding negotiations over CDSOA distributions. You indicated that
    the agencies would complete those consultations as soon as possible.
    You also agreed to continue to work to advance congressional objectives
    in the Doha Round negotiations, including reversal of not only the
    adverse CDSOA decision, but also other WTO decisions where WTO
    Panelists and the Appellate Body have overreached and created
    obligations never agreed to by U.S. negotiators.
        Since committing to ``pursue changes to those Agreements that will
    reverse specific adverse findings, including those regarding the
    Continued Dumping and Subsidy Offset Act,'' the United States has not
    submitted any further proposals recognizing the right of WTO Members to
    distribute monies collected from antidumping and countervailing duties.
        Can you please explain how the Administration intends to obtain an
    acceptable and expeditious solution to the CDSOA and other WTO
    disputes, where the WTO has inappropriately breached its authority in
    decisions adversely affecting the trade laws of the United States?
        Answer. We have been concerned with the possibility of the WTO
    dispute settlement system, in your words, ``inappropriately breach[ing]
    its authority.'' The USTR has noted our disagreement with certain
    dispute settlement reports and the reasons for those disagreements in
    appropriate circumstances. In addition, Commerce has raised WTO panel
    decisions on such topics as zeroing in the ongoing Rules negotiations.
    As you know, Congress repealed the CDSOA to comply with the adverse WTO
    ruling. We evaluate each decision on its own and work in conjunction
    with Congress to find an appropriate response. Where we believe
    revision of the agreement is necessary, we work with other members of
    the WTO toward accomplishing those changes.
                                  wto disputes
        Question. From 1995 to 2006, over 40 percent of all decisions
    adopted by the WTO Dispute Settlement Body addressed trade remedy
    disputes involving the WTO Antidumping (AD), Subsidies and
    Countervailing Measures (SCM) and Safeguards Agreements. And, I
    understand that, in 2005 and 2006, an even higher percentage--over 60
    percent--of WTO disputes initiated were trade remedy disputes. The
    United States, which actively helped shape the trade remedy rules and
    has a highly transparent system providing significant due process of
    law, is the primary target of those WTO trade remedy disputes. In fact,
    I have been advised that the United States has been the defending party
    in roughly 60 percent of the trade remedy decisions adopted by the WTO
    Dispute Settlement Body from 1995 to 2006. More specifically, the
    United States was the defending party in almost 50 percent of requests
    for consultations filed since 1995 concerning the WTO Antidumping
    Agreement in particular. Yet, the United States imposed only 12.6
    percent of all antidumping measures imposed by all WTO Members from
    1995 to June 2006. In the trade remedy area, the WTO has, often
    wrongly, found one or more violations by the United States in nearly 90
    percent of disputes, imposing on the United States obligations that our
    Nation never agreed to in trade talks. In fact, the United States
    actively opposed ``zeroing'' during negotiations. Thus, it is clear
    that the WTO dispute settlement system is being used unfairly,
    threatening U.S. sovereignty and eroding the effectiveness of our
    country's trade remedy laws. Despite this, the United States has
    submitted only a handful of publicly available proposals in the Rules
    negotiations suggesting textual modifications to correct instances of
    ``overreaching'' by the Appellate Body.
        When and how do you intend to collaborate with USTR to correct this
    continuing imbalance? What is your strategy to rapidly generate textual
    proposals that will better protect existing U.S. trade laws?
        Answer. We are fully aware of the frequency in which the United
    States has had to defend its trade remedy laws before the WTO Dispute
    Settlement Body and have collaborated with USTR to address this issue
    since the inception of the Doha Round. In the context of the Dispute
    Settlement Understanding negotiations, we have raised proposals
    addressing the problem of the Appellate Body creating rights and
    obligations that are not contained in the underlying agreements.
    Additionally, in the Rules negotiations, the United States continues to
    emphasize the importance of clearly written rules so that the dispute
    settlement process will involve less interpretation to the extent that
    the intent of the Members is clearer. As the negotiations progress, in
    close coordination with USTR, we plan to intensify our efforts to
    advance the proposals already tabled that will protect U.S. trade laws
    and direct the WTO Dispute Settlement Body toward a balanced decision
    making process.
                      doha dispute settlement negotiations
        Question. Specifically concerning the issue of the Doha Dispute
    Settlement negotiations, during your confirmation process, you offered
    a general strategy of: (1) increasing Member nations' control over the
    dispute settlement process; (2) increasing transparency; (3) pursuing
    changes to the Rules Agreements to ensure that panels and the Appellate
    Body adhere to the appropriate standards of review; and (4) pursuing
    changes to the Rules Agreements that ``will reverse specific adverse
    findings, including those regarding the Continued Dumping and Subsidy
    Offset Act, `zeroing,' and injury determinations.''
        Can you please provide the status of U.S. efforts to advance
    negotiations concerning items (1), (2), and (3), above, and advise the
    Committee when specific proposals will be submitted by the United
    States addressing the fourth item, namely reversing the WTO's findings
    with respect to CDSOA, zeroing, and injury determinations?
        Answer. In the context of the Dispute Settlement Body negotiations,
    USTR, collaborating with Commerce, has introduced two sets of
    proposals--including proposed text. The first set of proposals would
    expand transparency and public access to dispute settlement proceedings
    by opening panel hearings to the public, requiring public versions of
    written submissions, providing for early public release of panel
    reports, and setting guidelines for amicus curiae submissions. The
    second set of proposals, submitted jointly with Chile, contains
    provisions aimed at giving parties to a dispute more control over the
    process and greater flexibility to settle disputes. These proposals
    address such concepts, among others, as ensuring that panel members
    have appropriate expertise to appreciate the issues presented in a
    dispute and providing additional guidance to WTO adjudicative bodies
    concerning the nature and scope of the issues and rules of
    interpretation of the WTO agreements. These proposals are still on the
    table, and as the negotiations progress, we will intensify our
    collaboration with USTR to advance the key concepts encompassed by the
    proposals.
        We agree that the Appellate Body's findings raise concerns;
    however, we also place significant importance on respecting the dispute
    settlement system and addressing the findings, whether we agree with
    them or not, through the appropriate mechanisms. First, we are
    developing our thoughts and options with respect to implementation and
    are committed to consulting closely with Congress as to the appropriate
    way to move forward in response to the Japan zeroing report. Second, we
    will continue to use the Rules negotiations as a forum to educate other
    Members on the troubling implications of the Appellate Body reports,
    particularly with respect to their own antidumping systems. We firmly
    believe that the zeroing issue is one that must be addressed through
    negotiation and we are in close consultation with USTR regarding how to
    move forward.
        Likewise, injury is part of our affirmative agenda in the Rules
    negotiations, and we have submitted proposals to address specifically
    the problem created by the WTO decision related to this issue. As the
    Negotiations progress, we will continue to advance these proposals and
    address our injury concerns as an integral part of the U.S. negotiating
    strategy.
        Regarding CDSOA, we have been concerned with the possibility of the
    WTO dispute settlement system, in your words, ``inappropriately
    breach[ing] its authority.'' The USTR has noted our disagreement with
    certain dispute settlement reports and the reasons for those
    disagreements in appropriate circumstances. However, in light of the
    importance we attach to respecting the dispute settlement system, noted
    above, and the potential consequences of a failure to abide by
    Appellate Body decisions, we evaluate each decision on its own and work
    in conjunction with Congress to find an appropriate response. Where we
    believe revision of the agreement is necessary, we work with other
    members of the WTO toward accomplishing those changes.
                               wto appellate body
        Question. As described in prior questions, it is unfortunate that
    the WTO Appellate Body for several years now has been engaged in
    improperly expanding its mandate by making a series of decisions that
    undermine our Nation's trade remedy laws. One of the most egregious of
    these decisions has been issued against the U.S. antidumping duty
    practice called ``zeroing.
        On one level, the Bush Administration should be commended for
    combating these zeroing decisions, which would force the United States
    to collect less than 100 percent of dumping duties owed. For example,
    in recent statements before the WTO Dispute Settlement Body, the
    Administration has called Appellate Body reports against zeroing
    ``deeply flawed,'' and ``devoid of legal merit.''
        Yet, on February 22, 2007, the Commerce Department nonetheless
    implemented the findings of the Appellate Body with respect to
    ``zeroing'' in investigations, and, two days earlier, the
    Administration told the WTO that it would comply with its WTO
    obligations with respect to ``zeroing'' in other phases of antidumping
    proceedings.
        Why would the United States implement Appellate Body reports that
    it admits are ``deeply flawed'' and ``devoid of legal merit''? Couldn't
    the United States simply refuse to implement these ``deeply flawed''
    WTO decisions and, instead, seek a negotiated solution through the WTO
    Doha Round negotiations? This would be consistent with our Nation's
    statements on the Appellate Body's report before the Dispute Settlement
    Body (DSB), which consisted of the following:

        ``Were this a municipal court result, such an illogical outcome
    would be a prime candidate for reconsideration by the legislative
    branch. That is no less the case here, and the United States submits
    that Members take up this issue, which affects the antidumping systems
    of a number of Members, in the Rules negotiations.''

        When will the United States submit a proposal in the Rules
    negotiations addressing this issue?
        Answer. We agree that the Appellate Body's recent findings on
    zeroing in reviews are very troubling, however, we also place
    significant importance on respecting the dispute settlement system and
    addressing the findings, whether we agree with them or not, through the
    appropriate mechanisms. To that end, we are thinking about this issue
    along two tracks. First, we are developing our thoughts and options
    with respect to implementation and are committed to consulting closely
    with Congress as to the appropriate way to move forward in response to
    the Japan zeroing report. Second, we will continue to use the Rules
    negotiations as a forum to educate other Members on the troubling
    implications of the Appellate Body reports, particularly with respect
    to their own antidumping systems. We firmly believe that this zeroing
    issue is one that must be addressed through negotiation and we are in
    close consultation with USTR regarding how to move forward.
                               cafta--sock trade
        Question. In July 2005, during the CAFTA debate before the U.S.
    House of Representatives, you and U.S. Trade Representative Portman
    wrote a letter in which you advised that the United States would
    initiate a special CAFTA textile safeguard re-imposing U.S. tariffs on
    imported socks for three years, if imports ``cause or threaten to cause
    serious damage to the domestic industry.'' You stated that you wished
    to be ``pro-active in initiating a sock safeguard if the situation were
    to warrant it.''
        I have been apprised that, since CAFTA came into effect 11 months
    ago, sock imports from Honduras have increased by roughly 40 percent.
    Domestic production is falling, and over 20 U.S. sock mills have
    closed. Because it appears that the situation today may warrant the
    initiation of a safeguard on imported socks, is the Administration
    prepared to seek such a safeguard? Does the Administration intend to
    honor its prior commitment to the Congress in this regard, even as it
    seeks additional free trade agreements? Is there some reason that
    CAFTA's negotiators failed to anticipate and address the possibility of
    such an un-level playing field in trade in socks?
        Answer. As you noted, on July 27, 2005, USTR Rob Portman and I
    promised Congressman Aderholt that the Administration would (1) include
    socks in any textile agreement with China, (2) ensure that, if the
    existing China sock safeguard was renewed, it would be in place for the
    maximum possible time period at the minimum possible safeguard level,
    (3) seek to amend CAFTA-DR to alter the rules of origin or to lengthen
    the tariff phase-out for socks, and (4) to proactively utilize the
    CAFTA-DR textile safeguard for socks, if warranted. The Administration
    subsequently, as promised, included socks in the China textile
    agreement, concluded a special China sock quota agreement while the
    China textile talks were ongoing, and has pursued a sock amendment to
    the CAFTA-DR. We also are carefully monitoring CAFTA-DR sock import
    data and, as promised, will proactively utilize the CAFTA-DR safeguard,
    if warranted by the facts. To assess whether safeguard action may be
    warranted, the Department of Commerce carefully monitors imports of
    socks from CAFTA-DR signatories and other relevant data, including
    domestic production data, to assess whether imports of socks from these
    countries are causing, or threatening to cause, serious damage to the
    domestic industry as a result of the elimination of duties under the
    Agreement, which went into effect for Honduras on April 1, 2006.
    Notably, imports of socks from Honduras fell in each of the last three
    months of 2006 to levels lower than before CAFTA went into effect.
    Nevertheless, we are closely tracking the data and will act should data
    warrant a safeguard, but it is worth noting that domestic production
    was down by only 1.1 percent in 2006 from 2005 levels.
                                     ______

                Question Submitted by Senator Richard C. Shelby
                          bea's r&d budget initiative
        Question. The BEA has a proposal for $2.1 million to measure the
    impact of research and development on the economy. Can you tell us more
    about this initiative and how it will impact future GDP calculations?
        Answer. While most economists believe that R&D and other
    investments in intangibles are among the most important sources of
    growth in GDP and productivity--with some estimates ranging as high as
    40 percent of growth--there are no hard official estimates on their
    impact. This project will provide the Nation with a much clearer
    picture of the impact of investments in R&D and other intangibles on
    trend growth in GDP and productivity, as well as their impact over the
    course of the business cycle. The BEA project will provide aggregate
    data, as well as data on the effects across industries, across regions
    of the country, and its impact on our international trade and balance
    of payments. These data will prove useful in a broad variety of
    contexts ranging from monetary policy and budget projections to tax
    policy and the funding of investments in R&D.
        BEA is in the early stages of developing estimates for R&D as
    investment, and these estimates will not be fully incorporated into the
    National Income and Product Accounts until 2013. However, this
    preparatory work, in the form of satellite accounts, can provide
    valuable information on the effect of investment in R&D on U.S.
    economic growth. The preliminary R&D satellite accounts released in
    September 2006 showed R&D investment accounted for 6.5 percent of
    growth in real GDP between 1995 and 2002 and 4.5 percent of growth
    between 1959 and 2002. In comparison, businesses' investment in
    commercial and all other types of buildings accounted for just over 2
    percent of real GDP growth between 1959 and 2002.
                    noaa joci and the ocean policy scorecard
        Question. Although NOAA's 2008 budget request boasts a $123 million
    increase for ocean-related activities, it represents a fraction of the
    true budgetary needs for the marine community. For the past few years,
    the Joint Ocean Commission, which formed the inception of the
    President's U.S. Ocean Action Plan, has clearly and objectively laid
    out the budgetary requirements to better support ocean-related science
    research and education. I am extremely concerned that Congress
    continually receives a budget request from the Administration that
    downplays these critical activities. I wonder at what level your
    department endorses marine science, because frankly, Mr. Secretary, the
    Senate is weary of being the only federal entity that champions this
    funding disparity.
        Are you familiar with the Joint Ocean Commission Initiative, and
    the contents of its recent publications, namely the U.S. Ocean Policy
    Report Card for 2006? And are you aware that the category for ``New
    funding for ocean policy and programs'' received the grade of ``F''?
    What are your thoughts on this grade?
        Answer. Yes, I am familiar with both the Joint Ocean Commission
    Initiative and the recent Ocean Policy Score Card. We are pleased to
    note that we have had grade improvements for 2006 in five out of the
    six subject areas. We were also pleased with the overall scores for
    Ocean Governance and Fisheries Management Reform. With respect to the
    grade for ``new funding for ocean policy and programs,'' the scorecard
    was issued prior to the release of the fiscal year 2008 President's
    Budget. The fiscal year 2008 Budget includes significant new increases
    in support of implementing the Ocean Action Plan, addressing many of
    the concerns noted by the Report Card.
         ntia public safety interoperable communications grant program
        Question. Mr. Secretary, your department has entered into a
    memorandum of understanding with the Department of Homeland Security to
    assist in the development of policies, procedures and regulations
    governing the Public Safety Interoperable Communications (PSIC) grant
    program.
        What role will your department play in developing the grant
    guidance package and eligibility requirements for this $1 billion
    program?
        Answer. The Department of Commerce's National Telecommunications
    and Information Administration (NTIA) is working very closely with the
    Department of Homeland Security (DHS) in the development of grant
    guidance and requirements for the program. Consistent with the
    requirements of the Deficit Reduction Act of 2005 and the Call Home Act
    of 2006, NTIA retains final approval authority for policies, procedures
    and regulations that govern the PSIC Grant Program.
        Question. The Department of Homeland Security has been grappling
    with the issue of interoperable communications for years. I sit on the
    appropriations subcommittee for that department as well. These funds
    are intended to focus on the purchase of equipment to address
    interoperability.
        Mr. Secretary, tell me how your involvement will ensure this
    funding will be put to the best use by the localities in Alabama and
    throughout the United States to achieve true interoperability across
    county and state lines?
        Answer. NTIA intends to use its expertise to explore and encourage
    all technology solutions that are available to first responders to
    advance overall interoperability. With the Statewide Interoperability
    Communications Plans and the PSIC investment justifications, NTIA and
    DHS will be able to approve projects that clearly identify
    interoperability gaps and provide the greatest benefit toward improved
    interoperability.
        Question. Will Commerce work to ensure that the choice for a
    workable solution to interoperability will rest in the hands of locals
    and will not be dictated from the federal level?
        Answer. NTIA understands that interoperability is a complex issue
    and no one federal solution exists. Local governments have collectively
    spent billions of dollars on communication infrastructure. The program
    guidance and application process for the PSIC Grant Program will be
    designed to leverage existing investments to build and sustain
    intrastate and interstate regional capabilities and identified needs.
    NTIA is working with DHS to develop the grant guidance that ensures
    that funding will be passed through to eligible public safety agencies.
                        2010 census--cost effectiveness
        Question. The President's budget request includes increased funding
    for the Census Bureau in anticipation of conducting the decennial
    census. These increases are quite significant and will continue to grow
    over the next several years. While this effort is constitutionally
    mandated, there are also other activities that the Census is involved
    in, including surveys of state and local governments, as well as
    economic indicators.
        Mr. Secretary, what efforts are being made to ensure that the 2010
    Census is as cost effective and accurate as possible while maintaining
    the other capabilities the Bureau provides?
        Answer. All the factors that have led to higher costs for each
    decennial census since 1970 will continue--besides inflation and
    increased workload, these include the increased difficulty of ensuring
    coverage accuracy (both overall and for each population group and
    jurisdiction); increased public resistance to answering surveys; and
    increased diversity that make it more difficult to reach everyone. No
    matter what design is chosen, the 2010 Census will be costly.
        For the 2010 Decennial Program, compared to the cost of the
    previous census (2000), the percentage increase in estimated life cycle
    costs will be the lowest in the last four decades. This pattern also
    holds when comparing unit costs. Thus, while achieving the significant
    benefits to our Nation from the annual release of long-form data by the
    new American Community Survey, and improvements to our MAF/TIGER
    (geographic) databases, the Reengineered 2010 Census of Population and
    Housing also will be significantly less costly than historical trends
    would project.
      --Cost containment is one of the four key goals for the reengineered
            2010 Decennial Census program. When this effort was launched in
            2001, we estimated it would save over $400 million compared to
            repeating the Census 2000 approach. And, we now estimate that
            reverting in fiscal year 2008 to the Census 2000 approach would
            cost over $1 billion more than continuing with our reengineered
            approach.
      --Significant savings and accuracy improvements will result from:
        --Not having to collect long-form data in the 2010 Census (because
                it now is being collected by the American Community
                Survey),
        --Restructuring our field data collection process to use GPS-
                equipped Handheld Computers (that will benefit from the
                improvements to our MAF/TIGER databases), and
        --Reducing non-response follow-up workloads by sending a targeted
                second mailing of questionnaires to households who do not
                respond to initial mail-out, and being able to
                electronically remove late mail returns from the non-
                response follow-up assignments on the Handheld Computers.
     security of personally identifiable information on laptops and other
                                portable devices
        Question. Last year the Department of Commerce reported the loss of
    hundreds of laptop computers, thumb drives and data disks used in
    collecting data for many of its surveys, including data associated with
    the American Community Survey. The Census Bureau is now acquiring
    hundreds of handheld devices to be used by temporary employees as part
    of the 2010 Census.
        Do all portable devices in the Bureau containing sensitive personal
    information have the necessary encryption to protect the data if the
    computer or handheld is lost or stolen?
        Answer. Yes. All data files on the laptops currently being used for
    data collection in census survey and census operations are encrypted
    (FIPS 140-2 compliant). Full disk encryption for the laptops is under
    development and will be implemented later this year. For the 2010
    Census, we plan to use handheld computers for collection of Title 13
    data for three major operations (Address Canvassing, Non-response
    Follow-up and Coverage Measurement Person Interviews), with all others
    still being done on paper. All sensitive data collected during the 2008
    Dress Rehearsal and 2010 Census using the handheld computers will be
    stored on removable secure digital (SD) cards using FIPS 140-2
    compliant encryption software.
        Question. How can we ensure we protect the privacy of our citizens
    if handhelds are lost?
        Answer. In addition to the file encryption described above, census
    enumerators will access their handheld computers through biometric
    technology (fingerprint reader) as well as a response to a question for
    which only they would know the answer. All sensitive data are encrypted
    while stored on the enumerator's handheld computer's secure digital
    (SD) card, as well as during transmission over a secure private network
    to the secure data center. Upon successful transmission, all sensitive
    data on the enumerator's Handheld Computer that are no longer required
    to conduct the census operation will be automatically deleted.
        Question. What procedures have been instituted to track devices
    that contain sensitive personal information within the Bureau?
        Answer. All laptops that currently contain sensitive personal
    information are managed through the Census Bureau's automated property
    management system (APMS). The APMS assigns a unique identifier to each
    device and associates it with the individual that is using it. In
    addition, we are implementing new procedures that will require our
    census field representatives to enter their laptops' unique identifiers
    into an automated questionnaire. This information will be automatically
    retrieved by our control systems and matched against the information in
    the APMS to ensure that all devices are accounted for on a regular
    basis. This procedure should be in place later this Spring.
        With respect to the hand-held computes (HHCs), Secure Digital (SD)
    Cards (SD), laptop computers, and air cards used in the 2008 Dress
    Rehearsal (DR) and 2010 Census, we track who possesses them via a paper
    and an automated tracking system. We track all hand-offs of equipment
    via a paper process. All staff that deliver or are assigned equipment
    sign a paper form acknowledging receipt of that equipment. We also key
    the data from the paper forms into Harris' asset management system.
    Every time a piece of equipment is replaced, the user signs a paper
    form to return the defective device. Staff also sign another paper form
    to acknowledge receipt of the replacement device. All paper forms are
    stored in computer control files in the Local Census Offices.
        Harris provided laptops are used by Field Operations Supervisors.
    These laptops are not used for data collection, but do have PII on
    them, such as payroll data and staff rosters. These laptops will have
    full disk encryption. They will require a user ID and password for
    access during 2008 DR Address Canvassing. We plan to add biometric
    technology (fingerprint reader) in time for DR Non-Response Follow-Up.
        Question. Once the sensitive data is collected on the laptop or
    handheld computer and transmitted to the Census Bureau, how do you
    ensure that the data is scrubbed from these computers?
        Answer. For the laptops currently being used by census field
    representatives, the Regional Office survey manager initiates a process
    to delete data from the laptops based on the interview period. This
    process does not require the census field representative to execute a
    routine; it happens automatically as part of the transmission
    processing. A date is stored in the survey control database indicating
    when this deletion routine was initiated, which allows us to ensure
    that it is happening on a regular basis.
        With respect to the hand held computers that will be used in the
    2008 Census Dress Rehearsal and the 2010 Census, upon successful
    transmission, all sensitive data that are no longer required to conduct
    the census operation will be automatically deleted. In addition, we
    plan to destroy the SD cards following the completion of each operation
    to further ensure data protection. Procedures will be fully developed
    and tested prior to use in the field.
                       reauthorization of the noaa corps
        Question. The Committee understands that the size of NOAA's fleet
    is expanding, yet the NOAA Corps authorization, which regulates the
    size of the NOAA Commissioned Officer Corps, expired in 2005. The
    Committee supports NOAA Corps officers and the valuable expertise they
    lend to NOAA's field operations and homeland security activities.
        When can Congress expect to receive the legislative package
    reauthorizing the NOAA Corps, and may I receive a copy personally?
        Answer. We are interested in reauthorizing the NOAA Corps and we
    look forward to working with the Committee on this important
    legislation. We will ensure that you receive a personal copy of any
    legislation the Administration submits to reauthorize the NOAA Corps
    when it is delivered.
       federal consistency standards and the czma for florida and alabama
        Question. Recently, an issue has come up during my meetings with
    constituents involving interstate coastal zone management activities,
    namely between Florida and Alabama. I am concerned about the potential
    situation arising where one state can influence, or even impede,
    another state's development projects. I am watching this situation
    closely as it unfolds, especially with how it may impact Alabama's
    businesses and economic development.
        What level of assurances can I receive from you that my office will
    be informed of any interstate coastal zone management issues affecting
    Alabama?
        Answer. We understand that this is an issue of high priority and
    importance for Alabama. You have my full assurance that NOAA will
    continue to keep you informed as this process unfolds. At this time,
    there has not been a formal submission by Florida of a request for
    approval to review activities in other states, but, as you know,
    Florida has initiated the state and federal agency consultation process
    to list activities for interstate consistency review. On March 7, NOAA
    staff with the Office of Ocean and Coastal Resource Management
    facilitated a meeting between the coastal program managers for the
    States of Florida, Alabama and Georgia to develop a better
    understanding of Florida' intentions, the concerns of neighboring
    States, and the expectations that NOAA will place on Florida in
    justifying their request for NOAA's approval. In addition to ensuring
    that any change to the Florida Coastal Management program is fully
    consistent with the requirements of the Coastal Zone Management Act and
    NOAA's Interstate Consistency regulations, NOAA will be fully engaged
    in a dialog with all of the states and affected federal agencies in
    addressing whatever concerns may arise from Florida's proposed
    extension of its review authority.
                 funding levels for severe weather forecasting
        Question. Severe weather always threatens the Gulf Coast. Although
    last year's hurricane season was relatively light, I still encourage my
    constituents to remain vigilant as flooding, tornadoes and severe
    thunderstorms are a constant danger.
        Are we providing sufficient resources to meet the challenges of
    predicting and protecting our citizens from severe weather events?
        Answer. NOAA's fiscal year 2008 President's budget request fully
    supports its forecast and warning operations. Specifically, NOAA's
    fiscal year 2008 budget requests additional funding to improve its
    hurricane forecasting program: $3 million for hurricane data buoy O&M,
    $1 million for Hurricane Weather-Research Forecast (HWRF) model O&M and
    $2 million to accelerate research to improve hurricane intensity
    forecasts. NOAA is committed to improving operational effectiveness and
    services, particularly for high-impact weather events, by taking full
    advantage of emerging science and technological improvements. We are
    committed to evolving services to best meet the changing and growing
    need for environmental forecasts and services. NOAA's fiscal year 2008
    budget request supports efforts to upgrade the NEXRAD Radar network by
    implementing dual polarimetric radar. It also supports other efforts
    including: improved numerical modeling, data assimilation, education
    and outreach, training, forecaster workstation (AWIPS) upgrades, as
    well as efforts for future technological advances, such as phased array
    radar (PAR). We believe the President's fiscal year 2008 budget request
    positions us to make those technical and service improvements.
                    patent allowance versus patent rejection
        Question. I'm aware that you set production goals for PTO
    examiners. Those production goals should of course promote quality
    examination. The last thing we want is for production goals to be based
    solely on patent allowance so that examiner's are motivated to allow a
    patent even if the application doesn't warrant such allowance,
    resulting in poorer quality patents.
        Do you consider patent allowance versus patent rejection when
    setting production goals?
        Answer. Examiner production goals are set so that an examiner
    receives the same amount of credit for an application that is allowed
    or becomes abandoned.
        Question. The Bureau of the Census has initiated a large IT program
    to automate the process of conducting the 2010 Decennial Census, such
    as using wireless GPS-enabled handheld computers to directly capture
    information collected during interviews. This process is expected to
    reduce the need for paper-based processing while increasing operational
    efficiency, improving accuracy and reducing costs.
        Mr. Secretary, former Census Director Kincannon testified before
    Congress last year that capital investment in an automated system to
    replace the traditional paper count will save taxpayers approximately
    $1 billion to conduct the 2010 Census. Is that estimate still accurate?
        Answer. Yes--we still estimate that reverting to paper-based
    operations would add more than $1 billion to the total cost of the
    program. Thanks in large part to the support of Congress in the
    continuing resolution for fiscal year 2007, we have been able to
    continue our efforts for the automation components of the reengineered
    census.
        Last summer, when those funds were in jeopardy, the Census Bureau
    was forced to consider reverting back to paper-based operations that
    would have added over $1 billion to the overall cost of the 2010
    Census. That estimate is based on the savings we expect to achieve
    through the use of handheld computers and other aspects of our
    reengineering efforts. If we have to revert to a paper-based census:
      --The Census Bureau would have to expand space and office staff in
            over 450 temporary Local Census Offices by 50 percent to
            conduct 2010 Census operations. The additional space and office
            staff would be needed to store, track, and process the
            additional paper forms that will be needed if we do not use
            handheld computers for data collection.
      --Non-response follow-up and other field operations would be less
            efficient, requiring significantly more field enumerators.
      --We would have to spend significantly more money visiting households
            that have already responded to the Census. This is because,
            without the handheld computers, we would have no ability to
            remove late mail returns (those households that return their
            census forms after the date we begin preparing non-response
            follow-up assignments) from the assignment lists on those
            devices.
      --Other cost increases would be inevitable, including increased cost
            for paper and other supplies, mileage, and salaries to conduct
            a census without automation.
        These additional costs would be offset only partially by reductions
    in automation costs that would not be incurred (under a paper-based
    census) related to the handheld computer equipment.
                        2010 census--handheld computers
        Question. What is the status of the development of the handheld
    computer that is critical to the success of this program?
        Answer. Thanks in large part to the support of Congress in the
    continuing resolution for fiscal year 2007, we have been able to
    continue our efforts for the automation components of the reengineered
    census. For the 2008 Dress Rehearsal and the 2010 Decennial Census, the
    Census Bureau plans to use handheld computers and supporting services
    to directly capture information collected during personal interviews
    and eliminate the need for paper maps and address lists for the two
    largest field data collection operations (Address Canvassing and Non-
    response Follow-up) and for the Census Coverage Measurement Personal
    Interview process. The development of handheld computers for these
    operations in the Dress Rehearsal is on-track.
                              dvd piracy in mexico
        Question. The Department of Commerce is part of the
    Administration's effort to combat global piracy. I understand U.S.
    businesses are concerned about DVD piracy in Mexico.
        Can you comment on the implications of the recent DVD and CD raid
    in Mexico City and what this might mean for United States-Mexican
    cooperation to combat piracy?
        What is Commerce's role on this issue?
        Answer. The Department of Commerce is encouraged by the Mexican
    Government's efforts to combat piracy and counterfeiting over the past
    year. Recent raids by Mexican enforcement officials during February and
    March reflect the new Calderon Administration's commitment to the rule
    of law and economic competitiveness. However, greater enforcement
    efforts and stronger prosecution are still needed in Mexico. According
    to the 2007 Special 301 Submission by the International Intellectual
    Property Alliance, trade losses due to copyright piracy in Mexico are
    estimated to have exceeded $1 billion in 2006. Accordingly, Commerce
    continues to monitor Mexico's progress on intellectual property rights
    (IPR) issues through the combined efforts of an interagency IPR team.
    Additionally, Commerce and the U.S. Trade Representative (USTR) are
    working with the Governments of Mexico and Canada on the Security and
    Prosperity Partnership of North America Intellectual Property Action
    Strategy, a trilateral initiative to combat piracy and counterfeiting
    in North America.
        Finally, the USPTO conducts several programs for government
    officials in order to improve the level of expertise on intellectual
    property enforcement in Latin America. In August of 2006 and February
    2007, the USPTO invited Latin American government officials to its
    Global Intellectual Property Academy. The Academy provided practical
    intellectual property rights enforcement education and capacity-
    building to Latin American judges, prosecutors, customs officials, law
    enforcement officers and others who are involved in the civil,
    administrative or criminal enforcement of intellectual property rights.
    Mexican government officials participated in the Academy.
        Also, in December of 2006, the USPTO held a Seminar for the
    Judiciary on Intellectual Property Enforcement. The program was
    attended by both Mexican and Central American judges.
                               ita cafta nations
        Question. Since the enactment of CAFTA, the domestic sock industry
    has continued to close plants. The CAFTA nations, particularly
    Honduras, have increased their production and importation of socks to
    the United States by significant amounts to the detriment of our
    domestic industries. Why has the Department of Commerce not granted
    their promise to extend the period for tariffs on socks produced in
    CAFTA nations?
        Answer. As you know, on July 27, 2005, USTR Rob Portman and
    Secretary Gutierrez promised Congressman Aderholt that the
    Administration would (1) include socks in any textile agreement with
    China, (2) ensure that, if the existing China sock safeguard was
    renewed, it would be in place for the maximum possible time period at
    the minimum possible safeguard level, (3) seek to amend CAFTA-DR to
    alter the rules of origin or to lengthen the tariff phase-out for
    socks, and (4) to proactively utilize the CAFTA-DR textile safeguard
    for socks, if warranted. The Administration subsequently, as promised,
    included socks in the China textile agreement, concluded a special
    China sock quota agreement while the China textile talks were ongoing,
    and has pursued a sock amendment to the CAFTA-DR. We also are carefully
    monitoring CAFTA-DR sock import data and, as promised, will proactively
    utilize the CAFTA-DR safeguard, if warranted by the facts. To assess
    whether safeguard action may be warranted, the Department of Commerce
    carefully monitors imports of socks from CAFTA-DR signatories and other
    relevant data, including domestic production data, to assess whether
    imports of socks from these countries are causing, or threatening to
    cause, serious damage to the domestic industry as a result of the
    elimination of duties under the Agreement, which went into effect for
    Honduras on April 1, 2006. Notably, imports of socks from Honduras fell
    in each of the last three months of 2006 to levels lower than before
    CAFTA went into effect. Nevertheless, we are closely tracking the data
    and will act should data warrant a safeguard, but it is worth noting
    that domestic production was down by only 1.1 percent in 2006.

                              SUBCOMMITTEE RECESS

        Senator Mikulski. We're going to stand in recess until next
    Thursday, March 8, continuing our innovation oversight
    hearings. We will be getting testimony from the National
    Oceanic and Atmospheric Administration, and the Director of the
    National Science Foundation.
        This subcommittee stands in recess until March 8.
        [Whereupon, at 11:50 a.m., Thursday, March 1, the
    subcommittee was recessed, to reconvene at 10 a.m., Thursday,
    March 8.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                            THURSDAY, MARCH 8, 2007

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Barbara A. Mikulski (chairman)
    presiding.
        Present: Senators Mikulski, Inouye, Reed, Stevens, Shelby,
    and Hutchison.

                             DEPARTMENT OF COMMERCE

                National Oceanic and Atmospheric Administration

    STATEMENT OF VICE ADMIRAL CONRAD LAUTENBACHER, JR.,
                ADMINISTRATOR

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Good morning and welcome to the second
    hearing of the Commerce, Justice, Science Subcommittee. As I
    said in the first hearing, the themes of the subcommittee will
    be innovation, security, and accountability. Today's hearing
    will focus on two of the premiere agencies that promote
    innovation in our society and using the principles of the
    gathering storm, which is that innovation rests on research,
    discovery as well as on education. We are looking forward to
    hearing from the National Science Foundation (NSF) as well as
    the National Oceanic and Atmospheric Administration (NOAA).
        Just a brief announcement before I go more deeply into my
    statement and listen to our ranking member. On March 25, the
    subcommittee will conduct a classified hearing on the Federal
    Bureau of Investigation (FBI), which will deal with their role
    in counterterrorism. We remember that after 9/11, we chose not
    to create--but an agency within the agency. There are aspects
    of the agency's law enforcement responsibilities that are
    deeply involved in the global war against terrorism. We will be
    holding traditional public hearings but we will also be holding
    classified hearings. So we want to alert the members of the
    very important meeting with the FBI.
        But today, we're examining the budgets for the National
    Science Foundation and NOAA, focusing on innovation, education,
    and accountability. This isn't about line items in the budget.
    It's about our country and how we're going to compete in the
    global economy. It's about science. It's about the climate
    crisis. It's about educating our young people to come into the
    fields of science, technology, and engineering. We're holding
    this hearing in the midst of an awakening in this country about
    these particular issues. We all know that the issue just of
    climate--the climate crisis has resulted in a former colleague
    winning an Oscar and who knows, maybe a Nobel Prize.
        The CJS Subcommittee is the innovation subcommittee in the
    United States Senate appropriation process.
        NSF and NOAA are two key innovation agencies relating to
    discovery that have power to save lives, protect our
    communities, protect the planet, and create prosperity for our
    country. I'm pleased that the NSF is in the President's
    innovation agenda but I'm sorry that NOAA isn't as well.
        As we look at today's hearing, we will be looking at broad
    topics but I want to assure everyone that one of the areas of
    focus will be on the climate crisis. The CJS Subcommittee is
    going to look a little green while we look at the blue planet.
        What do I mean by that? I believe that every public policy
    should be based on sound science. In that way, we can build the
    coalitions necessary to create the positive and constructive
    solutions while minimizing at the same time, any economic
    increase or dislocation.
        As we look at the budget requests for NSF and NOAA, we're
    going to follow the roadmaps given to us by the National
    Academy of Sciences and the blueprint given to us by the Joint
    Ocean Commission initiative.
        Seventy percent of the Earth is covered by oceans. When you
    look at us from space, we are big blue. Our Nation's economy
    depends on the oceans, contributing over $120 billion to our
    Nation's economy, supporting 2 million jobs. The Senator from
    Alabama as well as myself, are coastal Senators. We know how
    important our oceans and our estuaries are. We also know how
    oceans influence the weather and we know that the focus also of
    this subcommittee will be a very good weather prediction.
        Alabama was hit very hard by Katrina and they worry about
    every hurricane season. Maryland was hit so hard most recently
    by Isabel. We need the National Weather Service but we need
    also those scientists and so on, that can give us early
    predictions and early warnings but also those kinds of things
    that mitigate against what is changing in our climate that then
    could be exacerbating these weather disruptions that we are
    seeing, from wild fires to hurricanes.
        At the same time, we want to know about education, how
    we're going to be able to attract the best and the brightest
    into science, engineering, and technology. What are the
    financial supports that we need to provide to be able to do
    that? Because that is where our future lies.
        At the same time, we'll be focusing on the accountability
    from the NOAA satellites to the NSF research stations and
    observatories. We know they are critical tools but we have
    faced cost overruns and schedule slippages.
        So we're here--we're here to really promote innovation. So
    it is not about agencies. It's not about line items, though it
    is about that. But it is about our Nation's future. I want to
    make sure we continue to be a superpower but that our
    superpower rests on our intellectual capital and the values
    that we stand for in the world.
        Having said that, I turn to my ranking member, Senator
    Shelby, for anything he has to say.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Madam Chairman and thank you,
    Admiral Lautenbacher and Dr. Bement for joining us today.
        This is an important hearing, as the chairman has pointed
    out because it gives me the opportunity to talk about the
    critical roles the National Oceanic and Atmospheric
    Administration we know as NOAA and the National Science
    Foundation, the NSF, play in the economic, scientific, and
    technology drive the engine of our country's economic future,
    as the chairman mentioned.
        Cutting edge technology creates a better quality of life
    for all of us. The strategic Federal investment in scientific
    research, particularly the funding supporting NSF has led to
    innovative problem solving and technological developments that
    have dramatically increased the country's economic growth.
        NOAA's budget request for the year 2008 is $3.8 billion.
    This is a decrease of $100 million from the funding level
    provided in the joint resolution of 2007.
        In stark contrast to the budget for NOAA, the budget
    request for NSF is $6.4 billion, an increase of $513 million
    over the 2007 joint resolution level.
        Our Nation as a whole seems to do more to protect--needs to
    do more to protect our citizens, not just with storm prediction
    but also with disaster response and community preparedness. We
    must improve short-term forecasting and gain a better
    understanding of long-term climate change. The National Weather
    Service, which is an important part of NOAA, is key to this
    understanding. After forecasting, we must explore what can be
    done in advance communications so that warnings can reach
    communities quicker. We must find better ways to respond.
    Emergency coordination after a severe storm is a critical but
    often overlooked function in saving lives.
        Last Friday, as a lot of you know, my home State of Alabama
    was devastated by a storm system that spawned killer
    tornadoes--I believe it was Thursday that claimed the lives of
    10 people and destroyed hundreds of homes and a school and
    severely damaged another school. In southeast Alabama's Coffee
    County, a tornado slammed into Enterprise High School. Not far
    from the school in Enterprise, an elderly woman was killed by
    flying storm debris. In west Alabama's Wilcox County, the storm
    claimed the life of a Miller's Fairy father who was crushed in
    his home.
        While we will never recover from the loss of life, I'm
    certain that the people of Alabama will work to rebuild even
    stronger communities and I will continue to do everything in my
    power to get them the resources that they need to do so. It
    will take time and resources for the damaged communities to
    begin to heal and erase the scars of this destruction and
    death.
        The people of Alabama--my State--are resilient and have
    already begun cleaning up and planning to rebuild. I saw this
    firsthand when I toured some of the damaged areas this past
    Saturday.
        But how can we ensure that they rebuild safer homes and
    schools to withstand the next storm? I don't have to be a NOAA
    weather forecaster to predict that another devastating storm
    will hit my State again and other States. It's just a matter of
    time.
        Will our citizens be any safer? Hurricanes Ivan, Katrina,
    and Rita showed us how vulnerable we are to natural disasters.
    Last week, we were grimly reminded that we still have a long
    way to go in finding answers to the lessons taught us by those
    hurricanes. Science, technology, and research hold many of
    these answers.
        Today, Admiral, I will be asking for your support and
    guidance on how we can better respond to these natural storms,
    be they hurricanes, tornadoes or what. Last week's storms
    claimed 20 lives from Alabama, Georgia, and Missouri. We cannot
    eliminate severe storms--we know that. But we should envision a
    day when we can live with them more safely.
        Overall, I'm concerned about the health of NOAA's science
    budget. Congress continually receives a budget request from the
    administration that downplays critical science activities when
    compared to the previous year's funding levels. The NOAA 2008
    request is less than what the agency received in 2007, 2006 and
    Madam Chairman, even 2005.
        In past years, the Joint Ocean Commission has clearly and
    objectively laid out the budgetary requirements to better
    support ocean-related science research and education. NOAA's
    budget request boasts a $123 million increase for ocean-related
    activities while the National Science Foundation requests to
    study marine ecosystems and associated human impacts, contains
    only a $17 million increase. These mighty figures represent
    only a fraction of the true budgetary needs for the marine
    community.
        I'm pleased to see that the American competitiveness
    initiative, ACI, has continued to receive support from the
    administration through the National Science Foundation's budget
    request. The ACI will keep the competitive edge that our Nation
    expects in the world economy through research and innovation by
    focusing on the ingenuity of our people and tying our
    capabilities to policies that will keep us at the forefront of
    scientific and technical advancement for generations to come.
    The ACI provides a tremendous opportunity to maintain our
    national technological advantage in a more competitive world.
        I think--I do not think that it goes far enough to take
    advantage of our existing Federal investments, however. The
    funding of ACI includes an increase of $366 million in the
    research and related activities account in NSF. While this
    benefits current research, I'm concerned about what we're doing
    to encourage the next generation of researchers. The long-term
    vision, Madam Chairman, I believe must include increasing
    opportunities for colleges and universities across the country
    to participate in innovation. Many of the funds provided to NSF
    as part of the ACI will go to traditional research schools that
    have historically fared well in retaining its research grants.
        We should find ways to raise the bar of competitiveness, to
    reach out to universities that have not traditionally been
    taken into consideration. We also need to provide the funds to
    increase the level of science education through better
    curriculum and inspiring K through 12 science teachers. NSF is
    the ideal place to begin such a long-term investment for this
    country.
        I'm also concerned about the number of American students
    enrolling in science and engineering fields of study. The most
    recent report from the Council on Competitiveness states that
    foreign students account for most of the growth in Ph.D.s in
    science and engineering, despite the progress being made by
    females and minorities in this area. Our lack of new scientists
    and engineers will eventually become a crisis. We're not
    attracting enough young students into these disciplines and are
    relying too heavily on foreign students. These same students
    return to their homeland where competitive jobs are becoming
    increasingly available.
        To remain at the cutting edge of innovation, I believe we
    need to act now in cultivating our next generation of engineers
    and scientists. There is much untapped potential within our own
    borders. We must make this a priority. The Office of Science
    and Technology Policy states that the goal of the ACI's goal is
    not to introduce entirely new Government programs but to
    increase fundamental research capacity and while there is
    significant Federal investment in research and innovation,
    there should be a much broader vision to include agencies
    beyond those already included in the ACI while not diluting
    current efforts.
        Along those lines, it is discouraging to see that the
    administration wants to see the Nation at the forefront of
    innovation yet chooses to exclude NOAA from the initiative.
    This is perplexing.
        NOAA stands out as an international leader in marine and
    atmospheric science and is a cornerstone of our Nation's
    research community. NOAA's education and outreach activities
    appear to fall directly in line with the ACI's educational
    goals. As I stated here in last week's Department of Commerce
    hearing, I'm concerned why this agency is not recognized as a
    candidate for the ACI program.
        At this point, I want to thank Chairman Mikulski for having
    this hearing today and I look forward to the testimony.
        Senator Mikulski. Thank you very much, Senator Shelby and
    as usual, I'm going to associate myself with your remarks.
    There are two key agencies that have, I believe, been left out
    of the ACI. Certainly NOAA, our flagship agency and on oceans,
    fisheries, and weather as well NASA. The fact that NASA was
    left out of ACI is absolutely stunning. There are two
    colleagues. I'd like to go right to the testimony rather than
    opening statements and you make them then when you get to the
    questions and answers. That way, we can move right along. Does
    that sound good?
        Therefore, let's go right to those who are ready to
    testify. Why don't we start with, Admiral Lautenbacher and go
    to the National Science Foundation?

           SUMMARY STATEMENT OF VICE ADMIRAL CONRAD LAUTENBACHER, JR.

        Admiral Lautenbacher. Madam Chair, Ranking Member Shelby,
    Senator Hutchison, Senator Reed, distinguished staff members,
    thank you very much for this opportunity to testify on behalf
    of the President's fiscal year 2008 budget request for NOAA and
    also thank you for your extremely important leadership in the
    areas that are under NOAA's responsibility. The support of this
    subcommittee has been extremely important to our ability to
    carry out the mission that is required for our country, so
    thank you very much for your continued support of our programs.
        Our programs and services impact one-third of U.S. gross
    domestic product. Our environmental information is vital to the
    competitiveness of our country in the world marketplace and to
    the security and safety of our people here at home. Our
    investments in research and technology contribute to our
    Nation's innovative culture and our work to conserve and manage
    coastal and marine resources ensures economic vitality and
    enhances U.S. trade.
        NOAA has had many notable accomplishments in 2006, some of
    which are mentioned in my written statement. I would like to
    take a moment to just highlight a couple of those before I move
    into the fiscal year 2008 budget request.
        Thanks to the funding from Congress, NOAA was able to
    provide a NOAA weather all-hazards radio to every public school
    in America. That's 97,000 radios. These radios provide
    automatic alerts for severe weather, manmade disasters such as
    chemical spills and terrorist threats as well as Amber Alerts
    for missing children. While tragedies will still occur as they
    did last week with the tornado mentioned by Senator Shelby,
    officials there did receive our warnings on their weather radio
    and actions were taken. Unfortunately, lives were still lost
    but many fewer were lost as a result of the warning and the
    radios and the procedures that were in effect.
        In June, the President designated the northwestern Hawaiian
    Islands as a marine national monument, the largest single act
    of marine conservation in history. Encompassing nearly 140,000
    square miles, the monument includes 4,500 square miles of
    relatively undisturbed coral reef habitat, home to more than
    7,000 species. For the first time, NOAA will play a leading
    role in managing a national monument. This is an exciting and
    important opportunity for NOAA.
        In December, NOAA achieved initial operating capability for
    the expanded U.S. tsunami warning system. This means that the
    most dangerous tsunami generation areas are covered by tsunami
    deepwater buoy stations and last April, the Nation's two
    tsunami warning centers became operational 24 by 7. This
    combination of buoys and around-the-clock warning capability
    has greatly increased the security of the Nation's people
    living along Pacific coastlines.
        Before I highlight the fiscal year 2008 budget request, I
    want to draw your attention to the fact that this year, NOAA is
    celebrating 200 years of science, service, and stewardship. In
    1807, President Thomas Jefferson founded the Survey of the
    Coast to provide nautical charts to the marine community. Safe
    passage of vessels to American ports and along our coastlines
    was critical to increasing trade and building the U.S. economy,
    just as it is today. The Survey of the Coast, along with the
    Weather Bureau founded in 1870, the U.S. Commission on Fish and
    Fisheries in 1871, were brought together in 1970 with the
    establishment of NOAA. We're very proud to be celebrating this
    200-year legacy with Americans across the Nation at events
    throughout the year.
        My written testimony presents the details of the budget as
    it aligns with five priority areas. First of all, sustaining
    critical operations, supporting the U.S. ocean action plan,
    improving weather warnings and forecasts, climate monitoring
    and research, and critical facilities investments. I will just
    highlight a couple of those.

               NOAA deg.FISCAL YEAR 2008 BUDGET REQUEST

        The fiscal year 2008 request, as already stated, is $3.8
    billion. That does represent a $131 million or 3.4 percent
    increase over the President's request from fiscal year 2007 but
    it does represent a $96 million decrease from the fiscal year
    2006 enacted level.
        The budget is able to provide modest new investments in our
    priority areas while maintaining critical services. In critical
    operations, we are providing an increase of $10.1 million for
    operations and maintenance of NOAA vessels and aircraft. NOAA
    is also driving innovation in research and monitoring by
    requesting $3 million in funding to support the further use of
    unmanned aircraft systems or UAS. With this funding, NOAA will
    evaluate the benefits and potential of using UAS to collect
    data crucial for such missions as fishery enforcement, coastal
    zone studies, and hurricane forecasting.
        Continued implementation of the President's ocean action
    plan remains a priority. The fiscal year 2008 budget requests
    $123 million in increase to support the plan, including $60
    million to advance ocean science and research, $38 million to
    protect and restore marine and coastal areas, and $25 million
    to ensure sustainable use of ocean resources.
        Specifically, the request includes $16.4 million for the
    integrated ocean observing system or IOOS for development of
    regional systems and improved data management and
    communications. It also includes $8 million for enforcement and
    management activities in the newly designated Northwestern
    Hawaiian Islands Marine National Monument.
        Funding of $10 million is requested to restore nearly 1,000
    miles of habitat for endangered Atlantic salmon and other fish
    species in New England's largest watershed. Increased funding
    of $3 million will support Klamath River salmon recovery
    projects.
        The fiscal year 2008 budget also provides $20 million in
    increases to support better management of fish harvests. This
    includes $6.5 million in increases to implement the new and
    expanded requirements of the Magnuson-Stevens Fishery
    Conservation and Management Reauthorization Act, passed last
    season. It provides $3 million to establish the regulatory
    framework to facilitate environmentally sustainable commercial
    aquaculture. Our Nation currently has an $8 billion trade
    deficit in seafood. Providing regulatory certainty will foster
    private sector investment in offshore aquaculture, increasing
    the Nation's competitiveness in the world seafood market and
    decreasing our reliance on imported seafood.
        To improve weather warnings and forecasts, we are
    requesting a $5 million increase for the support of operation
    and maintenance of hurricane data buoys and research on
    hurricane intensity that will ultimately save lives. More than
    $23 million is requested to continue strengthening the U.S.
    tsunami warning program, including an increase of $1.7 million
    to deploy additional deep ocean buoy stations.
        Climate monitoring and research includes a $9.4 million
    increase to support the development of an integrated drought
    early warning and forecast system that will also enhance the
    Nation's food security by providing earlier and more accurate
    drought forecasts. More than one-half of this increase will be
    used to research the link between ocean currents and abrupt
    climate change.
        Finally, critical facilities investments include an
    increase of $20 million for the Pacific Regional Center in
    Hawaii, which will bring NOAA's Pacific Island programs
    together in one facility to improve operations and strengthen
    our performance.
        Let me conclude briefly by talking about two oversight
    issues important to the subcommittee and extremely important to
    NOAA. There have been many challenges with our satellite
    programs and the national polar-orbiting operational
    environmental satellite system (NPOESS) in particular. Let me
    assure the subcommittee that I and my staff are doing
    everything we can do to ensure that this program stays on
    track. We have made numerous personnel and organizational
    changes. We are implementing every recommendation from the
    Government Accountability Office (GAO) and Department of
    Commerce inspector general and I meet with the Under Secretary
    of the Air Force and NASA Administrator once a quarter at
    least, to review the program in detail, along with the
    presidents of the companies who have signed the contract to
    develop those satellites. Satellites are complex and risky
    tools but they are vital to all aspects of NOAA's mission. I
    also want to assure the subcommittee that the Department of
    Commerce is in the final stages of updating its communication
    policy, which will ensure for generations into the future that
    our scientists are able to freely and openly communicate their
    science to the media and the public. I have been on the record
    with my scientists numerous times supporting their ability to
    communicate freely their science activities to the public.

                               PREPARED STATEMENT

        Again, I appreciate the opportunity to testify and I am
    happy to answer any of your questions. Thank you.
        [The statement follows:]
          Prepared Statement of Vice Admiral Conrad Lautenbacher, Jr.
        Madam Chairwoman and members of the subcommittee, before I begin my
    testimony I would like to thank you for your leadership and the
    generous support you have shown the National Oceanic and Atmospheric
    Administration (NOAA). Your continued support for our programs is
    appreciated as we work to improve our products and services for the
    American people. Thank you for the opportunity to testify on the
    President's fiscal year 2008 budget request for NOAA.
        The fiscal year 2008 President's budget supports NOAA's priority to
    advance mission-critical services. The fiscal year 2008 request is
    $3.815 billion, which represents a $131 million or 3.4 percent increase
    over the fiscal year 2007 request. This request includes the level of
    resources necessary to carry out NOAA's mission, which is to understand
    and predict changes in the Earth's environment, and conserve and manage
    coastal and marine resources to meet our Nation's economic, social and
    environmental needs. At NOAA we work to protect the lives and
    livelihoods of Americans, and provide products and services that
    benefit the economy, environment, and public safety of the Nation.
    Before I discuss the details of our fiscal year 2008 budget request, I
    would like to briefly highlight some of NOAA's notable successes from
    the past fiscal year (2006).
                        fiscal year 2006 accomplishments
    President Designates Largest Fully-Protected Marine Area on Earth
        Recognizing the continuing need for resource protection, President
    Bush designated the Northwestern Hawaiian Islands as a marine national
    monument on June 15, 2006. Encompassing nearly 140,000 square miles,
    the monument covers an area larger than all of our national parks put
    together, including 4,500 square miles of relatively undisturbed coral
    reef habitat that is home to more than 7,000 species. The creation of
    the largest fully-protected marine area in the world is an exciting
    achievement and recognizes the value of marine resources to our Nation.
    Successful Launch of NOAA Satellite GOES-13 and New Satellite
            Operations Facility Ensure Continuity of Improved Data
            Collection
        On May 24, 2006, officials from NOAA and the National Aeronautics
    and Space Administration (NASA) confirmed that a new geostationary
    operational environmental satellite, designed to track hurricanes and
    other severe weather impacting the Nation, successfully reached orbit.
    Upon reaching final orbit, the satellite was renamed GOES-13. This is
    the first in a new series of satellites featuring a more stable
    platform enabling improved instrument performance. NOAA instruments
    were also launched on the European MetOp-A polar-orbiting satellite in
    October 2006. Combined with NOAA and Department of Defense (DOD)
    operational satellites, MetOp-A will help provide global data for
    improving forecasts of severe weather, disaster mitigation, and
    monitoring of the environment. This launch ushered in a new era of
    U.S.-European cooperation in environmental observing.
        In 2006, NOAA satellite operations and data processing groups began
    moving into the new NOAA Satellite Operations Facility (NSOF). The NSOF
    will house the NOAA satellite command and control functions and data
    and distribution activities that are central to NOAA's mission. The
    NSOF will also house the U.S. Mission Control Center for the Search and
    Rescue Satellite-Aided Tracking (SARSAT) program and the National Ice
    Center (NIC), a joint NOAA/DOD mission to track ice floes and issue
    warnings to the Nation's maritime force. The NSOF will become fully
    operational in Spring 2007.
    Enhancements to NOAA's Fleet of Ships and Aircraft
        Significant progress is being made in modernizing NOAA's fleet.
    NOAA took delivery of the Fisheries Survey Vessel (FSV) Henry B.
    Bigelow, the second of 4 new FSV, on July 25, 2006. The Bigelow has
    high-tech capabilities that make it one of the world's most advanced
    fisheries research ships. These ships will be able to perform hydro-
    acoustic fish surveys and conduct bottom and mid-water trawls while
    running physical and biological oceanographic sampling during a single
    deployment--a combined capability unavailable in the private sector
    that will enable research and assessment to be carried out with greater
    accuracy and cost efficiency. NOAA also took delivery from the Navy of
    a ``retired'' P-3 aircraft in response to the hurricane supplemental
    bill attached to the fiscal year 2006 Defense appropriations
    legislation. Rehabilitation of the P-3 is expected to be completed by
    the start of the 2008 hurricane season.
    Magnuson-Stevens Fishery Conservation and Management Act Reauthorized
        Congress reauthorized the Magnuson-Stevens Fishery Conservation and
    Management Act (MSA) in December, 2006, and it was signed into law by
    President Bush on January 12, 2007. The MSA is the guiding legislation
    that authorizes fishery management activities in federal waters.
    Enactment of this bill was one of the top priorities of the U.S. Ocean
    Action Plan. The reauthorized MSA strengthens NOAA's ability to end
    overfishing, rebuild fish stocks, and work collaboratively on
    conservation.
    U.S. Tsunami Warning System Improved
        NOAA designed easy to deploy Deep-ocean Assessment and Reporting of
    Tsunamis (DART)-II technology, which provides two-way communication
    between the buoys and NOAA facilities. This technology allows engineers
    to troubleshoot these systems from the lab and repair the systems
    remotely when possible. This functionality can minimize system downtime
    and save money by not requiring a ship be deployed to make minor
    repairs. The U.S. Tsunami Warning Program also created tsunami impact
    forecast models for nine major coastal communities, providing
    information for inundation maps. With the December 11, 2006 deployment
    of DART #23 in the Western Pacific Ocean, NOAA achieved initial
    operating capability (IOC) of the planned expanded U.S. Tsunami Warning
    Program. NOAA also achieved full 24/7 operations of the Nation's two
    Tsunami Warning Centers. Plans call for the U.S. Tsunami Warning
    Network to total 39 DART-II buoy stations by mid-summer 2008 (32 in the
    Pacific, 7 in the Atlantic).
        NOAA also continued to monitor sea height through a network of
    buoys and tide gauges, collecting information critical to understanding
    the time of arrival and the height of tsunami waves. In 2006, NOAA
    completed the installation of eight new National Water Level
    Observation Network (NWLON) stations to fill gaps in the detection
    network, bringing the 2-year total to 15. The 15 stations were
    installed in California, Oregon, Washington, Alaska, Puerto Rico, and
    the Virgin Islands. These and other new stations brought the NWLON to
    200 stations by the end of calendar year 2006. In addition, NOAA
    continued to upgrade the entire NWLON to real-time status by replacing
    over 50 data collection platforms.
    Red Tide Monitoring Protects Human Health and Coastal Economics in New
            England
        In the wake of the 2005 New England red tide crisis that forced the
    closure of most shellfisheries in the region, NOAA provided additional
    emergency funding in 2006 to provide timely and critical information to
    State managers to build upon long-term research supported by the
    Ecology and Oceanography of Harmful Algal Bloom, and Monitoring and
    Event Response for Harmful Algal Bloom programs at the Woods Hole
    Oceanographic Institution, as well as other partner institutions. In
    the spring of 2006, NOAA-sponsored monitoring detected rapid
    escalations of the bloom, which subsequently closed shellfisheries in
    Massachusetts, New Hampshire and Maine. Additional NOAA efforts allowed
    New England managers to make more strategic sampling and shellfish bed
    closures/openings to protect human health and minimize the economic
    impacts of harmful algal blooms.
    National Estuarine Research Reserve System Adds 27th Reserve
        On May 6, 2006, commerce and congressional officials dedicated the
    newest site in the National Estuarine Research Reserve System in Port
    Aransas, Texas, bring the total to 27 reserves. This new reserve
    introduces a new biogeographic area type into the system, and adds
    185,708 acres of public and private land and water. The reserves are
    Federal-State partnerships, where NOAA provides national program
    guidance and operational funding. These reserves serve as living
    laboratories for scientists and provide science-based educational
    programs for students and the public.
    Wide Application Potential of Unmanned Aircraft Systems Demonstrated
        In 2006, NOAA worked with federal and private sector partners to
    successfully demonstrate Unmanned Aircraft Systems (UAS) technology.
    NOAA is interested in UAS as a tool to explore and gather data to help
    us reach new heights in our ability to understand and predict the world
    in which we live. Use of UAS could help NOAA achieve our mission goals
    and provide cost-effective means to: enforce regulations over NOAA's
    National Marine Sanctuaries, conduct long endurance flights for
    weather, conduct research over areas that pose significant risks to
    pilots, validate satellite measurements, provide counts of marine
    mammal populations, monitor atmospheric composition and climate, and
    hover above hurricanes and gather critical data for input into
    hurricane models. NOAA will continue to examine how UAS can assist in
    the collection of environmental data.
    Protecting Habitat Essential to Fish
        In 2006, over 500,000 square miles of U.S. Pacific Ocean habitats
    were protected from damage by fishing practices, particularly bottom-
    trawling. Combined, these areas are more than three times the size of
    all U.S. national parks. The historic protections, implemented by NOAA
    with the support and advice of the regional fishery management
    councils, fishing industry, and environmental groups, made the
    protection of essential fish habitat and deep coral and sponge
    assemblages a significant part of management efforts to conserve
    fisheries in the Pacific Ocean.
    NOAA Continues Efforts to Assist with Gulf Coast Recovery Following
            2005 Hurricanes Katrina and Rita
        In addition to providing the forecasts and immediate response
    assistance in 2005, following Hurricanes Katrina and Rita, NOAA has
    continued to assist with Gulf Coast recovery efforts in fiscal year
    2006.
        NOAA ships and aircraft provided critical response and recovery
    capabilities in the aftermath of Hurricanes Katrina and Rita. NOAA Ship
    Thomas Jefferson completed obstruction surveys in the Gulf of Mexico so
    that busy ports and shipping lanes could be re-opened to traffic.
    NOAA's citation aircraft flew post-storm damage assessment surveys
    along the coasts of the Gulf States. This imagery was downloaded on the
    NOAA website, enabling emergency managers, local officials and average
    citizens to inventory damage and prioritize recovery efforts.
        NOAA mounted a multi-pronged effort to address fishery-related
    impacts in the Gulf of Mexico in fiscal year 2006. In August, 2006,
    NOAA awarded $128 million to the Gulf States Marine Fisheries
    Commission to reseed and restore oyster beds and conduct fisheries
    monitoring in the Gulf. In addition, NOAA Ship Nancy Foster conducted a
    seafood contamination survey for NOAA Fisheries near the Mississippi
    Delta to spot potential safety issues. This research monitored the
    seafood coming in from the Gulf to ensure it was safe for public
    consumption (free of PCBs, pesticides, and fossil fuels).
    Collaboration Enables a NOAA Weather Radio to be Placed In Every Public
            School in America
        NOAA and the Departments of Homeland Security and Education worked
    to get 97,000 NOAA weather radios placed in every public school in
    America to aid in protecting our children from hazards, both natural
    and man-made. In many cases, local weather forecast office staff
    provided expertise in programming the radios to select specific hazards
    and geographic areas for which the school wanted to be alerted. This
    multi-month effort required close collaboration between the Departments
    of Homeland Security, Education, and Commerce (NOAA). This effort
    enabled schools to connect to part of the Nation's Emergency Alert
    System and greatly increases environmental situational awareness and
    public safety.
    World Ocean Database 2005
        NOAA's National Oceanographic Data Center (NODC) released a major
    upgrade to its World Ocean Database product. World Ocean Database 2005
    (WOD05) is the largest collection of quality-controlled ocean profile
    data available internationally without restriction. All data are
    available on-line for public use. Data are available for 29 ocean
    variables, including plankton data. The database includes an additional
    900,000 temperature profiles not available in its predecessor. The
    database provides the ocean and climate science communities with
    research-quality ocean profile data sets that will be useful in
    describing physical, chemical and biological parameters in the ocean,
    over both time and space. This database is a crucial part of the
    Integrated Ocean Observing System and the Global Earth Observation
    System of Systems.
    New Arctic Observatory Established for Long-Term Climate Measurements
        NOAA's Earth System Research Laboratory in Boulder, Colorado, in
    conjunction with our Canadian counterparts, established a research site
    located on Ellesmere Island to make long-term climate measurements of
    Arctic clouds and aerosols. This observatory supports NOAA's activities
    for the 2007-2008 International Polar Year.
    NOAA Scientists Identify Carbon Dioxide Threats to Marine Life
        A report co-authored by NOAA research scientists documents how
    carbon dioxide is dramatically altering ocean chemistry and threatening
    the health of marine organisms. The research also uncovered new
    evidence of ocean acidification in the North Pacific. The report
    resulted from a workshop sponsored by NOAA, the National Science
    Foundation, and the U.S. Geological Survey.
    First Operational Satellite Products for Ocean Biology
        In June, 2006, NOAA began to process and distribute ocean biology
    products for U.S. coastal waters, using satellite observations. This
    activity represents a successful transition of NASA research to NOAA
    operations. These products (e.g. chlorophyll concentration) represent
    the first satellite-derived biological products generated by NOAA for
    coastal and open ocean waters. These products are useful in detecting
    and monitoring harmful algal blooms, assessing regional water quality,
    and locating suitable habitat for fish and other important marine
    species. Development of these products prepares NOAA for generating and
    distributing ocean biology products in the global ocean after 2010.
                   fiscal year 2008 budget request highlights
    Supporting the U.S. Ocean Action Plan
        Coastal and marine waters help support over 28 million jobs, and
    the value of the ocean economy to the United States is over $115
    billion. The commercial and recreational fishing industries alone add
    over $48 billion to the national economy each year. The fiscal year
    2008 President's budget requests $123 million in increases for NOAA to
    support the President's U.S. Ocean Action Plan. This oceans initiative
    includes $38 million to protect and restore marine and coastal areas,
    $25 million to ensure sustainable use of ocean resources, and $60
    million to advance ocean science and research.
        New investments in ocean science are aimed at monitoring and better
    understanding marine ecosystems. Increased funding of $16 million is
    included for the Integrated Ocean Observing System to enhance models
    and information products through development of regional systems and
    improved data management and communications. A total increase of $20
    million is provided for NOAA research on four near-term priorities
    established through the national Ocean Research Priorities Plan. An
    additional $8 million will support exploring and defining areas of the
    continental shelf that are adjacent to, but currently outside of, U.S.
    jurisdiction. This work will enable a U.S. claim to these areas and the
    potential $1.2 trillion worth of resources they are estimated to
    contain.
        The fiscal year 2008 President's budget builds on NOAA's strong
    record of investing in projects that embody the spirit of cooperative
    conservation. Projects to protect and restore valuable marine and
    coastal areas include funding of $8 million for enforcement and
    management activities in the recently designated Northwestern Hawaiian
    Islands Marine National Monument, and $10 million for a project to
    restore nearly 1,000 stream miles of habitat for endangered Atlantic
    salmon and other fish species. A total of $15 million is provided for
    the Coastal and Estuarine Land Conservation Program, to assist State
    and local partners in the purchase of high priority coastal or
    estuarine lands or conservation easements. Increased funding of $3
    million is also included to support Klamath River salmon recovery
    projects. Finally, an increase of $5 million will support competitive
    grant programs focused on the Gulf of Mexico Alliance coastal resource
    priorities, as identified in the Governors' Action Plan for Healthy and
    Resilient Coasts.
        Finally, the fiscal year 2008 NOAA budget provides support to
    ensure sustainable access to seafood through development of offshore
    aquaculture and better management of fish harvests. The administration
    will propose legislation to establish clear regulatory authority and
    permitting processes for offshore aquaculture. An increase of $3
    million is included to establish the regulatory framework to encourage
    and facilitate development of environmentally sustainable commercial
    opportunities. In addition, $20 million in increases are provided to
    improve management of fish harvests, including $6.5 million in
    increases to implement the new and expanded requirements of the
    Magnuson-Stevens Fishery Conservation and Management Reauthorization
    Act of 2006, $3 million for observer programs, and $6 million for
    market-based approaches to fisheries management. Market-based
    approaches--such as Limited Access Privilege Programs (LAPPs) that
    provide exclusive privileges to harvest a quantity of fish--move
    fisheries management away from cumbersome and inefficient regulatory
    practices and have been shown to lead to lengthened fishing seasons,
    improved product quality, and safer conditions for fishermen. The
    administration has set a goal of doubling the number of LAPPs in use by
    the year 2010, and the increased funding of $6 million for LAPPs in
    this request supports that goal. Finally, an additional $2 million in
    funding is provided to meet the management challenges of assessing and
    mitigating the impacts of sound from human activities, such as national
    defense readiness and energy exploration and development, on marine
    mammals.
    Sustaining Critical Operations
        As always, I support NOAA's employees by requesting adequate
    funding for our people, infrastructure, and facilities. NOAA's core
    values are science, service, and stewardship, as well as people,
    ingenuity, integrity, excellence, and teamwork. Our ability to serve
    the Nation and accomplish the missions outlined below is determined by
    the quality of our people and the tools they employ. Our facilities,
    ships, aircraft, environmental satellites, data-processing systems,
    computing and communications systems, and our approach to management
    provide the foundation of support for all of our programs.
    Approximately $54.6 million in net increases will support our workforce
    inflation factors, including $44.9 million for salaries and benefits
    and $6.6 million for non-labor related adjustments such as fuel costs.
        This year, we focus on the operations and maintenance of NOAA
    vessels and necessary enhancements to marine safety, facility repair,
    and modernization. A funding increase of $8.3 million will be used to
    support marine operations and equipment, including $5.6 million for new
    vessel operations and maintenance and $1.7 million to implement a more
    effective maritime staff rotation and safety enhancements. This funding
    will support the operations maintenance for the Okeanos Explorer,
    NOAA's first dedicated ocean exploration vessel. Increased funding of
    $5.5 million will support operations and maintenance for NOAA's third
    P-3 aircraft. NOAA is also moving forward this year with increases in
    funding for unmanned vehicles, with $0.7 million in support of
    Autonomous Underwater Vehicles (AUV) and an increase of $3 million in
    funding to support the further use of Unmanned Aircraft Systems (UAS).
    With this increase, NOAA will evaluate the benefits and potential of
    using UAS to collect data crucial for climate models, weather research,
    fisheries enforcement, and coastal zone studies.
        The backbone of the NOAA infrastructure is our integrated Earth
    observation effort. NOAA, NASA and the Office of Science and Technology
    Policy (OSTP) serve as the lead agencies for the Federal Government in
    developing our U.S. integrated Earth observing strategy. In addition, I
    serve as one of four intergovernmental co-chairs of the effort to
    develop the Global Earth Observation System of Systems. Building and
    maintaining state of the art satellite programs is an important
    component of NOAA's integrated observation efforts. An increase of $25
    million in the Polar Operational Environmental Satellite (POES) program
    continues support for development and acquisition of polar-orbiting
    weather satellites to improve weather forecasting and our understanding
    of the climate. This increase will allow NOAA to complete acquisition
    of this series of polar satellites and install and maintain instruments
    important to U.S. Government interests on the European MetOp partner
    satellite. Following the completion of the POES program, it will be
    replaced by the tri-agency National Polar-orbiting Operational
    Environmental Satellite System (NPOESS). This transition is expected in
    2013. We will continue to partner with the Europeans on their MetOp
    satellite as NPOESS replaces our current POES satellites.
    Improving Weather Warnings and Forecasts
        Severe weather events cause $11 billion in damages and
    approximately 7,000 weather-related fatalities yearly in the United
    States. Nearly one-third of the economy is sensitive to weather and
    climate. Realizing this, NOAA seeks to provide decisionmakers with key
    observations, analyses, predictions, and warnings for a variety of
    weather and water conditions to help protect the health, lives, and
    property of the United States and enhance its economy. Increased
    funding of $2 million will accelerate research to improve hurricane
    intensity forecasts through targeted research for new models and
    observations. Another $3 million will support the operations and
    maintenance of 15 hurricane data buoys in the Caribbean, Gulf of
    Mexico, and the Atlantic Ocean. Finally, NOAA continues to strengthen
    the U.S. Tsunami Warning Program with an increase of $1.7 million to
    deploy additional deep ocean buoy (DART) stations. Strengthening the
    U.S. Tsunami Warning Program provides effective, community-based
    tsunami hazard mitigation actions including required inundation flood
    mapping, modeling, forecasting efforts and evacuation mapping, and
    community-based public education/awareness/preparedness for all U.S.
    communities at risk.
    Climate Monitoring and Research
        Society exists in a highly variable climate system, and major
    climatic events can impose serious consequences on society. The fiscal
    year 2008 budget request contains investments in several programs aimed
    at increasing our predictive capability, enabling NOAA to provide our
    customers (farmers, utilities, land managers, weather risk industry,
    fisheries resource managers and decisionmakers) with assessments of
    current and future impacts of climate events such as droughts, floods,
    and trends in extreme climate events. NOAA is building a suite of
    information, products and services to enable society to understand,
    predict, and respond to changing climate conditions. These activities
    are part of the U.S. Climate Change Science Program and are being
    conducted in collaboration and coordination with our important
    interagency partners including NASA, NSF, and the Department of Energy.
    We will continue to expand and improve access to global oceanic and
    atmospheric data sets for improved climate prediction and development
    of climate change indicators. NOAA will support the critical National
    Integrated Drought Information System with increases of $4.4 million to
    develop an integrated drought early warning and forecast system to
    provide earlier and more accurate forecasts of drought conditions. This
    request also supports the administration's efforts to create a U.S.
    Integrated Earth Observation System. With an increase of $0.9 million,
    we will support research on water vapor to refine climate models. In
    support of the Ocean Research Priorities Plan, NOAA will enhance our
    understanding of the link between ocean currents and rapid climate
    change with an increase of $5 million in support of research on this
    topic. Finally, an additional $1 million in funding will provide
    additional computational support for assessing abrupt climate change.
    Critical Facilities Investments
        The fiscal year 2008 President's budget request also includes
    important increases for critical facilities, necessary to provide a
    safe and effective working environment for NOAA's employees.
        Of particular importance this year is the $3 million funding
    increase to begin design of a replacement facility at the La Jolla
    Southwest Fisheries Science Center. NOAA is also requesting $20.3
    million for continued construction of the new Pacific Region Center on
    Ford Island in Honolulu, Hawaii. This increase in funding will allow
    NOAA to complete the exterior renovation of one of the Ford Island
    buildings, a crucial next step in the construction process.
                                   conclusion
        NOAA's fiscal year 2008 budget request provides essential new
    investments in our priority areas while maintaining critical services,
    reflecting NOAA's vision, mission, and core values. The work NOAA
    accomplished in 2006 impacted every U.S. citizen. We will build on our
    successes from last year, and stand ready to meet the challenges that
    will surface in fiscal year 2008 and beyond. NOAA is dedicated to
    enhancing economic security and national safety through research and
    accurate prediction of weather and climate-related events, and to
    providing environmental stewardship of our Nation's coastal and marine
    resources. That concludes my statement, Madam Chairwoman. Thank you for
    the opportunity to present NOAA's fiscal year 2008 budget request. I am
    happy to respond to any questions the committee may have.

                          NATIONAL SCIENCE FOUNDATION

    STATEMENT OF DR. ARDEN BEMENT, JR., DIRECTOR
        Senator Mikulski. Dr. Bement.
        Dr. Bement. Yes, thank you, Chairman Mikulski, Senator
    Shelby, Senator Hutchison, and Senator Reed. I am pleased to
    present the National Science Foundation's (NSF) budget for the
    next fiscal year. Before I begin, however, I must express my
    heartfelt appreciation for your support of NSF's research
    budget in the fiscal year 2007 continuing resolution.
        The President's request for NSF is $6.43 billion for fiscal
    year 2008. This represents a $513 million or 8.7 percent
    increase over the continuing resolution. Funding at this level
    will keep NSF on a course set by the President's American
    competitiveness initiative to drive innovation and sharpen
    America's competitive edge.
        Let me just quickly highlight some of the activities we are
    emphasizing in the new budget. As the lead agency supporting
    polar research, NSF will invest $59 million for international
    polar year (IPY) activities. Climate change research and
    environmental observations will be a major focus of
    investigation. The outlines of environmental change from sea
    ice extent and retreating glaciers to shifting patterns in
    flora and fauna are already visible in the polar regions, with
    implications for the rest of the globe. Another research effort
    will be to explore how life adapts to and survives in the polar
    extremes. Other major thrusts during IPY will be education and
    outreach activities.
        The budget includes an important new NSF-wide investment of
    $52 million to develop a next generation of computationally
    based discovery concepts and tools to deal with complex, data
    rich, and interacting systems. Cyber-enabled discovery and
    innovation aims to explore radically new concepts, approaches
    and tools at the intersection of computational and physical or
    biological worlds to address such challenges.
        Understanding how human activity interacts with the oceans
    can help ensure that the world's oceans remain clean, healthy,
    productive, and stable. NSF will invest $17 million in four
    research areas identified in the ocean research priorities plan
    as critical near-term priorities, the complex dynamics that
    control and regulate marine ecosystem processes, variability of
    Atlantic Ocean currents, the response of coastal ecosystems to
    a variety of natural events and human influence processes and
    the development of new sensors for marine ecosystems.
        Our request also includes $390 million for nano-technology
    research. NSF's investment in the interagency national nano-
    technology initiative will increase by nearly $17 million. We
    will increase our multidisciplinary and interagency regulatory
    support efforts that address the environmental health and
    safety impacts of nano materials by exploring how nano
    particles and materials interact with the living world at all
    scales.
        NSF will increase support by $8 million for the
    experimental program to stimulate competitive research
    (EPSCoR). EPSCoR investments provide strategic programs and
    opportunities for participants in States that have historically
    received less Federal R&D funding to make sustainable
    improvements in research capacity and national research
    competitiveness.
        We moved EPSCoR to the Office of the Director in order to
    focus on the research potential and capacity of these States
    and to integrate this activity across NSF.
        Creating a strong science and engineering workforce for the
    future is vital to maintaining the Nation's competitive edge.
    NSF will continue to fund a broad portfolio of successful
    programs that contribute to this goal: CAREER, aimed at junior
    faculty, advanced technological education aimed at 2 year
    colleges, Noyce Scholarships for promoting the development of a
    world-class math and science teaching corp and programs which
    aim to broaden participation of underrepresented groups and
    engage a broader spectrum of institutions such as the STEM
    Talent Expansion Program and Centers for Research Excellence in
    Science and Technology.
        We will fund an additional 200 graduate research
    fellowships, increasing the total number of students supported
    to nearly 3,000.
        In coordination with the Department of Education, NSF will
    continue funding for the highly successful Math and Science
    Partnership Program aimed at improving K to 12 science and math
    education and teaching. In addition to supporting ongoing
    awards, approximately $30 million will be available for new
    awards in fiscal year 2008.
        Scientists, engineers, and students need world-class
    instruments with the best capabilities, the farthest reach, and
    the finest accuracy. NSF proposes an investment of $32.75
    million to initiate advanced LIGO, a gravitational wave
    observatory that will improve detection rates by a factor of
    1,000 over current Earth-based facilities. Observations made
    with this instrument could revolutionize our understanding of
    the universe.
        The development of a petascale computing capability and
    world-class cyber-infrastructure will continue to be a high
    priority. These investments will significantly augment
    computational and networking capabilities available to
    scientists and engineers in all disciplines.
        The Foundation strategy for research and education must be
    to keep all fields and disciplines of science and engineering
    healthy and strong. At the same time, we must be constantly
    alert to research that has the potential to transform the
    world. This is the kind of research that can overturn accepted
    paradigms and open entirely new fields for exploration.
        The National Science Foundation looks to the future with
    these important considerations in mind and we have crafted our
    fiscal year 2008 budget to address them.

                               PREPARED STATEMENT

        Madam Chairman, thank you for the opportunity to present a
    brief overview of our request and I look forward to any
    questions you may have.
        [The statement follows:]
                 Prepared Statement of Dr. Arden L. Bement, Jr.
        Chairman Mikulski, Senator Shelby, and members of the committee, I
    am pleased to present the National Science Foundation's budget for the
    next fiscal year. Before I begin, I must express my heartfelt
    appreciation for your support of NSF's research budget in the Fiscal
    Year 2007 Continuing Resolution.
        The President's request for NSF is $6.43 billion for fiscal year
    2008. This represents a $513 million or 8.7 percent increase over the
    continuing resolution. Funding at this level will keep NSF on the
    course set by the President's American Competitiveness Initiative to
    drive innovation and sharpen America's competitive edge.
        Let me just quickly highlight some of the activities we are
    emphasizing in the new budget. As the lead agency supporting polar
    research, NSF will invest $59 million for International Polar Year
    activities. Climate change research and environmental observations will
    be a major focus of investigation. The outlines of environmental
    change, from sea ice extent and retreating glaciers, to shifting
    patterns in flora and fauna, are already visible in the polar regions,
    with implications for the rest of the globe. Another research effort
    will be to explore how life adapts to and survives in the polar
    extremes. Other major thrusts during IPY will be in education and
    outreach activities.
        The budget includes an important new NSF-wide investment of $52
    million to develop a new generation of computationally based discovery
    concepts and tools to deal with complex, data-rich, and interacting
    systems. Cyber-enabled Discovery and Innovation aims to explore
    radically new concepts, approaches, and tools at the intersection of
    computational and physical or biological worlds to address such
    challenges.
        Understanding how human activity interacts with the oceans can help
    ensure that the world's oceans remain clean, healthy, productive, and
    stable. NSF will invest $17 million in four research areas identified
    in the Ocean Research Priorities Plan as critical near-term priorities:
    the complex dynamics that control and regulate marine ecosystem
    processes; variability of Atlantic Ocean currents; the response of
    coastal ecosystems to a variety of natural events and human influenced
    processes; and the development of new sensors for marine ecosystems.
        Our request also includes $390 million for nanotechnology research.
    NSF's investment in the interagency National Nanotechnology Initiative
    will increase by nearly $17 million. We will increase our
    multidisciplinary and interagency regulatory support efforts that
    address the environmental, health, and safety impacts of nanomaterials
    by exploring how nano particles and materials interact with the living
    world at all scales.
        NSF will increase support by $8 million for the Experimental
    Program to Stimulate Competitive Research (EPSCoR). EPSCoR investments
    provide strategic programs and opportunities for participants--
    jurisdictions and States that have historically received less Federal
    R&D funding--to make sustainable improvements in research capacity and
    national research competitiveness. We moved EPSCoR to the Office of the
    Director in order to focus on the research potential and capacity of
    these States and to integrate this activity across NSF.
        Creating a strong science and engineering workforce for the future
    is vital to maintaining the Nation's competitive edge. NSF will
    continue to fund a broad portfolio of successful programs that
    contribute to this goal: CAREER, aimed at junior faculty; Advanced
    Technological Education, aimed at 2-year colleges; Noyce Scholarships,
    for promoting the development of a world-class math and science
    teaching corps; and programs which aim to broaden participation of
    underrepresented groups and engage a broader spectrum of institutions,
    such as the STEM Talent Expansion Program and Centers for Research
    Excellence in Science and Technology. We will fund an additional 200
    Graduate Research Fellowships, increasing the total number of students
    supported to nearly 3,000.
        In coordination with the Department of Education, NSF will continue
    funding for the highly successful Math and Science Partnership program,
    aimed at improving K-12 science and math education and teaching. In
    addition to supporting ongoing awards, approximately $30 million will
    be available for new awards in fiscal year 2008.
        Scientists, engineers, and students need world-class instruments
    with the best capabilities, the farthest reach, and the finest
    accuracy. NSF proposes an investment of $32.75 million to initiate
    Advanced LIGO, a gravitational wave observatory that will improve
    detection rates by a factor of 1,000 over current earth-based
    facilities. Observations made with this instrument could revolutionize
    our understanding of the universe.
        The development of a petascale computing capability and world-class
    cyber-infrastructure will continue to be a high priority. These
    investments will significantly augment computational and networking
    capabilities available to scientists and engineers in all disciplines.
        The foundation's strategy for research and education must be to
    keep all fields and disciplines of science and engineering healthy and
    strong. At the same time, we must be constantly alert to research that
    has the potential to transform the world. This is the kind of research
    that can overturn accepted paradigms and open entirely new fields for
    exploration. The National Science Foundation looks to the future with
    these important considerations in mind, and we have crafted our fiscal
    year 2008 budget to address them.
        Madam Chairman, thank you for the opportunity to present a brief
    overview of our request. I look forward any questions you might have.

       NOAA deg.NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION
                            TSUNAMI WARNING PROGRAM

        Senator Mikulski. Thank you very much for your excellent
    testimony. I'm going to get right to a couple of the questions
    that I know are pressing in my mind and one is the whole idea--
    I know of the--kind of the mantra, if you will, of NOAA, saving
    lives and saving livelihoods. I just want to note the early
    part of your testimony about early warning for weather. The
    school alerts. Admiral, I think this is an example of what NOAA
    develops, works with the private sector then with the larger
    public sector, truly that develops products, creates jobs, and
    saves lives and saves livelihoods.
        My question then to you is, I'd like to go right to weather
    warning systems. In this year's budget, you have a set of
    requests for ensuring the tsunami warning system. We all note
    when the terrible tsunami hit Indonesia and other parts of the
    Pacific, the world was alarmed and wondered what it would mean
    to Hawaii, to other places in the Pacific rim. Could you tell
    us the status of where you are on the tsunami warning and could
    you also tell us where we are in terms of having enough
    resources to implement that because this Pacific is pretty big
    and what about, also the east coast?

                    NOAA deg.TSUNAMI WARNING SYSTEM

        Admiral Lautenbacher. Yes, thank you. I'd be happy to.
    First of all, it's a result of the request that we turned in,
    the strong support of Congress to provide the money and the
    authorization for us to do this work. We have right now in
    place 25 deep-water buoys that are spaced around the Pacific
    and into the South Pacific as well as the Atlantic and the
    Caribbean area to provide warnings for the gulf coast and east
    coast.
        So that represents an increase from 6 to 25. We had six
    experimental buoys in the water at the time of the Indonesian
    earthquake, buoys off of Alaska and off of the Aleutian Islands
    and off of the west coast. We now have 25 of these deepwater
    buoys to protect us from all directions. Thanks to funding from
    Congress, we also have 24 by 7 coverage, so we have people on
    duty at the warning centers around the clock that provide those
    warnings. We are equipped today to provide the warnings to the
    Atlantic, to the Pacific and Pacific rim and we now have, from
    our international efforts, a buoy in the Indian Ocean and we
    are working to provide the coverage for the Indian Ocean for a
    worldwide system. We're also building more interest, I think,
    from communities to become tsunami ready. We've had 10 to 20
    new communities join that program.
        Senator Mikulski. Do you have enough? In looking at this
    year's appropriations to keep the tsunami program on track?
        Admiral Lautenbacher. We do. If we are allowed the increase
    of the $1.7 million, that will provide us the ability to
    complete the program and to maintain the continuity of it into
    the future.

             NOAA deg.SUSQUEHANNA BASIN MONITORING SYSTEM

        Senator Mikulski. Something that is very important to us in
    the Northeast, is the Susquehanna River Basin, which stretches
    from upstate New York, goes through Pennsylvania, touches a bit
    on Delaware but mostly New York and Pennsylvania and comes into
    Maryland and converges at a place at Port Depost, that without
    this Susquehanna warning system, could have tremendous loss of
    lives and an inability to manage it. I understand that the
    Susquehanna Basin monitoring system needs upgrading but it is
    never included in the budget. Can you tell me where we are on
    that and we do know it needs to be modernized. It was
    originally put into play in the 1960s and technology has
    changed and the weather has gotten more severe.
        Admiral Lautenbacher. It does need to be modernized. We
    work with the United States Geological Survey (USGS) to try to
    ensure that there is funding in those areas. Many of our
    systems need improvement for monitoring of streams. We have
    some programs to improve the technological capability of these
    monitoring stations. Our AHPS Program, which is the advanced
    hydrological prediction system, makes use of these gauges so
    we've made some increases but more remains to be done in that
    regard.
        Senator Mikulski. I would really like, as part of the
    excellent work that you're already doing, to include funding
    for this. We're talking about maybe $2 or $3 million that
    impact four States and billions of dollars of private property
    and impacting also on Aberdeen Proving Ground. And I would
    really like you to take a look at that as we move through this
    and look ahead.

    NOAA deg.NATIONAL ACADEMY OF SCIENCES REPORT ON CLIMATE CHANGE

        Let me get then to the whole issue of climate change,
    studying our planet and also the oceans. The National Academy
    of Sciences has issued a report encouraging that NASA and NOAA
    sign a memorandum of agreement and follow about 17 different
    projects to really coordinate and have a synergistic leveraging
    effect on Earth science and encourage this. Have you had a
    chance to review this document? Your reaction to this document?
    Where is this heading with Dr. Griffin and where would this be
    in this budget because again, following the reports of a
    National Academy, which means it has been peer reviewed
    recommendations. It's not what anyone of us wants but it seems
    like it would really leverage what we need to know and play a
    major role in climate change.
        Admiral Lautenbacher. It's a very important study and it
    was one that was chartered and supported, obviously, by NASA
    and NOAA. I have read the report. I agree with the thrust of
    the report. Right now, both within NOAA and NASA, we are going
    through the detailed recommendations and looking at ways that
    we can bring them into effect. It's an important study for us,
    for both agencies. I have talked with Dr. Griffin about it and
    we take it very seriously. It did not come out in time to
    affect the fiscal year 2008 budget but it is going to be an
    important factor as we go through this year developing it.
        Senator Mikulski. Well, NASA itself is under tremendous
    stress, as my colleagues here at the table would attest to,
    from exploration, completing the space station as well as
    science and we work very closely together but in order to
    leverage every nickel from every agency, to accomplish a
    science budget, I think it's really important that NOAA and
    NASA will get at how they can literally leverage each other,
    particularly in the science area, while we look at completing
    the very important responsibilities for this station and a crew
    return vehicle. So we've got a lot here that we're juggling,
    including my time.
        I have other questions. We haven't forgotten the NSF. It
    shows you how important this hearing is. Senator Shelby, I'll
    turn to you.

             NOAA deg.AMERICAN COMPETITIVENESS INITIATIVE

        Senator Shelby. Thank you, Madam Chairman. As I mentioned
    in my opening statement, Admiral, I'm concerned that NOAA was
    noticeably excluded from the American competitive initiative,
    the ACI program. NOAA stands out as an international leader in
    marine and atmospheric science. We all know that and it's in
    line with other advanced science agencies that are part of ACI.
    Admiral, from what you know of ACI and I think it's a lot, what
    aspects of NOAA do you feel have the potential to be part of
    this innovative program?
        Admiral Lautenbacher. I thank you, Senator Shelby. I think
    that we are part of the American competitiveness initiative.
    Obviously, not in the funding arena as most people know----
        Senator Shelby. Well, you are and you're not but go ahead.
        Admiral Lautenbacher. We are and we're not and the issue
    was to talk about basic research. NOAA doesn't have a
    definition of basic research so there is an issue with that.
    But we do have a substantial and very important R&D budget of
    around $500 million, depending on what categories you use and
    we are absolutely essential for the competitiveness of our
    economy. As I pointed out, one-third of our GDP depends on the
    kinds of environmental information that make our country
    competitive in a variety of industries.
        We have looked very carefully at things like aquaculture.
    Here's an area where we need to be innovative. We are, in fact,
    going to try to partner with the National Institute of
    Standards and Technology (NIST), to leverage some of the money
    that is in that budget because an $8 billion trade deficit is
    an important area of our economy so we are looking to try to
    provide more innovation in building the kinds of tools for
    sustainable aquaculture, for doing it in an environmentally
    sensitive way. We're looking at trying to be innovative, given
    the importance of the satellites.
        We have taken the newest instruments that NASA has
    developed and have figured out how to assimilate them into our
    weather models and our climate models so we're getting right on
    the front edge of research to ensure that it provides benefit
    for the country. We are asking this year to experiment and use
    unmanned aircraft to help us gain more information. The Arctic
    is a region that would be very useful for us to work in with
    these kinds of instruments and certainly, severe weather.
    Hurricanes, storms at sea and that sort of thing. Phased array
    radar--as we talked about trying to increase the warning times.
    Remember that in 1985, our warning time for tornadoes was
    negative. It was minus 2 minutes to warn people about
    tornadoes. Today, it's an average of 13 minutes or so and the
    Enterprise, Alabama tornado was a warning time of about 18
    minutes. That's because of the technology innovation that has
    been created from our research.
        We're looking now towards dual polarization radar systems
    that will help improve that warning time and in the future, we
    have a program for phased array radars. These are the radars
    that the Navy has on their ships at sea, which could double for
    Federal Aviation Administration (FAA) types of radars as well
    as allow us to gain significant advantage in the warning time
    that may save more lives. So those are a few of the things that
    we're working on and there are many others, Senator. Thank you
    for the question.

     NSF deg.NATIONAL SCIENCE FOUNDATION'S EDUCATION PROGRAMS AND
                      AMERICAN COMPETITIVENESS INITIATIVE

        Senator Shelby. Dr. Bement, as I mentioned in my opening
    statement, the ACI provides substantial dollars on the research
    side of the National Science Foundation (NSF), yet hardly
    touches the education efforts at NSF. One of the goals of the
    ACI as well as the Augustine report, is to develop a sustained
    pipeline of highly trained U.S. students in scientific fields.
    You're very aware of this. I'm disappointed that the potential
    for educating our students to be the scientists and engineers
    of the future has not been a highlight of NSF's portion of the
    ACI. Can you take this opportunity here today to talk about the
    program, such as the math and science partnerships, HBCU and
    other K through 12 programs where NSF can achieve the goals our
    country needs to stay on the cutting edge and remain
    competitive?
        Dr. Bement. Thank you for that question, Senator Shelby.
    Obviously I feel very strongly about education because
    educating the workforce of the 21st century is a major goal of
    the ACI.
        Senator Shelby. It's the key to our survival economically
    and our standard of living, isn't it?
        Dr. Bement. Absolutely. And you know, throughout all of our
    programs, even our research programs, we include education
    components, because those who do the research are graduate
    students who eventually move into the private sector or
    academia and become the leaders of our innovation system. So
    it's critically important and we try to keep our program in
    balance at all levels, K to 12, undergraduate and graduate
    education. The 2008 request was structured at the time that the
    Academic Competitiveness Council was formed in response to the
    Deficit Reduction Act of 2005 and the sense of that legislation
    was that programs should be increased on the basis of rigorous
    evaluation and evidence that they were meeting their goals.
        All of our programs are evaluated. Some were evaluated at
    the time the budget was formulated. Some are scheduled for
    evaluation this year and next year. You'll note in our budget
    that the programs that had been shown effective were plus-ed up
    significantly by 10 percent or more. There were some that were
    flat funded, pending evaluation this year and next and
    hopefully those budgets will increase after they are shown to
    be effective.

       NOAA deg.NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION
                           DISASTER RESPONSE CENTERS

        Senator Shelby. In recent years, NOAA has greatly improved,
    as we know, the timeliness of severe weather warnings. You just
    mentioned this and I think you will continue to make progress
    there. It saves lives. Yet despite this warning, many lives are
    still lost as we know this last week. Effectively safeguarding
    our citizens from natural disasters involves more than just
    improving warning times. It requires better education, better
    planning, better infrastructure, and better emergency response.
    Does it not? I will--you said yes, didn't you?
        Admiral Lautenbacher. Yes, absolutely.
        Senator Shelby. Last year, NOAA explored the viability of
    having a Disaster Response Center on the gulf coast, a NOAA
    center that can effectively respond to weather and marine
    disasters as well as serve as a focal point for innovative
    research that prevents future storms from inflicting such
    deadly results in the gulf. I think it is necessary. In your
    opinion, what would such a gulf center need to effectively meet
    the full spectrum needs of mitigating disaster response before,
    during, and after these weather events? Because they will
    occur.
        Admiral Lautenbacher. Yes, sir. They will occur. And we
    found out that we didn't have a really coordinated response
    effort to Katrina. I'm very proud of what we did in the gulf in
    restoring and providing our services down there but the object
    of having a node that is in the area that has a trained staff,
    that has the kind of the facilities that are available in an
    area that is close enough to bring them together.
        Senator Shelby. Does that make a lot of sense?
        Admiral Lautenbacher. It makes a lot of sense and we are
    working on regional types of initiatives within NOAA and this
    region would be obviously very critical to us.
        Senator Shelby. Thank you.
        Senator Mikulski. Excellent point. Senator Reed, from an
    ocean State?

                  NOAA deg.REGIONAL FISHERIES COUNCIL

        Senator Reed. Thank you very much, Madam Chairman and let
    me first thank Admiral Lautenbacher for the decision by NOAA to
    evaluate Rhode Island for the home port for the Okeanos
    Explorer, which is a ship that will be, I think, very, very
    useful in terms of your mission and also for the proposed
    increase in funding for ocean exploration in this budget. Thank
    you very much.
        Let me turn, Admiral, to a question about the Regional
    Fisheries Council. Since 1977, the budgets for these councils
    increased about 25 percent whereas the National Marine
    Fisheries Service (NMFS) budget went up about 225 percent.
    We're asking the councils to do more and more with the Magnuson
    Act reauthorization. Could you tell if there is going to be a
    funding increase in this budget for regional fisheries
    councils?
        Admiral Lautenbacher. There is an increase and it is a
    modest increase based on the increment that I was able to get
    for the Magnuson-Stevens reauthorization, so part of the
    funding that we've talked about there is going to improve the
    science, and the support that each of these fishery management
    councils must use to meet the requirements of this bill. It's
    important to us to maintain fishery councils that are capable
    of doing the work.
        Senator Reed. It seems that they have more responsibilities
    but the resources aren't concomitant with that responsibility,
    is that fair?
        Admiral Lautenbacher. I would say that it has been
    difficult over the years, to keep pace with the increasing
    administrative and scientific requirements. I'm very sensitive
    to it and would like to do more in that area.

     NOAA deg.NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION SEA
                                 GRANT PROGRAM

        Senator Reed. Thank you. The NOAA Sea Grant Program, for
    years, has been the mainstay of a great deal of research. In
    fact, I think at the University of Rhode Island is one of your
    largest programs and the program took a significant cut in
    fiscal year 2006 and the President's budget this year is simply
    a repeat, about $55 million. With increased discussion of ocean
    research, hurricane effects, tidal issues, all these things,
    why can't we do more with respect to sea grant funding?
        Admiral Lautenbacher. Well, quite frankly, I would like to
    see a larger sea grant budget. We were very sensitive to the
    congressional compromise, I guess, at the level that we have
    today so I'd like to keep working on trying to build the sea
    grant budget but looking at the lay of the land and the
    priorities and what would be supported at levels we have today,
    continuing the congressional appropriated level was felt to be
    the best approach, given the resources that we have.
        Senator Reed. Now, one following question--I understand
    National Marine Fisheries Service put out a request for funding
    proposals for research and those proposals were presented--at
    least offered to sea grant programs but I understand they are
    being offered to consulting firms instead of the sea grant
    programs. Is there a reason why the sea grant program wasn't
    used?
        Admiral Lautenbacher. NOAA offers numerous funding
    opportunities that directly relate to our core mission,
    including grants for cooperative research. In June and December
    2006, NOAA published in the Federal Register Omnibus notices of
    consolidated sources of program and application information
    related to its competitive grant and cooperative agreement
    award offerings for fiscal year 2007. In addition, in February
    2007 NOAA augmented the Omnibus notices by publishing in the
    Federal Register a Broad Area Announcement (BAA) to request
    proposals for special projects and programs associated with the
    agency's strategic plan and mission goals as a mechanism to
    encourage research, technical projects, or sponsorships that
    are not normally funded through our competitive discretionary
    programs. While each grants program has specific guidelines
    regarding eligibility, in general, researchers at Sea Grant
    colleges are free to compete for NOAA funding.

    NSF deg.EXPERIMENTAL PROGRAM TO STIMULATE COMPETITIVE RESEARCH

        Senator Reed. Thank you, sir. Dr. Bement, thank you for
    your testimony and for your leadership and you mentioned
    EPSCoR--that's to us a very important program. We fought hard
    to get EPSCoR into Rhode Island and the thought was and I think
    the theory is that EPSCoR would allow a much more active
    participation in the national research funds of NSF.
        It seems, however, that the NSF distribution of research
    funds has changed little over 25 years, that there are States
    that continue to have a lion's share and then many other States
    are still at 10 percent or less. In fact, one-half the States
    are 10 percent or less of the funding and my sense was when
    EPSCoR was rolled out, it was to give you a big footprint all
    across the country and not just to particular areas of
    research. So are you evaluating ways in which every State can
    participate more aggressively in the NSF funding through
    EPSCoR?
        Dr. Bement. Yes, we are, Senator Reed. I should point out
    that I felt that EPSCoR could be more strategic, more
    effective, so we moved the EPSCoR office into the Office of the
    Director and the reason that EPSCoR serves and interacts with
    all the divisions and all the research offices in the
    Foundation. So it provides much closer coordination through the
    NSF senior management team, not just rely on the base funding
    for EPSCoR, which is largely through the research
    infrastructure improvement program, but to use those
    improvements to be more effective in addressing the rest of our
    research budget, which is the $4.8 billion part.
        We will be looking at the strategic initiatives to do that
    and we did have a workshop just last year where we brought the
    leadership from EPSCoR to the Foundation and they developed
    their report for ``EPSCoR 2020''. So that report is informing
    us on some of the initiatives, but we'll go beyond that report
    as well.
        Senator Reed. Thank you very much, Doctor and it's an
    important program and I encourage you to keep looking at in
    strategic dimensions. Thank you, Madam Chairman.
        Senator Mikulski. Senator Hutchison.

                NOAA deg.WEATHER MODIFICATION RESEARCH

        Senator Hutchison. Well, thank you, Madam Chairwoman. I
    think we have discussed a lot in the area of hurricane
    notification and certainly better timing of notification of
    hurricanes and violent storms; but in the last Congress, I
    tried very hard to work with NOAA on weather modification
    research and NOAA, frankly, blew me off, honestly--didn't care
    about it, didn't want it. They suggested that we go to the
    Office of Science and Technology Policy (OSTP) in the White
    House. OSTP didn't really want it either. My question is, am I
    missing something? Why wouldn't we want, in addition to knowing
    in a timely manner, how we protect against these violent
    weather storms, tornadoes, and hurricanes, why wouldn't we
    study if there are ways to modify these types of occurrences
    and do the research on weather modification in how one area
    affects another area, either for the better or the worse?
        Admiral Lautenbacher. Certainly it's an important topic. If
    you ask our meteorologists and our folks that look at the kinds
    of things that we do--that we are charged to do in our
    authorization bills and appropriation bills, obviously the
    warning and the observation of current storms needs to take top
    precedence because we can't neglect our ability to be able to
    warn citizens and save lives today.
        Senator Hutchison. Of course, of course.
        Admiral Lautenbacher. And then the next point is that you
    start looking at the maturity of weather modification as a
    science and it's really in a basic phase of science. I don't
    want to force it off on my colleague here, who does basic
    science----
        Dr. Bement. I'm glad you did.
        Admiral Lautenbacher. But in all seriousness, NOAA doesn't
    engage in the giving of grants that are in the experimental,
    very grade level of asking fundamental questions. Those kinds
    of things are done by the basic research agencies and what we
    felt was that OSTP, as the head of the science enterprise for
    the U.S. Government, would be in a better position to allocate,
    to decide how to deal with the issue. I think it is an
    important issue and certainly we did not try to blow it off at
    all. I think we need to worry about it and think about it.
    Other countries do and we should do it as well.
        Senator Hutchison. Well, where should it go, and where will
    it get thorough attention? OSTP didn't pick it up. We
    couldn't--actually, they stopped the bill, to be honest. So
    where should it go? Should it go to the National Science
    Foundation? Is that something that would fit there? It seems to
    me that it would more likely fit in NOAA but putting it in the
    White House where they have so many other areas of need, didn't
    seem to work either. Can either of you, Dr. Bement, can you
    suggest if there is something----
        Dr. Bement. Senator, there are many ways in which NSF and
    NOAA collaborate closely and especially in the area of
    understanding extreme weather formation, hurricanes, and
    cyclonic events, and also research on climate change. We are
    very much interested in how best to model the intensification
    of hurricanes, and we do that very well, but also to deal with
    other cyclonic behavior like tornadoes, to understand how they
    form and how they propagate. It is that type of basic research
    and the cyber-infrastructure that goes with modeling and
    simulation that will inform us on how to mitigate these very
    extreme weather events and if modification is the only means of
    mitigation.
        Senator Hutchison. Do you think that we could work to bring
    our bill back and is there a way to bring in NSF and NOAA,
    together, where I think there is more collaboration--the White
    House, OSTP, doesn't really--they don't have grantmaking.
    They're not on the ground studying the research and looking at
    ways to better notify residents of coming storms and floods. Is
    there a potential that we could work together to carve an area
    where we not only look at notification, which is absolutely the
    first thing, I understand, but also whether research holds
    potential that we would lessen the impact of a hurricane
    forming 1,000 miles out in the ocean?
        Dr. Bement. Well certainly, Senator, speaking for the
    National Science Foundation, we would continue to encourage
    grants from the universities and colleges to do research on
    that topic. We would certainly make that information available
    in the open literature.
        Senator Hutchison. My question is, could I work with you,
    then, Dr. Bement, to try to set something up that might create
    a focus there at the NSF?
        Dr. Bement. I'd be delighted to work with you.
        Admiral Lautenbacher. If you'd allow us, we'll work with
    the Office of Science--we can work together, too, if you can
    provide for----
        Senator Hutchison. I think that would be helpful since you
    have so much in that area.
        Admiral Lautenbacher. We can continue this further than I
    thought it had been.

                  NOAA deg.RENEWABLE ENERGY RESEARCH

        Senator Hutchison. Okay. Let's work on that. The other area
    I want to quickly just ask about is, I am working on a bill now
    that would establish a council on renewable energy, which would
    again bring together a focus on research on renewable energy,
    including wave technology and wind technology, wind energy
    created in the oceans or the gulf. Do you think that we could
    do something by bringing all of those entities together? My
    bill actually puts in either the National Science Foundation or
    the Federal Lab Consortium for Technology Transfer but do you
    think that there is a potential and maybe you're already doing
    it and I would like to know, on wave technology for creation of
    energy and wind energy in the water as opposed to wind on land?
        Admiral Lautenbacher. Yes, we are the definer of the
    resource, so to speak. We have models, wave models and we have
    the National Oceanographic Data Center that produces reams of
    data of interest. We don't do the actual research on the energy
    devices themselves but we're a part of what needs to come
    together.
        Senator Hutchison. But you could provide the data on what
    kind of power would be in the different parts of the----
        Admiral Lautenbacher. We could tell people where--what
    sorts of energies are available in different parts of our
    coasts at what times of the day, et cetera, how things change.
    We also do that for wind, so if you want to place a wind farm
    somewhere, you can come to NOAA and see where there are winds
    and what the potential capability from them is. The same thing
    works for waves but the actual research on the instruments
    themselves that you would use to harness the energy would be
    done by the Energy Department or by some other outfits in the
    academic or private sector.
        Senator Hutchison. Okay. We're going to be working with the
    National Science Foundation on that as well. Thank you, Madam
    Chairman.

        NSF deg.INTERNATIONAL POLAR YEAR AND THE ALASKA REGION
                                RESEARCH VESSEL

        Senator Stevens. Thank you, Madam Chairman. I have noticed
    that there is a $59 million request for the IPY activities in
    the budget. I'm sure that you both know that great, desirable
    Alaska and the Alaska Delegation that this money be used in a
    way to try to bring about some understanding of the climatic
    activities in Alaska and really, also the social challenges
    that we face because of those changes.
        We had a hearing last year on this matter and we had hopes
    that these monies would be spent in that way. I don't know what
    the plans are and I'd be happy to learn them.
        I do hope that you will acknowledge the role that Alaska
    must play in the IPY activities. I also note the President now
    has a request for NSF for $42 million for the construction of a
    new Alaska region research vessel. This will replace the Alpha
    Helix, which is a ship that has been dedicated to science. The
    replacement will literally be a floating laboratory focusing on
    chemistry, biology, physics, oceanography, geology. The
    President had $56 million in the 2007 budget. This year there
    is $42 million. Had the first been available--this $42 million
    would have completed construction on that vessel. Unfortunately
    some people around here think that that is an earmark for
    Alaska. It's part of the budget and I'm very disturbed at the
    way it's been viewed by some people.
        I also want to note that we have great hopes that NOAA will
    really use some of these funds available in the President's
    budget. You've got a 3.4 percent increase. I know, however,
    that it is still below the enacted level for 2006 and 2007 but
    we have some enormous changes taking place. One-half the fish
    that we provide from domestic sources are harvested off the
    North Pacific of my State and we are very fearful that the NOAA
    programs that have been ongoing, including the monitoring of
    sea life and research--we now have a petition to declare the
    beluga whales endangered in the Cook Inlet. They are there when
    the fish are there. They follow the salmon. But now we've got
    lawsuits about that, too. I do think that--you mentioned the
    Magnuson-Stevens Act--money--I do think that we have to
    continue our protection against overfishing those areas but I
    do hope that--my question for that introduction is, what are
    you going to be doing about IPY and what's the situation with
    regards to the ship?
        Dr. Bement. Thank you very much, Senator Stevens. IPY is a
    2-year activity but we hope to put in legacy systems that will
    continue research over the next 50 years on some of these
    global issues, including sustainability. With regard to the
    State of Alaska, I have been working, and so has our Office of
    Polar Programs, with the University of Alaska at Fairbanks.
    We've been trying to get a closer partnership with the Barrow
    Climate Change Research Facility. So some of the infrastructure
    elements that we'll be investing in under the International
    Polar Year will be first of all, an Arctic observing network
    that will be linked in with other countries involved in IPY,
    and this Arctic observing network will be part of what we call
    SEARCH, which is the study of environmental Arctic change, and
    hopefully, will eventually be part of GEOSS, the global Earth
    observing system of systems. That is a platform to build upon.
        Second, we need to be able to measure climate change on a
    year-round basis, not just in the summertime. At Toolik Lake,
    we want to make that a year-round facility and we'll be making
    investments to provide the energy and the heating requirements
    to make it a year-round facility.
        Third, working with NOAA on the Barrow Climate Change
    Research Facility, that facility will be completed and will be
    operational next year, in time for the International Polar
    Year. As a result of a workshop we had approximately 1 year ago
    with the University of Alaska and the Barrow Arctic Science
    Consortium, we've identified a number of opportunities for
    those two entities to work closely together during IPY and that
    will require instrumentation of the research facility and also
    connectivity to broadband communications and to the Internet.
    That will give researchers at Barrow access to the University
    of Alaska computing facilities as well as their technical and
    scientific library capabilities. Those are a few examples of
    what we have in our plan for Alaska during the IPY.
        With regard to the Arctic region research vessel, that
    program is going well. We had our solicitation. The proposal
    that was selected turned out to be a sole proposal, from the
    University of Alaska at Fairbanks. We intend the Arctic region
    research vessel to be a national asset, more than just an asset
    for the State of Alaska. There were some issues with the
    proposal but we will work with the University of Alaska to
    broaden the scope and improve the plans for managing the
    project.
        We hope to be able to start that project this fiscal year
    and we will be requesting permission to do so in our 2007 plan.

              NOAA deg.INTERNATIONAL POLAR YEAR PROJECTS

        Admiral Lautenbacher. Well, as you're aware, the bulk of
    the new IPY funding or additional funding is not within NOAA.
    We are partnering with the agencies as I am with NSF to
    leverage the basic research funding that is going into it. We
    have $15 million associated directly with the IPY projects,
    which is an increase of $1 million for new projects.
        The bulk of that is in observations. We need to create, as
    I know you well know, a better long-term observing system for
    the Arctic. We've partnered with the Canadians to start a new
    Arctic Observation Station on Ellesmere Island. We have
    research crews into the Arctic with the Russians, where we are
    leveraging some of their money.
        We are going to continue looking at the stratosphere of
    ozone measurements. We have put some money in for looking at
    improved weather, sea ice, and ocean wave forecasting in the
    Arctic. That's a special part of the world, as you are well
    aware. That will be an important part of refining the new
    information that comes out of it and using it, hopefully, to
    help improve our weather and climate forecasting. We are
    looking at predictions on improving arctic environment
    forecasts from seasonal to centennial. So we want to get into
    the climate prediction area for that part of the world.
        A very important part of the data gathering is the $3.3
    million we have for UAS systems, unmanned aircraft systems, a
    perfect place to test and experiment with those kinds of
    systems for continuous observing, is the Arctic. We plan to
    look for a strong way of doing that during this IPY. Thank you,
    sir.

               NOAA deg.INTERNATIONAL WHALING COMMISSION

        Senator Stevens. I'd be remiss if I didn't mention that the
    meeting in Anchorage of the International Whaling Commission,
    for almost 25 years, through the great efforts of Sylvia Earl,
    who is one of your predecessors. We've had the opportunity for
    Alaska Eskimos to harvest a number of whales that they use to
    consume. It's not a commercial operation. Japan now, is using
    surrogates from Pacific and Caribbean Islands to try to
    threaten that program unless we all support the restoration of
    their commercial whaling activities, which we oppose, totally
    oppose.
        I hope that you use all the efforts that you can to
    convince the Japanese that as far as I'm concerned, if they
    insist on destroying the Eskimos ability to continue their
    cultural activities and have that meat available for their
    personal use because of the world's desire not to support their
    commercial activities, I think this--I will lead the charge and
    get some severe reaction against the nation of Japan. They're
    wrong and that's a small group within their country. They
    should not be doing this politically. They should not be doing
    it with their Embassy group and I'm really very disturbed with
    Japan to think that they believe that those 15 to 18 whales
    that our people consume should be offset by commercial whaling
    off their country, we've now restored the populations. They are
    balanced and protected so I hope you will all help us emphasize
    to Japan, this is not their day to bargain commercial whaling
    against Eskimos right to survive.
        Admiral Lautenbacher. Yes, sir. We're working very strongly
    to support your position. Thank you, sir.
        Senator Inouye. Thank you very much, Madam Chair. I'd like
    to say that the Senator from Alaska is absolutely correct.
        Madam Chair, the two agencies represented here are the
    guardian angels of the State of Hawaii. Hawaii, as we all know,
    is rather unique, isolated. For example, we have 85 percent of
    all the coral reefs in the United States. We just opened up a
    140,000 square mile marine sanctuary. That's more than all the
    national parks combined.
        And we're counting upon NSF to save us because of the
    climate change studies. You may not know this, Doctor, but as a
    result of your work, real estate people are beginning to look
    at whether coastal properties are just as good as mountain
    properties.
        Senator Inouye. The coastal properties used to be the prime
    ones but now with the sea level getting up there, people are
    beginning to take a second look. So what do you do? Hawaii is
    very important and we're working at this moment, Madam Chair,
    with the NSF on the feasibility and possibility of establishing
    a major solar telescope on Mount Hale/Akala and we're pleased
    with the work that NOAA does for us. For example, without NOAA
    I don't think Hawaii or the rest of the world can get such fast
    advance notice on tsunamis. I don't have any questions. I just
    want to thank them and I thank you.
        Admiral Lautenbacher. Thank you very much, Senator.
        Dr. Bement. Thank you very much, Senator.
        Senator Mikulski. Well, the Senator was absolutely right in
    describing his own State. Before he arrived, we asked about the
    status, particularly of the tsunami early warning system, which
    I knew that you've been a real leader in establishing and
    advocating with this subcommittee, regardless who was Chair.
    Yes, sir?
        Senator Inouye. I have one question for the National
    Science Foundation. This is my third meeting this morning and I
    had to attend all three. Can you devise some system for the
    United States Senate where we can attend several meetings at
    the same time? I go to one for 10 minutes, another one for 15
    minutes and here I am and I didn't hear your testimony. I
    wanted to be here in the morning, Madam Chair but----
        Senator Mikulski. Well, you're here. We're very well
    mindful of this.
        Senator Inouye. Can you get the NSF to do this for us?
        Senator Mikulski. We can put that in with Senator
    Hutchison's Weather Modification Program.
        Senator Inouye. I move to increase----
        Senator Mikulski. We'll get a College Senate Venture
    Capitol Fund.
        Dr. Bement. I think, Senator, perhaps in the next 50 years,
    we might be able to discover how to clone you physiologically
    but I don't think we'll ever be able to clone you mentally.
        Senator Mikulski. Senator Shelby.
        Senator Shelby. Thank you, I think.
        Senator Mikulski. A wrap-up here.

         NOAA deg.FUNDING INCREASES FOR NATIONAL OCEANIC AND
                  ATMOSPHERIC ADMINISTRATION SATELLITE PROGRAM

        Senator Shelby. The Senator is absolutely on point, though.
    We do have to be at a lot of places at the same time and we
    can't do this but we appreciate your appearance here today.
    NOAA--the NOAA 2008 budget shows a decrease in overall
    satellite costs. However, it is my understanding that Congress
    can expect future increased budget requests for our NPOESS.
        At some point, NOAA needs to make up for the $4.1 billion
    gap between the program's original cost and its projected
    expenses. NOAA's satellite program dwarfs the funding levels of
    NOAA's other research and operation programs. Admiral, what
    assurances, if any, can you provide the subcommittee today,
    that any increased funding for NOAA's satellite programs, which
    are important, will not infringe on the budget request for
    NOAA's other research and operation programs, especially for
    ocean-related activities?
        Admiral Lautenbacher. Yes, sir. That's a very important
    question. We have tried to work on, since I've arrived, a
    longer range budget forecasting and programming system. One of
    the results of that is that we have delivered to you, through
    the chain of command, a budget that goes out 5 years. So you
    can look--we can look and see what's there.
        Senator Shelby. We know. And you're deeply challenged here.
    I know this, as we are.
        Admiral Lautenbacher. Yes, yes we are. But I think there is
    a realization, certainly through much of my chain of command in
    the administration that you have to look at these longer term
    plans and if you commit to a certain year, you are committing
    to a budget estimate that must be accounted for. I assure you
    that I will continue to push to have that capitalization budget
    held separately from the operating budget. Can I guarantee what
    will happen as you have future difficult budget decisions to
    make? That's a very difficult thing for me to make projections
    and commit to today. But I think there is more interest in
    dealing with the capitalization budget on a rational basis and
    looking at the operational budget.
        Senator Shelby. Absolutely. And I think this is going to be
    one of our challenges here, too.
        Admiral Lautenbacher. Yes, sir.

               NSF deg.NATIONAL SCIENCE FOUNDATION DAYS

        Senator Shelby. The National Science Foundation. Raising
    the awareness of opportunities available through research
    grants for the National Science Foundation, we know will
    benefit the Nation and also bring researchers with great ideas
    to an agency that funds the best of the best research. One such
    way to do this is through the National Science Foundation days
    where Foundation staff go to schools and explain the grant
    application process and how to improve proposals submitted to
    the National Science Foundation because we're interested in the
    best of the best, aren't we, Doctor?
        Dr. Bement. That's correct.
        Senator Shelby. Could you give us briefly, some examples of
    how high past NSF Days have had an impact on improving grant
    approval rates at locations where the National Science
    Foundation has conducted some of these meetings?
        Dr. Bement. Yes, sir. As you know, NSF has conducted three
    NSF days in the State of Alabama over the last 5 years, the
    last one being at Tuskegee just last March. What we normally
    discover is that it is an opportunity for all of those who
    attend these NSF Days. Collectively, for all three of these
    events, we interacted with 400 principal investigators (PIs) in
    the State of Alabama. Those who attend the days have an
    opportunity to talk with program officers and they have an
    opportunity to talk with other PIs on how best to submit
    proposals to the Foundation and especially how to submit a
    successful proposal. The proposal volume does go up shortly
    after the NSF Days, in fact, sometimes it's a blizzard. That is
    not the end of the story. Beyond that, it is a matter of our
    program officers working closely with the PIs after they may
    have been declined the first time to improve their proposals so
    that their chances of being accepted the second or third time
    can go up.
        We generally find that that's probably the best way to
    succeed in getting a grant. It's seldom the case that a grant
    is approved the first time but usually the second or third
    time. So the role of the program officer is really very
    critical.
        I should tell you, however, that workload on our program
    officers has become very enormous, primarily because what was
    the salaries and expenses account, which we now call the agency
    operation and award management account, keeps getting
    truncated, one way or another.
        The opportunity to improve success rate depends very much
    on the ability of the program officers to work with the PIs in
    improving their proposals.

                    NSF deg.EPSCOR PROGRAM ENHANCED

        Senator Shelby. How will the elevation of the EPSCoR
    program into the Office of the Director enhance its position
    and benefit states in making them more competitive?
        Dr. Bement. It will get the senior management team more
    directly involved. We will be working more closely at that
    level, with the leadership in EPSCoR, to see what more we can
    do to re-invigorate the program and perhaps take a more
    strategic approach in improving the leverage of the EPSCoR
    investment. Those are the directions we'll be taking.
        Senator Shelby. Madam Chairman, I have a number of
    questions that I'd like to submit for the record, in the
    interest of time, if you would.

                       NOAA deg.POLAR SATELLITES

        Senator Mikulski. Certainly, Senator Shelby. We'll welcome
    those questions and before you might have to depart because I
    know we're--several appropriations hearings are going on
    simultaneously. I'd like to pick up on the issue of polar
    satellites and yesterday, Admiral Lautenbacher, you talked
    about it because it's accountability and I've got two big
    issues. You, with this satellite system and where we're heading
    this way also, with the research facilities that I think are
    getting overruns at the National Science Foundation.
        You outline for me and I'd like you to outline and repeat
    for Senator Shelby, how you intend to stand sentry over this
    bill, to bring about the necessary management reforms and
    oversight that have been triggered by Nunn-McCurdy that I think
    we can expect a better stewardship of this because this is a
    program that has overruns. We're worried about spending more
    money to get less science.
        This is one of the most crucial observatory tools that
    we're going to have, particularly for the climate crisis. But
    could you share, for the record which you shared with me and
    I'd like very much if Senator Shelby heard it because every
    time they hear about overruns, it's just one more excuse to not
    get support for what we need to do for the agency. Would you
    agree, Senator?
        Senator Shelby. Yes.
        Admiral Lautenbacher. Thank you, Madam Chair. I would be
    very happy to do that. This obviously is a very critical issue
    to me personally and to the agency.
        The entire NOAA team is energized to work on this problem.
    My Deputy for Satellites, Assistant Deputies, the Deputy Under
    Secretary. We have set a program management team. We have
    basically overhauled the management team inside of NOAA from
    top to bottom. We've made personnel changes where necessary in
    our chain of command and personnel changes within the program
    office and set up, basically an inspector general (IG)--
    internal IG to make sure that there is continual oversight. We
    have also ensured that we'll work collaboratively with the
    Department of Defense and NASA, the other two agencies involved
    and I meet quarterly with the heads of acquisition for the
    Department of Defense (DOD) and Space, which is the Under
    Secretary of the Air Force and Administrator Mike Griffin from
    NASA. So we are definitely, personally involved and we have
    gotten the personal attention of the presidents of and chief
    executive officers (CEOs) of Northrop Grumman and Raytheon, who
    sit in those meetings, too.
        We have program monitoring from the Government down to very
    fine details inside the program. We are getting independent
    cost estimates frequently. We have independent review teams
    looking at it from outside to make sure we have independent
    advice to make sure people are on track. We track schedules and
    dollars on an earned value management system down four or five
    levels into the program and that information is reported daily
    and weekly, internal to the program.
        We are changing the contract to set up the right
    incentives. That was another criticism and we will reward
    performance versus just hanging in there. We've also revamped
    the program so that it is less risky. We have reduced the
    amount of difficult technical milestones that contractors had
    trouble meeting, to a level we believe they can be met. I am
    confident that the schedule that we put in place with the new
    funding profile is going to achieve success, and I assure you
    that everyone at NOAA, from top to bottom, is committed to
    making that happen, Madam Chair. Thank you.
        Senator Mikulski. Senator Shelby, does that give you a
    little bit more assurance on this matter?
        Senator Shelby. It does. I like what they're doing and
    you're trying to do. I think you just need some more funds.

         NSF deg.NATIONAL SCIENCE FOUNDATION FACILITY FUNDING

        Senator Mikulski. Let's go though, to also another area of
    accountability, is with the National Science Foundation. We're
    very concerned about the research facilities and also certain
    tools for research. The Alaska region research vehicle that
    Senator Stevens spoke about is really important. So we don't in
    any way minimize the need to have this vessel. And it's a
    research vessel, as I understand it, Director Bement, that has
    to operate in ice under very rugged conditions. But at the same
    time, it's running $25 million over the original estimate.
        Now, this ship could run aground here, with cost overruns
    and as Senator Stevens said, he's being treated like it's an
    earmark when essentially it's an integral part of Arctic
    research. And when the overruns come, it sounds like we're
    picking and porking out here in some Alaska toy when it's not.
    It is a very important research tool but we're very concerned
    about this $25 million cost overrun. Now why are there overruns
    and what are you going to do about it?
        Dr. Bement. Yes, Senator, thank you. This vessel was scoped
    a long time ago. The design was completed in 2004. The original
    baseline budget was set at that time. It is now being re-
    evaluated. Since that time, there have been changes in
    regulations, some having to do with environmental operations,
    some having to do with safety and operating in the Arctic
    region. And as you know, this ship will operate in ice up to 2
    to 3 feet thick so it will be a great advancement over the
    Alpha Helix.
        In addition to that, commodity costs, especially the cost
    of steel has skyrocketed because of global demand, especially
    from China. Furthermore, shipyards are now value pricing their
    operations, primarily because they're overloaded with building
    ships for the oil industry. So it's very difficult to get a
    shipyard scheduled, and furthermore, the cost of construction
    in a shipyard these days has also escalated. As we move into
    the coming year, we're going to have to revisit the budget. I
    can assure you it will be higher than it is now. This is just
    the way things are turning out, but the sooner we get a start
    on that project, and that's one of the reasons we want to start
    it in 2007, the more I think we can mitigate these cost
    increases over the next year or two.
        Senator Mikulski. Do we know how much this is going to
    cost?
        Dr. Bement. I'm sorry?
        Senator Mikulski. Do we--you know, it's a pattern here that
    I've now experienced in other subcommittees and we're seeing it
    here, that there was a project. It was 2004. Then we're
    operating on data that is several years old and then we don't
    know what the cost is. But when we get into these things and
    they get started, it has congressional support because of the
    scientific necessity and then there we are. Now, do we know
    what this is actually going to cost?
        Dr. Bement. Madam Chair, we will very shortly revisit the
    design of this ship, based on current regulations. The redesign
    will take place over the next 4 months or so, and we then will
    re-baseline the cost. We will be able to report to you at that
    time what we think the real cost will be for this ship.
        Senator Mikulski. But at the same time that you're doing
    that, are you also going to be rebasing these costs?
        Dr. Bement. Oh, we do that on a continuing basis, not only
    internal to the Foundation but also with the grantees that have
    the responsibility for this ship.
        Senator Mikulski. Well, just know, we believe that this
    vessel is important, just like the satellites are important.
    And the world is mesmerized by Arctic research and now we're
    also looking at how to have more collaborative work with
    Greenland. We could elaborate on that. But when these things go
    $25 million, we also know that the ALMA telescope is $16
    million over. Now why is the ALMA telescope $16 million over?
        Dr. Bement. The ALMA telescope is pretty much the same
    story. The reflectors on the telescope are made out of a very
    expensive nickel-based alloy in order to prevent any thermal
    expansion, because it's a very precise instrument. The cost of
    those alloys have gone up enormously, again because of world
    pressure on commodity costs, which was the biggest contributor
    to the cost of the instrument. There are other factors that
    also contributed to increased project costs: construction costs
    in Chile and some upper management costs that escalated because
    it is a 50/50 joint venture between the United States and the
    European Southern Observatory that has been a very difficult
    teaming relationship to put together and to operate.
        Senator Mikulski. But then my question is--so what? Where
    do we go from here? And what again are the fiscal disciplines
    coupled with making sure that the fiscal discipline is so
    severe we lose the point of the project?
        Dr. Bement. Madam Chairman, we have re-scoped the project.
    We've reduced the number of telescopes from 24 to 50 in order
    to absorb some of the cost increases yet still retain the
    transformational capability for this facility. We have put in
    cost tracking methods and other management techniques and it
    has undergone a high level senior review of all elements and
    costs associated with the project. The project has been re-
    baselined. We have re-established a contingency. We have better
    management tools in place and I think based on the reports that
    I get, are confident that we'll be able to stay within the
    current budget.
        Senator Mikulski. Well, you have a big responsibility here
    in this agency but I can tell you that as you look at how all
    of your research endeavors add up, if they begin to have
    overruns, there will have to then be a moratorium on new
    projects. I mean, the scientific community needs to know that.
    That is, once that goes up, there is not just unlimited--I'm
    not threatening. I'm not saying it. We would not do arbitrarily
    or capriciously. But every time we turn around, there is some
    big ticket being added then somebody else comes in and wants to
    do something new and we have inherited what are now becoming
    legacy projects and just these two alone come to $41 million in
    cost overruns. We know that instruments are expensive. We know
    about the global pressures on commodities, et cetera. At the
    same time, we are where we are. And, therefore, there needs to
    be both within the agencies themselves, all within our
    portfolio, NASA, NSF, NOAA--all--the FBI with their info-tech
    boondoggle that they are now getting back on track.
        The subcommittee is going to be very stern on
    accountability because it's the only way, particularly in these
    off austere budget times, that we must get value for the
    mission and I'm very--I want everyone in the Commerce, Justice,
    Science to understand it's not being prickly but we just face a
    real reality.
        Dr. Bement. Well, Madam Chairman, I accept that. As a
    matter of fact, I appreciate it because I stake my personal
    accountability on these projects.
        Senator Mikulski. And I know you do--we know each other
    from the National Institute of Standards and Technology.
        Dr. Bement. And between myself and the Deputy Director and
    our senior management team, we are spending much more time on
    this. We are having more frequent reviews and I can assure that
    going forward, we are going to watch these costs like a hawk.

                NOAA deg.ADDITIONAL COMMITTEE QUESTIONS

        Senator Mikulski. What we want to say very loud and very
    clearly to both the agency directors, to the scientific
    community and then to the private sector with whom we have to
    have contracts with, we've got to really--we've got to really
    exercise every modern fiscal discipline technique at our
    disposal and the Congress loves science and technology. So do
    the American people. But we can't rubber stamp. So that's kind
    of what we wanted to talk about. We also want to encourage
    ongoing cooperation in ocean research. That's something we'd
    like to talk about more in another day, also really encouraging
    our young people in science. I think Senator Shelby raised
    this. I don't want the subcommittee to end on a downer. It's
    because Senator Shelby and I are so committed to the fact of
    really rising above the gathering storm. But we have to also
    rise against what we fear is a gathering fiscal morass.
        [The following questions were not asked at the hearing, but
    were submitted to the administration for response subsequent to
    the hearing:]
          Questions Submitted to Vice Admiral Conrad Lautenbacher, Jr.
               Question Submitted by Senator Barbara A. Mikulski
                     progress on the u.s. ocean action plan
        Question. In response to the U.S. Ocean Commission, the
    Administration developed the ``U.S. Ocean Action Plan''. To date what
    progress has been made regarding implementation of this plan? To what
    extent does the ``U.S. Ocean Action Plan'' coincide with the
    recommendations of the Joint Ocean Commission?
        Answer. In January 2007, the Committee on Ocean Policy released the
    ``U.S. Ocean Action Plan Implementation Updates.'' Seventy-three of the
    88 actions have been completed. The remaining actions are progressing
    on schedule.
        The U.S. Ocean Action Plan (OAP) was a required response under the
    Oceans Act of 2000 to the U.S. Commission on Ocean Policy. Therefore,
    it is difficult to directly map the OAP to the recommendations of the
    combined Commissions, represented by the Joint Ocean Commission
    Initiative. In broad terms, both Commissions outlined the need for:
    enhancing ocean leadership and coordination, developing the
    institutional capacity to coordinate across jurisdictional boundaries,
    and strengthening the agency structure in phases in order to enhance
    the goals of addressing management needs through an ecosystem-based
    approach.
                              ``counterfeit'' fish
        Question. A recent article in the Washington Post cited an example
    of counterfeit fish being sold to restaurants and consumers in Florida.
    The article reported how undercover agents ordered grouper at 24
    Florida restaurants, but the alleged grouper at 17 of 24 restaurants
    sampled by investigators was actually another, less desirable species,
    according to DNA analysis conducted. NOAA reported that, in many
    instances the ``grouper'' was actually farm-raised Asian catfish from
    Vietnam or other species that swim with grouper, and the filets have
    shown signs of salmonella and traces of illegal carcinogenic
    fungicides.
        How rampant of a problem is imported counterfeit fish?
        Answer. Mislabeled seafood products are a significant problem in
    the marketplace worldwide. While no definitive statistics exist about
    the rates at which fish is mislabeled, the NOAA Seafood Inspection
    Program (SIP) encounters several types of mislabeling that affect the
    economic integrity of seafood products. Examples of mislabeling
    include, substituting a lower cost species for a higher cost species,
    such as the grouper example in your question, short weighing, and
    altering the country of origin or fraudulently identifying the area
    fished and port of landing.
        A recent example of the problem is provided by a 2005 case where
    NOAA SIP rejected over nine million pounds of seafood that was destined
    for a large retail supermarket chain. Another recently completed
    investigation disclosed the importation of approximately 3 million
    pounds of falsely labeled fish product over a three year period. During
    this investigation NOAA seized approximately 300,000 pounds of this
    illegal fish which contained malachite green--a known carcinogen banned
    by the FDA. NOAA SIP works with many retailers to ensure that the
    seafood they buy meets their quality levels and these scenarios are not
    untypical.
        Question. Does NOAA have enough resources to adequately address
    this problem?
        Answer. Currently, NOAA has approximately 150 special agents and 20
    enforcement officers dispersed nationwide. Incidents of mislabeling are
    an international problem which provides substantial financial profits
    to those who participate in this illegal activity. Although NOAA's
    enforcement resources are primarily focused on importers and exporters,
    this illegal activity extends well beyond these operations to included
    distributors, wholesalers, retailers and restaurants. Investigations
    can take years to complete, are labor intensive, demand extensive
    financial and document analysis, and in many instances requires the
    cooperation of other countries. NOAA leverages its investigative
    resources by concentrating on the primary businesses (importers,
    exporters or large distributors) which have the greatest impact on this
    illegal activity.
        Question. What is being done to prevent this problem from
    escalating?
        Answer. Continued investigations and subsequent successful
    prosecutions of those found violating our laws is the best deterrent.
    Our investigations have resulted in the seizure and ultimate forfeiture
    of hundreds of thousands of pounds of mislabeled product worth millions
    of dollars on the market. Additionally, the imposition of fines and
    penalties in the millions of dollars and, in some cases, incarceration
    has a significant impact. In one recent case, two businesses were
    forfeited and we have observed the dissolution of business entities
    involved in illegal activities as a result of our enforcement
    activities. We continue to focus on the most blatant violators in an
    effort to have the largest impact on this illegal activity. Publication
    of our investigations and education of the public through various media
    sources is extremely helpful.
                                  aquaculture
        Question. The NOAA budget for fiscal year 2008 requests an increase
    of $3 million to develop a regulatory program for marine aquaculture.
    What is the state of the U.S. marine aquaculture industry? What
    investment are our international competitors doing in regard to marine
    aquaculture? Are there technological barriers to more marine
    aquaculture? What is being done to reduce those technological barriers?
        Answer. The U.S. marine aquaculture industry is relatively small
    compared with overall U.S. and world aquaculture production. U.S.
    aquaculture production totals about $1 billion annually, compared to
    world aquaculture production of about $70 billion. Only about 20
    percent of U.S. aquaculture production is marine species.
        The largest single sector of the U.S. marine aquaculture industry
    is molluscan shellfish culture (oysters, clams, mussels), which
    accounts for about two-thirds of total U.S. marine aquaculture
    production, followed by salmon (about 25 percent) and shrimp (about 10
    percent). Current production takes place mainly on land, in ponds, and
    in coastal waters under state jurisdiction. Recent advances in offshore
    aquaculture technology have resulted in several commercial finfish and
    shellfish operations in more exposed, open-ocean locations in state
    waters in Hawaii, New Hampshire, and Puerto Rico.
        Marine aquaculture includes the production of hatchery fish and
    shellfish which are released into the wild to support commercial and
    recreational fisheries as well as to enhance or rebuild wild stock
    populations. Marine aquaculture also includes the production of
    ornamental fish for the aquarium trade and plant species used in a
    range of food, pharmaceutical, nutritional, and biotechnology products.
    There are also related industries--such as equipment production, feed,
    and nutrition companies and aquaculture consulting service firms--that
    provide support to the global aquaculture industry.
        According to the United Nations Food and Agriculture Organization,
    the United States ranked 10th in total aquaculture production in 2004,
    behind China, India, Vietnam, Thailand, Indonesia, Bangladesh, Japan,
    Chile, and Norway. The United States imports significant volumes of
    marine aquaculture products from these and other countries, resulting
    in an annual seafood trade deficit of about $8 billion.
        There is significant potential to increase aquaculture production
    in the United States using today's technology. Preliminary production
    estimates by NOAA indicate that domestic aquaculture production of all
    species could increase from about 0.5 million tons annually to 1.5
    million tons per year by 2025. The additional production could include
    760,000 tons from finfish aquaculture, 47,000 tons from crustacean
    production, and 245,000 tons from mollusk production. Of the 760,000
    tons of finfish aquaculture, 590,000 tons could come from marine
    finfish aquaculture.
        The major barriers to marine aquaculture are finding suitable sites
    in coastal areas (where aquaculture must compete with many other
    coastal uses), clarifying the regulatory and environmental requirements
    for existing as well as new marine aquaculture operations (including
    offshore), and developing technologies and best management practices to
    ensure that various types of production systems are compatible with
    marine ecosystems. There is also a need to develop hatchery operations
    to provide fingerlings for finfish production systems.
        Business needs regulatory certainty to make sound investment
    decisions and obtain financing. There is currently no way to obtain a
    permit for aquaculture in federal waters under existing laws and
    regulations. Thus, in response to the U.S. Commission on Ocean Policy
    and the U.S. Ocean Action Plan, the National Oceanic and Atmospheric
    Administration (NOAA) and the Department of Commerce drafted and sent
    to Congress the National Offshore Aquaculture Act of 2007. The Act
    would provide the necessary authority to establish a regulatory
    framework and authorize research for all types of marine aquaculture.
        Those concerned about the impacts of offshore aquaculture need to
    know the industry will be held to strict environmental standards by the
    proposed legislation. One way to address these needs at the same time
    as those of the marine aquaculture industry is through demonstration
    projects with research partners so that technologies and practices can
    be tested, their impacts evaluated, and systems improved. Another is to
    support research projects to develop alternatives to use of fish oil
    and fish meal in aquaculture feeds, develop culture methods for new
    species of value to commercial production as well as stock enhancement,
    and study the impacts (including cumulative impacts) of marine
    aquaculture on marine ecosystems.
        Since 1998, the National Oceanic and Atmospheric Administration
    (NOAA) has funded a total of $15 million through the National Marine
    Aquaculture Initiative (NMAI) to support research to boost the
    production of commercially and recreationally valuable marine shellfish
    and finfish species in the United States. Projects have responded to
    key scientific, engineering, environmental, and economic questions for
    aquaculture. For example, NMAI has funded studies of candidate species,
    health and nutrition, best management practices, ecosystems monitoring
    and management, engineered production systems, and legal and
    operational frameworks.
        In September 2006, NOAA awarded $3.6 million in competitive grants
    to 11 sustainable marine aquaculture demonstration and research
    projects under NMAI. The initiative is managed by the NOAA Aquaculture
    Program and administered by NOAA Sea Grant. The 2006 NMAI funding
    supports projects to assess the commercial potential of marine
    aquaculture, the feasibility of stock enhancement, the environmental
    impacts of aquaculture in various environments, as well as research on
    key aquatic animal nutrition and health issues.
        Another way in which NOAA is working to address technological
    barriers is through a planning process with the Department of
    Agriculture and the Department of Interior to develop a national
    aquatic animal health plan. This plan, which has been in development
    for four years and has included stakeholders from industry and state
    agencies, will provide protection for the nation's cultured and wild
    aquatic resources, facilitate safe commerce of live products, and
    improve the availability of diagnostic laboratories for aquaculture.
    This plan will be completed by summer of 2007.
        NOAA also has marine aquaculture research capabilities at NOAA
    laboratories within the National Marine Fisheries Service and the
    National Ocean Service, and research and extension capabilities through
    state Sea Grant Programs. Congressionally mandated research--such as an
    open ocean aquaculture demonstration project at the University of New
    Hampshire and research around the country on oysters, shrimp, crab, and
    other species--has also helped to advance the state of marine
    aquaculture technology. Other federal agencies and research
    institutions are also investing in research to address technological
    challenges. For example, the Advanced Technology Program within the
    National Institute for Standards and Technology has supported a number
    of advanced research and technology projects. In addition, aquaculture
    companies have received support for the development of commercial
    products and services through the Small Business Innovation Program
    (SBIR) at NOAA and the U.S. Department of Agriculture and, in the past,
    through the Saltonstall-Kennedy Program.
            noaa's center for weather and climate prediction project
        Question. The Committee was recently informed that the planned
    Center for Weather and Climate Prediction in College Park is behind
    schedule and cost estimates have increased for NOAA ``above standard''
    improvements.
        What are the consequences to NOAA's budget request due to the
    delayed construction schedule?
        Is NOAA reexamining the ``above standard'' improvements in order to
    lessen any budgetary impacts?
        Answer. The NOAA Center for Weather and Climate Prediction (NCWCP)
    project is a build and lease-back project under which a private
    developer is responsible for building a facility, in this case on
    property owned by the University of Maryland. The developer will own
    the building once built, and NOAA will lease back the building. The
    developer is only responsible, under the development lease with the
    General Services Administration (GSA) who is managing the project for
    the government, to build general office building space. Tenant specific
    requirements--such as enhanced heating, ventilation, air conditioning,
    electrical, and lighting capabilities--required to support specialized
    (above office-standard) NOAA operations such as weather and climate
    modeling, laboratory operations, analysis of global environmental
    satellite data, and protecting the reliable flow of critical weather
    warning, forecast, and data products to the Public must be paid for by
    NOAA as part of the initial construction costs of the building.
        NOAA has been apprised by GSA that, due to delays in the
    construction schedule and general increases in construction costs
    (labor and materials) at rates higher than those projected by GSA when
    the initial cost estimate for the project was developed in 2002, NOAA
    should expect increases in the cost of above-standard construction
    work. NOAA has not yet received final pricing of above-standard
    construction work from the developer. Once we have received this
    pricing information, we will assess the impact on fiscal year 2008.
    Failure by the government to timely fund these costs could further
    delay the construction schedule; and expose the government to claims
    from the developer for government-caused delays and associated
    financial damages.
        We are continuing to re-examine areas where we can take reductions
    in above-standard requirements without compromising the mission
    conducted at the facility, so as to mitigate budgetary impacts.
                       npoess and goes-r funding request
        Question. Please provide a detailed breakout of the NPOESS and
    GOES-R program funding requests for fiscal year 2008 for each of the
    major aspects of the programs.
        Answer. The fiscal year 2008 request for the Geostationary
    Operational Environmental Satellite Series R (GOES-R) Series is $279
    million. The breakout of the budget request, in millions of dollars, is
    as follows:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                      Development Activity                        Request
    ------------------------------------------------------------------------
    System Acquisition and Operations.......................              45
    Spacecraft..............................................              14
    Instruments:
        Advanced Baseline Imager (ABI) to meet the                        54
         production schedule for launch and provide real-
         time environmental data and uninterruptible
         observations.......................................
        Solar Imaging Suite (SIS) preliminary design........              55
        Space Environmental In Situ Suite (SEISS)                         21
         preliminary design.................................
        Geostationary Lightning Mapper (GLM) continuation of              17
         the acquisition and operations phase...............
    Government Program Office Operations....................              73
                                                             ---------------
          TOTAL GOES-R Fiscal Year 2008 Request.............             279
    ------------------------------------------------------------------------

        The combined fiscal year 2008 request for the National Polar-
    orbiting Operational Environmental Satellite System (NPOESS) is $666
    million. Of that amount, NOAA's portion is $331 million, with the
    remaining funding coming from the U.S. Air Force. The breakout of the
    fiscal year 2008 budget request, in millions of dollars, is as follows:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                      Development Activity                        Request
    ------------------------------------------------------------------------
    Program Acquisition--NPOESS Prime Contract:
        Ground Systems......................................              98
        Spacecraft and Instruments..........................             340
        System Engineering/Program Management...............             142
    Government Program Office Operations....................              86
                                                             ---------------
          TOTAL NPOESS Fiscal Year 2008 Request.............             666
    ------------------------------------------------------------------------

                            goes-r program trl level
        Question. The NOAA budget justification states that the GOES-R
    satellite launch date is now ``no earlier than 2014'' and that this
    provides ``additional opportunities to mitigate identified risks in
    GOES-R development.''
        Using the NASA defined Technical Readiness Scale (TRL), what level
    is the GOES-R program currently in? What TRL level will GOES-R be in at
    the end of fiscal year 2008?
        Answer. Technology Readiness Levels (TRL) for GOES-R are:

    ------------------------------------------------------------------------
                                                Current TRL    Projected TRL
                   Instrument                   (September      (September
                                                   2006)           2008)
    ------------------------------------------------------------------------
    Advanced Baseline Imager (ABI)..........               5               6
    Solar Imaging Suite (SIS)...............               6               6
    Space Environmental In-Situ Suite                      5               6
     (SEISS)................................
    Geostationary Lightning Mapper (GLM)....               4               5
    Spacecraft contract.....................         ( \1\ )             5-6
    ------------------------------------------------------------------------
    \1\ Not awarded.

                        goes satellite construction time
        Question. Please provide a summary of how long it took to build
    each GOES satellite starting with GOES-11 through GOES-P.
        Answer.
    GOES I-M Series
        Contract award for the Geostationary Operational Environmental
    Satellites (GOES) I-M Series was made on 1985. The first in the series,
    GOES-I, was launched in April 1994.

    ------------------------------------------------------------------------
                                         Contract Award
                Satellite                     Date          Satellite Launch
    ------------------------------------------------------------------------
    GOES-L (GOES-11).................  1985..............  May 2000
    GOES-M (GOES-12).................  1985..............  July 2001
    ------------------------------------------------------------------------

    GOES N-Series
        GOES N-Series used the same primary instruments as the GOES I-M
    Series but a different spacecraft.

    ------------------------------------------------------------------------
                                         Contract Award
                Satellite                     Date          Satellite Launch
    ------------------------------------------------------------------------
    GOES-N (GOES-13).................  1998..............  May 2006
    GOES-O...........................  1998..............  Spring 2008
    GOES-P...........................  1998..............  Spring 2009
    ------------------------------------------------------------------------

        For both the GOES I-M Series and GOES N-P Series, it took longest
    to build and launch the first satellite in the Series. The second and
    subsequent satellites in the Series are the same design as the first
    satellite.
                     probability of goes-r operational gap
        Question. What is the estimated probability of an operational gap
    if GOES-R launches in 2013? 2014? 2015?
        Answer. In order to minimize the probability of an operational gap,
    NOAA maintains two operational spacecraft, Geostationary Operational
    Environmental Satellite (GOES)-East and GOES-West, and an on-orbit
    spare at all times. The on-orbit spare can be activated to operational
    status in a short period of time in the event either GOES-East or GOES-
    West satellites fail.
        NOAA constantly assesses the health of the spacecraft and
    instruments and uses sophisticated statistical techniques to calculate
    when satellites are needed to avoid an operational gap. Based on these
    analyses, NOAA has determined that the GOES-R satellite needs to launch
    in December 2014 to serve as the on-orbit spare. Two years later it
    will replace GOES-O as an operational satellite.
        Launching GOES-R in December 2014 results in a 78 percent
    probability of two spacecraft availability.
        Launching GOES-R in 2013 increases the probability to 86 percent of
    two operational spacecraft.
        Launching GOES-R later in 2015, decreases the two-operational
    spacecraft availability to 62 percent.
        Question. If an operational gap were to occur in GOES-R--what
    backup plan exists (e.g., utilizing other systems (allied or
    domestic))?
        Answer. A single catastrophic failure of GOES-R would not
    compromise our ability to provide coverage. Should GOES-R sustain a
    catastrophic failure, GOES-S is planned to be launched (April 2016) in
    sufficient time to support the planned GOES-R activation in 2017. If
    the GOES constellation were to sustain multiple catastrophic failures,
    then NOAA would continue to rely on potentially degraded support using
    existing satellites from the GOES-N Series, or a degraded single
    satellite constellation located over the central United States.
        Further, NOAA would supplement data needs from all available NOAA
    and non-NOAA polar-orbiting environmental satellites. NOAA also has on-
    going international agreements to provide mutual geostationary
    environmental satellite back-up with the European Organisation for the
    Exploitation of Meteorological Satellites (EUMETSAT) and the Japanese
    Meteorological Agency (JMA) in the event of premature system or launch
    failure. This arrangement is based on previous experience of NOAA
    providing backup to JMA, and EUMETSAT providing backup support to NOAA.
    Under the single satellite constellation, NOAA would lose the ability
    to detect and track storms at the edges of the Atlantic and Pacific
    Oceans. This could lead to degraded hurricane forecasting in the
    Caribbean and Atlantic coasts, and Hawaii, respectively.
        Question. If an operational gap were to occur in GOES-R--what
    backup plan exists (e.g., utilizing other systems (allied or
    domestic))?
        Answer. A single catastrophic failure of GOES-R would not
    compromise our ability to provide coverage. Should GOES-R sustain a
    catastrophic failure, GOES-S is planned to be launched (April 2016) in
    sufficient time to support the planned GOES-R activation in 2017. If
    the GOES constellation were to sustain multiple catastrophic failures,
    then NOAA would continue to rely on potentially degraded support using
    existing satellites from the GOES-N Series.
        Further, NOAA would supplement data needs from all available NOAA
    and non-NOAA polar-orbiting environmental satellites. NOAA also has on-
    going international agreements to provide mutual geostationary
    environmental satellite back-up with the European Organisation for the
    Exploitation of Meteorological Satellites (EUMETSAT) and the Japanese
    Meteorological Agency (JMA) in the event of premature system or launch
    failure. This arrangement is based on previous experience of NOAA
    providing backup to JMA, and EUMETSAT providing backup support to NOAA.
        Question. If an operational gap does occur--what is the impact to
    short-term forecasting ability?
        Answer. In the event there was a gap in coverage from the
    Geostationary Operational Environmental Satellite (GOES), the most
    immediate impact would be loss in the quality of short term weather
    forecasts and timeliness of data refresh from every 30 minutes with
    GOES to every 6 hours with polar-orbiting satellite data.
        Without GOES, forecasters would be blind to short-term variations
    in hazard weather events such as hurricanes, thunderstorms, flash
    floods, low clouds and fog.
                                     ______

                Questions Submitted by Senator Dianne Feinstein
                          coastal non-point pollution
        Question. The Coastal Zone Management Act gives authority to
    coastal states to implement a coastal nonpoint polluted runoff control
    program and both the Pew and U.S. Ocean Commissions found that polluted
    runoff is the single greatest source of ocean pollution. How can you
    assure us that coastal states will get adequate funding to carry out
    these coastal water quality programs in the 2007 budget? And because
    the President's 2008 budget provides zero funding for this program,
    what will you do to restore funding for this vital program?
        Answer. Although NOAA was not able to fund the non-point grants
    within the fiscal year 2007 plan, NOAA has funded the Coastal Zone
    Management Grants at $65.7 million. States can reallocate resources
    within their programs to address their highest priorities, including
    the coastal water quality programs. In addition, states benefit from
    NOAA's development and dissemination of management tools and scientific
    research on nonpoint source pollution problems and responses.
        NOAA continues to support state Coastal Nonpoint Source (NPS)
    Management Programs by fostering program integration, and by helping
    coastal states focus on managing the cumulative and secondary impacts
    of development to prevent NPS pollution. NOAA is also investing in
    monitoring, research, and modeling to support NPS management, such as
    through the development, testing and transfer of innovative
    technologies and best management practices to control polluted runoff.
    We are actively pursuing efforts to link coastal growth and development
    management with water quality protection by fostering a greater
    emphasis on community development and planning efforts to address
    growth issues in a sustainable manner.
        The Non Point Implementation Grants have not been included in the
    President's Request for NOAA for a number of years, as significant
    funding for this issue is requested through other Federal Agencies.
        NOAA and the Coastal States Organization (CSO) have undertaken a
    project to engage coastal managers and stakeholders to envision the
    future of coastal management. The goal of this visioning process is to
    gather feedback on priority issues and innovative ideas for improving
    the CZMA and the National Coastal Management Program. State coastal
    managers have identified decreasing water quality as one of the highest
    priority threats to the coastal resources of their states. Workshops
    will be held for stakeholders, coastal management experts and other
    Federal agencies to generate innovative techniques and solutions,
    explore their feasibility, and assess their potential impacts and
    degree of support among constituents.
                         coastal zone management grants
        Question. Funding for California's core coastal management program
    has been capped at $2 million for the past 14 years while population
    growth now finds 1 in 10 Americans living along the California coast.
    Given that funding for coastal management nationally has increased
    during the same period by more than $20 million, are you going to
    allocate funds in the 2007 budget to the large coastal states
    proportionate to their population and length of coastline as mandated
    by the Coastal Zone Management Act?
        Answer. We greatly appreciate the multitude of issues that
    California's coastal management agencies face in managing the
    activities which affect your State's coastal resources. We also
    recognize the effectiveness of the California's coastal management
    efforts which have been consistently documented in our Section 312
    evaluations of your programs.
        As mandated by the CZMA, Section 306 funding is awarded pursuant to
    a formula based on the shoreline mileage and coastal population of each
    state. The fiscal year 2007 funds have been allocated pursuant to this
    formula.
        A $2 million cap on individual state allocations has been put in
    place by Congress for the past 14 years through the appropriations
    process. NOAA has followed this Congressional direction.
                   nrdc vs. rodgers settlement implementation
        Question. The National Marine Fisheries Service (NMFS) is a Party
    to the Settlement in NRDC v. Rodgers (concerning restoration of flows
    below Friant Dam in the Central Valley Project) and NMFS has an
    important role to play to ensure the success of the restoration effort
    required by the Settlement, especially the reintroduction of Chinook
    salmon. Could you please tell me what NOAA and NMFS are currently doing
    to support the Settlement implementation effort, what actions are
    proposed in fiscal year 2008 by NOAA and NMFS to further implement the
    Settlement, and what actions are needed, if any, to ensure that the
    Department of Commerce has the necessary staff and resources to fulfill
    its future roles and responsibilities under this major Settlement?
        Answer. NMFS Southwest Regional Office has been actively involved
    in the Settlement since October 23, 2006. NMFS has been working closely
    with the Bureau of Reclamation, Fish and Wildlife Service, parties to
    the Settlement, and third parties on actions required to implement the
    Settlement. We have already provided staff to: (1) brief technical
    working groups and the public on fisheries, fish habitat, and
    Endangered Species Act compliance issues; (2) engage in all
    implementation-related technical and management meetings; (3) answer
    Congressional questions and review draft legislation; (4) provide
    expertise and technical support for the development of implementation-
    related documents; and (5) provide management and policy-level guidance
    to the overall Settlement and implementation processes. NMFS is working
    closely with the Bureau of Reclamation's Sacramento Office to secure
    reimbursable funding to support staff to fully implement all of our
    roles under the Settlement. Depending on the availability of funding
    for this Settlement, NMFS will continue working on the 26 items listed
    below in a coordinated and collaborative manner.
        1. Review plans and designs for 14 major structural projects
        2. Analyses, review and provide recommendations on over 500 varying
    flows regimes
        3. Develop and review MOUs including associated budgets
        4. Review numerous contracts
        5. Review several Friant Dam maintenance and operational plans
        6. Review several water right options
        7. Develop and review recirculation, recapture, reuse, exchange or
    transfer of water plans and proposed modifications including monitoring
        8. Review draft development and implementation water plans
        9. Coordinate with 6 State agencies, 5 Federal agencies, tribes,
    and numerous NGOs
        10. Develop and review design, engineering, and monitoring studies
        11. Review potential land acquisitions and easements
        12. Develop and review environmental and permitting documents
        13. Undertake ESA Section 7 consultations and reinitiate
    consultations
        14. Undertake ESA Section 10 consultations and reinitiate
    consultations
        15. Develop and review procedural documents
        16. Analyze, review, and make recommendations on: water year data;
    water flows data and models; riparian corridors habitat models; Chinook
    fall-run and spring-run and steelhead populations
        17. Analyses, review, and make recommendations on: Restoration
    Administrator proposed actions: Technical Advisory Committee proposed
    activities; BOR and FWS proposed actions; CA DWR and DFG proposed
    actions; Secretary of the Interior proposed actions
        18. Participation in numerous technical committees
        19. Provide assistance to Federal and State agencies staffs
        20. Review legal and procedural documents
        21. Provide technical expertise and assist in the development of
    the restoration plans
        22. Develop and execute budgets and financial plans
        23. Make recommendations to Secretary of Commerce
        24. Make recommendations to Secretary of the Interior
        25. Develop and execute monitoring plans
        26. Documentation of all activities for any future court actions
                   funding levels for severe weather research
        Question. The overall NOAA budget request for 2008 is less than 2
    percent greater than that for 2006, including reductions in funding of
    $82 million for Oceanic and Atmospheric Research and reductions of $4
    million for the National Weather Service. Given the large impacts of
    severe weather events on our nation's economy and the central role of
    climate change research in preparing our nation to adapt to the
    economic and ecologic impacts of climate change, can NOAA fulfill its
    mission at the funding levels requested in the President's budget? If
    not, what level of additional support is needed to properly address
    these challenges?
        Answer. The President's fiscal year 2008 budget for NOAA requests a
    total of $3.8 billion, an increase of $131 million or 3.4 percent over
    the fiscal year 2007 President's budget. NOAA believes that the fiscal
    year 2008 budget request will allow NOAA to fulfill its obligations.
    The budget request advances mission-critical services, including work
    to expand meteorological prediction and extend our knowledge of
    climatic change.
        The Office of Oceanic and Atmospheric Research (OAR) requests a
    total of $368.8 million in fiscal year 2008, reflecting a net increase
    of $20.1 million from the fiscal year 2007 President's budget and a
    decrease of $10.9 million from the fiscal year 2006 appropriation. The
    decrease from the fiscal year 2006 enacted level is due primarily to
    the large number of un-requested projects in 2006. Even in a tight
    budget year, the fiscal year 2008 budget request supports some new,
    cutting-edge science efforts by OAR's research programs.
        The National Weather Service (NWS) requests $903.5 million in
    fiscal year 2008, reflecting a net increase of $21.6 million over the
    fiscal year 2007 President's budget as well as an increase of $55.2
    million from the fiscal year 2006 enacted level. This budget request
    continues NWS on a path to produce and deliver forecasts that are
    trusted, employ cutting-edge technologies, provide services in a cost-
    effective manner, strive to eliminate weather-related fatalities, and
    improve the economic value of weather, water, and climate information.
    The request fully supports NWS forecast and warning operations. NOAA/
    NWS is committed to improving operational effectiveness and services,
    particularly for high-impact weather events, by taking full advantage
    of emerging science and technological improvements. We are committed to
    evolving services to best meet the changing and growing need for
    environmental forecasts and services. The NWS's fiscal year 2008 budget
    request supports efforts to upgrade the NEXRAD Radar network by
    implementing dual polarimetric radar. It also supports other efforts
    including: improved numerical modeling, data assimilation, education
    and outreach, training, forecaster workstation (AWIPS) upgrades, as
    well as efforts for future technological advances, such as phased array
    radar (PAR). We believe the President's fiscal year 2008 budget Request
    positions us to make those technical and service improvements.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                            ocean initiative funding
        Question. I am pleased to see that NOAA's 2008 budget request
    includes an increase of $123 million for the President's Ocean Action
    Plan, which is in part, related to the Joint Ocean Commission's recent
    reports. As you know, the Senate has been working with the Commission
    to receive specific, real-world guidance on how to improve ocean
    research and education. NOAA's increase is a step in the right
    direction, but based on the Commission's recommendations, the Nation
    still have a long way to go. Admiral, I know you are well aware of the
    Joint Ocean Commission's recent reports, and I know you strive to
    better our nation's ocean research activities. How can the Senate help
    you to ensure that this trend on funding increases and program
    advancements continues?
        Answer. As you are aware, the fiscal year 2008 President's budget
    request includes $123 million in direct support of the President's
    Ocean Action Plan. To continue this positive trend in NOAA's ocean
    programs, please support the President's budget; specifically those
    items that support the Ocean Action Plan. We thank you and your
    colleagues for your continued support of NOAA's ocean programs, and ask
    that you continue to be leaders on ocean and coastal issues on a
    national level.
                           noaa corps reauthorization
        Question. Admiral, the Committee supports NOAA Commissioned Officer
    Corps and the valuable expertise they lend to NOAA's field operations
    and homeland security activities. The Committee understands that the
    NOAA Corps authorization, which regulates the size of the Corps, has
    expired. When can Congress expect the NOAA Corps legislation package to
    be cleared by NOAA?
        Answer. NOAA is interested in reauthorizing the NOAA Corps and we
    look forward to working with the Committee on this important
    legislation. Efforts to consider and possible develop a NOAA Corps
    legislation package are currently underway.

                              SUBCOMMITTEE RECESS

        Senator Mikulski. If there is nothing further, the
    subcommittee will stand in recess.
        [Whereupon, at 11:41 p.m., Thursday, March 8, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                            THURSDAY, MARCH 15, 2007

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:04 p.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Barbara A. Mikulski (chairman)
    presiding.
        Present: Senators Mikulski, Shelby, Stevens, and Alexander.

                 NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    STATEMENT OF HON. MICHAEL D. GRIFFIN, Ph.D.,
                ADMINISTRATOR

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Good afternoon, everybody, and welcome to
    the subcommittee hearing of Commerce, State, Justice. The topic
    today will be the appropriations for the National Aeronautics
    and Space Administration (NASA). As we have said earlier, the
    subcommittee was focusing on innovation, security, and
    accountability. Once again, we feel that NASA is the premier
    innovation agency within the United States Government.
        We know that more inventions, technology, and patents have
    come out of NASA than I think is ever fully grasped or fully
    appreciated by the American people, and certainly at times by
    people who wear green eyeshades.
        Today we are going to hear from the NASA Administrator, Dr.
    Mike Griffin, about the agency budget and priorities. Since our
    hearing last year, a NASA civil servant, Dr. John Mather, a
    civil servant at Goddard, won the Nobel Prize, the New Horizons
    Mission has given us new spectacular pictures of Jupiter on its
    way to Pluto. Cassini continues to send its images from Saturn,
    and good old Hubble keeps plugging away, continuing
    extraordinary contributions to science even though it is
    running a little low these days. We have successfully and
    safely returned the Space Shuttle to flight and laid the
    foundation to return to the Moon and eventually to go to Mars.
        For 2008, the President's budget funds NASA at $17.3
    billion, a 6.8-percent increase over the continuing resolution
    level. But when we look at the President's budget over the 2007
    request, it is a 3-percent increase over last year. To put
    NASA's budget in perspective, a $17.3 billion budget represents
    seven-tenths of 1 percent of the entire Federal budget.
        As we looked at science funding we see inside the budget
    request, $5.5 billion, a $300 million increase over the
    continuing resolution, or a $50 million increase when compared
    to the 2007 budget, the budget for science includes funding for
    Hubble servicing, the continuing development of the Webb
    telescope, and other missions. We are very, very pleased that
    these two will be in 2008.
        I do see a significant problem with future science budgets
    because from 2008 to 2011 it only goes up by 1 percent, and we
    will be talking about that with the Administrator.
        For Earth science, the budget shows a cut in funding
    starting next year, and by 2012 the budget for Earth science
    will be $200 million less than in 2008.
        Now, the exciting news is the National Academy of Sciences
    recently released its report on the future of Earth science,
    calling for new Earth science missions by NASA over the next
    decade, 14 of them, and also others to be done by the National
    Oceanic and Atmospheric Administration (NOAA) and one in
    conjunction. Though this year's NASA budget does not
    accommodate any of these new missions, we would like to discuss
    these with the Administrator, get his reaction, and try to find
    a way forward.
        In 1988 the aeronautics budget at NASA was $1.5 billion.
    Today it is $554 million. Every commercial aircraft on-line
    today uses technology developed by NASA and we need to talk
    about our aeronautics program because, after all, when we look
    at its name, it is the national aeronautics, as well as the
    national space program.
        The Space Shuttle budget is $4 billion, the same as 2007
    funding. The administration's budget calls for 14 additional
    flights to space, one to fix the Hubble. We just wonder how the
    Shuttle is doing. We know you have been hit by, was it, ice,
    hail? But our Space Shuttle returned to flight and the safety
    of our astronauts remains our number one priority. So we will
    be asking, how long can we keep the Shuttle going. And of
    course, like the Administrator, we do not want to be in the
    dark on the landing pad with a Shuttle return and not a way
    forward.
        When we talk about exploration, it is a $500 million
    increase over the continuing resolution funding and, quite
    frankly, we are disturbed about the continuing resolution
    funding. If Shelby-Mikulski had passed from the way we did the
    bill, we would have been in a better spot. But you know, we are
    where we are. We know that NASA estimates that it is going to
    cost $16 billion to build Ares and Orion by 2012. We are
    concerned that there will be a 4-year delay between the
    retirement of the Space Shuttle and the launch of Orion and
    Ares. And look at it. The delay is not caused by Congress. As I
    understand, the President's plan also reflects this. But we do
    not want to delay any more than we can.
        The Space Station will receive $2.2 billion, an increase of
    over $300 million, and we know we need to also have a way of
    resupplying it. So as we look ahead, there is no real growth in
    NASA's budget and there is no margin for error or overruns, and
    there is a lot of pressure on the NASA budget and on the
    Administrator on how to coordinate all the pieces that often
    need to move forward in what we hope is a balanced space
    program.
        Senator Hutchison and I will work to increase the top line
    by $1 billion and to repay NASA for the cost of Columbia. We
    also want to salute both Hutchison and Nelson, who are putting
    NASA in the President's authorizing legislation, putting NASA
    in the President's competitiveness agenda, and I will say more
    about that in my questions and answers.
        But no matter how we look at it, we just think that we have
    too many good things for too little money and we are concerned
    about that.
        We intend to, as always, pledge our bipartisan support to
    work with Senator Shelby, with the space Senators, to help
    balance the space program. But I remember over a decade ago
    President Bush's dad and then Vice President Quayle when they
    were contemplating the Space Station and some other
    breakthroughs on a very important Apollo anniversary invited us
    to the White House for a space summit, to kind of get a
    navigational chart on where we wanted to go in space and then
    what would be the revenue stream that we would talk about over
    multiple years.
        I think it is time for another space summit so that we can
    talk over both the President's agenda, the need to continue our
    effort in space science and aeronautics and to make sure that
    our country is number one in innovation, always ahead in
    competition on new ideas and new technology, knowing that we
    have got to get to the Moon, know that China is looming out
    there, and at the same time continue the bold, bodacious space
    exploration that is characteristic of our program.
        So having said that, it is just a direction to suggest and
    discuss, and as always I turn with real warmth and collegiality
    to my ranking member, Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Madam Chair.
        Dr. Griffin, thank you for joining us here today. This is
    an important hearing because it gives us on the subcommittee an
    opportunity to discuss the significant role of the National
    Aeronautics and Space Administration and its budget proposal.
    NASA's proposed budget for 2008 is $17.3 billion. This is a $1
    billion increase to NASA's base programs or 6.5 percent over
    2007 joint resolution funding level.
        This is by some yardsticks a sizable sum, considering the
    funding constraints that the Federal Government faces in the
    coming fiscal year. But it is not too much money, Dr. Griffin,
    for what we want to do. The requested increase can be
    attributed to $522 million for funding exploration systems
    which will enable NASA to return to the Moon, an additional
    $652 million for the exploration capabilities account, which
    will allow for further construction of the International Space
    Station and other space operations.
        While these are significant increases, the proposed budget
    also contains a reduction of $336 million to aeronautics. Dr.
    Griffin, I think it is important to note that, while this
    budget reflects the President's implementation of the
    exploration vision, it is also grounded in NASA's 2007 request
    rather than the actual funding level provided in the 2007
    funding resolution. This poses many difficulties for this
    subcommittee in developing its proposal for NASA funding in
    2008.
        There are many complex elements required to achieve the
    goal of returning to the Moon. No one knows this better than
    you, Dr. Griffin. First there are the preparatory missions,
    such as the Lunar Reconnaissance Orbiter and Lunar Crater
    Observation and Sensing Satellite, which will launch, I
    understand, in October 2008. The follow-on mission, which is
    expected to launch around 2010 or 2011, has been selected since
    December 2005. Yet the 2008 budget continues to be vague
    regarding a time line for beginning the development work.
        Delaying such preparation missions will only further delay
    man's return to the Moon. I understand that the preparatory
    lunar missions are moving forward and that the crew launch and
    crew exploration vehicles are well into their design and
    development work. Over the past year NASA has refined the Ares
    vehicle to be a five-segment solid rocket booster and selected
    the J-2X engine for its upper stage. This selection will make
    it possible for the Orion capsule to reach the Space Station
    and also be ready for a rendezvous with other vehicles for the
    trip to the lunar surface.
        These are but a few examples of the ongoing work needed to
    make NASA's goals a reality. It is my hope, Dr. Griffin, that
    the implementation of the President's vision can be
    accomplished while maintaining the capabilities that NASA has
    developed in other mission areas. I do not believe that we
    should sacrifice missions and capabilities that will be vital
    to the future of exploration while trying to obtain this goal.
    I believe that we can and should find a balance here.
        Much like last year's hearing, we are reminded today that
    the proposed plan for returning to the Moon is contingent on
    several factors. We are all keenly aware that any unexpected
    bump along the path could pose significant challenges to NASA's
    long-term plans. We can point to the sizable funding
    requirements of flying the Space Shuttle until it retires in
    2010 and the ongoing construction of the International Space
    Station's heavy fiscal burdens on NASA's ability to continue
    down the path laid out in the vision for exploration.
        The continual strains on NASA's budget require that we all
    work together as partners to ensure NASA can meet its many
    objectives.
        Dr. Griffin, I am very interested in you discussing how
    NASA today will preserve its ongoing programs and how it will
    modernize its ongoing programs and how it will modernize its
    institutions and facilities which are critical to NASA's
    success in the coming years. I expect that we will have an
    ongoing dialogue over the course of the year about NASA's
    ability to achieve the Vision for Space Exploration.
        I am also excited by the opportunities that lay ahead
    regarding the exploration vision at NASA. But I must point out
    the fiscal realities that you face every day that have and will
    continue to affect some of these efforts. NASA must show the
    same resourcefulness in operating within fiscal reality on the
    ground as it does in its innovation and can-do spirit for
    exploring space.
        Dr. Griffin, I believe that the subcommittee has made every
    effort to work with you and we will continue to provide NASA
    with the appropriate level of funding to ensure that roles and
    missions are protected and preserved. When such significant
    funds are provided, it is NASA's responsibility to have the
    systems in place to ensure that these funds are spent
    responsibly.
        I am concerned that for the fourth year in a row NASA's
    financial systems have earned the worst rating possible from
    the administration. We were assured in our hearing last year
    that efforts were underway to fix these problems. Yet,
    according to the administration there has been little progress
    since we last met. In addition, the Government Accountability
    Office (GAO) has released its annual high risk report that
    focuses on programs with the greatest vulnerability to fraud,
    waste, and mismanagement. NASA has the unfortunate distinction,
    Dr. Griffin, of having been included in the 1990 inaugural
    edition for its contract management and remains on the high
    risk list to this day.
        Finally, the annual audit of NASA's financial statement by
    an independent auditing firm does not bring me any comfort.
    NASA's finances were disclaimed in both 2005 and 2006 due to an
    inability to provide auditable financial statements as well as
    material weaknesses in its financial systems regarding the
    management of property and equipment. With such assessments of
    NASA's accounting, the agency's $17.3 billion request should be
    backed up, I believe, by solid budget practices, not shoddy,
    unclear bookkeeping. I believe that NASA should be as committed
    to fiscal responsibility to this subcommittee, the
    Appropriations Committee, and the taxpayer as it is to your
    exploration mission, which we commend you for.
        I think, Dr. Griffin, NASA must be better as far as what is
    going on with its books. I look forward, Dr. Griffin, to
    discussing how we may find a solution that keeps all of NASA's
    activities moving forward. It will be a difficult task, given
    the demands for funding across all of the agencies in this
    bill. The administration did not leave many crumbs on the table
    after making severe cuts to, among other things, NOAA and the
    proposed over $1.5 billion in reductions to State and local law
    enforcement. But we are willing to work with you and the
    chairman to ensure that NASA receives the funds necessary to
    achieve the Nation's goals. We look forward to your testimony.
        Senator Mikulski. Thank you.
        Now I would like to turn to Dr. Griffin, but I also want to
    acknowledge--Senator, can you stay for the hearing then? I know
    you have a lot of pressures with Defense.
        Senator Stevens. We have a Defense hearing at 2:30. I will
    have to leave soon, but I would like to hear Dr. Griffin if
    possible.
        Senator Mikulski. As soon as Dr. Griffin finishes, to
    accommodate you, Senator, shall we turn to you then for
    questions? Okay.
        Dr. Griffin. Senator, in deference to your time constraints
    today, I will keep my opening remarks short, but would like to
    enter my opening statement in the record along with my other
    formal statement.
        Senator Mikulski. We also want to note this is the third
    day that you are testifying on NASA budget, two in the House
    yesterday, the authorizers and the appropriators, and this is
    the third.

                    ADMINISTRATOR GRIFFIN'S OPENING REMARKS

        Dr. Griffin. Thank you.
        Chairman Mikulski, Senator Shelby, members of the
    subcommittee: I thank you for inviting me here today to discuss
    our $17.3 billion fiscal year 2008 request. I am here today to
    seek your support for that request. The fiscal year 2008 budget
    request is 3.1 percent higher than that requested by the
    President for fiscal year 2007 and demonstrates his commitment
    to maintaining our Nation's leadership role in space
    exploration, scientific discovery, and aeronautics research.
        But it supports many diverse priorities in these
    disciplines and so we need to allocate our resources carefully.
    In this we are guided by the NASA Authorization Act, our annual
    appropriations legislation, Presidential policy, and the
    decadal surveys of the national academies. But even so, we
    cannot afford everything that our many constituencies would
    like us to do. You will not find major strategic changes in the
    fiscal year 2008 budget request as compared to that for last
    year, but you will see some slight course corrections. Overall
    I think we are heading in the right direction and I think we
    have made great strides in the past year and we are on track
    and making progress in carrying out our tasks.
        We have aligned NASA's aeronautics program with the first
    ever presidential policy on aeronautics research and
    development (R&D). The goal of this policy is to ensure that
    NASA and other agencies advance U.S. technological leadership
    in aeronautics.
        We currently operate an armada of over 50 Earth and space
    science satellites and payloads today in orbit around the
    Earth, our Sun, and other planets. The fiscal year 2008 budget
    request provides the resources to launch 10 new science
    missions in that year, most of which involve international
    partners or other U.S. Government agencies. Our $5.5 billion
    portfolio of Earth and space science accounts for almost 32
    percent of the budget.
        It is interesting to develop some perspective on this.
    During the 1960s, the decade of Apollo, science was 17 percent
    of the NASA portfolio. By the early 1990s, it had grown to 24
    percent and today, as I said, it is 32 percent. In contrast,
    NASA's human space flight account during the Apollo years was
    63 percent of the budget and is 62 percent today. So science is
    doing very well at NASA.
        Now, our greatest challenge over the next few years is to
    fly the Space Shuttle safely while using it to finish the
    International Space Station and to do one final Hubble Space
    Telescope mission, and then transitioning to our new systems,
    the Orion crew exploration vehicle and the Ares 1 immediately
    thereafter.
        Human space flight is a strategic capability for this
    Nation. We are now, as you know, facing about 4, 4\1/2\ year
    gap following Space Shuttle retirement when the United States
    will not have its own human space flight capability. Some in
    the Earth and space science community have called for further
    delays in NASA's human space flight efforts in order to allow
    more money to be set aside for science missions. I do not agree
    with this and, in fact, I often wonder what the community of
    scientists would say if they and not the human space flight
    community were facing a 4\1/2\ desert of opportunity.
        If Orion is further delayed, we will be viewed by many as
    ceding our Nation's leadership in human space flight at a time
    when Russia and China have such capabilities and India has
    declared its intention to develop them.
        In 1963 President Kennedy visited Redstone Arsenal in
    Huntsville and posed the following question: ``I know there are
    lots of people now who say, why go any further in space. When
    Columbus was halfway through his voyage the same people said,
    why go on any further? What will we possibly find? What good
    will it be? They want to stop now. I believe the United States
    of America is committed to be first in space, and the only way
    we are going to be first in space is to work as hard as we can
    here and all across the country.''
        I love that quote for its endorsement of the necessity to
    stay the course.
        So when you consider our fiscal year 2008 funding request,
    I ask you to consider our Nation's interests above the
    interests of any individual product, program, or constituency.
    The United States is a recognized leader in space because
    several successive Presidents and Congresses have worked
    together in the past to make the right strategic decisions, but
    this leadership is something we cannot take for granted.

                               PREPARED STATEMENT

        I believe that our budget request today provides you with a
    carefully considered, balanced set of programs for our Nation's
    civil space effort, with world-class Earth and space science,
    strategic capabilities in human space flight, and U.S.
    technical leadership in aeronautics. We need the help of the
    Congress to provide the resources to maintain that leadership.
        Thank you.
        [The statement follows:]
                    Prepared Statement of Michael D. Griffin
        Chairman Mikulski and members of the subcommittee, thank you for
    the opportunity to appear today to discuss the President's Fiscal Year
    2008 Budget request for NASA. The President's Fiscal Year 2008 Budget
    request for NASA is $17.3 billion. This represents a 3.1 percent
    increase over the fiscal year 2007 request for the agency, but not the
    enacted fiscal year 2007 appropriation. The fiscal year 2008 budget
    request for NASA demonstrates the President's continued commitment to
    our Nation's leadership in space and aeronautics research, especially
    during a time when there are other competing demands for our Nation's
    resources. The fiscal year 2008 budget request reflects a stable plan
    to continue investments begun in prior years, with some slight course
    corrections. Overall, I believe that we are heading in the right
    direction. We have made great strides this past year, and NASA is on
    track and making progress in carrying out the tasks before us.
        Before I outline the fiscal year 2008 budget request, I would like
    to address the status of NASA's plans for the use of fiscal year 2007
    funding. On February 15, 2007, the President signed into law a joint
    resolution stipulating fiscal year 2007 funding levels for NASA and
    other Federal agencies. This appropriation represents a funding level
    that is $545 million below the President's fiscal year 2007 request.
    The fiscal year 2008 budget request could not possibly factor the
    impact of this reduced level from the fiscal year 2007 request for
    NASA's carefully-considered multi-year programs, and thus, several
    programs in the fiscal year 2008 budget request will be impacted. The
    fiscal year 2007 appropriation further specifies funding levels in
    human spaceflight of that are $677 million below the request--$577
    million of that from exploration systems. This reduction from the
    requested level may significantly impact our ability to safely and
    effectively transition from the shuttle to the Orion Crew Exploration
    Vehicle and Ares I Crew Launch Vehicle. It will have serious effects on
    many people, projects, and programs this year, and for the longer term.
    As I noted during last year's congressional hearings on NASA's fiscal
    year 2007 budget request, we have a carefully balanced set of
    priorities to execute on behalf of our Nation. So as a result of these
    funding levels that are less than the fiscal year 2007 request, NASA is
    carefully assessing the implications to overall exploration priorities
    and milestones, and will present detailed impacts after a full analysis
    is complete. The initial NASA operating plan for fiscal year 2007,
    which, we are endeavoring to finalize as soon as practicable, will
    reflect the impacts of less funding than planned and the requisite
    decisions. As always, we are here to carry out our Nation's civil space
    and aeronautics programs with the resources made available by the
    Congress. All of our programs proceed in a ``go-as-we-can-afford-to-
    pay'' manner; so if we receive less funding than requested, we will
    adjust our pace. Our stakeholders have my commitment to continue to
    keep them informed as to what I believe is the best approach to
    carrying out NASA's space and aeronautics research missions with the
    resources provided. In this determination, I will be guided by the NASA
    authorization acts, annual appropriations acts, presidential policy,
    and the decadal survey priorities of the National Academy of Sciences.
    If we determine that there is an agency objective that we will be
    unable to meet, I will inform our agency's stakeholders, including this
    subcommittee.
    Highlights of the NASA Fiscal Year 2008 Budget Request
        The fiscal year 2008 budget request for NASA is a carefully
    considered and balanced request formulated over many months with the
    White House. Unfortunately, the Congress had not completed action on
    the fiscal year 2007 budget at the time the fiscal year 2008 budget was
    being finalized, so the impact of the final fiscal year 2007
    appropriation outcome is not accounted for in NASA's fiscal year 2008
    budget request. The fiscal year 2008 budget request weaves together the
    Nation's priorities in space exploration, scientific discovery, and
    aeronautics research that will help fuel this Nation's future, creating
    new opportunities for scientific benefit, economic growth, national
    security, and international cooperation.
        The greatest challenge NASA faces is safely flying the Space
    Shuttle to assemble the International Space Station (ISS) prior to
    retiring the shuttle in 2010, while also bringing new U.S. human
    spaceflight capabilities on-line soon thereafter. We must understand
    that, given proper goals, human spaceflight is a strategic capability
    for this Nation, and we must not allow it to slip away. In January, we
    remembered those whom we have lost in the exploration of space. In the
    aftermath of the Columbia tragedy, President Bush addressed the NASA
    workforce, saying, ``In your grief, you are responding as your friends
    would have wished--with focus, professionalism, and unbroken faith in
    the mission of this agency.'' We must commit ourselves to the focus of
    professionalism and unbroken faith every day in order to carry out the
    tasks before us.
        In analyzing not only the root causes, but also the systemic
    reasons behind the Columbia accident, the Columbia Accident
    Investigation Board (CAIB) made critical observations that guided the
    formulation of our present civil space policy. I fear that with the
    passage of time and the press of other concerns, we may be losing sight
    of some of these principles, so let me reiterate some of them here
    today. First, the CAIB noted that, ``The U.S. civilian space effort has
    moved forward for more than 30 years without a guiding vision.''
    Second, ``because the shuttle is now an aging system but still
    developmental in character, it is in the Nation's interest to replace
    the shuttle as soon as possible as the primary means for transporting
    humans to and from Earth orbit.'' Third, ``the previous attempts to
    develop a replacement vehicle for the aging shuttle represent a failure
    of national leadership.'' And finally, the board noted that ``this
    approach can only be successful: if it is sustained over the decade; if
    by the time a decision to develop a new vehicle is made there is a
    clearer idea of how the new transportation system fits into the
    Nation's overall plans for space; and if the U.S. Government is willing
    at the time a development decision is made to commit the substantial
    resources required to implement it.''
        Since then, the President, the Congress and NASA have charted a new
    course in U.S. civil space policy that addresses all of these points,
    and the President's Fiscal Year 2008 Budget reaffirms that commitment
    with the necessary funds for the space shuttle and the ISS. NASA will
    continue forward at the best possible pace with the development of the
    Orion and Ares I crew vehicles. However, due to the cumulative effect
    of previously underestimated costs to retire/transition the space
    shuttle and support the International Space Station, the reduction from
    the fiscal year 2007 request reflected in the fiscal year 2007
    continuing resolution, and the maturing design and integrated flight
    tests baselined for the Constellation program, it is unlikely that NASA
    will be able to bring these new exploration capabilities online by
    2014. Full funding of NASA's fiscal year 2008 exploration systems
    request is critical to ensuring the gap between retirement of the space
    shuttle and the new U.S. human spaceflight capability does not grow
    longer. If the gap in our human spaceflight capability extends even
    further than already planned, I believe our Nation will be ceding
    leadership in human spaceflight at a time when China and Russia have
    their own indigenous capabilities and India is developing its own
    capabilities. If we do not quickly come to grips with this issue,
    America may have a prolonged gap between the end of the shuttle program
    and the beginning of Orion and Ares I operational capability, a gap
    similar to the one that occurred from 1975 to 1981 when our Nation
    transitioned from Apollo to the space shuttle.
        NASA has a lot of hard work ahead of it and many major milestones
    this year and next. The transition from the space shuttle to the Orion
    and Ares launch vehicles over the next several years must be carefully
    managed, and we must be focused, professional and committed to our
    mission. This is NASA's greatest challenge, and I ask the
    subcommittee's help in meeting it.
        In the important area of Earth science, we recently received the
    first-ever Decadal Survey for Earth science from the National Academy
    of Sciences, which NASA, the National Oceanic and Atmospheric
    Administration (NOAA), and the United States Geological Survey (USGS)
    requested in 2003. As the first of its kind, the survey has drawn
    considerable attention, and we will observe the programmatic priorities
    for Earth Science which it advocates. In addressing the survey's Earth
    science priorities, and consistent with ensuring that NASA maintains a
    balanced portfolio of science as directed by the NASA Authorization Act
    of 2005 (Public Law 109-155), we have added funding to the Global
    Precipitation Measurement (GPM) mission, the follow-on to the highly
    successful Tropical Rainfall Measuring Mission (TRMM), to improve our
    ability to keep this mission on schedule. Our plan is to launch the
    first core satellite for the GPM mission not later than 2013, followed
    by the second Constellation spacecraft the following year. The fiscal
    year 2008 budget request also augments funding for the Landsat Data
    Continuity Mission (LDCM) and Glory missions in order to help keep
    those projects on schedule. Within planetary sciences, funding has been
    identified for Lunar science research project beginning in fiscal year
    2008 to leverage the many opportunities for payloads on NASA and other
    nations' lunar spacecraft, such as India's Chandrayaan-1, as well as to
    analyze the science data from these missions, including NASA's Lunar
    Reconnaissance Orbiter. In 2008, we will launch a host of Heliophysics
    missions, many with international and interagency partners, to analyze
    the effects of solar flares, coronal mass ejections, and galactic
    cosmic rays. In Astrophysics, the final Hubble servicing mission is
    currently planned for a space shuttle flight in September 2008. And, as
    I advised the Congress and the science community last summer, NASA has
    reinstated the Stratospheric Observatory for Infrared Astronomy (SOFIA)
    mission. Though we know of no technical showstoppers in regard to the
    airworthiness of the aircraft or operation of the telescope, this
    program has some remaining hurdles to overcome and so remains subject
    to a management review later this spring. NASA will launch or
    participate in seven science missions in fiscal year 2007, followed by
    10 missions in fiscal year 2008, resulting in many new Earth and space
    science discoveries in the years ahead.
        The fiscal year 2008 budget request increases the budget profile
    for Aeronautics Research over the President's fiscal year 2007 request,
    aligns our aeronautics activities with the President's recently issued
    Aeronautics Research and Development Policy, and advances U.S.
    technical leadership in aeronautics. NASA has made significant progress
    in reformulating its approach to aeronautics research by collaborating
    with the broad research community including industry, academia, and
    other government agencies including the Federal Aviation Administration
    (FAA) and the Department of Defense (DOD). Through these changes, NASA
    will help ensure that America continues to lead the way in aeronautics
    research.
        NASA continues to monitor and manage our ``uncovered capacity''
    (employees not directly assigned to specific projects and programs). A
    little over 18 months ago, nearly 3,000 of NASA's 19,000 employees were
    designated as ``uncovered capacity.'' Today, largely with the work
    defined in the Constellation program, we have greatly reduced that
    problem to manageable levels. As of February 2007, we have fewer than
    200 uncovered capacity employees in fiscal year 2007 and fiscal year
    2008. More importantly, many of our best engineers are working
    diligently on the great challenges before us. Every NASA center is now
    vested in our space exploration mission. While we are proud of the
    progress that has been made, significant human capital challenges
    remain. These include matching available skills with the important work
    to be done, managing attrition, retraining and hiring, and improving
    our workforce planning for future years in fiscal year 2009 and beyond.
    To address these challenges and any potential impacts resulting from
    the fiscal year 2007 funding reductions, we have established a new
    intra-agency Workforce Planning Technical Team.
        In addition, beginning in fiscal year 2007, the agency revised
    overhead allocations to simplify how we manage under full cost
    accounting. These changes will ensure a uniform cost rate for all NASA
    civil servants across the agency's government field centers. All
    changes are revenue-neutral to programs and projects; none of NASA's
    missions gain or lose funding as a result of this accounting change. At
    first glance, this accounting change appears to reduce the Aeronautics
    Research budget because so much of that work is done at our smaller
    research centers. However, in actuality, NASA's direct spending for
    Aeronautics Research has increased in the fiscal year 2008 budget
    runout by $205 million through fiscal year 2011 compared to the fiscal
    year 2007 budget runout.
        Beyond our budget request, NASA is beginning to transition the
    workforce, infrastructure, and equipment from the space shuttle to new
    exploration systems. Many of our most experienced people will be
    considering retirement between now and 2010. We will need the means to
    manage this attrition in a targeted manner to achieve better alignment
    of the workforce with our mission without creating unwanted losses and
    skills imbalances. One tool we may be using is the authority for the
    agency to be able to re-employ selected retirees without an offset to
    their annuity--thus giving them an incentive to see a project or
    program to completion. To assist employees with transition to the
    private sector, and to ease that upheaval, another tool would authorize
    NASA to continue their coverage under the Federal Employees Health
    Insurance for 1 year after departure.
        We will also need better tools to manage the transition of our
    facilities. The agency is proposing slight changes and expansion to
    existing authority to permit leasing of underutilized facilities and
    related equipment. The agency would retain the proceeds of those leases
    to be deposited in a NASA capital asset account and invested in
    activities to improve and sustain our facilities and infrastructure. We
    plan to discuss the details of these legislative requests with members
    of Congress in the weeks and months ahead.
        The remainder of my testimony outlines the fiscal year 2008 budget
    request for NASA in greater detail.
    Science Mission Directorate
        This past year was truly remarkable for science discovery about the
    Earth, Sun, solar system, and universe. NASA was responsible for 11
    percent of Science News magazine's top stories (covering all fields of
    science) for 2006, which is an all-time record in the 34 years of
    tracking this metric. NASA's findings ranged from new observations of
    familiar phenomena like hurricanes, thunderstorms, and rainfall, to the
    identification of 16 new extra-solar planets orbiting distant stars
    near the center of our galaxy. As NASA continues to add observations
    from long-lived assets such as the Spirit and Opportunity Mars
    Exploration Rovers, it continues to successfully develop and launch the
    next generation of missions and to support a vigorous scientific
    community.
        In 2006, NASA launched four new science missions, one technology
    demonstration mission, and partnered with other Federal and
    international agencies to launch three other science and technology
    missions, as well as the GOES-O satellite, to bring the current total
    number of operational science missions to 52. In January 2006, we
    launched the New Horizons spacecraft to the planet Pluto. Scheduled to
    arrive at Pluto in 2015, the spacecraft made its closest approach to
    Jupiter in late February. With the April 2006 launch of the CloudSat
    and Cloud-Aerosol Lidar and Infrared Pathfinder Satellite Observations
    (CALIPSO) spacecraft, NASA added to the ``A-train'' of satellites
    flying in close proximity around Earth to gain a better understanding
    of key factors related to climate change. In October 2006, NASA's twin
    Solar Terrestrial Relations Observatories mission (STEREO) spacecraft
    were launched to help researchers construct the first-ever 3-
    dimensional views of the Sun. Although the two spacecraft will not
    return images until later this year, initial results from STEREO have
    provided us with an unprecedented look at solar activity. On February
    17, 2007, we launched five Time History of Events and Macroscale
    Interactions during Substorms (THEMIS) microsatellites to study the
    Earth's magnetosphere, and we are on track to launch the Dawn mission
    to main belt of asteroids between Mars and Jupiter and the Phoenix Mars
    mission later this year.
        NASA's fiscal year 2008 budget requests $5.5 billion for the
    agency's science portfolio. This represents an increase of $49.3
    million (or 1 percent) over the fiscal year 2007 request and it will
    enable NASA to launch or partner on 10 new missions, operate and
    provide ground support for more than 50 spacecraft, and fund scientific
    research based on the data returned from these missions. For fiscal
    year 2008, NASA separated the Earth-Sun System theme into two themes:
    Earth Science and Heliophysics, and programmatic responsibility for
    studies of Near Earth Objects is transferred to the Exploration Systems
    Mission Directorate.
        The Earth science budget requests $1.5 billion--an increase of
    $27.7 million over the fiscal year 2007 request--to better understand
    the Earth's atmosphere, lithosphere, hydrosphere, cryosphere, and
    biosphere as a single connected system. This request includes
    additional funding for the Global Precipitation Measurement (GPM)
    mission to improve schedule assurance in response to the high priority
    placed on GPM in the Decadal Survey. As the follow-on to the highly
    successful Tropical Rainfall Measuring Mission, NASA's plans to launch
    GPM's first Core satellite no later than 2013, followed by the second
    Constellation spacecraft the following year. The Earth science budget
    also includes increased funding for the Landsat Data Continuity Mission
    and Glory in order to help keep them on their schedules, and provides
    funds for the National Polar-orbiting Operational Environmental
    Satellite System (NPOESS) Preparatory Project (NPP) to reflect
    instrument availability and launch delays. Funds are requested for
    continued development and implementation of the Ocean Surface
    Topography Mission to launch in 2008, the Aquarius mission to measure
    the ocean's surface salinity to launch in 2009, and the Orbiting Carbon
    Observatory mission planned for launch in 2008. NASA will continue to
    contribute to the President's Climate Change Research Initiative by
    collecting data sets and developing predictive capabilities that will
    enable advanced assessments of the causes and consequences of global
    climate change. Over the coming months, NASA will evaluate
    opportunities for implementing the recommendations of the National
    Research Council's Earth Science Decadal Survey and responding to
    challenges to the continuity of climate measurements resulting from the
    Nunn-McCurdy recertification of the NPOESS program.
        The Heliophysics budget request of $1.1 billion will support 14
    operational missions to understand the Sun and its effects on Earth,
    the solar system, and the space environmental conditions that will be
    experienced by astronauts, and to demonstrate technologies that can
    improve future operational systems. During fiscal year 2008, the
    Explorer Program will launch the Interstellar Boundary Explorer (IBEX)
    mission, focused on the detection of the very edge of our solar system,
    and the Coupled Ion-Neural Dynamics Investigation (CINDI) Mission of
    Opportunity conducted by the University of Texas. The Solar Dynamics
    Observatory (SDO) to study the Sun's magnetic field will complete
    launch readiness milestones in fiscal year 2008 and is presently
    scheduled for launch in August of 2008. The Geospace Radiation Belt
    Storm Probes (RBSP) mission, presently in formulation, will undergo a
    preliminary design review and a non-advocate review in fiscal year 2008
    in preparation for entering development in early fiscal year 2009. RBSP
    will improve the understanding of how solar storms interact with
    Earth's Van Allen radiation belts. While the ST-7 and ST-8 missions are
    on track for launches in 2009, the New Millennium ST-9 mission, along
    with follow-on missions, is delayed.
        The planetary science budget request of $1.4 billion will advance
    scientific knowledge of the solar system, search for evidence of
    extraterrestrial life, and prepare for human exploration. NASA will get
    an early start on Lunar science when the Discovery Program's Moon
    Mineralogy Mapper (M3) launches aboard India's Chandrayaan-1 mission in
    March 2008, along with the Mini-RF, a technology demonstration payload,
    supported by NASA's Exploration and Space Operations Mission
    Directorates and the Department of Defense, which may glean water in
    the Moon's polar regions. In addition, the budget requests $351 million
    from fiscal year 2008 to fiscal year 2012 for new Lunar science
    research, including missions of opportunity, data archiving, and
    research. The budget supports the Mars Exploration Program by providing
    for a mission every 26 months, including the Phoenix spacecraft,
    scheduled for launch in 2007, and the Mars Science Laboratory, with a
    launch scheduled for 2009. The Discovery Program's Dawn Mission is
    scheduled to launch later this year, and the Mercury Surface, Space
    Environment, Geochemistry and Ranging (MESSENGER) spacecraft is already
    on its way to Mercury. Three Discovery Mission proposals and three
    Missions of Opportunity were selected in 2006 for Phase A studies, and
    the Discovery Program will invite proposals for additional new missions
    in 2008. With the New Horizons spacecraft continuing on its way to
    Pluto, the New Frontiers Program's Juno Mission will undergo a
    preliminary design review and a non-advocate review in fiscal year 2008
    in preparation for entering development. The New Frontiers Program will
    release its third Announcement of Opportunity (AO) in late 2008.
        The Astrophysics budget requests $1.6 billion to operate NASA's
    astronomical observatories, including the Hubble Space Telescope (HST),
    Chandra X-Ray Observatory, and Spitzer Space Telescope, and to build
    more powerful instruments to peer deeper into the cosmos. HST is
    scheduled for a final servicing mission in September 2008 using the
    space shuttle Atlantis. Along with service life extension efforts, two
    new instruments will be installed during the servicing mission that are
    expected to dramatically improve performance and enable further
    discoveries, including enabling some science observations that have
    been affected by the recent failure of the Advanced Camera for Surveys.
    After the servicing mission, HST will once again have six fully
    operational instruments (including a suite of cameras and spectrographs
    that will have about 10 times the capability of older instruments) as
    well as new hardware capable of supporting at least another 5 years of
    world-class space science. The ESA Herschel and Planck missions, both
    of which include contributions from NASA, will launch in fiscal year
    2008 aboard an ESA-supplied Ariane-5. Kepler instrument and spacecraft
    integration and test will be completed in preparation for launch in
    November 2008, to determine the frequency of potentially habitable
    planets. The Gamma-ray Large Area Space Telescope (GLAST) will launch
    in fiscal year 2008 to begin a 5-year mission mapping the gamma-ray sky
    and investigating gamma-ray bursts. The James Webb Space Telescope will
    undergo preliminary design review and a non-advocate review in fiscal
    year 2008, in preparation for entering development. The SOFIA
    observatory has been reinstated. Though we know of no technical
    showstoppers in regard to the airworthiness of the aircraft or
    operation of the telescope, this program has some remaining hurdles to
    overcome and so remains subject to a management review later this
    spring chaired by the NASA associate administrator. The SOFIA program
    baseline will be finalized at that time.
    Exploration Systems Mission Directorate
        The fiscal year 2008 budget request for the Exploration Systems
    Mission Directorate (ESMD) is $3.9 billion to support continued
    development of new U.S. human spaceflight capabilities and supporting
    technologies, and to enable sustained and affordable human space
    exploration after the space shuttle is retired in 2010. With this
    budget, ESMD will continue to develop our next-generation crew
    exploration vehicle, while also providing research and developing
    technologies for the longer-term development of a sustained human
    presence on the Moon. However, due to the cumulative effect of
    previously underestimated costs to retire/transition the space shuttle
    and support the International Space Station, the reduction from the
    fiscal year 2007 request reflected in the fiscal year 2007 continuing
    resolution, and the maturing design and integrated flight tests
    baselined for the Constellation program, it is unlikely that NASA will
    be able to bring these new exploration capabilities online by 2014.
    ESMD will also continue to work with other nations and the commercial
    sector to leverage its investments and identify opportunities for
    specific collaboration on lunar data and lunar surface activities. New
    human spaceflight development of this magnitude, such as the Orion Crew
    Exploration Vehicle, occurs once in a generation. The next 5 years are
    a critical period in our Nation's space flight efforts.
        The Constellation program includes the Orion Crew Exploration
    Vehicle; Ares I, a highly reliable crew launch vehicle; Commercial
    Orbital Transportation Services (COTS) demonstrations of cargo and crew
    transport to the International Space Station; Ares V, a heavy-lift
    launch vehicle; spacesuits and tools required by the flight crews and;
    associated ground and mission operations infrastructure to support
    either lunar and/or initial low-Earth orbit (LEO) missions.
        For fiscal year 2008, pending a full analysis of the fiscal year
    2007 budget impacts, ESMD is on track to maintain its commitments for
    Ares I and Orion, and to continue meeting major milestones. This year
    Constellation will continue to mature and develop overall. Formulation
    of the Constellation elements will continue, leading to the preliminary
    design review in 2008, at which time the program will be baselined.
    NASA will conduct an update for the overall Constellation Systems
    Requirements Review (SRR) in 2007 after the completion of all the
    Program Element SRRs--the Orion Project recently completed its SRR on
    March 1, 2007. ESMD released the Ares I Upper Stage Request for
    Proposals (RFP) on February 23, 2007. The RFP for the Ares I Avionics
    Ring is scheduled for release in May 2007, with selection and contract
    award scheduled for November 2007.
        Facility, equipment, and personnel transitions from space shuttle
    to Constellation will be the major emphasis of the fiscal year 2009
    budget process. NASA transition activities are focused on managing the
    evolution from current operations of the space shuttle to future
    operations of Constellation and emerging commercial services, in a
    safe, successful and smooth process. This joint effort between the
    Space Operations Mission Directorate (SOMD) and ESMD includes the
    utilization and disposition of resources, including real and personal
    property, personnel, and processes, to leverage existing shuttle and
    International Space Station assets for NASA's future exploration
    activities. Formalized transition boards are working to achieve this
    outcome. A Human Spaceflight Transition Plan was developed in 2006;
    updates are in work, and metrics for the plan are being refined and
    will be implemented in 2007.
        In August 2006, NASA signed Space Act Agreements with Space
    Exploration Technologies Corporation, of El Segundo, California, and
    Rocketplane-Kistler, of Oklahoma City, Oklahoma, to develop and
    demonstrate COTS that could open new markets and pave the way for
    commercial providers to launch and deliver crew and cargo to the ISS.
    The Space Act Agreements establish milestones and identify objective
    criteria to assess their progress throughout Phase 1 of the
    demonstrations. In the fiscal year 2008 budget, funding for the
    purchase of crew and cargo transportation services, either from
    international partners or preferably from commercial providers, is
    transferred from ESMD to SOMD. COTS demonstration funding remains in
    ESMD to better exploit potential synergies with the Constellation
    Program.
        With activities in the Advanced Capabilities program, NASA seeks to
    understand the space environment as it relates to human performance by
    addressing respective recommendations from the Exploration Systems
    Architecture Study that was conducted 2005. This included refocusing
    biomedical research and human life-support activities through new
    milestones and requirements to target the timely delivery of research
    products. Accordingly, ESMD created two new programs under Advanced
    Capabilities: the Human Research Program (HRP) to study and mitigate
    risks to astronaut health and performance and the Exploration
    Technology Development Program (ETDP) to enable future exploration
    missions and reduce cost and risk. Plans for 2008 include:
      --Testing of prototype ablative heat shield materials, low-impact
            docking systems, and landing attenuation systems;
      --testing of advanced environmental control systems on the ISS;
      --developing a lightweight composite command module test article for
            the Orion;
      --conducting studies to assess risks of long-term radiation exposure
            and continuing the use of the ISS as a testbed for studying
            human health and safety in space;
      --spacecraft integration and testing in preparation for the Lunar
            Reconnaissance Orbiter (LRO) launch in October 2008;
      --next-generation spacesuit capable of supporting exploration; and
      --developing jointly with the U.S. Air Force the RS-68 engine that
            will be used on the Ares V.
        Finally, the LRO and the Lunar Crater Observatory Sensing Satellite
    (LCROSS) to the Moon is planned to be launched in early fiscal year
    2008. These dual-manifested spacecraft have completed critical design
    review and are currently in development. The science yielded from these
    missions will enable future outpost site selection and new information
    about the deep craters at the lunar poles. The LRO/LCROSS missions
    represent NASA's first steps in returning to the Moon.
    Aeronautics Research Mission Directorate
        In 2006, NASA's Aeronautics Research Mission Directorate (ARMD)
    conducted a significant restructuring of its aeronautics program,
    allowing NASA to pursue high-quality, innovative, and integrated
    research that will yield revolutionary tools, concepts, and
    technologies to enable a safer, more flexible, environmentally
    friendly, and efficient national air transportation system. As such,
    ARMD's research will continue to play a vital role in supporting NASA's
    human and robotic space activities. The reshaped Aeronautics Program
    content and direction is consistent with the National Aeronautics
    Research and Development Policy, signed by the President on December
    20, 2006.
        A primary goal across all of the programs in ARMD is to establish
    strong partnerships involving NASA, other government agencies,
    academia, and industry in order to enable significant advancement in
    our Nation's aeronautical expertise. Because these partnerships are so
    important, NASA has put many mechanisms in place to engage academia and
    industry, including industry working groups and technical interchange
    meetings at the program and project level, space act agreements for
    cooperative partnerships, and the NASA Research Announcement (NRA)
    process that provides for full and open competition for the best and
    most promising research ideas. During 2006, ARMD's NRA solicitation
    resulted in the selection of 138 proposals for negotiation for award
    from 72 different organizations representing 29 different States plus
    the District of Columbia. NASA's fiscal year 2008 budget request for
    aeronautics includes $51 million for NRA awards.
        In fiscal year 2008, the President's budget for NASA requests $554
    million for aeronautics research. This budget reflects full cost
    simplification, which significantly reduces the center overhead and
    infrastructure allocated to the aeronautics programs.
        NASA's Airspace Systems Program (ASP) has partnered with the Joint
    Planning and Development Office (JPDO) to help develop concepts,
    capabilities and technologies that will lead to significant
    enhancements in the capacity, efficiency and flexibility of the
    National Airspace System (NAS). Such improvements are critical to meet
    the Nation's airspace and airports requirements for decades to come. In
    fiscal year 2008, NASA's budget request would provide $98.1 million for
    ASP to conduct further research in operational concepts and human-in-
    the-loop simulation modeling that supports advancements in automated
    separation assurance capabilities. In addition, ASP will pursue
    enhanced development of airport surface movement trajectory models to
    provide a basis for optimized use of super density airports, integrated
    airport clusters, and terminals where demand for runways is high. Last
    year, ASP took an important step toward this goal by completing
    development of a system-wide operational concept that provides a
    detailed description of future NAS capacity enhancements while
    assessing the benefits of such system improvements. Key to the analysis
    of the operational concepts was program-developed tools such as the
    Airspace Concepts Evaluation System and the Future Air Traffic
    Management Concepts Evaluation Tool, both of which have successfully
    transitioned from NASA to the Federal Aviation Administration and the
    JPDO.
        NASA's Fundamental Aeronautics Program (FAP) conducts research in
    the engineering and scientific disciplines that enable the design of
    vehicles that fly through any atmosphere at any speed. The fiscal year
    2008 budget request, amounting to $293.4 million, will enable
    significant advances in the hypersonics, supersonics, subsonic fixed
    wing, and subsonic rotary wing projects that make up the FAP. These
    projects focus on creating innovative solutions for the technical
    challenges of the future: increasing performance (range, speed,
    payload, fuel efficiency) while meeting stringent noise and emissions
    constraints; alleviating environmental and congestion problems of the
    Next Generation Air Transportation System (NGATS) through the use of
    new aircraft and rotorcraft concepts; and, facilitating access to space
    and re-entry into planetary atmospheres. A wide variety of cross-
    cutting research topics are being pursued across the speed regimes with
    emphasis on physics-based multidisciplinary analysis and design,
    aerothermodynamics, materials and structures, propulsion, aero-servo-
    elasticity, thermal protection systems, advanced control methods, and
    computational and experimental techniques. A number of key activities
    are planned for fiscal year 2007 and fiscal year 2008 including the
    launch of a suborbital rocket to conduct flight experiments in
    hypersonic boundary layer transition and re-entry shapes, the flight
    test of scale models of the X-48B Blended Wing-Body concept to assess
    this advanced unconventional airframe configuration for its potential
    to decrease aircraft noise while also improving performance, the
    evaluation of radical new concepts for variable-speed rotor
    technologies that can result in highly improved performance, and the
    evaluation of actively-controlled inlets for supersonic transports.
        The fiscal year 2008 budget request for NASA's Aviation Safety
    Program (AvSP) is $74.1 million. The four projects within the program
    (Integrated Intelligent Flight Deck, Integrated Resilient Aircraft
    Control, Aircraft Aging and Durability, and Integrated Vehicle Health
    Management) will develop cutting-edge tools, methods, and technologies
    with close coordination among them to improve the intrinsic safety
    attributes of current and future aircraft that will operate in the
    NGATS. In fiscal year 2008, the program will complete a study of human-
    automation technology that will improve safety during approach and
    landing operations by allowing for active operator assistance that
    maintains appropriate levels of workload and will be conducted to
    evaluate neural networks for direct adaptive control that will maximize
    adaptation to simulated in-flight failures while minimizing adverse
    interactions. At the same time, onboard sensor technology will be
    developed and validated to achieve significant improvement in measuring
    atmospheric water content that will improve the ability to detect the
    onset of potential icing hazards. Challenges related to aircraft aging
    and durability will also be addressed by developing models capable of
    simulating the initiation and propagation of minute cracks in metallic
    materials.
        Finally, NASA's Aeronautics Test Program (ATP) will continue to
    safeguard the strategic availability of a critical suite of aeronautics
    test facilities that are deemed necessary to meet agency and national
    aeronautics needs. The fiscal year 2008 budget request for ATP is $88.4
    million, which will enable strategic utilization, operations,
    maintenance and investment decisions for major wind tunnel/ground test
    facilities at Ames Research Center, Glenn Research Center and Langley
    Research Center and for the Western Aeronautical Test Range support
    aircraft and test bed aircraft at Dryden Flight Research Center. In
    fiscal year 2006, NASA implemented procedures to ensure affordable and
    competitive pricing of its aeronautics facilities for use by other
    parties, including industry and university researchers. In fiscal year
    2008, ATP plans to continue ensuring competitive prices for ATP
    facilities, reducing a backlog of maintenance issues and investing in
    advanced technologies such as installing consistent angle of attack
    instrumentation at the research centers.
    Space Operations Mission Directorate
        This was an extraordinary year for the space shuttle and
    International Space Station (ISS) programs. NASA celebrated
    Independence Day 2006 by launching space shuttle Discovery on the STS-
    121 mission. The second of two test flights (the first was STS-114 in
    July/August 2005), STS-121 helped validate the improvements made to the
    space shuttle system since the loss of Columbia on February 1, 2003.
    The mission also marked the return of a complement of three crewmembers
    to the ISS. The space shuttle Atlantis (STS-115), which launched on
    September 9, marked a return to sustained space shuttle operations and
    placed NASA on track to completing assembly of the ISS by 2010. STS-115
    delivered the critical P3/P4 truss to the ISS, which will provide a
    quarter of the power services needed to operate the completed research
    facility. The last flight in December 2006, STS-116, was devoted
    primarily to deactivating the electrical power systems on the U.S.
    segment of the ISS and making a series of electrical and coolant
    connections between the P3/P4 truss segment and the rest of the
    station. To do this, flight controllers at the mission control centers
    in Houston and Moscow uplinked over 17,900 commands to the ISS during
    the mission--all without a single unplanned or command error. STS-116
    crewmember Robert Curbeam also set a record for the most spacewalks
    ever conducted by an astronaut on a single space shuttle mission, with
    four excursions totaling over 25 hours.
        Operational activities onboard the ISS have continued into 2007,
    with a series of spacewalks that reconfigured the thermal system on the
    station and prepared us for future assembly tasks. The station is now
    able to provide additional power to the space shuttle, allowing two
    extra docked days, and we have connected permanent systems in place of
    temporary ones. The sequence of three complex spacewalks within 9 days
    also demonstrated capabilities we will need later this year to fully
    install Node 2 following its delivery on STS-120.
        These mission achievements reflect the NASA team's dedication to
    safely and successfully flying out the space shuttle program and
    meeting our Nation's commitments to our international partners. The
    program's successes also led to the decision in October 2006 to move
    forward with plans for a final servicing mission to the Hubble Space
    Telescope (HST). Following an extensive review by the relevant NASA
    offices of all safety and technical issues associated with conducting
    such a mission, it became clear that an HST servicing mission could be
    carried out effectively and safely. While there is an inherent risk in
    all spaceflight activities, the desire to preserve a truly
    international asset like the HST makes doing this mission the right
    course of action.
        The space shuttle fiscal year 2008 budget request of $4.01 billion
    would provide for five shuttle flights, including four ISS assembly
    flights as well as the HST servicing mission. The ISS assembly flights
    include the launch of major research facility modules from the European
    Space Agency and Japan. The Canadian Special Purpose Dexterous
    Manipulator robotic system will also be flown in 2008. These flights
    are a major step towards fulfilling U.S. commitments to NASA's
    international partners as specified in the ISS agreements and the
    Vision for Space Exploration.
        The fiscal year 2008 budget request includes $2.24 billion for ISS
    activities. NASA has consulted with our international partners on the
    configuration of the ISS, and is working closely with them to determine
    the detailed plans for logistics required during and after assembly.
    The fiscal year 2008 budget request provides the necessary resources to
    purchase Soyuz crew transport and rescue for U.S. astronauts as well as
    progress vehicle logistics support for the ISS from the Russian Space
    Agency.
        As the shuttle approaches its retirement, the ISS Program intends
    to use alternative cargo and crew transportation services from
    commercial industry. Once a capability is demonstrated in phase 1 of
    the Commercial Orbital Transportation Services (COTS) Space Act
    Agreements, NASA plans to purchase cargo delivery services
    competitively in phase 2 and will decide whether to pursue crew
    demonstrations. In the fiscal year 2008 budget, funding for the
    purchase of crew and cargo transportation services, either from
    international partners or preferably from commercial providers, is
    transferred from the Exploration Systems Mission Directorate to the
    Space Operations Mission Directorate. One item of significance in the
    fiscal year 2008 budget runout, especially in the out-years, is that it
    allows for increases to our previously estimated costs for purchasing
    commercial cargo and crew services to support the ISS, assuming these
    commercial services are successfully demonstrated and are cost-
    effective. Should costs for those services be greater than what is
    presently budgeted, NASA has accepted a management challenge to scale
    back on our space operations costs and will curtail some of our robotic
    lunar exploration or long-term exploration technology development in
    the out-years. COTS demonstration funding remains in ESMD to better
    exploit potential synergies with the Constellation Program.
        The space shuttle program's highest priority is to safely complete
    the mission manifest by the end of fiscal year 2010, using as few
    flights as possible. Working through formalized transition control
    board processes, the space shuttle program will also play a key role in
    coordinating the smooth transition of space shuttle assets and
    capabilities to the next generation of exploration systems without
    compromising the safety of ongoing flight operations. The greatest
    challenge NASA faces is safely flying the space shuttle to assemble the
    ISS prior to retiring the shuttle in 2010, while also bringing new U.S.
    human spaceflight capabilities on-line soon thereafter. There are a
    number of major transition milestones set for fiscal year 2008,
    including the transition of one of the four high bays in the vehicle
    assembly building and launch pad 39B to the Constellation Systems
    Program. Space shuttle Atlantis may also be retired in fiscal year 2008
    after the HST SM-4 mission and its systems and parts would be used to
    support the remaining space shuttle orbiters, Discovery and Endeavour,
    during the program's last 2 years of operations. The fiscal year 2008
    budget request reflects the current assessment of costs to retire the
    space shuttle. Over the next year, NASA will develop additional detail
    and refine our cost estimates for the transition.
        The fiscal year 2008 budget also provides for the procurement of
    two additional Tracking and Data Relay Satellite System (TDRSS)
    satellites to replenish the Constellation. NASA projects that the
    availability of aging TDRSS satellites to support overall user demand
    will be reduced by 2009 and depleted by 2015. In order to continue to
    support all users, NASA must begin the procurement process immediately,
    with planned launches in fiscal year 2012 and fiscal year 2013. By
    replenishing the satellites, NASA will be able to meet overall user
    demand through 2016. The Space Operations Mission Directorate has
    partnered with non-NASA users to provide a proportionate investment in
    the replacement capabilities.
    Cross-Agency Support Programs
        The fiscal year 2008 budget request for activities within the
    Cross-Agency Support Programs (CASP)--education, advanced business
    systems, innovative partnerships programs, and Shared Capabilities
    Assets Program--is $498.2 million. Within this amount, $34.3 million is
    for the Shared Capability Assets Program (SCAP), which is designed to
    ensure that critical capabilities and assets (e.g. arc jets, wind
    tunnels, super computing facilities, rocket propulsion testing, etc.)
    required agency-wide are available to missions when needed. The fiscal
    year 2008 budget request for Advanced Business Systems, comprising the
    Integrated Enterprise Management Program (IEMP), is $103.1 million.
    Fiscal year 2007 and fiscal year 2008 funding will support IEMP in
    implementing capabilities that improve NASA's tracking and
    accountability of its property, plant, and equipment; integrate human
    capital information, providing employees and management with new,
    secure tools for accessing personnel data, and planning and budgeting
    NASA's workforce; and, provide more relevant and accurate financial
    information in support to NASA's programs and projects. This funding
    also supports ongoing operations and maintenance of NASA's financial
    system and other agency-wide business systems.
        For NASA's education activities, the fiscal year 2008 budget
    request totals $153.7 million and sustains our ongoing commitment to
    excellence in science, technology, engineering, and mathematics (STEM)
    to ensure that our agency is equipped with the right workforce to
    implement the Vision for Space Exploration. NASA will continue the
    tradition of investing in education and supporting educators who play a
    key role in preparing, inspiring, exciting, encouraging, and nurturing
    the youth who will manage and lead the laboratories and research
    centers of tomorrow. NASA education is committed to three primary
    objectives to help improve the state of STEM education in our country:
    strengthen the Nation's and NASA's future workforce; attract and retain
    students in the STEM discipline and; engage the American people in
    NASA's missions through partnerships and alliances.
        The Innovative Partnerships Programs (IPP) provides leveraged
    technology investments, dual-use technology-related partnerships, and
    technology solutions for NASA. The fiscal year 2008 budget request for
    IPP activities is $198.1 million. The IPP implements NASA's Small
    Business Innovative Research (SBIR) and Small Business Technology
    Transfer (STTR) programs that provide the high-technology small
    business sector with an opportunity to develop technology for NASA.
    Recently, NASA has made some changes to the management structure of
    these two programs to better enable technology infusion and to increase
    the efficiency of the operations. IPP also manages the Centennial
    Challenges Program. NASA has already benefited from the introduction of
    new sources of innovation and technology development even though the
    program is relatively new and no prizes have yet been awarded. In
    addition, ongoing and future prize challenges will continue to inspire
    brilliant young minds.
                                   conclusion
        NASA has many challenges ahead of us, but we are on track and
    making progress in managing these challenges. The fiscal year 2008
    budget request demonstrates commitment to our Nation's leadership in
    space and aeronautics research, and while we may face a significant
    funding reduction for fiscal year 2007, we will carry on, though not at
    the pace we had previously hoped.
        I ask your help to ensure this Nation maintains a human spaceflight
    capability. Without stable funding as requested in this budget, we face
    the very real possibility of allowing that capability to slip away for
    the foreseeable future--even as other nations continue to develop
    similar capabilities.
        I also need your help to effectively transition key elements of our
    space shuttle workforce, infrastructure, and equipment to our Nation's
    exploration objectives. The provisions I referenced earlier, as well as
    stable funding, will help ensure we preserve a critical and unique
    industrial base capability that has allowed the United States to lead
    the world in space exploration.
        Again, thank you for the opportunity to appear before you today. I
    would be please to respond to any questions that you may have.

                NATIONAL AERONAUTICS AND SPACE ADMINISTRATION PRESIDENT'S FISCAL YEAR 2008 BUDGET REQUEST
                                         [Budget authority, dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                     Fiscal      Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                By Mission Directorate              year 2007  year 2008  year 2009  year 2010  year 2011  year 2012
    ----------------------------------------------------------------------------------------------------------------
    Science, Aeronautics and Exploration:
        Science:
            Earth Science........................   $1,469.6    $1,497.3   $1,539.7   $1,500.7   $1,411.2   $1,353.2
            Heliophysics.........................   $1,028.1    $1,057.2   $1,034.5   $1,107.1   $1,241.2   $1,307.5
            Planetary Science....................   $1,406.1    $1,395.8   $1,676.9   $1,723.9   $1,738.3   $1,748.2
            Astrophysics.........................   $1,563.0    $1,565.8   $1,304.2   $1,268.9   $1,266.2   $1,393.8
                                                  ------------------------------------------------------------------
              Subtotal, Science..................   $5,466.8    $5,516.1   $5,555.3   $5,600.6   $5,656.9   $5,802.7
                                                  ==================================================================
        Exploration Systems:
            Constellation Systems................   $3,232.5    $3,068.0   $3,451.2   $3,784.9   $7,666.0   $7,993.0
            Advanced Capabilities................     $920.0      $855.8     $861.6     $973.0   $1,059.1   $1,083.9
                                                  ------------------------------------------------------------------
              Subtotal, Exploration Systems......   $4,152.5    $3,923.8   $4,312.8   $4,757.8   $8,725.2   $9,076.8
                                                  ==================================================================
        Aeronautics Research: Aeronautics             $529.3      $554.0     $546.7     $545.3     $549.8     $554.7
         Technology..............................
                                                  ==================================================================
        Cross-Agency Support Programs:
            Education............................     $167.4      $153.7     $152.8     $152.7     $149.8     $149.6
            Advanced Business Systems............      $97.4      $103.1      $69.4      $71.6      $67.6      $67.5
            Innovative Partnerships Program......     $215.1      $198.1     $197.2     $199.8     $200.0     $200.0
            Shared Capability Assets Pro-  gram..      $22.1       $34.3      $34.2      $36.2      $37.3      $37.2
            Continuing Resolution Rate \1\.......   ($555.60)  .........  .........  .........  .........  .........
                                                  ------------------------------------------------------------------
              Subtotal, Cross-Agency Support          $502.0      $489.2     $453.5     $460.4     $454.7     $454.4
               Programs..........................
                                                  ==================================================================
              Total, Science, Aeronautics and      $10,650.6   $10,483.1  $10,868.4  $11,364.2  $15,386.5  $15,888.6
               Exploration.......................
                                                  ==================================================================
    Exploration Capabilities:
        Space Operations:
            Space Shuttle........................   $4,017.6    $4,007.5   $3,650.9   $3,634.4     $116.2  .........
            International Space Station..........   $1,762.6    $2,238.6   $2,515.1   $2,609.2   $2,547.5   $2,600.8
            Space and Flight Support.............     $328.1      $545.7     $544.3     $382.0     $372.9     $377.2
            Continuing Resolution Rate \1\.......     ($40.9)  .........  .........  .........  .........  .........
                                                  ------------------------------------------------------------------
              Total, Space Operations............   $6,108.3    $6,791.7   $6,710.3   $6,625.7   $3,036.6   $2.978.0
                                                  ==================================================================
    Inspector General............................      $33.5       $34.6      $35.5      $36.4      $37.3      $38.3
        Continuing Resolution Rate \1\...........      ($2.0)  .........  .........  .........  .........  .........
                                                  ------------------------------------------------------------------
          Total..................................  $16,792.3   $17,309.4  $17,612.2  $18,026.3  $18,460.4  $18,905.0
                                                  ==================================================================
    Year to Year Change \2\ (percent)............  ..........        3.1        1.8        2.3        2.4        2.4
    ----------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 2007 column represents the 2007 President's Budget in full-cost simplification and shown in the
      new Theme structure.
    \2\ Modification to fiscal year 2007 if current continuing resolution is extended for entire year, and assuming
      $126.1 million institutional mission support transfers from Exploration Capabilities to Science, Aeronautics
      and Exploration not included in totals.

    Totals may not add due to rounding.

        Senator Mikulski. I have also read your written oral
    testimony particularly, and I appreciate, in the interest of
    time, pages 4, 5, and 6, which I think go to the meat of the
    issues around the continuing resolution, the way forward,
    flashing yellow lights about what will be done when, and
    workforce impact issues, which I know are of keen impact to not
    only those who are currently here, but to certainly extensive
    conversations with Senator Shelby, Senator Sessions, Senator
    Hutchison, and Senator Nelson, which goes to essentially where
    we are in this year's appropriation.
        I am going to ask you a question and if you feel
    comfortable answering it, fine. If not, I understand. But my
    question is, when we look at 2008 what did you ask for from the
    Office of Management and Budget (OMB) and therefore what did
    you get that we would also have to take into consideration, not
    only in terms of the increase that was in the President's
    budget? Because the 3 percent just kind of keeps us almost at
    inflation.
        Dr. Griffin. That is correct, ma'am. I am not able to delve
    into discussions that go on within the Executive Office of the
    President. I will say that everyone gets a full opportunity to
    air their views. I've got mine. Ultimately decisions are made
    and when the President signs his name to that budget it becomes
    his submission, and I work for him and must support that.
        Senator Mikulski. Dr. Griffin, I respect that and I respect
    that confidentiality. But that is also--see, I think the
    President has a vision of where he wanted to go and I think you
    are in alignment with that vision. But I think that there is a
    gap here with the OMB view of the vision, which is why I would
    like us all to get in the room as kind of a space summit. And I
    say that in the most friendly way. It worked so well with the
    President's father and Vice President Quayle.
        Let me move--so just know, I think we all know where we
    want to go. It is how can we get there.
        Dr. Griffin. I admire and am very grateful for the support
    that you have given to the space program on a bipartisan basis,
    regardless of who is in charge when, and I know that that will
    continue.
        Senator Mikulski. Sure.
        Dr. Griffin. Thank you.

                             HUBBLE SPACE TELESCOPE

        Senator Mikulski. Let us go to the Hubble telescope. What
    is the current launch date for the Hubble servicing mission and
    does your fiscal year 2008 budget fully fund the servicing
    mission?
        Dr. Griffin. Well, the current date is September 2008 for
    the Hubble servicing mission. The fiscal year 2008 budget, of
    course, does not support that because the fiscal year 2008
    budget was prepared and submitted by me and determined by the
    OMB before we had ascertained that we could do the Hubble
    servicing mission. You were with me. We announced----
        Senator Mikulski. I remember it.
        Dr. Griffin [continuing]. That last October. We had been
    hoping for a spring 2008 launch and what we have is a September
    2008 launch, which is 4 months different, because of the
    necessity to first of all be certain that we could get the
    servicing mission hardware to the pad in time, and April or May
    would have been very dicey. Then second of all, we wanted to
    have a launch on need capability if there were a rescue
    mission.
        Senator Mikulski. Dr. Griffin, I know we have talked about
    this.
        Dr. Griffin. Right, okay. Sorry.
        Senator Mikulski. Safety of the astronauts. What I hear is
    that you have the financial resources----
        Dr. Griffin. So I need to find $40 million in the
    astrophysics budget and I will do that.
        Senator Mikulski. But it is a $40 million price tag which
    is not now currently in the 2008 framework; am I correct in
    that?
        Dr. Griffin. That is correct, ma'am.
        Senator Mikulski. So we will have to work together on that.
    And again, we are just identifying kind of a must-do list that
    we need to go down.

                            EARTH OBSERVING SENSORS

        Now, I found interesting your commentary on the science
    budget, now 32 percent, which carries us through, of course,
    2012. But at the same time, what we are concerned about is
    these years into the future, one of which is 40 percent--now
    let us go to Earth observing. Forty percent of the Earth
    observing sensors now in orbit are going to kind of end by the
    end of the decade unless they are replaced.
        As you look ahead, is there money now in this year's
    appropriation to make a down payment on replacing these
    sensors? Do you see replacing these sensors? Where do you see
    going with that?
        Dr. Griffin. You, of course, ask a very good question.
        Senator Mikulski. That is our bread and butter, am I
    correct, apart from new ideas and new National Academy of
    Sciences recommendations?
        Dr. Griffin. We certainly have to keep in place the Earth
    sensing, climate resource programs and the data. The continuity
    of the data is crucial and we have to keep that in place. Now,
    I need to take you back for just a moment to decisions made
    some years ago that all of this climate research capability
    would be put on the national polar-orbiting operational
    environment satellite system (NPOESS) program, which is a
    Department of Defense (DOD), NOAA, and NASA program. So NASA
    climate research dollars were diverted to NPOESS.
        Now, NPOESS breached the Nunn-McCurdy and so the climate
    research sensors will not be on that. So we have asked the
    National Academy of Sciences for a study; and we are doing
    ourselves a study to determine, for OSTP, how we are going to
    recover from the loss of climate information that was to be
    provided by NPOESS and how we are going to incorporate that
    into the Earth science program.
        We will have those studies by some time this spring. We
    will be factoring that into our planning for the 2009 request
    and beyond, because we have to adapt now to a changed set of
    circumstances that we did not anticipate.
        Senator Mikulski. Well, I know my time has expired, but
    with the indulgence of my ranking member, because he and I
    thought--we had NOAA in here last week, I think, and we were
    pretty robust in our questioning around the need for
    accountability on NPOESS. We are very disappointed at the
    enormity of the overrun, the fact that we were glad that the
    McCurdy stepped in, but now we asked Admiral Lautenbacher, what
    are you going to do about this and how are you going to
    implement the recommendations.
        But as you know, it was a three-headed thing. It was NOAA,
    NASA, and the Air Force. I do not think we would ever go for
    that kind of thing again. But where do you see yourselves
    coming in, not only with the loss of Earth science capability,
    but then also for the fiscal stewardship necessary for both
    your role that when NPOESS flies you are still going to be
    involved, ``you'' meaning NASA, is still going to be involved
    with NPOESS.
        So where do you see your fiscal stewardship? And then when
    this happens in May, we do want to talk to you about climate
    change, the climate crisis, because I think we all agree this
    is where the American people want us to be working as well.
        Can you help us out here?
        Dr. Griffin. Well, we absolutely intend to discuss with you
    the recommendations that come out of these two studies in
    connection with how we will continue our climate research.
        Senator Mikulski. That is how we are going to continue the
    research. But you know, it was not only NOAA that dropped the
    ball on the NPOESS. The Air Force played a big role in this and
    so did NASA.
        Dr. Griffin. NASA does not have money in the NPOESS
    program.
        Senator Mikulski. But you were all part of developing the
    NPOESS and they, as they look at some of the issues here, feel
    that it was also NASA that played a role, as did the Air Force,
    in part of these overruns. Are you with me?
        Dr. Griffin. I hear what you say and I understand you, but
    I do not think that NASA had any role in the NPOESS overruns
    and shortfalls.
        Senator Mikulski. Well, I do not want to use my time going
    down this path, but when we talked with Admiral Lautenbacher
    last week, and we talked with him both publicly and I had a
    conversation with him about it, because this is really a big
    ticket item, as you know, about what was our way forward. He
    seemed to also feel that there was a NASA role. So we need to
    be able to talk about this and talk about it, so it is not only
    about the climate change.
        But I am going to turn to Senator Shelby and Senator
    Alexander. I will come back with some more of this.

                         MANNED FLIGHT OF ORION VEHICLE

        Senator Shelby. Thank you, Madam Chairman.
        Dr. Griffin, you have indicated that unless there are
    additional funds provided in the next few fiscal years to NASA
    that the first manned flight of Orion will not be until 2015
    perhaps, instead of 2014 as called for in the recent NASA
    authorization bill. The additional funds beyond those already
    in the budget that would be required to have an operable
    replacement for the Shuttle I understand would be $350 million
    in 2009 and an additional $400 million in 2010.
        In response to the funding levels provided by NASA for
    2007, does NASA anticipate making any supplemental requests or
    sending a budget amendment to the subcommittee in the months
    ahead to try to make up this shortfall?
        Dr. Griffin. We are discussing within the administration
    what the way forward is, but I cannot say at this time. I
    simply do not know whether we would be making an amended
    request or change plans going forward.

                    PRECURSOR PROGRAM FOR LUNAR EXPLORATION

        Senator Shelby. Senator Mikulski and a number of us that
    support NASA believe you need more money for what you are
    called upon to do. Lunar precursor missions. In 2005 the NASA
    authorization act directed NASA to institute a robust precursor
    program for lunar exploration. In December 2005, NASA awarded a
    follow-on mission, the RLEP as it was called then, to a team
    from the Marshall and Goddard Space Flight Centers, with
    Marshall as the lead.
        Last year before the subcommittee you stated that this
    mission would be done in a timely way as a precursor mission,
    but would not start until 2007. In your hearing with the House
    Appropriations Committee early this week, it was my
    understanding that you mentioned that all the information NASA
    will need for a return to the Moon can be obtained from orbit.
    This seems to indicate that the precursor mission will never
    happen. If I am wrong, can you correct me on that?
        Can you explain if the requirements have changed between
    2005 and today and align that position with the direction of
    NASA's authorization language for having a robust precursor
    program? In other words, what is the current status of this?
        Dr. Griffin. The information that we feel that we need--and
    this conclusion has been reached in discussion with our NASA
    advisory councils, science groups, as well as internally--the
    conclusions we have reached are that the information we need
    before putting people back on the Moon can be obtained with
    lunar reconnaissance orbiter. The surface science and
    technology that we would like to do is something we would like
    to do, but it is not essential.
        Because funding is very tight, we have a choice between
    doing lunar surface science and technology with robotic
    precursors early on. If we do that, we will delay the
    development of the Ares launch vehicle and the Orion crew
    vehicle by another 6 months. So if I undertake that work, I
    will delay Orion and Ares even further. That is work not yet
    started, and so when budgets are tight my normal first choice
    is to delay work not yet started rather than to cancel work,
    and my normal choice is to delay work which is nice to have but
    not essential, and that is what we will be doing here.

                      PROPULSION RESEARCH AND DEVELOPMENT

        Senator Shelby. In the area of propulsion, we talked about
    this before. The Vision for Space Exploration will require many
    new technologies and systems to be developed in order to
    maximize our investment on returning to the Moon. One of these
    areas will require ongoing research and development in this
    area of propulsion. Marshall Space Flight Center has expertise
    in this area and has continued working on propulsion systems
    from the time of the last missions to the Moon to the present.
        As the work continues on the research and development on
    Vision-related vehicles and systems, what do you anticipate
    will be the need for propulsion research and development this
    year and in the future?
        Dr. Griffin. I do not need propulsion research to get back
    to the Moon. I need propulsion systems development, if you
    will, and that is going on at the Marshall Space Flight Center
    and through its contractors, and they are doing, frankly, a
    very good job. I am quite pleased with them. They will be busy
    with the redevelopment of the Nation's space propulsion
    capabilities for an upper stage and rocket capabilities for the
    foreseeable future.
        So Marshall is fully occupied helping us first replace the
    Shuttle and then after that return to the Moon. I would like to
    say, believe me, I would very much like to be doing advanced
    research in propulsion. But as with other things in the budget,
    there is a difference between must have and nice to have, and
    right now what I must have is working propulsion systems, and
    what would be nice to have is advanced propulsion research.

       AGING NATIONAL AERONAUTICS AND SPACE ADMINISTRATION INFRASTRUCTURE

        Senator Shelby. Dr. Griffin, a lot of the NASA facilities
    have aged and deteriorated, as you well know. A lot of us
    believe there is significant need for infrastructure. Do you
    have any plan for that? What can we do to help you? I know we
    are the money Committee to appropriate money. We have those
    challenges at Marshall. You have them at Goddard, you have them
    at Kennedy Center, you have them in Florida.
        Dr. Griffin. Sure. Sir, most of the NASA infrastructure, as
    you know, is 40 some years old and more. Even at that, it is
    not as old as many other Government facilities, but that is as
    it is. We are working on an agency-wide facilities plan right
    now. It will be done shortly. We are working with the Office of
    Management and Budget to finalize that, and it will cover the
    detailed data for the fiscal year 2008 construction of
    facilities, including repair, rehabilitation, renovation,
    replacement on existing systems, as well as any new things that
    we need.
        It will describe about a little more than a $6 million
    strategic initiative to address our facilities repairs and
    upgrades that are needed. Now, with regard to returning to the
    Moon, we are going to make every effort to use existing
    facilities. We would only propose building a new facility if
    something that the U.S. Government already owns just does not
    make the grade. But we will discuss that, the strategic plan,
    with you just as soon as we have it.
        Senator Shelby. Thank you very much.
        Senator Mikulski. Senator Alexander.

                               EDUCATION PROGRAM

        Senator Alexander. Thank you, Madam Chairman.
        Mr. Griffin, I want to ask you about a $153 million item in
    the budget that is labeled ``Education.'' I see that NASA's
    education themes are: one, to contribute to the development of
    science, technology, engineering, and math workforce in
    disciplines needed to achieve NASA's strategic goals; and two,
    to attract students and retain them in those disciplines. So it
    is teachers, workers, students--and students, I guess is what
    we are talking about.
        Two years ago a group of us, including the chairman of this
    subcommittee, asked the National Academy of Sciences and the
    National Academy of Engineering, of which you are a member----
        Dr. Griffin. Yes, sir.
        Senator Alexander [continuing]. To tell us what are the top
    things we need to do in priority order to keep our brainpower
    advantage in this country. They assembled a distinguished group
    and gave us 20 specific items in priority order. And items A-1
    and A-2 were the same things as your themes. In other words,
    one, is annually recruit 10,000 science and math teachers by
    awarding scholarships, et cetera; and two, is strengthening the
    skills of 250,000 existing teachers through training and
    education programs. So what I want to ask you is, in order to
    keep our jobs in this country, keep growing them, if we wanted
    quickly to recruit more math teachers and strengthen the skills
    of existing math teachers and inspire students in math and
    science, your $150 million is already at work toward that
    objective. How effective are you at that? And specifically, how
    many teachers, how many students, do you touch each year? And
    do you have any measures of how much they learn or what
    progress, how effective the programs are toward these goals?
    And have you invited your Academy of Engineering or scientists
    or other outside groups to look at this $150 million and say,
    in light of these goals, which are now being incorporated into
    legislation that has been introduced and is likely to pass here
    by big bipartisan numbers, are we getting the biggest bang for
    our buck on this $150 million in terms of new math and science
    teachers and outstanding teachers, especially with summer
    institutes and academies, which were highly recommended here as
    some of the most effective programs for training math and
    science teachers and aspiring students?
        Dr. Griffin. I do not know that we are. I have a new
    Assistant Administrator for Education. She has taken on the
    task of trying to link our spending to measurable goals and
    outcomes. When I rejoined NASA as Administrator, I too was
    unhappy with the indefinite nature of our education program. We
    are spending, as you see there, in round numbers around $150
    million or so every year on direct education, and we are
    spending another very substantial sum, in the low hundreds of
    millions, on education and public outreach as a part of our
    normal missions. So from all sources, NASA is spending
    literally hundreds of millions on education, and it would be
    nice to have it strategically oriented. I do not know that it
    is right now, but we are working on it and I would be more than
    pleased to provide an answer to you for the record on exactly
    what we are doing or a briefing to you or your staff.
        [The information follows:]
            Science, Technology, Engineering and Mathematics (STEM)
        NASA is continually looking for ways to support science,
    technology, engineering and mathematics (STEM) education to compete
    effectively for the imaginations and career ambitions of America's
    young people. NASA also provides teachers with supplemental curricular
    materials for the learning environment in communities.
        NASA has developed a number of innovative programs that use NASA's
    unique content, people and facilities to support educators in science,
    technology, engineering, and mathematics fields, and to inspire the
    next generation of explorers and innovators through the Vision for
    Space Exploration. Specific examples include:
    Attracting students to the teaching profession
        The NASA Educator Astronaut project uses the visibility and
    educational opportunities created by the activities of the Educator
    Astronauts to inspire greater K-12 STEM achievement, promote STEM
    careers, and elevate public esteem for the teaching profession. In
    selecting our Educator Astronauts, we identified hundreds of our
    country's top educators. We have captured their energy through the
    Network of Educator Astronaut Teachers (NEAT). Approximately 180 NEAT
    members are now in communities all across America conducting workshops
    (three annually) reaching about 90 educators per session. These efforts
    result in strengthening STEM skills of approximately 10,000 teachers
    annually. Additionally, professional development training engaging
    educators, their schools and communities in NASA education activities
    and informing them of NASA resources has taken place in 280 NASA
    Explorer Schools (NES) 17 Science, Engineering, Mathematics, Aerospace
    Academies (SEMAA), and 31 Aerospace Education Laboratories (AEL).
    Providing pre- and in-service teacher training
        NES provide intensive teacher training, the Aerospace Education
    Support Project (AESP) provides on site professional development to
    teachers in classrooms across the country. NES assist middle schools
    with improving teaching and learning in STEM education through
    significant structural (professional development, stipends, grants) and
    curricular support based on NASA resources. In 2006, 5,339 teachers
    received intensive training as part of the NES project. Additionally
    the AESP conducted sessions across the Nation, reaching 13,938
    educators.
      --Research Academy provides leading-edge research opportunities for
            faculty and students from Minority Institutions (MI) that
            compliment NASA's research programs and make original
            contributions to NASA in astrobiology, biotechnology,
            information technology, and nanotechnology. Faculty and
            students from MI collaborate with the scientists at NASA's Ames
            Research Center, industry, academia and nonprofit organizations
            on research that helps prepare the next generation of explorers
            for NASA missions.
      --In addition to in-service workshops based on our missions, NASA is
            committed to the pre-service training of our future educators.
            Through the National Pre-Service Teacher Conference, Pre-
            Service Teacher Institutes and Online Professional Development,
            NASA recruits STEM teachers to develop the confidence and
            skills to effectively teach mathematics and science using
            cutting-edge technology and educational materials. Such efforts
            have led to 200 STEM-enhanced teachers instructing an average
            of 25 students per classroom times 3 years, impacting a
            projected total of 15,000 students.
      --NASA's Digital Learning Network (DLN) fosters the effective use of
            interactive instructional technologies through the delivery of
            NASA educational content for the benefit of its students and
            educators. It also contributes to the professional development
            of internal and external educators through the delivery of
            face-to-face and distance learning-based events. Over 74,000
            students, teachers and other participants were engaged in a DLN
            event last year.
    Developing and distributing curricular support materials
        Curriculum Improvement Partnership Award, a three-year
    undergraduate curriculum improvement program for minority institutions
    (MI), including Historically Black Colleges and Universities, Hispanic
    Serving Institutions, Tribal Colleges and Universities, and other MI,
    emphasizes improvements that are directly related to the NASA mission
    by infusing innovative learning experiences in STEM into the
    curriculum. NASA's Educator Resource Centers (ERC) conducted educator
    Resource Center Network 362 workshops in fiscal year 2006, helping
    23,819 teachers learn about and use NASA's educational resources.
    Personnel at ERCs located throughout the United States work with
    teachers to find out what they need and to share NASA's expertise. The
    ERCs provide educators with demonstrations of educational technologies
    such as NASA educational Web sites and NASA Television. ERCs provide
    in-service and pre-service training utilizing NASA instructional
    products. Educators also have the opportunity to preview, copy and
    receive NASA instructional products.
        Through an innovative partnership, NASA is collaborating with
    OfficeMax to provide educators with a convenient way to access NASA
    materials in the most economical, productive and efficient way. If
    educators require a document or material that is large quantity (number
    of pages), and doesn't have the resources to print them, OfficeMax will
    print materials and make them available at any of their nearly 1,000
    stores across the country, including Puerto Rico and the Virgin
    Islands.
    Supporting informal learning
        The Museum Alliance provides near real-time access to NASA
    information from missions such as Cassini, Hubble and Mars, as well as
    Earth science resources, for use in museums and science centers across
    the country.
        In collaboration with the American Museum of Natural History,
    dozens of activities and curricular support materials and lessons were
    adapted for use by the after school community.
        Other examples of the unique innovative projects that NASA makes
    available to support students across our Nation and to inspire more
    students to pursue higher levels of study in STEM courses include:
      --The Science Engineering Mathematics and Aerospace Academy Program
            (SEMAA) reaches K-12 minority students that are traditionally
            underrepresented in careers involving STEM. Students meet
            during school, after school or on Saturday mornings and during
            the summer to engage in hands-on, interactive learning sessions
            that are specifically designed for each grade level.
          Between the International Space Station, the space shuttle,
            sounding rockets and high altitude balloons, NASA's Education
            Flight Projects provide hands-on experiences to inspire and
            motivate students to pursue studies and careers in STEM through
            participation in NASA research applications. NASA is using its
            unique assets like the C-9 to allow students to study
            microgravity; we are launching student experiments more than 25
            miles above the Earth on sounding rockets; and our astronauts
            make phone calls from 240 miles above Earth's atmosphere to
            students to involve them in current research aboard the
            International Space Station. All these opportunities take
            advantage of our flight hardware projects provide real, hands-
            on experiences to inspire the minds, imaginations, and career
            ambitions of America's young people.
      --Teacher training for Worlds Beyond Our Own captures the excitement
            and discovery surrounding planetary exploration. NASA and the
            Johns Hopkins Applied Physics Laboratory developed workshops
            and materials to assist educators in capturing the excitement
            surrounding NASA's New Horizons mission to Pluto that launched
            in January 2006. New Horizons is the fastest spacecraft ever
            launched from Earth, on board one of America's most powerful
            rockets, and will be traveling the farthest distance of any
            NASA spacecraft to begin its primary mission. Students will
            grow up with this project. Today's elementary school students
            will be in college when this spacecraft encounters Pluto.
      --Museums and Science Centers are developing activities and materials
            to inspire, educate, and engage students, educators and the
            general public. They are also hosting professional development
            opportunities for formal and informal education professionals
            across the Nation. For example, in 2005 NASA and the Children's
            Museum of History, Natural History, Science and Technology in
            Utica, NY unveiled two new exhibits at the museum. The exhibits
            ``Why We Explore'' and ``Space Station Imagination'' provided
            an overview of the history and future of space exploration.
            Astronaut Ed Lu, a veteran Space Station astronaut, who spent
            six months aboard the International Space Station, hosted the
            unveiling.
      --NASA's Great Moonbuggy Competition allows high school and college
            students' to race into the future and cross the surface of the
            moon without leaving the Earth. Teams from the United States
            and Puerto Rico design human-powered vehicles to compete in
            NASA's annual Great Moonbuggy Race. The race was inspired by
            the lunar rover vehicles astronauts drove on the moon during
            three Apollo missions. This year's event, opened to the media
            and public, was held April 13-14 at the U.S. Space & Rocket
            Center in Huntsville, Alabama.
        In fiscal year 2005, through a variety of venues (distance
    learning, videoconferencing, events, competitions, face-to-face, Space
    Shuttle and ISS downlinks, workshops, and other activities NASA has
    reached more than 2.9 million students, (776,000 K-12; 50,000 higher
    education; 2,151,380 distance learning students) and 855,000 teachers.
    (Please note: the number of teachers represents not a number of the
    individuals that participated but a number of participation
    opportunities that were taken, many of which were taken multiple times
    by the same individuals.)
        Educators who participated in NASA workshops and events provided
    feedback via the NASA Education Evaluation Information System (NEEIS)
    regarding the effectiveness and relevance of our efforts. With a 5.0
    Liken scale in which ``5'' is the highest value, the average of the
    teacher participant ratings of NASA's workshops and resources was 4.67.
        NASA's resources (teacher training programs, supplemental
    curricular materials, etc.) are aligned to national standards and
    complement other agencies efforts. Interagency forums, e.g. the
    National Science and Technology Council enable all STEM education
    focused agencies and departments to share information and best
    practices to promote complementary activities.
        Additionally, NASA uses objective and verifiable performance
    metrics, regular management insight and review processes, and defined
    tools to assess its performance at all levels--portfolio, outcome, and
    the individual program/project/product/activity.
        The Agency is working with other agencies, e.g., National Science
    Foundation to examine their evaluation techniques to determine
    applicability and best practices for assessing NASA's education
    portfolio, strategic outcomes, and projects.
        In fiscal year 2006, the National Research Council (NRC) Board on
    Science Education began work under a contract with NASA to conduct an
    evaluation of NASA's precollege education program. An expert panel was
    convened and the first committee meeting was held Nov. 15-17, 2006. A
    second meeting held on January 18-19, 2007. Three additional committee
    meetings will be held prior to the submission of the NRC's report,
    scheduled for November 2007. The NRC does not release preliminary
    results prior to submission of their report.
        In addition to the NRC evaluation, other independent assessments,
    evaluations and program reviews of projects such as NES, AESP,
    EarthKam, and SEMAA are conducted annually by Paragon Tec Inc. (NES),
    Western Michigan University (AESP), Education Development Center for
    Child and Technology (EarthKam), and Benson Penick and Associates
    (SEMAA).

        Senator Alexander. Well, no, I would be--you can provide it
    to me, because I am very interested in it and would like to
    work with you. My son went to the space camp in Huntsville and
    that's an attractive way to inspire students. But if I may
    suggest, one outside group that may be useful to your assistant
    and to you as you measure the $150 million might be the
    Augustine Group in the National Academies, because they spent a
    summer looking over a great many programs, looking at their
    effectiveness. That would be one source of input.
        For example, the legislation that we have would increase
    the number of summer institutes at national labs. Well, I can
    think of no more inspiring place for math and science teachers
    in Tennessee to go for a 2-week session than an academy in
    Huntsville, to learn new techniques for teaching math and
    science and to inspire them to do a better job.
        You have so many degrees that you have enough degrees for
    the whole room here, so I know I am preaching to the choir. But
    just as an example, we are talking about very measurable
    numbers here. Governor Hunt of North Carolina, former Governor,
    told us that the University of North Carolina College of
    Education graduated three physics teachers last year for the
    entire State of North Carolina. I am sure the number in
    Tennessee is not much more. But just in our own region with
    that one activity in Huntsville, we could probably quadruple or
    double or even by a factor of more the number of teachers
    through summer institutes, academies, a variety of ways.
        So I would look forward to working with you on that and
    following it over time, and I am delighted that you are there
    and that it is a priority of yours.
        Dr. Griffin. I would be interested in working with you on
    it and I am certain that if legislation is passed increasing
    the number of summer academies and institutes that we would be
    happy to be part of that. We would be thrilled.

                         MATH AND SCIENCE INSTITUTIONS

        Senator Alexander. Madam Chairman, and I am also suggesting
    that since they have recommended this as the single most
    important thing we could do to keep our competitive edge, ahead
    of research, ahead of the R&D tax credit, ahead of everything
    else, we might take some of that $150 million you have now got
    and have some summer institutes for math and science teachers
    and students.
        Dr. Griffin. Well, much of the money that we are spending
    today is set aside for member preferences on how the education
    dollars are to be spent, and if it could be spent more
    strategically I would be, for one, I would be much in support
    of that.
        Senator Mikulski. Dr. Griffin, now you know why Senator
    Shelby and I were so excited that Senator Alexander joined the
    subcommittee. We worked with he and Senator Domenici and
    Senator Bingaman last year to literally put into a legislative
    framework the rising above the gathering storm, and he came on
    this particular subcommittee because of his passion really to
    implement the triad of increased research, increased
    opportunities in education to get people excited about science,
    and number three, a more innovation-friendly government.
        Who is your new assistant for education?
        Dr. Griffin. Her name escapes me right now.
        Senator Mikulski. Mary, do you want to?
        Dr. Griffin. Oh, thanks. Dr. Joyce Winterton. I am sorry.
    She just recently came on board and I met her only once.
        Senator Mikulski. No, I know you've got a lot on your mind.
    This is like sitting for your oral exams for your doctorate. We
    go from one topic--no, we understand.
        Dr. Griffin. No, that was easy. This is much tougher.
        Senator Mikulski. What we would like to suggest is that the
    new Administrator meet with Senator Alexander, because you are
    right, in previous years education has been gushy and where
    there is a vacuum members step in. So now I think we would like
    to make wise and prudent use of that $150 million and we can
    see the benefits. Certainly the NASA relationship with the
    Maryland Science Center has been a cornucopia of running
    opportunities both for teachers and for students.
        But we would like to really make good use of this because,
    again, NASA is where it is at. It is--what I said to the
    President about being in the innovation-competition agenda,
    competitiveness agenda. It is NASA through its technology,
    through Hubble, to its space exploration program, that really
    excites people about science. And we have got all these young
    little geniuses out there who want to participate in October
    Sky, while we, of course, do our appropriations.

                            SPACE SHUTTLE RETIREMENT

        So moving on, though, to like some nuts and bolts again,
    Shuttle retirement. What I am concerned about is what happens
    if the Space Station is not finished by 2010 and you are ready
    to retire the Shuttle? Do we anticipate that the Shuttle really
    will be done by--excuse me, the Space Station, that the Space
    Station will be done by 2010? And do you really believe that it
    will, but do you have a contingency plan? What is the
    consequences of the contingency plan?
        Dr. Griffin. We have dealt with that in a couple of ways.
    First of all, I do believe that the assembly schedule
    accommodates ample margin to finish the assembly of the Space
    Station with the Space Shuttle by 2010. It was planned that
    way. When I came back to NASA, we did not have a plan that
    accommodated a reasonable schedule reserve to finish the Space
    Station by 2010, nor did we have the budget for it. So we
    tightened our belt on the human space flight side of the house
    and we deferred, as many have regretted and as I regret, we
    deferred some of the utilization of the Space Station in the
    next few years in order to focus on assembling it.
        So our average flight rate over the years, including time
    out for two losses due to accidents, has been 4\1/2\ flights
    per year. We are on that pace now again. We are doing well, and
    if we continue that pace we will finish with ample margin. So I
    do believe we can do that.
        Now, the consequences----
        Senator Mikulski. Do you envision any scenario that would
    keep the Shuttle going after 2010?
        Dr. Griffin. I do not. In fact, at some point years ahead
    of your last flight you have to buy your last tank, your last
    solid rocket boosters. We've done that. So we do not envision a
    scenario in which we would continue to fly past 2010. Now, the
    last couple of flights have been arranged so that they are the
    least crucial flights, and so if it were necessary to drop a
    flight or two we would still have the assembly complete. Some
    of our logistics would not be delivered and we would have to
    find some other means of commercial transport to put those up.
    In fact, that is what we plan to rely on between 2010 and when
    the crew exploration vehicle (CEV) comes along, is commercial
    transportation to the Space Station to deliver our supplies and
    other cargo.

                 ORION CREW RETURN VEHICLE/ARES LAUNCH VEHICLE

        Senator Mikulski. We could have a robust conversation just
    on that. But I would like to give you the opportunity, because
    I know Senator Shelby as our other colleagues are very keenly
    interested in, of course, the Orion crew return vehicle and the
    Ares launch vehicle. That is the bread and butter. I mean, that
    is the--without that, space exploration will really just
    sputter.
        The Orion of course, the safety of our astronauts, the crew
    return vehicle, and of course the launch vehicle. In your fall
    testimony, which was the part that I was reading, you talk
    about how, based on everything I know, due to the cumulative
    effect of reductions in the exploration system to pay for the
    Space Shuttle return, previously underestimated costs to fly
    the Shuttle until 2010, and the reduction in fiscal year 2007,
    you were concerned about, number one, the schedule that you now
    had, and number two, you also comment that you are not sure
    about what will be the workforce implications of all of this.
        What I would like to do today with Senator Shelby and I
    here, do you want to elaborate on that, so we just kind of get
    it all out into the air? Right now we have just identified
    Hubble costs $40 million. That is a chunk of money. Let us
    really talk about what it is going to take and what you would
    like to see in order that we meet--we understand, we do want
    Orion. We do want Ares, and we want it in as well-paced a way
    as you would, and I think the mission calls for.
        So do you want to elaborate on your testimony, because I
    think this is the nuts and bolts of what colleagues are asking
    and what we are asking. So tell us how you see this and for you
    to elaborate on your testimony, and particularly also the work
    force implications, because some of our colleagues are
    apprehensive.
        Dr. Griffin. Yes, Madam Chairman. Would you like me to sort
    of walk you through how we got where we got?
        Senator Mikulski. No, we know how we got where we are.
        Dr. Griffin. You know how we got there, okay. So you want
    to know what we need to go forward.
        Senator Mikulski. Yes. We know how--it is kind of that
    same, we are where we are. So we know where we got, but we have
    got to get going. So let us talk about the got to get going.
        Dr. Griffin. Yes, Madam Chairman. I just wanted to make
    sure I understood what you wanted me to talk about. Accepting
    the intent of the Congress on the fiscal year 2007 continuing
    resolution, Senator Nelson and Senator Hutchison asked me what
    it would take to get back into 2014 with the CEV and the Ares
    and Orion. I said, after we studied it carefully, to replace
    the money that was not appropriated in 2007 would require $350
    million in fiscal year 2009 and $400 million in fiscal year
    2010, as close as we can estimate it. That would get us back to
    September 2014. I was also asked what it would take to get back
    into 2013 and, considering that again as carefully as we can,
    we believe that it is about $100 million a month. So that
    should just be the way that you should think about it. Every
    month that you want to pull the schedule in is $100 million.
        The best we could do at this point would be to bring it
    back to June 2013. So June 2013 is where we are on a technical
    schedule.
        Senator Mikulski. Technical. But as it stands now, based on
    the 2014, knowing earlier is always nice to hear, but we would
    be concerned about two things. Number one, what now as we look
    at 2008 in order to meet responsibilities, meet our
    responsibilities in 2008, and also what you need to do in terms
    of the fiscal mechanisms, not to be sure that we do not get
    into the overrun problem.
        Dr. Griffin. Of course, now----
        Senator Mikulski. What do you need in 2008 to, say, meet a
    2014?
        Dr. Griffin. I do not need anything additional in 2008.
        Senator Mikulski. But for us to stay the course?
        Dr. Griffin. For us to stay the course. If you wished to
    pull the schedule in and stay the course and be in 2014, we
    would need money in 2009 and 2010. Of course, you know better
    than anyone that fiscal year 2009 preparation starts next
    month. So fiscal year 2009 is already upon us. But I do not
    need additional funds in fiscal year 2008. But I would need to
    know that funding would be coming along in fiscal years 2009
    and 2010.
        Senator Mikulski. But your point, though, is that in 2008,
    that if there is any shrinkage in 2008--and, of course, we are
    looking forward to what our allocation is going to be. This is
    why we are looking--you know, we are so glad the budget is
    going to be on the floor, that we know what our allocation is,
    because we presume that some time in May we will need
    additional conversations. We will know what our allocation is,
    we will know the direction.
        But to be clear, if we stay the course in 2008 as
    recommended here, you will be moving while you are looking at
    2009. And that is also if something unforeseen does not happen.
        Dr. Griffin. That is exactly correct, Senator. If I get the
    President's budget in 2008 and if the funding I mentioned in
    2009 and 2010 were to be supplied, if you chose to do that,
    then we would be back on track. I will say for the record, our
    technical planning on these systems is very conservative. We
    are budgeting with new levels of conservatism. I have spoken of
    65 percent confidence level budgeting. Paul has heard me and
    Art has heard me on this. So I strongly believe, that we can
    avoid future technical surprises in this. We are not developing
    new technology here. We are striving to restore lost
    capability. So this is not the time to develop new technology.

                   INDEPENDENT PROGRAM ANALYSIS ORGANIZATION

        Senator Mikulski. Well, first of all, I know that many are
    talking about even if we could accelerate it another year. I
    want to be sure that there are mechanisms in place to make sure
    that Orion and Ares are properly managed. And I know you share
    that.
        Do you have an independent oversight mechanism to verify
    cost, design, and technical feasibility?
        Dr. Griffin. Yes, we do. We have an entire independent
    program analysis organization that, in fact, does just such
    cost analyses, that is independent of the programs.
        Senator Mikulski. I am sorry; who does that?
        Dr. Griffin. Again, it is our independent program analysis
    organization.
        Senator Mikulski. So you have an internal red team?
        Dr. Griffin. Yes, Madam Chair.
        Senator Mikulski. Is that kind of that in a nutshell?
        Dr. Griffin. We do. They are located at Langley or they are
    headquartered at Langley. They are independent of the programs
    and their estimates in fact have been quite reliable. It was
    they who brought to me the correct information regarding the
    underfunding of the James Webb Space Telescope a couple of
    years ago. So I have found them to be very good.
        Senator Mikulski. We just needed to know what it was.
        I just--I do not know if Senator Shelby has more questions,
    but when Shelby--when Senator Shelby moved the bill last year,
    I think, Senator, you had $3.7 billion in there for this, which
    of course is very close to the President's budget. Had we been
    able to move our bill, I think we would be in good shape.
        I know with the continuing resolution--and it has given
    heartburn to many of us, even the idea that we had to do one--
    there was $400 million, so it was not a total loss. But it was
    enough of a loss for you to lose time, but you do not want to
    lose ground; is this right? And if we get back to where we are,
    I think we will have a way forward.
        Dr. Griffin. That is correct, Madam Chairman. I would again
    emphasize we will soon be making decisions with our contractor
    based on what money we can expect when. So if it is your
    intention----
        Senator Mikulski. You know, when you talk about 2009 and
    2010, I do not dispute this. I am glad to hear. Also there is
    the red teaming, which means--but we are not the only ones that
    need to hear this. And I know you are starting next month. This
    is why I would like for us to be in the room and say, we have
    got to talk about a couple of years here, how we can retire the
    Shuttle with honor and say goodbye, not be sitting on the
    launch pad for a prolonged period of time, but do it in a well-
    paced way, as well as to meet important scientific objectives
    that have been identified by both your team and the national
    academies.

                      AMERICAN COMPETITIVENESS INITIATIVE

        Senator Shelby. Thank you. Madam Chairman, I think we do
    need some type of summit with Dr. Griffin and others where we
    can just talk about what we really need, where you really want
    to go, and so forth, and see how we can help.
        Dr. Griffin, ACI. I was surprised to see that NASA was not
    included as part of the American competitiveness initiative,
    ACI. The goals for the education component of NASA's budget are
    to strengthen the Nation's future workforce, attract and retain
    students in science and engineering, and to engage Americans in
    NASA's mission. Coupled with the high public visibility and
    recognition that you enjoy, it seems that NASA would be a
    natural fit for such an initiative.
        It is troubling why NASA was not included in this
    initiative. It seems like it is a pretty good fit.
        Dr. Griffin. Well, yes, sir. In fact, much of what we do
    fits very naturally within the goals of the ACI. There may be
    some semantics involved here, but I think in a way that is a
    reason why NASA was not specifically included. We are already
    doing many of those things.
        The ACI was also intended to provide additional budget for
    agencies which had not been receiving it, and from the
    administration's point of view NASA is already above the
    average level for domestic non-defense discretionary agencies.
        Senator Shelby. You have got a lot of brainpower, I think,
    that we could use.
        Dr. Griffin. Well, I hope we do.
        Senator Mikulski. I would agree.
        Dr. Griffin. Well, we support your view that we at NASA do
    many things that are closely related to the goals of the ACI
    and we intend to keep doing those things.

                               CHINESE ASAT TEST

        Senator Shelby. China. I know that last summer you were in
    China to talk about their space program and so forth.
        Dr. Griffin. Yes, sir.
        Senator Shelby. As we are all aware, China recently
    conducted a test that destroyed a weather satellite in an orbit
    about 500 miles above the Earth. This test had to have created
    some space debris that eventually will fall or could fall to
    the Earth. But it would first have to pass through space
    occupied by the International Space Station and other valuable
    NASA assets. That is what I have been told.
        I do not want you to touch on any classified information
    here, but what risk to NASA's assets was created by this test
    and could you relate that here, or would you rather defer that?
        Dr. Griffin. No, I can discuss that here, Senator. For the
    first few weeks after the Chinese ASAT test, the risk to the
    Space Station approximately doubled. Now, I would state
    correctly for the record that the average daily risk to the
    Space Shuttle from orbital debris is about 1 in 100,000. So the
    risk doubled from about 1 in 100,000 to 1 in 50,000.
        After a few weeks, the debris had spread out and retreated
    into what the analysts refer to as the background. So after a
    few weeks that debris posed no measurable additional risk over
    the existing background that was already there. Nonetheless, of
    course, we deplore such tests because we now understand in a
    way that we did not some decades ago how dangerous that debris
    can be, and in fact China is part of international coordinating
    bodies whose goal is to mitigate such debris. So we do regret
    that test, but at this point it does not pose an additional
    threat to any space assets that we have.

                      STATUS OF THE EXPLORATION ACTIVITIES

        Senator Shelby. Dr. Griffin, for the record, could you give
    us a status of the exploration activities such as the
    Constellation program are progressing, would you specifically
    focus on crew exploration vehicle, the crew launch vehicle, and
    the launch operation aspects of the program? Could you do that?
        Dr. Griffin. Yes, Senator. The crew exploration vehicle--
    when I sat here with you a year ago we were in the middle of
    source selection. We said that we would select a winning
    contractor by Labor Day of that year, and we did. That winning
    contractor is Lockheed. We have spent the last few months
    working with them to scrub the design and definitize the
    requirements. That has gone quite well. They are on track and
    they are on target.
        We with Senator Mikulski already discussed the impact of
    various delays, including the need to find additional money for
    the Space Shuttle last year and the continuing resolution this
    year. The accumulated effect of delays is to put us into 2015,
    which none of us want to be in, and both of you have expressed
    your desire to help with that and I appreciate it.
        But the technical work on the CEV is on target. The Ares
    launch vehicle, which, as I think you know, is being developed
    under the leadership of a team at the Marshall Space Flight
    Center, is equally on target. They are doing just a great job.
    They have released the RFP, the request for proposals. Industry
    is now bidding on the upper stage development work for that
    vehicle. The first stage uses an existing development, the
    Shuttle solid rocket booster, which the project office for that
    exists at Marshall Space Flight Center. So we will be combining
    a second stage with an old first stage, and that will be the
    new crew vehicle.
        The instrument unit for that will be procured in an RFP
    this October. So by the time the new fiscal year starts, we
    will have all the elements of Shuttle replacement under
    contract and in work. I am very pleased. We have teams at
    Marshall Space Flight Center and Johnson Space Center on that.
    I am very pleased.
        Launch pad work has already started on Complex 39B to
    transition that from a Shuttle pad to a new Orion and Ares pad.
    Now, Senator Mikulski, as you and I have discussed, we will
    preserve the launch on need capability during the Hubble Space
    Telescope servicing mission. So we will not make modifications
    to Complex 39B which would interfere with the Shuttle launch,
    but we have started those modifications in non-interfering
    ways.
        The team is excited. They are energized. This is affecting
    our educational posture because I spent 13 years as an adjunct
    professor. If I ever again have a life to call my own, I will
    go back to doing it. But my academic friends are telling me
    that their college students are excited and they are energized
    because they see a space program being reborn out there that
    they can join when they graduate from college, and they look
    ahead and they say, well, when I am 45 we will be going to
    Mars, and that is true. If we keep going with what we are
    doing, that is true. So work is going very well.
        Senator Shelby. Dr. Griffin, I do not believe you will be
    an adjunct professor unless you want to by choice. You will be
    a chaired professor somewhere.
        Madam Chairman, thank you.

              NATIONAL ACADEMY OF SCIENCES REPORT ON EARTH SCIENCE

        Senator Mikulski. Thank you, Mister--thank you, Senator
    Shelby.
        I just have one last question before we go. I know there
    are votes. I want those college kids when they are 45 knowing
    that we are on Mars, but I do not want them sitting at a kayak
    at Goddard because the bay has risen that far because of global
    warming.
        Which takes us to the National Academy of Sciences report
    on Earth science. Dr. Griffin, as you know, they have
    recommended a robust agenda of 17 different projects to study
    climate and atmospheric and oceans issues along with NOAA, to
    really also focus on those things that would have societal
    benefit.
        Do you want to tell us your reaction to this and how you
    would see--I know it is not in 2008, but how you would see
    incorporating this? And also, one of the things it calls for is
    a memorandum of agreement with NOAA to really maximize and
    leverage the respective work that both agencies are doing. Do
    you want to comment on that?
        Dr. Griffin. Yes, Madam Chairman, I would like to. I think
    the NASA-NOAA relationship is as good or better than it has
    ever been. Admiral Lautenbacher and I and our staffs talk
    frequently. We, as I said in an answer to one of your earlier
    questions, we recognize the need to replan our Earth science
    and observation and climatology work together, given the
    restructuring of NPOESS, and we will be doing that over this
    summer and we will be keeping you and your staffs informed as
    to how that is going.
        We have a National Research Council study which is due to
    us to help with this issue, as well as a study that we are
    preparing for OSTP. We will factor in the results of the new
    decadal, which I would remind you, we asked for that decadal.
    So we now have their priorities for the work which should be
    done within Earth science, and in fact we used the midterm
    report on that to increase money to the global precipitation
    measurement mission, the GPM, which we will be doing in
    conjunction with the Japanese. So we are paying attention.
        Senator Mikulski. I want to be very clear that the
    recommendations of the National Academy on Earth science for
    the climate crisis does not mean in any way to imply that you,
    meaning NASA and the Earth sciences have not already been
    looking at it.
        Dr. Griffin. Right.
        Senator Mikulski. This is the look ahead. That is why they
    call it the decadal. That is like we are in the decathlon.
        Dr. Griffin. So we will be restructuring our Earth science
    portfolio, or we will be making certain that our Earth sciences
    portfolio over the budget planning horizon starting with the
    fiscal year 2009 budget does reflect the input of the decadal,
    and we will share that with you.
        Senator Mikulski. Well, I am really excited to hear about
    that and, as both Senator Shelby and I have said, we have got a
    long road ahead. I think we are very clear that in 2008--
    ordinarily phrases like ``stay the course'' do not usually mean
    something, but we understand how--what we need to be doing in
    2008. But we also want to look ahead to the longer issue, the
    NASA trend lines, as well as ensuring that we do have a
    reliable space transportation system as promptly as the Nation
    can afford to do it, as well as keeping other important
    projects.
        I think we have really gone through quite a bit of our
    questions. Senator Shelby, do you have a last one?

                     RANKING MEMBER SHELBY CLOSING REMARKS

        Senator Shelby. I just have one brief comment since we have
    Dr. Griffin here again.
        Dr. Griffin, we want to work with you, both of us. I work
    now as the ranking Republican, former chairman. Senator
    Mikulski was the former ranking Democrat, now chairman. But I
    do not believe that NASA has two bigger supporters than the two
    of us here on this subcommittee. We are going to continue to
    work with you to make NASA what it wants to be.
        Dr. Griffin. Thank you, Senator. I know that you have been
    my biggest supporters and I very much appreciate it.

                              SUBCOMMITTEE RECESS

        Senator Mikulski. This subcommittee is recessed. We will
    return on April 12, when we will take testimony from the
    Attorney General.
        [Whereupon, at 3:18 p.m., Thursday, March 15, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                            THURSDAY, APRIL 19, 2007

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

                             DEPARTMENT OF JUSTICE

              Bureau of Alcohol, Tobacco, Firearms and Explosives

    STATEMENT OF MICHAEL J. SULLIVAN, ACTING DIRECTOR

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Good morning. The Subcommittee on
    Commerce, Justice, Science, and Related Agencies will come to
    order. Today we will be taking the testimony of the Bureau of
    Alcohol, Tobacco, Firearms, and Explosives (ATF), the Drug
    Enforcement Administration (DEA) and the United States Marshals
    Service.
        We want to extend a warm welcome to our witnesses today and
    let our witnesses know how important we think their job and
    their mission is to this country.
        When we planned this hearing a few months ago, it was to
    examine the budget of these very dedicated law enforcement
    agencies and to discuss how the Commerce, Justice, Science
    Subcommittee could work with them to make sure they had the
    tools they needed to protect our national security and keep our
    communities safe.
        Yet, this week, a very grim and very melancholy event
    occurred on the campus of one of our universities. On Monday we
    watched in shock and horror as Virginia Tech came under fire
    with over 32 dead and many more injured. The terrible tragedy
    highlights how important it is for our Federal law enforcement
    agencies to be able to work together with our local law
    enforcement at a time of great tragedy.
        What we know is that ATF was immediately on the scene
    sending 12 ATF experts to Virginia to secure the crime scene,
    and make sure that the integrity of the evidence at the crime
    scene was not compromised. In fact, Maryland is home to a very
    unique ATF forensic lab. I know the subcommittee will be
    interested to hear about this facility because it is where ATF
    identified the ballistics evidence to determine if there was a
    single killer or multiple killers. But at the same time we know
    that DEA and the Marshals Service also answered the call.
        In the briefing that you've provided me before this hearing
    it was clear there was an outstanding effort by Federal
    agencies in supporting and augmenting the local community so
    they knew they were not alone. While they were making the best
    of a terrible situation, you were doing your best, which was
    making sure needs were met. We will be asking you today
    questions along these lines.
        We also want to then focus on each of your very unique
    missions. We know that the DEA is an integral part of fighting
    the global war against terrorism. Terrorism, whether it's been
    growing poppies in Afghanistan to fund the Taliban or to what
    is happening in our own community with the cyber distribution
    of highly addictive substances or to working with State and
    local law enforcement to shut down and clean up toxic meth
    labs. We want to know more about what you're doing and what we
    can do to help you do it.
        Also for our Marshals Service, the Marshals Service plays a
    unique role. Right this minute on the Senate floor we're
    debating court security. We ask the Marshals Service to provide
    court protection to both witnesses and to our judges. We also
    ask them to guard fugitives. We also ask them to provide unique
    and special protection in high profile trials where there is a
    drug kingpin or a terrorist. At the same time we want them to
    enforce the Adam Walsh Act and make sure they apprehend the
    sexual predators who refuse to register while making sure you
    catch them before they commit another repugnant act.
        So we want to listen to all of you today. Our ATF, whose
    unique job is to enforce laws related to alcohol, tobacco, and
    firearms. This is not the old days of breaking up stills. There
    is nothing still about ATF in terms of its modern mission.
    They're on the scene investigating arsons, illegal trafficking
    of guns both internationally and nationally while providing
    unique forensic capability that often local communities cannot
    afford particularly those in rural America.
        Threats have changed since your agencies were created.
    Technology is in demand and at the same time the very people
    that work in these agencies need to have even better and unique
    training. So the job today is to listen to what you are doing
    and to tell us what resources you need to be able to do it
    better, to make sure that we're protecting our national
    security and our community security.
        With that I would like to then yield to my ranking member,
    Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Chairman Mikulski. I want to
    thank all of the participants for joining us to discuss the
    2008 budget for the Bureau of Alcohol, Tobacco, Firearms and
    Explosives, the Drug Enforcement Administration, and U.S.
    Marshals Service.
        The total Department of Justice request for 2008 is a
    little over $20 billion. This is a $771 million decrease below
    the 2007 joint resolution funding level. The Department faces a
    $500 million shortfall in the 2008 budget. Just as I said last
    year, the budget constraints placed upon us by the war on
    terror and the recent hurricane seasons will once again force
    us to make tough decisions.
        I would be remiss though if I didn't, as Senator Mikulski
    has already done, mention the tragedy that took place on the
    Virginia Tech campus Monday morning. My heartfelt thoughts go
    out to everyone that was affected by this horrible event.
        The ATF has been one of the lead investigative agencies in
    this horrible disaster and it has done an outstanding job. ATF
    agents quickly identified ballistic evidence linking a weapon
    used in the first shooting to the second shooting. Acting
    Director Sullivan, I commend your personnel in the labs and on
    the ground for their quick and professional response. This
    somber day will be one mourned and remembered by all of us for
    years and years to come.
        I also once again want to commend the ATF for its
    contributions to the quick capture and conviction of the
    Alabama church fire arsonist that was sentenced to prison last
    week, remember that horrible situation there, where they were
    burning churches.
        The ATF's 2008 request is a little over $1 billion. The
    request is $29.8 million over the 2007 joint resolution total
    and you'll need it. The ATF as we all know is the premier
    agency for gun crimes, gang activity, arson, and explosive
    related crimes. I'm committed, as the chairman is, to ensure
    that you have the tools and training facilities to fulfill your
    explosives mission.
        The National Center for Explosives Research will be a
    world-class addition to the Redstone Arsenal in Huntsville,
    Alabama, which is already home of the Federal Bureau of
    Investigation's (FBI) hazardous devices school.
        I'm working collaboratively here to expand the Federal
    Government's explosive infrastructure and expertise there. This
    will assist in our number one priority of terrorism prevention
    and ensuring a safe homeland.
        Redstone Arsenal should and will be the law enforcement
    capital of explosives research and training. We have the
    personnel. You have them there.
        Director Sullivan, I would like to offer you
    congratulations again on your nomination to be the permanent
    Director of ATF. We believe you will sail through. We all want
    to help you. You bring a lot of experience as a former U.S.
    attorney in Massachusetts and I believe that you will serve the
    ATF and the Nation well in this regard.
        Administrator Tandy, thank you for coming today. The Drug
    Enforcement Administration's budget request for 2008 is $1.8
    billion, a little over a $57 million increase over the 2007
    joint resolution total.
        The role of the DEA has shifted from being solely focused
    on narcotics to include an intelligence mission and a position
    on the front line on the war on terror. As former chairman on
    the Select Committee on Intelligence, I know all too well the
    link between global drug trafficking and terrorism.
        I understand the detrimental impact that a hiring freeze
    has on your ability to carry out your mission. Senator Mikulski
    and I will be working with you on the 2008 process to see that
    you, the DEA, have the manpower that you need to carry out your
    mission. I think it's critical.
        By the same token, while we're addressing the budget
    shortfalls and hiring freeze, I received this disturbing letter
    from the Department of Justice on March 6, stating that the
    cost of the clandestine laboratory training facility has
    doubled from $8 million to $16 million.
        This letter combined with the disastrous cost escalations,
    poor estimations, and project management of the DEA's
    information technology center that jumped from $7.1 million to
    $38 million show a disturbing and, I think, unacceptable trend
    that we'll have to put our hands on in this subcommittee.
        I will reserve any further judgment because we don't know
    all the facts until we hear from the recommendations of the
    inspector general and the Government Accountability Office
    (GAO).
        Meth, as the chairman has mentioned, use continues to
    poison our Nation, knowing no boundaries of age, gender, class
    or race. The majority of this drug is shipped into our country
    from Mexico and I want to commend the DEA and the Department of
    Justice in their recent success of Operation Imperial Emperor,
    where more than 400 individuals were arrested and $45 million
    in U.S. currency and 18 tons of illegal drugs were seized from
    a Mexican drug cartel. That's progress.
        Violent Mexican drug cartels have turned our Southwest
    border into a battle zone where our DEA agents put their lives
    on the line everyday. These cartels have their own advanced
    telecommunications towers and encrypted radios making their
    communications system virtually impenetrable with our current
    surveillance quota.
        I hope, Senator Mikulski, that we will be able to help fund
    with the modern technology that the DEA needs here to have the
    right technology in the hands of our agents so that they can
    fight this battle.
        Director Clark, the U.S. Marshals Service budget request is
    $899.8 million. This is an $80 million increase over the 2007
    joint resolution total. The core responsibilities of the
    Marshals Service include providing judicial and courthouse
    security, safeguarding witnesses, transporting prisoners for
    court proceedings, seizing forfeited property and apprehending
    fugitives. That's a lot.
        The National Center for Missing and Exploited Children
    estimates that over 600,000 sex offenders in the United States,
    more than 100,000 of them have failed to register. With the
    enactment of the Adam Walsh Act, marshals are tasked with
    removing those unregistered offenders from our streets which is
    a daunting task.
        Last year the U.S. Customs and Border Protection Agency
    received funding to hire an additional 2,000 border patrol
    agents. Marshals bare the primary burden of transporting
    illegal alien prisoners taken into custody by these border
    patrol agents meaning there will be fewer marshals removing
    unregistered sexual offenders from our neighborhoods and
    streets. This is a problem, I think, Madam Chairman, we've got
    to address.
        The Presidential Threat Protection Act of 2000 authorized
    the permanent creation of fugitive apprehension task forces
    which are comprised of Federal, State, and local law
    enforcement authorities in designated regions. Through this
    act, the gulf coast regional fugitive task force, headquartered
    in Birmingham, Alabama, was created last May.
        At approximately 8 a.m., a young female lawyer was
    kidnapped at gunpoint in the parking lot just a few blocks from
    my office in downtown Birmingham. Some of you might remember
    seeing video of this as it was captured on a security camera
    and shown on network news channels all over the Nation.
        Through the efforts of the gulf coast regional fugitive
    task force, the kidnapper was captured and the woman returned
    to her family without serious bodily harm. That is good, good
    work. This is just one example of what you're doing and how
    you're doing it.
        Last, the reprehensible working conditions and inadequate
    security resources that our marshals endure in the District of
    Columbia Superior Court building have recently been brought to
    my attention. Stale ventilation, flooding hallways, poor
    plumbing, malfunctioning lights that are needed to illuminate
    prisoner traffic areas monitored by security cameras and
    archaic prisoner tracking system and antiquated prisoner
    scanning devices are conditions that are not acceptable, that
    you need better funds for better equipment.
        Director Clark, I understand you visited this facility last
    week and I look forward to hearing from your visit and what we
    can do, this subcommittee, to resolve this very, very serious
    matter and I want to thank you for the job you do and I want to
    thank the men and women who work at the Department of Justice
    for what they do everyday. Thank you.
        Senator Mikulski. Thank you very much, Senator Shelby. The
    way the subcommittee is going to proceed is we're now going to
    turn to our witnesses and then for those who colleagues who
    also had opening statements, you can incorporate that in your
    question and we'll add some additional moment or two so there
    would be no penalty.
        Our colleague Senator Domenici, I know, has to go to
    another hearing and we're going to work to accommodate him
    after the testimony of our three people.
        Does that meet your needs, Senator Domenici?
        Senator Domenici. I have an entire delegation in my office
    now in 5 minutes so I will hope that I'll be finished in time
    to come back. I'll try my best.
        Senator Mikulski. Well, Senator, we'll certainly reserve
    the time for you and I can assure you along with Senator Shelby
    if you have questions for the record or if your staff would
    even want us to be sure we cover any ground this morning.
        Senator Domenici. We have had a very important set of
    activities regarding meth in New Mexico and I wanted to follow
    up on them and I hope I get back in time to do that.
        Senator Mikulski. And any way we can support you in doing
    that, fine.
        Why don't we then turn to, excuse me, turn to our panel to
    present their testimony. What I'd like to suggest is Mr.
    Sullivan, we start with the Bureau of Alcohol, Tobacco,
    Firearms and Explosives then go to Ms. Tandy and our very able
    Marshals Service will be the wrap up.

                    SUMMARY STATEMENT OF MICHAEL J. SULLIVAN

        Mr. Sullivan. Good morning Chairman Mikulski, Ranking
    Member Shelby, and distinguished members of the subcommittee. I
    have submitted a detailed statement that I'm asking to be made
    part of the record so I only have a few brief remarks.
        This is my second time testifying before a congressional
    Appropriations Committee and my first time before the Senate
    and I'm very pleased to be here to speak on the President's
    fiscal year 2008 budget request for ATF.
        I want to thank you Chairwoman Mikulski and Ranking Member
    Shelby for your recognition of ATF. It has been my personal and
    professional honor to lead this agency for the past 7 months.
        I'm also pleased to be sitting here with Administrator
    Tandy and Director Clark, two individuals I have tremendous
    respect for.
        ATF has a long and successful history of working closely
    with DEA and the U.S. Marshals Service as well as our other
    Federal law enforcement partners including the FBI and the
    Bureau of Prisons. Such partnerships are vital to accomplishing
    our mission and serving the interests of our fellow citizens.
        As the United States attorney in Massachusetts and a former
    local prosecutor, I came through the door at ATF with a
    tremendous respect for the work that our people do, day in and
    day out, to fight violent crime, combat gang violence, and
    improve the quality of life in the neighborhoods throughout our
    country.
        I must admit however, that I was unaware of the full depth
    and breadth of the agency's mission, responsibilities and
    contributions to the safety and security of our country. I very
    much appreciate the subcommittee's support of our agency, in
    particular the interest you have taken in our mission and our
    programs.
        Thanks to the leadership of this subcommittee and the
    dedication and diligence of the men and women of ATF, our
    efforts are producing real results that make our neighborhoods,
    our country, and our world safer for everyone.
        Finally before we proceed, like many others, I would like
    to take a moment to offer my condolences to the victims, their
    families, and the university community at Virginia Tech. This
    truly was a national tragedy.
        I have three college-aged children. As a parent and as a
    citizen of the greatest country in the world, it horrifies me
    that one of our Nation's top universities could serve as the
    setting for such a horrendous and unthinkable crime of
    violence. As you know and as you have pointed out, Chairwoman
    Mikulski, State and local law enforcement authorities in
    Virginia worked around the clock to investigate the matter and
    find answers for the victims and their families.
        ATF, along with our Federal partners, FBI, DEA, and the
    U.S. Marshals Service, has been lending support to those State
    and local agencies as requested and will continue to provide
    any and all assistance that is asked of us.

                               PREPARED STATEMENT

        Chairwoman Mikulski, I look forward to working with this
    subcommittee and with you and will be pleased to answer any
    questions you might have in the course of this hearing. Thank
    you.
        Senator Mikulski. Thank you Mr. Sullivan.
        [The statement follows:]
                   Prepared Statement of Michael J. Sullivan
        Madam Chairman, Senator Shelby, and distinguished Members of the
    Subcommittee, I am pleased to appear before you for the first time to
    discuss the President's fiscal year 2008 budget request for the Bureau
    of Alcohol, Tobacco, Firearms and Explosives (ATF). I very much
    appreciate the Subcommittee's support of ATF and the interest you have
    taken in our mission and programs. Thanks to the leadership of this
    Subcommittee, and the dedication and diligence of the men and women of
    ATF, our efforts are producing real results that make our neighborhoods
    and country safer.
                                 atf's mission
        As you know, ATF is a principal law enforcement agency within the
    Department of Justice dedicated to reducing violent crime, preventing
    terrorism and protecting our Nation. The men and women of ATF perform
    the dual responsibilities of enforcing Federal criminal laws and
    regulating the firearms and explosives industries. The combined efforts
    of special agents and industry operations investigators allow ATF to
    effectively identify, investigate, and recommend for prosecution
    violators of Federal firearms and explosives laws; additionally, their
    teamwork enables ATF to ensure that licensees are operating within
    established laws and regulations. We are committed to pursuing our
    mission by working both independently and through partnerships with
    industry and other Federal, State, local and international law
    enforcement agencies.
                                accomplishments
        Over the past fiscal year, ATF has initiated criminal
    investigations in the following areas: 29,166 firearms cases; 4,060
    arson and explosives cases; 2,023 gang-related cases; 135 alcohol and
    tobacco diversion cases; and 47 explosives thefts, which included 3,977
    pounds of explosives, 3,627 detonators and 25,107 feet of detonator
    cord.
        In addition, in fiscal year 2006, ATF conducted 12,148 inspections
    of Federal Firearms Licensees (FFL) and 6,392 inspections of Federal
    Explosives Licensees (FEL). We also processed: 401,792 National
    Firearms Act (NFA) weapons registrations; 284,443 firearms trace
    requests; 37,390 FFL applications and renewals; 5,524 FEL applications
    and renewals; and 11,001 import permit applications.
        ATF also provided important training not only for our own
    personnel, but for our local, State, Federal and international law
    enforcement partners. For instance, in fiscal year 2006, we provided
    training for 816 members of the international law enforcement
    community. We provided Project Safe Neighborhoods (PSN) training for
    5,816 Assistant U.S. Attorneys, State and local prosecutors, State and
    local police officers and sheriffs, and ATF Special Agents. We also
    trained:
      --Over 1,100 personnel, including 500 State and local investigators
            and bomb squad personnel, in explosives-related courses,
            including post-blast investigations;
      --Over 700 explosives detection canine teams on peroxide-based
            explosives;
      --450 U.S. Marshal Court Security Officers on improvised explosive
            device (IED) familiarization and security; and
      --402 personnel in arson-related courses.
                        fiscal year 2008 budget request
        For fiscal year 2008, ATF requests $1,013,980,000 and 5,032
    positions, of which, 2,468 are agents. This request includes
    $995,023,000 and 4,984 positions for current services and $18,957,000
    and 48 positions for program improvements.
        The program improvements include $8.9 million in increased funding
    for the successful PSN initiative, ATF's firearms trafficking
    enforcement teams, and participation in the National Gang Targeting,
    Enforcement, and Coordination Center (GangTECC). These programmatic
    increases would be an important investment in the pursuit of violent
    offenders and the reclamation of communities from the scourge of gangs,
    gun crime, and local, national and international gun trafficking
    organizations.
        An additional $10 million is being requested for continuation of
    our current explosives programs which will further fulfill our
    responsibilities under the Safe Explosives Act. These funds will ensure
    that explosives industry members continue to receive their licenses in
    a timely manner and will allow ATF to provide appropriate oversight
    concerning the safe and secure storage of explosives.
                project safe neighborhoods and anti-gang efforts
        The fiscal year 2008 budget request for ATF includes six additional
    FTE (12 positions) and $2.2 million to enhance the Bureau's gang and
    firearms enforcement efforts supporting PSN nationwide. ATF will apply
    these resources to locations that have experienced an increase in
    firearms violence and will focus them on multi-defendant conspiracies
    and criminal organizations in an effort to take violent criminals off
    the street.
        ATF has been the lead Federal law enforcement agency for PSN since
    its inception in May 2001, focusing on a wide range of firearms cases--
    those involving Racketeer Influenced Corrupt Organization (RICO)
    violations, firearms trafficking and the criminal possession of
    firearms by convicted felons and other prohibited persons. As the only
    Federal agency that focuses primarily on violent crime and the
    regulation of commerce in firearms and explosives, ATF exercises unique
    statutory authority over the ``tools of the trade'' that make gangs a
    threat to public safety.
        Nearly 2,000 of ATF's special agents are exclusively dedicated to
    investigating violent crime and gangs. These agents work closely with
    State and local law enforcement to investigate the most egregious
    violent criminals and violent criminal organizations. This strategy is
    employed effectively through ATF-led Violent Crime Impact Teams (VCIT),
    which are currently deployed in 25 cities across the nation. During
    fiscal year 2007, this number will expand by 5 additional cities
    bringing the total number to 30. In addition, ATF participates with
    State and local police and other Federal agencies on 110 anti-gang task
    forces.
        This past year ATF aggressively investigated and made significant
    strides in combating violent gangs. In fiscal year 2006: 2,023 gang-
    related cases were initiated by ATF--an increase of 157 percent from
    2002, the first full year of PSN; 1,680 defendants referred by ATF in
    gang-related cases were convicted--an increase of 289 percent from
    2002; and 779 defendants in gang-related cases were sentenced, with an
    average sentence of 107 months.
        An outstanding example of our anti-gang efforts is Operation Mano
    Dura, an investigation of the MS-13 gang conducted by our Baltimore
    Field Division. Those indictments included charges of various RICO
    predicate acts, including seven homicides and numerous other shootings,
    beatings and other violent crimes in aid of racketeering. To date, 15
    of the defendants have been convicted and 12 are awaiting trial. Nine
    of these defendants are eligible for the death penalty.
        Another noteworthy example is the arrest and indictment of 13
    members of the MS-13 street gang in January following a year-long joint
    investigation by ATF and the Nashville Metropolitan Police Department.
    During the investigation, information was developed linking Nashville-
    based MS-13 members and associates with seven shootings, three alleged
    murders, several planned murders, threats, intimidation and many other
    significant violent crimes, all of which occurred in 2006. The
    defendants were indicted on RICO charges. Several of these defendants
    also are eligible for death sentences.
        The President has identified violent street gangs as a national
    problem and has instructed the Department to institute strategies to
    address this problem. ATF has been successful in targeting high crime
    areas and dedicating investigative, inspection, analytical and
    technological resources to reduce violent crime. Through these
    strategies, ATF and the Department are acting decisively to demonstrate
    to the American public that Federal law enforcement agencies are
    working strategically to investigate, reduce and prevent violent crime.
    The additional PSN funds we are requesting will build upon proven,
    successful tactics: integrating regulatory enforcement, aggressive
    investigation techniques and the utilization of technology to impact
    violent crime.
        ATF also is requesting two positions, two agents, and $373,000 to
    dedicate to GangTECC. Established by the Attorney General, this new
    national anti-gang force serves as a coordinating center for multi-
    jurisdictional gang investigations involving Federal law enforcement
    agencies. It also provides a clearinghouse for gang-related
    intelligence data, assists in developing a refined understanding of the
    national gang problem, proposes appropriate countermeasure strategies,
    and supports the National Gang Intelligence Center. Currently, three
    ATF special agents are supporting GangTECC. These agents are
    facilitating the coordination of overlapping racketeering
    investigations and ensuring that tactical and strategic intelligence is
    shared between law enforcement agencies. Moreover, an ATF agent is
    currently serving as the initial Deputy Director of GangTECC. GangTECC
    provided important assistance in the aforementioned arrests and
    indictments of the Nashville-based MS-13 gang members. Specifically, it
    facilitated communications among the various law enforcement agencies
    involved in the case, arranged for other Federal agents to support the
    investigation as needed, and arranged an urgent translation and
    transcription of communications that were garnered through undercover
    operations.
                              firearms trafficking
        Street gangs are often involved in firearms trafficking in order to
    supply guns to gang members and criminals in furtherance of drug
    trafficking and in the commission of other violent firearms-related
    crimes. To successfully fight violent crime, it is essential to prevent
    the illegal flow of firearms to criminals. ATF's firearms trafficking
    interdiction efforts advance this goal by identifying and arresting
    those persons who illegally supply firearms to gang members and
    prohibited persons such as felons and juveniles.
        ATF is requesting 34 positions, of which all are agents, and $6.3
    million to expand its domestic firearms trafficking enforcement efforts
    along the Southwest Border and nationwide to target efforts on certain
    gun trafficking corridors. With this funding, ATF will establish
    investigative teams that will be devoted to firearms trafficking
    interdiction efforts in areas of the country with the highest levels of
    out-of-State guns recovered in crimes.
        ATF will use its analytical resources to strategically deploy these
    teams. To date, ATF has determined that the following routes are
    significant regional, national and international trafficking corridors:
    The Southwest Border; the I-95 corridor between Miami and Boston;
    Northern rural Mississippi to Chicago; Northern Indiana to Chicago; the
    triangle between Los Angeles, Las Vegas and Phoenix; and Birmingham to
    Chicago.
        Several of these trafficking routes impact not only local and
    regional crime patterns, but also have international significance,
    affecting our neighbors in Canada and Mexico, as well as other Central
    and South American nations.
        In fiscal year 2006, 1,526 ATF-referred defendants in firearms
    trafficking cases were convicted. This represents an increase of 166
    percent from 2002, the first full year of PSN.
        A noteworthy example of a firearms trafficking case is Operation
    Flea Collar, a complex, 2-year undercover investigation during which
    ATF learned that two suspected traffickers were purchasing firearms at
    an FFL in Alabama and then selling them at flea markets and gun shows
    in northern Alabama. Further investigation identified unlicensed
    firearms dealers at those flea markets. It also revealed a recurring
    scheme whereby gang members or their designees were routinely
    dispatched to the Alabama flea markets and gun shows to purchase
    firearms in bulk for use by various street gangs. Ultimately, ATF
    agents estimated that the various suspects had sold thousands of
    firearms over the last several decades. At least 12 of the trafficked
    firearms have been associated with homicide investigations, including
    one linked to the attempted murder of a Chicago police officer. Many of
    the trafficked firearms also have been linked to robberies, assaults,
    drug crimes and sex crimes throughout the United States. The firearms
    have been recovered in numerous States, including Alabama, California,
    Georgia, Illinois, Maryland, Michigan, New York, South Carolina,
    Tennessee, Texas and Washington, DC. Operation Flea Collar concluded
    with the seizure of 556 firearms and the arrest of 18 individuals on
    charges stemming from the illegal sale of firearms without a license
    and the illegal sale of firearms to convicted felons and out-of-state
    residents. All 18 suspects have been convicted and sentenced, and the
    investigation is ongoing.
        Another example of a significant trafficking case involved guns and
    drugs moving between West Virginia and New York City. In 2004, our
    Wheeling Field Office opened a firearms trafficking investigation of
    two corrupt pawn dealers located in Fairmont, West Virginia. During the
    course of these investigations, special agents uncovered an interstate
    conspiracy to traffic crack cocaine in Fairmont and illegally traffic
    firearms to New York City. This investigation resulted in the Federal
    conviction of three individuals for conspiracy and three other persons
    for Federal firearms and narcotics charges.
        One final noteworthy example of a firearms trafficking case
    involved members of the ``Bloods'' street gang in New Jersey arranging
    for students at Wilberforce University in Ohio to conduct straw
    purchases of firearms in Ohio and transport them to New Jersey. The
    gang members who received the firearms used them for an assortment of
    violent crimes in New Jersey, including a drive-by shooting, armed
    robbery, crack cocaine distribution and an attempted home invasion.
    This 2-year investigation resulted in the conviction of 12 defendants
    for Federal firearms violations for trafficking 146 firearms.
        ATF is attempting to balance the resources it devotes to fighting
    violent crime and addressing the supply of firearms to criminals.
    Successfully tackling the problem of firearms trafficking requires a
    comprehensive effort and a multifaceted approach utilizing court-
    authorized electronic surveillance, undercover operations, source
    development and cooperation with other law enforcement entities in
    order to be truly effective in shutting down illegal firearms markets.
                         other programs and activities
        In addition to PSN and firearms trafficking enforcement, ATF has
    other significant operations that are essential to carrying out our
    mission. Our law enforcement and regulatory responsibilities require
    ATF to maintain a host of efficient and effective activities, programs
    and facilities. I would like to take this opportunity to highlight a
    few important initiatives.
    Firearms Enforcement and Investigation
        In response to firearms trafficking and related violence on both
    sides of the border with Mexico, ATF has developed a Southwest Border
    Initiative. This initiative coordinates the resources of ATF's Dallas,
    Houston, Los Angeles and Phoenix Field Divisions, as well as Violent
    Crime Impact Teams (VCIT) in Laredo, Houston, Albuquerque and Tucson.
    The initiative focuses regional and cross-border violence and firearms
    trafficking by employing geographic targeting, partnerships, technology
    and training. In addition to working with local law enforcement, ATF
    also is collaborating closely with Immigration and Customs Enforcement
    (ICE) and Mexican officials. In fact, ATF meets regularly with its U.S.
    and Mexican law enforcement partners to discuss strategies, share
    intelligence, and initiate cooperative efforts to combat crime along
    the southwest border. One important effort we are undertaking through
    partnership with the Mexican government is ensuring that U.S.-sourced
    firearms recovered in Mexico are properly identified, documented and
    submitted to ATF for tracing. ATF uses the trace results to identify
    and investigate firearms traffickers who illegally divert firearms to
    drug traffickers. To this end, we will deploy across Mexico our eTrace
    system, an Internet-based system for submitting firearms trace
    requests.
        In order to reduce violent crime, ATF has and will continue to
    develop technology to assist law enforcement at all levels. Through our
    National Integrated Ballistic Information Network (NIBIN), ATF deploys
    automated ballistics comparison equipment to participating Federal,
    State, and local law enforcement forensics laboratories--230 sites in
    total--which provides the ability to identify ballistic links between
    crimes that might not otherwise be connected. As of December 2006,
    NIBIN had nearly 1.25 million images of casings and bullets in its
    database with nearly 19,000 ``hits.'' NIBIN has many success stories,
    including a recent one from Buffalo, New York. In this case, the
    ballistics evidence gathered at eleven separate shooting scenes between
    June 2003 and October 2006 was linked to a single .45 caliber handgun
    using the NIBIN ballistic imaging system at the Erie County Forensic
    Laboratory. On November 13, 2006, the Buffalo Police Department
    executed a narcotics search warrant and recovered narcotics, firearms
    and ammunition. A recovered firearm was processed by the Erie County
    Laboratory and identified as the handgun used in the eleven shootings.
    Explosives and Arson
        ATF's arson and explosives National Response Teams (NRT) provide
    expert assistance at the scenes of significant fire or explosives
    incidents. The NRT is comprised of veteran special agents with
    expertise in conducting post-blast investigations and determining the
    origin and cause of fires. In addition, the NRT is supported by all of
    ATF's arson and explosives assets, such as the Fire Research Laboratory
    (FRL), accelerant detection canines and audit services. In 2006, the
    NRT was deployed 17 times. For example, in February 2006, it was
    deployed to assist in the investigation of nine fires that occurred in
    churches in western Alabama. After a month of intense investigation,
    three suspects were arrested for the church fires.
        ATF's technical expertise is also evidenced by our three state-of-
    the-art forensic laboratories and one-of-a-kind FRL. In fiscal year
    2006, our National Laboratory Center in Ammendale, Maryland, added DNA
    analysis capability to its already impressive collection of forensic
    tools. The FRL, also located at our National Laboratory Center, has the
    capability of simulating fire scenarios approaching a quarter-acre in
    size, under controlled conditions, allowing for detailed analysis. It
    is the only such facility in the United States dedicated to providing
    case support in fire investigations using forensic fire science.
        The U.S. Bomb Data Center (USBDC) is the Department's comprehensive
    repository of data pertaining to arson and explosives incidents. The
    information within the USBDC is accessible to our law enforcement
    partners and can be analyzed to determine trends, patterns, criminal
    methodologies, and, in some cases, suspects. The USBDC contains more
    than 140,000 records. Law enforcement officials can query the
    characteristics of an explosive device and match it to others with
    similar characteristics. USBDC houses several databases, including the
    Bomb and Arson Tracking System (BATS), which facilitates and promotes
    the collection and dissemination of data among local law enforcement on
    arson and explosives incidents, and DFuze, which allows international
    law enforcement agencies to compare and exchange information on
    incidents within their jurisdictions. The USBDC has adopted a new
    ``Concept of Operations'' to guide it into the future. Under this plan,
    USBDC will become a Center of Excellence, hosting not only law
    enforcement officials, but also members of the intelligence community
    as well as representatives from academia and industry. USBDC will
    continue to consolidate all explosives incidents information and
    databases in an effort to be the ``one-stop shop'' for explosives
    incident information.
        Our regulatory responsibilities include enforcement of the Safe
    Explosives Act of 2002, which mandates a field inspection on all
    original and renewal applications for explosives licensees or
    permitees. Because most licenses and permits expire every 3 years, ATF
    is mandated to perform one inspection per licensee/permit user every 3
    years. Over 5 billion pounds of explosives are manufactured, imported
    and sold annually in the United States. ATF uses existing resources to
    ensure that all violations noted in such inspections are appropriately
    resolved. ATF also will continue to investigate all reported explosives
    thefts, respond to and investigate bombings and other explosives
    incidents, and assist local, State and other Federal agencies with
    explosives related issues.
    Sharing Our Expertise through Partnerships and Training
        We are committed to pursuing our mission by working both
    independently and through partnerships with industry and other Federal,
    State, local and international law enforcement agencies. For instance,
    our ``Don't Lie for the Other Guy'' program is a partnership with the
    National Shooting Sports Foundation which helps educate FFLs on how to
    identify and prevent straw purchases of firearms. We also have
    partnered with The Fertilizer Institute to launch voluntary campaigns
    to raise awareness of the sale, security, storage, and transportation
    of ammonium nitrate, the substance that was mixed with fuel oil in the
    Oklahoma City bombing. In addition, ATF has maintained outstanding
    relationships with a number of influential professional organizations
    including the International Association of Chiefs of Police, the
    International Association of Bomb Technicians and Investigators, the
    National Sheriffs' Association, Major Cities Chiefs Association, and
    the National Bomb Squad Commanders. ATF also has collaborative research
    partnerships with the U.S. Army Engineer Research and Development
    Center; Oak Ridge and Lawrence Livermore National Laboratories; the
    University of Missouri, Rolla; and the University of Massachusetts,
    Lowell. Moreover, ATF closely and regularly collaborates with the
    Departments of State, Defense and Homeland Security; and other
    components of the Department of Justice. We also work with INTERPOL and
    EUROPOL; and representatives of foreign governments, including the
    United Kingdom, Mexico, Colombia, Israel and Canada.
        At ATF's Canine Training Center in Front Royal, Virginia, ATF
    trains explosives detection and accelerant detection canines for use by
    Federal, State, international and local law enforcement and public
    safety officials. ATF is committed to ensuring that DOJ's canines
    conform to applicable ATF standards. In order to keep canine
    capabilities able to meet current threats, ATF has initiated a program
    to offer advanced training in the detection of organic peroxide-based
    explosives to law enforcement canine teams. At the request of the
    National Bomb Squad Commanders Advisory Board, ATF developed National
    Odor Recognition Testing to verify that explosives detection canines
    meet a national standard. During fiscal year 2006, the project
    certified approximately 150 non-DOJ canine teams, and has already
    certified 124 canine teams in fiscal year 2007. In addition, ATF has
    trained more than 350 explosives detection canines in 16 countries.
        With respect to training, the National Center for Explosives
    Training and Research (NCETR) offers numerous advanced courses related
    to explosives disposal and post-blast investigation techniques. NCETR
    provides training for State, local and international law enforcement,
    the U.S. Department of State and all branches of the Armed Forces. It
    also provides training for Army explosives units prior to their
    deployment in Iraq. NCETR has trained almost 6,000 bomb technicians and
    investigators in explosives disposal and investigative techniques. Each
    year, requests for explosives-related training have increased, and
    present demand exceeds our capability. The fiscal year 2006 Conference
    Agreement (Public Law 109-108) directed ATF to plan for the
    construction of a permanent facility co-located with other law
    enforcement and Federal government entities that provide similar
    training and research. Subsequently, we have selected a site at
    Redstone Arsenal in Alabama. To date, ATF has received a letter of
    intent memo from Redstone Arsenal for a commitment of resources, such
    as ranges, classrooms, explosives storage bunkers, land to build an
    administration/classrooms building and housing billets. ATF also has an
    interagency agreement with the Army Corps of Engineers (COE) for design
    and planning of the NCETR. This planned permanent facility for NCETR
    will promote efficiency by consolidating other Department of Justice
    and Department of Defense explosives training and research in one
    location. These collective resources will provide a unique opportunity
    to leverage assets, knowledge and expertise in the field, providing
    Federal, State, local and international law enforcement explosives
    expertise in one location.
    Alcohol and Tobacco Diversion
        ATF also combats the illegal diversion of alcohol and tobacco
    products by criminal gangs, organized crime, and terrorist groups. The
    illicit sale of these commodities causes a substantial loss of excise
    tax revenue to both the Federal and State governments. Moreover, there
    have been instances in which terrorist groups are using proceeds from
    tobacco trafficking to finance their organizations and activities. By
    utilizing the Contraband Cigarette Trafficking Act, RICO, wire fraud,
    mail fraud, and money laundering statutes, ATF has built complex cases
    against individuals who have used proceeds from the illegal trafficking
    of cigarettes to fund organized crime and terrorism. ATF's
    investigations into illicit trafficking of tobacco products and
    enforcement of existing statutes continue to become more refined. In
    fiscal year 2002, 18 defendants were convicted on tobacco diversion-
    related charges. Every year since, there has been an increase in the
    number of defendants convicted of these crimes as a result of ATF's
    efforts. In fiscal year 2006, 108 defendants were convicted of tobacco
    diversion-related offenses as a result of ATF's work--that is a 600
    percent increase in defendants convicted over a 5-year period. ATF will
    continue to fight the illicit trafficking of both alcohol and tobacco
    products, whether the means of illicit trafficking are more traditional
    in nature or contemporary such as Internet sales.
    International Programs
        In addition to the training NCETR provides to Army explosives units
    prior to their deployment to Iraq, ATF is lending its expertise to U.S.
    efforts in Iraq in a variety of ways. Since March 2005, ATF has
    deployed Special Agent Certified Explosives Specialists and Explosives
    Enforcement Officers to support the Iraq Combined Exploitation Cells
    (CEXC) within the U.S. Military Central Command. ATF explosives experts
    provide onsite investigative assistance in processing post-blast
    incidents directed at United States and allied forces and we also
    provide post-blast training for the Iraqi National Police. In addition,
    ATF employs explosives detection canine teams in Iraq and throughout
    the Middle East--these teams often are directly responsible for
    locating hidden explosives and weapons in enforcement actions conducted
    by host governments against terrorist groups. Moreover, ATF has special
    agents assigned to the Regional Crimes Liaison Office and the Major
    Crimes Task Force in Iraq to assist in the investigation and
    prosecution of war crimes and other criminal activity. ATF will
    establish a temporary duty presence of four ATF agents at the new U.S.
    Embassy in Baghdad later this year.
        Finally, ATF is a managing partner in the Terrorist Explosive
    Device Analytical Center (TEDAC). This joint DOJ-DOD program is housed
    at the FBI Laboratory in Quantico, Virginia, with an ATF special agent
    serving as the Deputy Director. At the TEDAC, ATF and other partners
    analyze IEDs from Iraq and Afghanistan in an effort to identify bombers
    and prevent further attacks. TEDAC's evaluation of terrorist IED
    components to identify similarities and its collection of latent prints
    and DNA from those devices helps identify bombing suspects and provides
    vital intelligence to military and law enforcement officials.
                                    closing
        Chairman Mikulski, Senator Shelby, distinguished Members of the
    Subcommittee, on behalf of the men and women of ATF, I thank you and
    your staff for your support of our crucial work. While the list of ATF
    programs and facilities I have noted today is far from comprehensive,
    it is intended to provide the Subcommittee with a sampling of the depth
    and breadth of our activities.
        ATF is protecting the American public from the threats of violent
    crime and terrorism. As noted previously, we initiated over 2,000 gang-
    related cases in fiscal year 2006. That is an increase of over 157
    percent from 2002, the first full year of PSN. We will continue to
    enforce the Safe Explosives Act and provide the education and
    regulatory oversight to an industry that manufactures, imports, and
    sells over 5 billion pounds of explosives every year. ATF will continue
    to investigate incidents involving nearly 4,000 pounds of stolen
    explosives, and we will continue to inspect approximately 12,000
    Federal Explosives Licensees and Permitees. We also will continue to
    share our expertise with our partners and provide invaluable training
    in a number of areas, including courses on post-blast investigative
    techniques and courses for explosives detection canine teams.
        With the backing of your Subcommittee, ATF can continue to build on
    these accomplishments, making our nation even more secure. The $2.2
    million we have requested to expand PSN and the $6.3 million to
    establish firearms trafficking teams are two important investments in
    this cause. We look forward to working with you in pursuit of our
    shared goals.
                                     ______

                   Biographical Sketch of Michael J. Sullivan
        Michael J. Sullivan was designated the Acting Director of the
    Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in August
    2006 by President George W. Bush. In this position, Sullivan oversees
    nearly 5,000 ATF employees and an annual budget of close to $1 billion.
    He ensures that ATF fulfills its mission of preventing terrorism,
    reducing violent crime, and protecting our Nation.
        As United States Attorney for the District of Massachusetts since
    September 2001, Sullivan has worked aggressively to combat terrorism.
    He established a counterterrorism unit in his office; formed an Anti-
    Terrorism Task Force comprised of federal, state and local law
    enforcement to prevent future terrorist attacks; and prosecuted the so-
    called ``shoe bomber'' Richard Reid.
        In addition to combating terrorism, Sullivan has focused on
    protecting youth and safeguarding communities from the threat of
    violence. As U.S. Attorney, Sullivan followed through on the
    President's Project Safe Neighborhoods Initiative to safeguard our
    communities by developing a Community Prosecution and Crime Reduction
    Unit to enforce the federal gun laws and develop highly targeted gun
    crime reduction strategies. Through his innovative efforts, Sullivan
    has elicited unprecedented cooperation among federal, State and local
    law enforcement agencies to target gun crime in Boston and across the
    State. From fiscal year 2000-2005, Sullivan increased federal gun
    prosecutions under existing laws by 114 percent in Massachusetts.
        Sullivan also created a unit within his office to target computer
    hacking and high technology crimes, including identity theft, Internet
    auction and credit card fraud, economic espionage, copyright and
    trademark violations. Under his leadership, the U.S. Attorney's Office
    in the District of Massachusetts has recovered more than $3 billion for
    the federal government. Sullivan serves on the Attorney General's
    Advisory Committee and chairs the Health Care Fraud Subcommittee.
        Before serving as U.S. Attorney, Sullivan was appointed District
    Attorney of Plymouth County by Massachusetts Governor William F. Weld
    in May 1995. He was elected to the position in November 1996 and again
    in 1998. One of Sullivan's top priorities during his tenure as District
    Attorney was to address the issue of unsolved homicides in the county.
    This initiative resulted in the resolution of a significant number of
    murders. In addition, he became known as a leader in the fight against
    child abuse, domestic violence and elder abuse.
        Sullivan began his public service in 1990 when he was elected to
    the Massachusetts State House of Representatives, where he served for
    three terms. As a legislator, Sullivan was a strong proponent of
    criminal justice reform.
        Prior to his public service, Sullivan worked at the Gillette
    Company for 16 years. He started as a stock clerk at the age of 18 and
    rose to positions in human resource management and quality operations
    before becoming assistant to the president. While employed at Gillette,
    Sullivan graduated from Boston College cum laude and Suffolk University
    Law School cum laude.

                        Drug Enforcement Administration

    STATEMENT OF HON. KAREN P. TANDY, ADMINISTRATOR
        Senator Mikulski. Ms. Tandy.
        Ms. Tandy. Madam Chairman and members of the subcommittee
    and Ranking Member Senator Shelby, it is my pleasure to discuss
    the President's 2008 budget request for the Drug Enforcement
    Administration.
        I want to thank this subcommittee for its support of DEA as
    we lead the Nation's fight against drugs and Senator Mikulski,
    we are particularly grateful to you for including the $25
    million in the supplemental spending bill that would lift our
    hiring freeze at DEA and fund our counterterrorism initiatives.
        In unprecedented numbers, DEA has been toppling cartel
    kingpins and stripping their drug trafficking organizations,
    not only of massive amounts of drugs, but also their illicit
    revenues. By 2009, our goal is to take $3 billion each year
    from these international drug trafficking networks that are
    operating in this country.
        In the last 2 years combined, we stripped drug trafficking
    organizations of $3.5 billion in revenue through the seizure of
    assets and drugs and already, just halfway through this fiscal
    year of 2007, we have seized an astounding $1.1 billion. This
    figure includes $90 million in cash and gold that DEA and our
    Colombian partners stripped from the North Valley cartel in
    January. For 60 days thereafter this was the world record for
    cash seizures until our Mexican partners, with whom we have
    been working more closely than ever over the past year, made
    the single largest cash seizure that the world has ever seen
    stripping methamphetamine chemical traffickers of $207 million
    in cash. That is the cash that's reflected here in this poster
    before the subcommittee.
        Two days later DEA information resulted in another record
    setting seizure. This time instead of cash it was drugs, 21
    tons of cocaine off of the coast of Panama that was worth more
    than $300 million wholesale which is the photo on the two
    posters to my left.
        Senator Mikulski. So it's one that, trifocals, always there
    where you don't need them but is that like a container ship?
    Where the cargo was literally drugs?
        Ms. Tandy. That is correct. It was a container ship off of
    Panama. The actual 21 tons of cocaine was brazenly on top of
    the deck of the container ship without concealment.
        With these unrelated operations, DEA dealt Mexican
    traffickers a one, two punch. They're down more than $500
    million in blood money in simply 48 hours. Other enforcement
    actions have impacted these traffickers as well.
        In January, DEA agents took custody of 10 major drug
    traffickers on U.S. soil in an unprecedented extradition from
    Mexico. These extraditions included violent kingpins and
    leaders from all four of Mexico's major drug cartels and with
    us, as we took custody, were the United States Marshals to whom
    we turned these traffickers over.
        Less than 2 months ago, DEA dismantled the United States
    infrastructure of a powerful Mexican drug cartel that Senator
    Shelby referenced in his opening statement. As the Senator
    noted, that included the arrest of more than 400 members of
    this organization throughout the United States, the seizure of
    $46 million in cash as well as 18 tons of marijuana, cocaine,
    meth, and heroin and thanks to Federal legislation that was
    passed by Congress, as well as State legislation and toughened
    enforcement efforts over the last 5 years, we've slashed the
    number of small toxic meth labs in this country by 61 percent
    and super lab seizures are down in the United States,
    plummeting 94 percent.
        All of these efforts by DEA and our partners are affecting
    drug organizations financially and operationally. According to
    recent intelligence, some trafficking organizations are now
    having difficulty finding transportation groups to move cocaine
    from Mexico to the United States. That in turn has led to a
    significant surcharge to the price of a kilogram of cocaine and
    in addition to that are some U.S. based meth traffickers that
    are having difficulty acquiring meth from some sources of
    supply in Mexico.
        I believe I'm taking the hint here that I am.
        Senator Mikulski. First of all what you've just told us is
    a phenomenal set of accomplishments. They're breathtaking and
    you go ahead and you finish your testimony, don't worry about
    some little huchipoo red light going off.
        You've got the green light after what you're telling us to
    do anything you want to do here today.
        Ms. Tandy. You are very generous, Senator. Thank you so
    much.
        These DEA victories in reducing the drug supply have also
    contributed to the 23 percent drop in our Nation's drug use
    over the past 5 years because as this subcommittee well knows,
    if drugs are plentiful, the demand reduction education efforts
    will not take root and drug treatment won't succeed.
        Despite these achievements though, DEA does face challenges
    fighting an evolving drug trade. First, we no longer just fight
    traditional drugs of abuse. In just 5 years the number of
    Americans abusing prescription drugs rose more than two-thirds,
    from 3.8 million abusers to 6.4 million and fueling this
    increase is the proliferation of illicit Internet web sites
    that make it possible with one simple click to purchase
    controlled substances. With additional funds DEA can do more of
    these online diversion investigations.
        Second, we need to increase our enforcement along the
    Southwest border where approximately 85 percent of the drugs
    are smuggled into this country. Additional funds will allow us
    to step up our fight there with improvements to our aviation,
    surveillance, and communication systems.
        A third challenge is our limited intelligence
    infrastructure. For example, if a multi-ton load of cocaine is
    seized off the African coast and DEA received classified
    intelligence about it, we need to pass that classified
    intelligence and work that information via our classified
    backbone which is known as our Merlin System.
        The problem is that we do not have the Merlin System in
    computer terminals anywhere in Africa or the Middle East. These
    computers are in limited places in South America and Europe.
    The ones we do have in the United States are aging and in dire
    need of upgrades and without an enhancement DEA cannot readily
    share and investigate the kind of information that's necessary
    to take down the drug trafficking cartels or to fulfill our
    responsibilities in the intelligence community.
        Finally, intercepting traffickers' communications has been
    DEA's most valuable weapon and traffickers now have the
    Internet and encrypted communications technology at their
    disposal. Consequently we are seeking an enhancement to expand
    our Internet capabilities so that we can get a trafficker's
    encrypted communications in the same way as we now get the
    trafficker's land line and cell phone conversations through a
    court order.

                               PREPARED STATEMENT

        These budget enhancements would allow DEA to fight the drug
    trade across our Nation, the globe and cyberspace and it will
    also help put the DEA back on a solid financial footing that's
    necessary to carry out these responsibilities and on behalf of
    the almost 11,000 men and women of the Drug Enforcement
    Administration, I thank this subcommittee for all of your
    support throughout the years that we have been undertaking
    these challenges. Thank you.
        Senator Mikulski. Thank you very much, Miss Tandy. I think
    it shows how important this hearing is and Mr. Clark why don't
    you tell us how the marshals ride a different kind of posse but
    still come in to save Miss Kitty and a lot of other people in
    the community.
        [The statement follows:]
                   Prepared Statement of Hon. Karen P. Tandy
        Madam Chairman and Members of the Subcommittee: Good morning, and
    thank you for inviting me to testify on behalf of the President's
    fiscal year 2008 budget request for the Drug Enforcement Administration
    (DEA). I have had the pleasure of working closely with some of you over
    the last four years. To those Members who are new to this panel, I
    welcome the opportunity to share the DEA story and to express my
    appreciation to you in advance for supporting the courageous men and
    women of the DEA.
        I am privileged to lead a worldwide drug law enforcement
    organization of more than 10,000 people, including over 700 people
    stationed in 62 countries. DEA employs a time-tested, multi-front
    strategy to fight global drug traffickers that are motivated solely by
    the desire for profit--profits that are generated by human misery. We
    must battle these well-organized, highly sophisticated organizations at
    every juncture: from the cultivation or manufacturing stage, through
    the transit zones to final distribution in our nation's communities;
    and, finally, we must be there when they launder the proceeds of their
    operations.
        The criminals we investigate are located throughout the world and
    we search them out wherever they are: in both hemispheres and
    increasingly in the ever-expanding realm of the Internet. We attack the
    economic basis of the drug trade and reduce the diversion of licit
    drugs. We support counterterrorism activities, assist our state and
    local law enforcement partners, and serve as an information resource
    for state and local communities to help them reduce the demand for
    illicit drugs.
        The support that this Committee provides allows us to work toward
    making America's neighborhoods safe and drug-free, and for that, we at
    DEA are very grateful.
        I would like to begin my testimony by sharing two pieces of good
    news with the Committee: First, teenage drug use is down; and second,
    DEA is hitting the world's drug traffickers harder than ever before.
                            teenage drug use is down
        In 2002, the President set ambitious goals to reduce drug use: a 10
    percent reduction over two years and a 25 percent reduction over five
    years. We have exceeded the first goal: drug use by young people is
    down 11 percent. And the second goal has nearly been reached: since
    2001, overall illicit drug use among teens has declined by 23 percent.
    This data, released in December 2006 by the National Institute on Drug
    Abuse (NIDA) means that 840,000 fewer teenagers have been damaged by
    the corrosive effect of drugs.
        Some specifics from the Substance Abuse and Mental Health Services
    Administration (SAMHSA) report include: marijuana use among teenagers
    has dropped by 25 percent since 2001; methamphetamine use by teenagers
    is down by 50 percent since 2001; ecstasy use by 8th graders decreased
    by 61 percent and dropped by 54 percent for 10th and 12th graders since
    2001; cocaine use among high school seniors declined by 55 percent
    between 1986 and 2006; steroid use by teenagers decreased by 20
    percent; LSD use fell by 60 percent for 8th graders, by 53 percent
    among 10th graders, and by 74 percent among high school seniors.
        Madam Chairman and Members of the Subcommittee, DEA works 24/7 to
    enforce our country's federal drug laws. Aggressive enforcement not
    only limits supply and increases the price of drugs, it provides a
    deterrent effect that may contribute to the decline in drug use. We who
    fight very hard to keep the poisonous chemicals from reaching young
    people see the statistics I just cited as a very positive trend. We
    hope it represents a fundamental and lasting downward shift in illicit
    drug use among young Americans.
                 enforcement successes over the last 12 months
        I would also like to share with you some of DEA's most significant
    accomplishments during the past year. For example, just one month ago,
    our partners in Mexico, with whom we have been working over the last
    year on a pseudoephedrine investigation, made the single largest
    worldwide cash seizure--$207 million in U.S. currency. Forty-eight
    hours later, as a result of joint DEA and Panama law enforcement
    intelligence, the U.S. Coast Guard made the largest maritime seizure on
    record--21 metric tons of cocaine bound for Mexico. The seizure denied
    Mexican drug lords $300 million in drug revenue and severely disrupted
    their transportation network.
        In the information that follows, I will highlight some individual
    cases and discuss the underlying strategies that led to such successful
    operations. An attachment to my statement provides an overview of the
    leading drug threats facing the United States and some additional
    examples of DEA's work against each of these threats.
    Attacking the Economic Basis of the Drug Trade
        Successes include:
      --Indicting 50 leaders of a designated Colombian foreign terrorist
            organization on charges of importing more than $25 billion
            worth of cocaine into the United States. This represents more
            than 60 percent of the cocaine entering the country.
      --Dismantling the Cali Cartel of Colombia, which is responsible for
            the export of multi-ton maritime shipments of cocaine to the
            United States. High ranking cartel members were sentenced in
            2006, with resulting forfeitures of more than $300 million.
            During the 1990s, the cartel was one of the world's most
            powerful criminal organizations, estimated at one time to be
            responsible for up to 80 percent of the cocaine smuggled into
            the United States.
      --Arresting more than 400 individuals nationwide, following a 20-
            month, DEA-led investigation into a Mexican drug syndicate and
            its U.S.-based distribution cells. The investigation has
            resulted in the seizure of approximately $45.2 million in U.S.
            currency, 27,229 pounds of marijuana, 9,512 pounds of cocaine,
            705 pounds of methamphetamine, 227 pounds of pure
            methamphetamine or ``ice'', 11 pounds of heroin, $6.1 million
            in property and assets, and 100 weapons and 94 vehicles.
      --Arresting a Canadian international money manager who, subsequently,
            was indicted for conspiracy to launder $1 billion in proceeds
            from narcotics trafficking and securities and bank fraud.
      --Dismantling a Brazilian Consolidated Priority Organization Target
            (CPOT)--the world's ``Most Wanted'' drug trafficking and money
            laundering organizations that was responsible for smuggling
            into the United States more than 15 tons of cocaine each month
            from Colombia. The dismantlement resulted in 100 arrests and
            the seizure of 52 tons of cocaine and nearly $70 million in
            assets, including three islands off the coast of Panama.
      --Extraditing a Colombian drug kingpin to the United States who had
            been indicted for importing cocaine and heroin worth an
            estimated $100 million.
      --Dismantling a Canadian-based trafficking organization that smuggled
            more than $5 million worth of ecstasy from Canada into the
            United States.
      --Arresting 26 members of a Colombian organization that laundered
            millions of Colombian dollars through the Black Market Peso
            Exchange. As part of the operation, more than $10 million in
            drug proceeds and $6.5 million in cocaine, heroin, and
            marijuana were seized.
      --Arresting three Colombian traffickers who laundered $3 million in
            proceeds that were derived from cocaine distribution rings that
            operated internationally in Colombia, Mexico, and Europe.
    Reducing the Diversion of Licit Drugs
        Successes include:
      --Immediately suspending the DEA registrations of 13 pharmacies that
            used their DEA registrations to fill controlled substances
            orders for rogue Internet pharmacies. Eight of the 13
            suspensions were issued in February 2007. The pharmacies
            suspended were responsible for distributing more than 75
            million dosage units of controlled substances in 2006, the vast
            majority of which was distributed based on invalid
            prescriptions originating with rogue Internet pharmacy
            websites. Ten of the pharmacies together purchased 45 million
            dosage units of hydrocodone, which is 64 times the amount ten
            average pharmacies would annually dispense.
      --Overseeing the largest steroid enforcement operation in U.S.
            history. On December 14, 2005, Operation Gear Grinder resulted
            in the arrest of five individuals who were responsible for
            importing anabolic steroids into the United States. This
            international investigation targeted the eight largest anabolic
            steroid manufacturing companies in Mexico, including three of
            the world's largest that conducted their sales via the
            Internet. Nearly 82 percent of the steroids seized and analyzed
            in 2003 are of Mexican origin and the majority of this 82
            percent originated from the eight companies charged in
            Operation Gear Grinder.
      --Arresting four individuals in Miami, Florida, who have been charged
            with the nationwide Internet distribution of large quantities
            of Schedule III and Schedule IV controlled substances. Sales
            exceeded $200 million over a three-year period. The
            investigation included the seizure of $817,000 in cash, $4.2
            million worth of property, two automobiles, and one marine
            vessel.
      --Indicting 11 individuals and an Atlanta-based company on charges of
            mail fraud, distribution of controlled substances, and the
            introduction of adulterated and misbranded drugs. The
            defendants allegedly manufactured millions of pills--
            approximately 24 different drugs--that were marketed through
            Internet ``spam'' advertisements. In addition to the forfeiture
            of numerous properties, automobiles and bank accounts, the
            indictment is seeking a monetary judgment of not less than
            $19.8 million.
      --Arresting five individuals in the Chicago, Illinois area, as part
            of an operation involving the illegal Internet distribution of
            prescription drugs and anabolic steroids. The diversion scheme
            included the wire transfers of thousands of dollars, and the
            Internet distribution of thousands of dosage units of
            controlled substances lacking valid prescriptions.
    Working With State and Local Law Enforcement Organizations
        Successes include:
      --Dismantling the largest marijuana-laced candy manufacturing
            organization in the western United States. The five-month
            investigation resulted in the arrest of the organization's
            leader, and the seizure of more than 4,000 marijuana plants,
            $100,000 in U.S. currency, three firearms, and hundreds of
            marijuana-laced food products. The marijuana-laced products,
            packaged to mimic legitimate food products, included labels
            such as ``Buddafingers,'' ``Munchy Way,'' and ``Pot Tarts.''
            The items were packaged in large boxes for distribution to
            cannabis clubs throughout the West Coast and over the Internet.
      --Working with the St. Paul, Minnesota Police Department on an
            operation that resulted in the arrest of 26 individuals
            associated with the Latin Kings street gang. The arrests, one
            of the largest drug takedowns in Minnesota history, were based
            on narcotics and firearms conspiracy violations and the
            possession and distribution of methamphetamine, cocaine, and
            marijuana.
      --Working with the New York City Police Department on an operation
            that resulted in the arrest of 20 individuals involved in a
            Panama/U.S. heroin drug smuggling operation. The smuggling was
            carried out by dozens of ``swallowers'' who were paid a fee
            plus reimbursements for airfare and hotel expenses. Over three
            kilograms of heroin were seized in the New York City area, and
            $300,000 in wire transfer receipts was recovered.
      --Working with Seattle, Washington area law enforcement agencies on
            an operation that targeted violent methamphetamine traffickers,
            resulted in the arrests of 38 individuals. The investigation
            netted the seizure of methamphetamine, marijuana, cocaine,
            crack cocaine, oxycodone, eight weapons, and 10 vehicles.
      --Working with St. Louis, Missouri area law enforcement agencies on
            an operation that resulted in the indictment of 30 individuals
            on charges of distributing approximately 50 kilograms of
            cocaine with a street value of $1 million.
        The accomplishments just listed are impressive on their own. But,
    they are the result of a carefully planned strategy that guides DEA
    operations around the world.
        Attacking the Drug Syndicates.--Significantly reducing the supply
    of illicit drugs is attainable if we disrupt or dismantle the drug
    trafficking and money laundering organizations that are primarily
    responsible for supplying them. At DEA, we refer to this approach as
    priority targeting. By using intelligence that we meticulously gather
    to identify the syndicates and coordinating our investigations against
    all levels of the drug and money supply chain, we are able to focus on
    the most important links in the supply chain.
        We are proud of our successes. In fiscal year 2006, 85 percent (39
    of 46) of the leaders of the most wanted international drug
    organizations (CPOTs) were indicted and 37 percent (17) were arrested.
    Terrorist-linked Priority Target Organization (PTO) investigations
    increased by 16 percent, comparing fiscal year 2005 investigations (82)
    to fiscal year 2006 investigations (95). Furthermore, between fiscal
    years 2003 and 2006, 13 drug organizations with terrorist links were
    disrupted and 20 were dismantled.
        Attacking the Economic Basis of the Drug Trade.--As a federal
    prosecutor, I saw firsthand the importance and value of stripping drug
    traffickers of their revenue. It works. I brought that experience with
    me when I came to DEA and shortly thereafter developed a five-year
    revenue denial plan. In the first two years, DEA has denied more than
    $3.5 billion through the seizures of both assets and drugs. This total
    amount exceeds the goal for the first two years of the plan by $1
    billion. The $1.6 billion denied in fiscal year 2006, includes $1.1
    billion in total assets and cash seized. With regard to high-value cash
    seizures (those over $1 million), 63 were made in fiscal year 2006,
    which represents a 44 percent increase since fiscal year 2004. DEA's
    Money Trail Initiative, launched in 2005, is a financial crime strategy
    that focuses on identifying and disrupting the flow of money back to
    the sources of drug supply, thereby crippling the ability of criminals
    to operate. In 2006, Money Trail operations resulted in more than 400
    arrests and the seizure of approximately 10,000 kilograms of cocaine,
    60,000 kilograms of marijuana, 9 kilograms of heroin, approximately 300
    pounds of methamphetamine, more than 60 dosage units of MDMA, 250
    vehicles, approximately 80 weapons, $65 million U.S. currency, and
    $14.6 million in other assets. Our fiscal year 2006 financial
    investigations of PTOs increased by 28 percent over fiscal year 2005
    (117 active cases in fiscal year 2005; 150 active cases in fiscal year
    2006). The number of financial investigation cases in fiscal year 2006
    that led to the disruption of a PTO increased by 100 percent over
    fiscal year 2005 (9 cases in fiscal year 2005; 18 cases in fiscal year
    2006). The number of financial investigation cases in fiscal year 2006
    that led to the dismantlement of a PTO increased by 138 percent over
    fiscal year 2005 (8 cases in fiscal year 2005; 19 cases in fiscal year
    2006).
        Forging International Partnerships--Mexico.--Experience has shown
    that strong international partnerships are vital in the drug law
    enforcement arena. A robust U.S./Mexico partnership, for example, is
    key if we are to reduce significantly the flow of drugs to the United
    States from Mexico, and halt the smuggling of the millions of pounds of
    bulk cash into Mexico that were generated from the sale of billions of
    dollars worth of illicit drugs in the United States. The 2007 National
    Drug Threat Assessment, which is prepared by the Justice's National
    Drug Intelligence Center, states that ``The Southwest Border remains a
    serious area of concern for U.S. drug money laundering.'' Furthermore,
    the assessment states that ``Mexican and Colombian Drug Trafficking
    Organizations (DTOs) together generate, remove, and launder between
    $8.3 billion and $24.9 billion in wholesale distribution proceeds from
    Mexico-produced marijuana, methamphetamine, and heroin and South
    American cocaine and heroin annually.'' Working with the Mexican and
    Colombian governments will help address this major problem. In May
    2006, the Attorney General unveiled a strategy to combat
    methamphetamine that calls for joint DEA/Mexico initiatives including:
    establishing specialized methamphetamine enforcement teams on either
    side of the border; developing a list for targeting the Most Wanted
    chemical and drug trafficking organizations; donating refurbished DEA
    clandestine laboratory enforcement trucks to Mexico for specialized
    enforcement teams' use. Since the launch of the strategy, over 2,100
    Mexican police officers have been trained to improve their
    methamphetamine trafficking investigative and enforcement skills.
        The U.S./Mexico partnership has already begun paying dividends. In
    August 2006, Mexican authorities seized a large-scale clandestine
    methamphetamine laboratory. The seizure netted 100 kilograms of
    finished methamphetamine, 3,000 liters of various solvents and
    chemicals, and four barrels of iodine. Due to its size and production
    capability, the laboratory is classified as a ``super lab''. More
    recently, a DEA-trained unit of Mexican police officers discovered an
    operational super methamphetamine laboratory in December 2006, that,
    based on the amount of equipment, chemicals and resources discovered,
    is likely the largest laboratory to be found in Mexico to date.
        With regard to major arrests, a DEA-led Organized Crime Drug
    Enforcement Task Force (OCDETF) investigation led to the August 2006
    apprehension of the leader of a Mexican narcotics trafficking
    organization that, over the past decade, has flooded our country with
    hundreds of tons of cocaine and marijuana, as well as very large
    quantities of methamphetamine and heroin. The leader, Francisco Javier
    Arellano-Felix, and one of his lieutenants, Manuel Arturo Villarrel-
    Heredia, have been charged with racketeering, drug trafficking, and
    money laundering offenses, and if convicted will be eligible for the
    death penalty.
        The January 2007 extradition of 15 violent Mexican criminals,
    including the leaders from all four of Mexico's major drug cartels, was
    a watershed event in the annals of U.S./Mexico relations. The
    extraditions mark the reversal of a long-standing Mexican government
    policy of not extraditing jailed citizens until the sentences handed
    down by Mexican courts had been served. One of the extradited kingpins
    commanded a drug cartel considered to be among the most brutal and
    powerful in the world. He directed the smuggling of between four and
    six tons of cocaine per month over the U.S. border. It is a drug law
    enforcement development of enormous significance, and we view it as
    major progress on more than one front.
        Forging International Partnerships--Afghanistan.--Combating the
    world-wide threat posed by heroin production in Afghanistan is a major
    challenge. A flourishing narcotics trade further weakens an already
    fragile country, and it must be attacked aggressively. For our part,
    DEA and the government of Afghanistan have formed a partnership with
    the goal of developing and expanding the capabilities of its law
    enforcement community. Our five Foreign-deployed Advisory and Support
    Teams advise, train, and mentor their Afghan counterparts in the
    National Interdiction Unit of the Counter Narcotics Police--
    Afghanistan. This program supplements our Kabul Country Office as well
    as ``Operation Containment'', a successful DEA initiative that was
    launched post September 11, 2001. It emphasizes coordination and
    information-sharing among 18 countries. Its aim is to choke the flow of
    drugs, precursor chemicals, and money into and out of Afghanistan.
    Madam Chairman and Members of the Subcommittee, we are seeing results
    from taking a regional, multi-national enforcement approach to a threat
    with worldwide implications. Over the last two years, Operation
    Containment has resulted in the seizure of approximately 17 metric tons
    of heroin, more than 170 metric tons of marijuana, and nearly 300
    opium-to-heroin conversion laboratories. Additionally, more than 900
    suspects have been arrested, and of those arrests, four of the six Most
    Wanted Operation Containment targets are now incarcerated. Moreover,
    intelligence developed by DEA in conjunction with other agencies has
    helped to thwart rocket and Improvised Explosive Device attacks on
    Afghan and coalition forces in Afghanistan. The 2006 convictions and
    sentencing of three major Afghan traffickers are yet another important
    byproduct of the DEA/Afghanistan partnership.
        As I conclude the discussion of international partnerships, I want
    to add a few words about the International Drug Enforcement Conference
    (IDEC). As you may know, this global forum was established in 1983, to
    bring together high-level drug law enforcement officials from
    throughout the Western Hemisphere. Its purpose is to share drug-related
    information and to develop a coordinated approach to law enforcement
    efforts against international drug organizations. As the DEA
    Administrator, I am the Co-President of the IDEC. In May 2006, I had
    the pleasure of addressing the conference's 24th gathering, which has
    grown to include representatives from 76 countries located in both
    hemispheres. Seven countries became new members in 2006: Afghanistan,
    Indonesia, Malaysia, New Zealand, Poland, South Africa, and the United
    Kingdom. The 2006 IDEC was a great opportunity to discuss our
    respective challenges and frustrations and to talk about how we could
    build on our accomplishments through even stronger multi-lateral
    partnerships that are beneficial to all parties.
        Fighting Methamphetamine--A Drug of Special Concern.--Before I
    begin a discussion of our fiscal year 2008 budget request, I would like
    to take a minute to talk about a drug of special concern to many
    Members of Congress: methamphetamine.
        As I mentioned in my opening comments, a 50 percent decline in
    methamphetamine use by teenagers since 2001, as reported by the
    National Institute on Drug Abuse (NIDA) in December 2006, is a dramatic
    and much-welcomed development. At the same time, this deadly drug
    remains a problem. DEA takes a comprehensive approach to fighting the
    drug--domestic and international enforcement and precursor chemical
    control, the identification and cleanup of large and small toxic
    laboratories, and an aggressive attack on the money flow. In fiscal
    year 2006, DEA spent an estimated $217 million for methamphetamine-
    related activities. This included approximately $196 million for
    methamphetamine investigations and $21 million for clean-up, safety,
    and training programs. DEA also provided clandestine laboratory
    training to more than 1,000 state and local law enforcement officers
    during fiscal year 2006.
        Implementing The Combat Methamphetamine Epidemic Act of 2005.--The
    provisions of the law aimed at the domestic and international
    regulation of precursor chemicals make it possible to place reasonable,
    common sense limitations on the availability of the products used in
    the manufacturing of methamphetamine. Sales at the retail level are
    controlled through such measures as keeping products stored in locked
    containers, requiring face-to-face sales and photograph identification,
    establishing additional record-keeping requirements for mail-order
    sales, and requiring producers of Scheduled Listed Chemical Products to
    make annual estimates of the quantities of the products needed for
    legitimate use. These domestic regulatory requirements, coupled with
    the enforcement actions being taken by states should lead to a decline
    in the number of domestic operational clandestine laboratories.
    Limiting sales at the wholesale level is another important part of the
    equation. Under the law, foreign distributors are required to disclose
    all known information to the importer on the chain of distribution of
    such chemicals from the manufacturer to the importer. Furthermore, the
    State Department is required to identify annually the five largest
    exporting and importing countries of Scheduled Listed Chemical
    Products, and DEA is given the authority to issue importation
    prohibition orders. Taken together, these actions are expected to help
    greatly on the international regulatory side. Effective methamphetamine
    enforcement calls for a balanced approach that addresses the drug law
    enforcement issues, while ensuring the availability of an adequate
    supply of controlled substances to meet consumers' legitimate medical
    needs.
               despite the accomplishments, the challenges remain
        Madam Chairman, DEA carefully manages the resources Congress
    provides to ensure we wring every penny out of every dollar you give
    us. And while we are proud of our many accomplishments, we never lose
    sight of the fact that drug abuse remains a very serious problem facing
    our country. The most recent data available from the federal Centers
    for Disease Control and Prevention sadly reveals that in 2004, 30,711
    Americans died from drug abuse. This is almost 2,000 more deaths than
    occurred in 2003.
        Compounding the loss of lives is the damage from increased crime
    and violence, the powerful grip of addiction, lower productivity in the
    workforce, child abuse and neglect, environmental danger, and the grief
    of lost promise. Taken together, the effect of these human tragedies
    eclipses even the very tragic impact of terrorism. And so, while we
    realize our country faces tight budget times, we are here today to ask
    you to give us a few more tools, a few more resources, so we can do a
    little more to drive illegal drugs from our shores.
                        fiscal year 2008 budget request
        For fiscal year 2008, DEA is requesting $2.4 billion ($1.8 billion
    under the Salary and Expenses Account, $239 million under the Diversion
    Control Fee Account, and $389 million for OCDETF activities and other
    reimbursable agreements). A total of 10,239 positions, of which 4,811
    are Special Agent positions, are requested from these funding sources.
    This request represents an increase of $110 million over the fiscal
    year 2007 President's budget, and was developed with the goal of
    advancing DEA's enforcement strategy in the most efficient and
    effective manner. It was developed through a planning process of
    several months duration, calling upon the knowledge, talent, and skills
    of many DEA professionals with years of experience in drug law
    enforcement. Under the Salary and Expenses Account, the fiscal year
    2008 request would provide funding for three initiatives. Fee Account
    collections would fund companion initiatives in the diversion control
    program.
                         salaries and expenses account
        DEA is requesting $39.3 million to expand activities in three key
    areas:
    Southwest Border and Methamphetamine Enforcement Initiative ($29.2
            million and 8 positions)
        DEA is an active participant in the Southwest Border Initiative, a
    cooperative effort launched in 1994 by federal law enforcement agencies
    to combat the threat posed by Mexico-based trafficking groups operating
    along the Southwest border. The Southwest Border and Methamphetamine
    Enforcement Initiative that DEA is proposing would complement the 1994
    initiative in an area of the country recognized as the principal
    arrival zone for most illicit drugs smuggled into the United States, as
    well as the predominant staging area for the subsequent distribution of
    these drugs throughout the country. With regard to methamphetamine
    alone, current drug and lab seizure data suggests that approximately 80
    percent of the methamphetamine used in the United States originates
    from larger laboratories operated by Mexican-based organizations on
    both sides of the border. The data also suggests that the remaining
    approximately 20 percent consumed is produced in small toxic labs.
    DEA's Southwest Border and Methamphetamine Enforcement Initiative would
    help DEA step up the fight on both sides of the border through
    increases in our aviation assets, and improvements in our surveillance
    and communications systems and data collection and analysis
    capabilities.
        Some specifics.--$15.4 million would be used to purchase, among
    other things, three helicopters, each equipped with a High Definition
    camera for complex aerial surveillance activities in support of our
    major investigations. An additional $3.4 million would fund operational
    expenses and equipment purchases needed for providing communications
    coverage of remote areas along the border. Also requested is $3.4
    million and two positions to design, develop and implement an advanced
    digital imagery program for capturing and storing facial and other
    identifiable images for drug trafficking organizations investigations.
    To purchase advanced satellite telephone and maritime tracking devices,
    and sensor and audio/video surveillance equipment, which often act as a
    force multiplier, DEA is requesting a total of $5.1 million. The El
    Paso Intelligence Center (EPIC) developed Operation Gatekeeper to
    research, analyze, and report information on the Mexican drug
    trafficking organizations that control entry corridors along the
    border. To expand this important operation, DEA is requesting $612,000
    and six positions. And to expand its information sharing capabilities,
    EPIC is requesting $3.4 million to develop the capacity to share
    digital images with its Federal, State and local law enforcement
    partners.
    Counterterrorism and Intelligence Sharing Initiative ($7.1 million and
            7 positions)
        In 2006, after a 25-year hiatus, DEA's Office of National Security
    Intelligence (NN) was designated a member of the Intelligence Community
    (IC). While the designation does not grant new authorities to DEA, it
    does formalize the long-standing relationship between DEA and the IC
    and allows DEA and other IC members to work on issues of national
    security interest in an integrated fashion. With over 33 years of
    operational experience in the foreign arena and the largest U.S. law
    enforcement presence abroad, DEA has made and will continue to make
    many unique contributions, not only in drug law enforcement, but also
    in the interest of national security. For example, with over 5,000
    confidential sources, DEA possesses substantial human intelligence
    capabilities. Additionally, DEA conducts 67 percent of all federal
    domestic law enforcement wire taps.
        An Overview Of The United States Intelligence Community--2007,
    which was prepared by the Office of the Director of National
    Intelligence, states that ``DEA/NN's membership in the Community helps
    optimize the overall U.S. government counter narcotics interdiction and
    security effort and furthers creative collaboration between the many
    organizations involved in countering the threats from narcotics
    trafficking, human smuggling/trafficking, immigration crimes, and
    global terrorism.'' Furthermore, based on available intelligence, there
    is clear evidence that drug profits are being used to facilitate acts
    of terrorism and violence. These acts undermine democratic governance
    and respect for the rule of law, as well as destabilize regional
    security in countries such as Afghanistan, Colombia, Mexico, Venezuela,
    and the tri-border area.
        The DEA and the IC have a long history of collaborating for
    purposes of identifying and disrupting illegal drug trafficking. The
    Counterterrorism and Intelligence Sharing Initiative would bolster
    those collaborations, allow DEA to enhance its classified information
    technology (IT) infrastructure, provide start-up funding and positions
    for studying and analyzing emerging as well as established coca and
    opium poppy growing regions, and provide resources for DEA to continue
    its participation in Justice's anti-gang activities.
        Some specifics.--$6 million would ensure that DEA's classified IT
    backbone, MERLIN, would be upgraded in every DEA office every four
    years. Regularly scheduled upgrades would make certain that DEA's IC
    component has the secure communications infrastructure that is critical
    to communicating classified IC requests to both domestic and foreign
    DEA field offices. Presently, DEA is in a precarious situation as it
    relates to the continued viability of MERLIN. In previous years,
    requests for operations and maintenance enhancement funding have been
    denied; with the result that much of our MERLIN equipment is five or
    six years old and in danger of serious failure. If we are to meet our
    IC commitments and exploit our intelligence capabilities against
    transnational threats, DEA must have an infrastructure that makes that
    possible. Six positions and $950,000 are requested to study regions of
    the world where coca and poppy are grown to determine the amount of
    finished cocaine and heroin that can be produced from a given quantity
    of plant material. Finally, one position and $204,000 is requested so
    DEA may assign one Special Agent to the Department's National Gang
    Targeting, Enforcement, and Coordination Center, which takes part in
    and coordinates investigations and prosecutions, and develops
    enforcement and prevention strategies to combat gang violence in this
    country.
    Online Investigations Initiative ($3 million)
        Drug traffickers are increasingly turning to the Internet to widen
    their reach and strengthen their criminal enterprises. State-of-the-art
    Internet investigative technologies are an essential tool if DEA is to
    attack the command and control communications of organizations,
    particularly those that operate across jurisdictional boundaries at the
    regional, national, and international levels. To achieve our
    objectives, DEA must acquire tailored Internet intercept solutions,
    arrange for permanent Internet connectivity between DEA's field
    divisions and the major Internet Service Providers, and purchase needed
    hardware for computer forensics purposes. With these purchases, DEA
    could greatly improve the quality, effectiveness, and timeliness of our
    investigations of these traffickers.
        Some specifics.--$1 million would be used to develop intercept
    solutions to counter traffickers who use Yahoo, Hotmail and other
    electronic mail accounts, as well as advanced Internet communications,
    wireless handheld devices, instant messaging services, and encrypted
    electronic mail. $1.5 million is requested to connect DEA field
    divisions to major Internet Service Providers by means of a secure,
    dedicated network. The total cost for these connections is $3 million,
    half of which is requested under the Salaries and Expenses Account and
    half would be covered by Diversion Control Fee Account to step up our
    investigations of illegal online pharmacies. Finally, DEA is requesting
    $520,000 to purchase computer hardware that is designed to aid forensic
    professionals with recovering and examining data more quickly and from
    numerous electronic devices.
    Diversion and Control Fee Account (DCFA)
        DEA's fiscal year 2008 request includes $239 million under the
    DCFA, a $27.1 million increase over fiscal year 2007.
        Prescription drugs are diverted for abuse through doctors,
    pharmacies, thefts and robberies from manufacturers and distributors,
    and illegal Internet distributors. Throughout the United States, the
    non-medical use of prescription drugs continues at alarming rates. The
    2005 National Survey on Drug Use and Health, released in September 2006
    by SAMHSA, reports that an estimated 6.4 million Americans abuse
    prescription drugs, compared to 3.8 million in 2000--a 68 percent
    increase over five years. Furthermore, they are the second most abused
    type of drugs--behind only marijuana. Particularly troubling is the
    data showing that nearly one out of every ten high school seniors
    abuses dangerous painkillers. Fueling this increase is the
    proliferation of illicit websites that make it possible, with one
    simple click, to purchase controlled substances. Furthermore, buying a
    medicinal product through an illegal Internet pharmacy exposes
    individuals who make these purchases to serious health risks.
        DEA is actively pursuing those who divert pharmaceutical controlled
    substances. On the Internet and non-Internet sides combined, DEA
    initiated 1,840 criminal, complaint, and regulatory pharmaceutical
    investigations in fiscal year 2006. 857 of those investigations
    targeted Schedule III-V pharmaceutical controlled substances, and 237
    investigations targeted Schedule II pharmaceuticals. Between fiscal
    year 2004 and fiscal year 2006, DEA seized $55 million in cash, bank
    accounts, property, and computers in the course of its investigations,
    compared to $2.5 million in fiscal year 2003. While we are pleased with
    our progress, it is imperative that DEA enhance its enforcement work in
    an area that poses such an immediate public safety threat.
        Some specifics of our DCFA request.--DEA is requesting $766,000 and
    seven positions to provide much-needed investigative support for our
    computer forensics teams. We estimate that online diversion cases will
    increase the workload of DEA attorneys assigned to these cases by 75
    percent for the foreseeable future, and to prepare for this, DEA
    requests $495,000 and five attorney positions. DEA is requesting
    $337,000 and two positions (one Special Agent and one Diversion
    Investigator) to work with the Customs and Border Patrol in Long Beach,
    California to identify shipments of precursor chemicals from source
    countries that are destined for Mexico. Additionally, we are requesting
    $474,000 and one position (Foreign Diversion Investigator) to support
    existing DEA investigations in Panama City, Panama involving the
    smuggling of precursors moving through Panama. Finally, DEA has
    proposed that a new hybrid job series be established which contains the
    specialized diversion investigator requirements as well as full law
    enforcement authorities. The proposal, with an associated cost of $11.5
    million, is now under review by the Office of Personnel Management
    (OPM). Current employees who are interested and eligible may apply.
    Those who do not apply will continue to perform compliance functions.
    Through attrition, we will arrive at the appropriate number of
    diversion investigators to sustain the compliance function. With OPM
    approval of the proposal, DEA will begin the conversion in fiscal year
    2007.
    Program Offsets
        Included in the President's budget is one funding offset proposal:
    the elimination of the MET program (Mobile Enforcement Teams). This
    offset would achieve savings of $20.6 million in fiscal year 2008.
        Over the years, DEA has valued each and every opportunity to
    support state and local law enforcement organizations as they combat
    drug-related violent crimes in our nation's cities and towns.
    Furthermore, as many of you know from experience in your own
    communities, our partnerships have yielded positive, and I hope,
    lasting results. At the same time, greater overall results are achieved
    when our focus is on targeting the drug trafficking organizations whose
    activities have the most significant impact on the drug problem in the
    United States as a whole.
        While DEA's field divisions will no longer deploy MET teams to
    local jurisdictions when we receive a deployment request, we will
    continue to provide law enforcement assistance to them whenever
    possible, including our vigorous training programs for state and local
    law enforcement officers. In fiscal year 2006, DEA trained more than
    41,000 officers. Also, during fiscal year 2006, DEA led over 200 State
    and Local Task Forces, with an on board strength of 1,600 Special
    Agents and 2,100 Task Force Officers.
                                   conclusion
        In closing, let me reiterate that DEA works very hard to manage its
    resources and finances wisely and efficiently. Nevertheless, as our
    base budget has gradually eroded over time due to pay raise
    absorptions, rescissions and program reductions, we have been unable to
    maintain adequately our infrastructure or agent and support staffing at
    their previous levels. This has put us at an enforcement disadvantage.
    We must regain our financial footing. We must have the ability to
    sharpen and expand the enforcement tools and techniques that have
    helped us establish our drug enforcement leadership role. The budget
    before you today sets us on the path to regain that footing.
        Madam Chairman and Members of the Subcommittee let me assure you
    that although we are experiencing fiscal challenges, we at DEA never
    waver in our firm commitment to public service and public safety.
        This concludes my remarks. I would now be happy to answer any
    questions you or the other Members of the Committee may have.
        attachment--drug threats and enforcement challenges--april 2007
                       drug threats to the united states
    Methamphetamine
        Methamphetamine is the most widely abused and most frequently
    clandestinely produced synthetic drug \1\ in the United States.
    Methamphetamine appeals to people across all genders, ages, and socio-
    economic levels. Methamphetamine has a high rate of addiction, a low
    rate of sustained recovery, and is cheap to manufacture. It devastates
    users, their families, and local communities. According to the 2005
    National Survey on Drug Use and Health (NSDUH), 512,000 persons 12 and
    older used methamphetamine during the past 30 days (an eighteen percent
    decrease from 2003) and 1.3 million have used it in the past year,
    virtually the same number as in 2003. The estimated number of past year
    methamphetamine users is nearly three and one-half times the number of
    estimated past year heroin users. In fiscal year 2006, DEA domestic
    seizures of methamphetamine totaled 2.1 metric tons. Super lab seizures
    in the United States were reduced by 86 percent through increased
    enforcement efforts, from 244 in calendar year (CY) 2001 to 35 in CY
    2005. The total number of clandestine methamphetamine laboratories
    seized nationally also decreased, from 10,212 in CY 2003 (the highest
    total from 2001 to 2005) to 5,840 in CY 2005 (43 percent). Of the 2,134
    clandestine methamphetamine laboratories seized nationally so far in CY
    2006, only 17 are classified as ``super labs.'' Seizures of
    methamphetamine along the Southwest Border of the United States and
    Mexico have increased 129 percent, from 1,170 kilograms in CY 2001 to
    2,679 kilograms in CY 2005.
    ---------------------------------------------------------------------------
        \1\ The term ``synthetic drugs'' refers to controlled substances
    such as methamphetamine, MDMA ``ecstasy'' (and its analogues), GHB (and
    its analogues), ketamine, and other substances, which are not of
    primarily organic origin and are usually associated with clandestine
    manufacture.
    ---------------------------------------------------------------------------
        By effectively targeting and arresting the main suppliers of bulk
    precursor chemicals, DEA has successfully reduced the number of super
    labs \2\ in the United States. As a consequence, operators of super
    labs have shifted their production to Mexico. Current drug and lab
    seizure data suggests that approximately 80 percent of the
    methamphetamine used in the United States originates from larger
    laboratories operated by Mexican-based syndicates on both sides of the
    border, and that approximately 20 percent of the methamphetamine
    consumed comes from small toxic labs (STLs) in the United States. STLs
    generally are unaffiliated with major drug trafficking organizations,
    but nevertheless present enormous environmental challenges. In recent
    years, the proliferation of STLs has been fueled by the ready
    availability of pseudoephedrine, the key ingredient in methamphetamine
    and by the fact that the manufacturing process is simple, inexpensive,
    and recipes can be found easily on the Internet. Super lab seizures in
    the United States declined by 86 percent through increased enforcement
    efforts, from 244 in calendar year (CY) 2001 to 35 in CY 2005. The
    total number of clandestine methamphetamine laboratories seized
    nationally also decreased, from 10,212 in CY 2003 (the highest total
    from 2001 to 2005) to 5,840 in CY 2005 (43 percent). Of the 2,134
    clandestine methamphetamine laboratories seized nationally so far in CY
    2006, only 17 are classified as ``super labs.''
    ---------------------------------------------------------------------------
        \2\ ``Super labs'' are those labs that are capable of producing at
    least 10 pounds of methamphetamine per cycle.
    ---------------------------------------------------------------------------
        The most promising means of eliminating STLs is to cut off their
    supply of ephedrine and pseudoephedrine. DEA has removed a number of
    distributors of grey market drug products (those that can be purchased
    at truck stops, party/liquor stores, etc.) from the marketplace.
    Following DEA's success with removing grey market distributors, STLs
    have become heavily reliant on obtaining precursor chemicals from cold
    and asthma drug products (usually packaged in blister packs) from
    traditional retail outlets, such as chain drug stores. Based on
    clandestine lab seizure statistics, those states restricting the
    availability of methamphetamine precursor chemicals, like
    pseudoephedrine, have seen a dramatic decrease in the number of STLs.
    Implementing the Combat Methamphetamine Epidemic Act of 2005 will
    further help reduce the number of STLs as it makes pseudoephedrine and
    ephedrine more difficult to obtain.
        DEA Operational Highlight--August 2006.--DEA arrested 28 members of
    two separate cocaine trafficking organizations which were
    simultaneously distributing methamphetamine in Henderson and Caldwell
    Counties, North Carolina. The arrests concluded ten-month and 15-month
    Organized Crime and Drug Enforcement Task Force (OCDETF) investigations
    that resulted in the dismantlement of the Juan LOPEZ and the Lewis
    CASAS methamphetamine trafficking organizations. The two organizations
    were responsible for the distribution of five kilograms of
    methamphetamine per month in the western part of North Carolina. To
    date, these two OCDETF investigations have resulted in 47 arrests,
    including LOPEZ and CASAS, 37 repeat offenders, and the seizure of more
    than one kilogram of methamphetamine, approximately $50,000 U.S.
    currency, and six weapons.
        DEA Operational Highlight--May 2006.--DEA and the FBI arrested 27
    individuals, resulting in the dismantlement of two crystal
    methamphetamine trafficking organizations. During the past ten years,
    the Rafael RAMIREZ organization was responsible for the distribution of
    approximately 100 pounds of crystal methamphetamine on a monthly basis
    from Mexico to the San Francisco area. The RAMIREZ organization
    supplied methamphetamine to the Kasi POHAHAU organization which, during
    the past ten years, was responsible for the distribution of more than
    50 pounds of crystal methamphetamine from San Francisco to Hawaii. This
    three-year OCDETF investigation has resulted in the arrest of 37
    individuals, including RAMIREZ and POHAHAU, and the seizure of 42
    pounds of crystal methamphetamine, 52 kilograms of cocaine, and $1.4
    million in U.S. currency.
    Non-medical use of prescription drugs
        Non-medical use of addictive prescription drugs has been increasing
    throughout the United States at alarming rates. In CY 2005, an
    estimated 6.4 million \3\ Americans age 12 and older reported past
    month use of prescription drugs for non-medical purposes compared to
    3.8 million in CY 2000 \4\--a 68 percent increase in 5 years.
    Nationally, the misuse of prescription drugs was second only to
    marijuana in CY 2005.
    ---------------------------------------------------------------------------
        \3\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. (2006). Results from the
    2005 National Survey on Drug Use and Health.
        \4\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. (2002). National Household
    Survey on Drug Abuse: Vol 1. Summary of National Findings.
    ---------------------------------------------------------------------------
        Individual users can easily acquire prescription drugs through a
    variety of means, generally dependent on the type of drug. DEA and
    other data sources reveal that OxyContin and other Schedule II drugs
    are most commonly obtained illegally through ``doctor shopping'' or are
    sold illegally by registrants (e.g., doctors/pharmacists). On the other
    hand, Schedule III and Schedule IV drugs (e.g., anti-anxiety
    medications, hydrocodone, and anabolic steroids) are often purchased
    through the Internet. Many of these pharmacies are foreign-based and
    expose the purchaser to potentially counterfeit, contaminated, or
    adulterated products.
        DEA targets its investigations on domestic Internet pharmacies
    using data from available data bases, such as the Automated Reporting
    of Completed Orders System (ARCOS), to determine which retail
    pharmacies are most likely involved in distribution of large quantities
    of controlled substances over the Internet. In fiscal year 2006, 14.7
    percent of investigative work hours dedicated to open diversion cases
    were Internet cases. This is an increase of 27.9 percent from fiscal
    year 2005 when Internet cases represented 11.3 percent of the
    investigative work hours dedicated to open diversion cases, and an
    increase of 50 percent from fiscal year 2004 when 8.8 percent of case
    work hours were for Internet cases.
        During fiscal year 2006, DEA has initiated over 218 investigations
    of online sales of controlled pharmaceuticals without a prescription.
    As a result of Internet investigations, DEA seized approximately $4.9
    million in cash, bank accounts, property, and computers during fiscal
    year 2006.
        In fiscal year 2004, DEA established a specialized section within
    its Special Operations Division (SOD) to coordinate multi-
    jurisdictional Title III investigations involving the diversion of
    pharmaceuticals and chemicals over the Internet. During fiscal year
    2006, DEA has coordinated over 90 Internet investigations, resulting in
    the arrest of approximately 128 individuals and the seizure of
    approximately 14 million dosage units of controlled substances and
    approximately $52.6 million in U.S. currency.
        In 2006, DEA continued to enhance the Online Investigations Project
    (OIP), which improves DEA's ability to systematically identify,
    investigate, and prosecute the owners and operators of rogue pharmacies
    using the Internet to divert controlled substances. During fiscal year
    2006, the OIP Configuration Control Board authorized the release of 71
    change request items. These improvements made significant changes to
    the functionality of the OIP system, which enabled Diversion Staff
    Coordinators assigned to Intelligence to provide effective, ongoing
    support of significant Internet investigations. The system has also
    been utilized to provide pertinent Internet data in furtherance of
    ongoing Internet investigations in the field, as well as to provide new
    tips and leads. Since the inception of the OIP Web-Check process in
    March 2005, Web-Checks were performed on 2,425 web sites and e-mail
    addresses as a result of 455 requests.
        DEA Operational Highlight--January 2007.--DEA arrested four
    individuals, resulting in the dismantlement of the Andrew RUSSO
    internet pharmaceutical drug trafficking organization. The RUSSO
    organization used illicit internet websites to sell controlled
    substances directly to consumers without a physician's medical
    evaluation. From July to December 2005, the RUSSO organization
    distributed over one million tablets of alprazolam, and six million
    tablets of phentermine through its two internet pharmacies, United Care
    Pharmacy and Kwic-Fill. In addition to the arrests, this 20-month
    Priority Target Organization (PTO) investigation has resulted in the
    seizure of $2,000,415 in U.S. currency, 11 vehicles valued at $700,000,
    and the possible forfeiture of real estate valued at $1.5 million.
        DEA Operational Highlight--December 2006.--DEA arrested seven
    individuals, resulting in the dismantlement of the Antonio QUINONES
    internet pharmaceutical drug trafficking organization. The QUINONES
    organization used illicit internet websites to sell controlled
    substances directly to consumers without a physician's medical
    evaluation. During the past two years, the QUINONES organization
    shipped more than one million dosage units of Vicodin and amphetamines
    per month from Miami, Florida, to locations throughout the United
    States. In addition to the arrests, this one-year OCDETF investigation
    has resulted in the seizure of $935,000 in U.S. currency, real estate
    valued at $4.2 million, two vehicles valued at $350,000, a watercraft
    valued at $650,000, and two firearms. The DEA conducted this
    investigation with the Internal Revenue Service and the U.S. Marshals
    Service.
                Cocaine
        Cocaine remains a major illegal drug of concern throughout the
    United States based upon abuse indicators, violence associated with the
    trade, and trafficking volume. After marijuana, cocaine continues to be
    the most widely used illicit drug among all age categories. The 2005
    National Survey on Drug Use and Health (NSDUH) found that 2.4 million
    Americans used cocaine within the past 30 days and that over 5.5
    million Americans used it within the past year. According to the 2004
    Drug Abuse Warning Network (DAWN) report, cocaine is the most
    frequently reported illegal drug in hospital emergency room visits,
    accounting for 1 in 5 (19 percent) drug related emergency room visits
    in CY 2004.\5\
    ---------------------------------------------------------------------------
        \5\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. Detailed Emergency
    Department Tables from DAWN: 2004. April 2006.
    ---------------------------------------------------------------------------
        Although Colombia is the principal source of cocaine distributed in
    the United States, most of the wholesale cocaine distribution in the
    United States is controlled by Mexican drug trafficking organizations
    and criminal enterprises. Even in areas dominated by Colombian and
    Dominican drug trafficking organizations, such as the Northeast and
    Caribbean regions, the influence of Mexican drug trafficking
    organizations is increasing.
        DEA Operational Highlight--September 2006.--Consolidated Priority
    Organization Targets (CPOTs) Miguel and Gilberto RODRIGUEZ-OREJUELA
    pled guilty in U.S. District Court for the Southern District of Florida
    to conspiracy to import cocaine, and agreed to plead guilty in the
    Southern District of New York to conspiracy to commit money laundering.
    Each brother was sentenced to thirty years in prison. The brothers also
    agreed to the entry of a $2.1 billion judgment of forfeiture, and the
    forfeiture of 287 properties. Twenty-eight family members have also
    agreed to these forfeitures. The RODRIGUEZ-OREJUELA brothers ran the
    Cali Cartel in Colombia, and since 1990 imported and distributed more
    than 200,000 kilograms of cocaine from Colombia to the United States.
        DEA Operational Highlight--May 2006.--The Brazilian Federal Police
    arrested CPOT Pablo RAYO Montano in Sao Paulo, Brazil, and in an
    operation coordinated by DEA, law enforcement teams in four U.S. cities
    and five foreign countries arrested 52 individuals, resulting in the
    dismantlement of the RAYO Montano cocaine trafficking organization.
    RAYO Montano started in the narcotics business as a transporter in
    Buenaventura, Colombia approximately 20 years ago. In the last four
    years alone, the RAYO Montano organization has been responsible for the
    transportation of 15 tons of cocaine per month from South America to
    the United States and Europe. RAYO Montano has been linked to the
    notorious Norte del Valle Cartel, the Autodefensas Unidas de Colombia
    (AUC) paramilitary organization, the Fuerzas Armadas Revolucionarias de
    Colombia (FARC) terrorist organization, and corrupt high-level
    officials in the Colombian government. On February 22 and March 3,
    2006, federal grand juries in the District of Columbia and the Southern
    District of Florida, respectively, indicted RAYO Montano on money
    laundering and cocaine trafficking charges. The indictments were the
    result of Operation Twin Oceans, a three-year OCDETF investigation
    supported by the DEA Special Operations Division. Operation Twin Oceans
    has resulted in 138 arrests and the seizure of 47,550 kilograms of
    cocaine, 700 pounds of marijuana, ten kilograms of heroin, $1.6 million
    in U.S. currency, and other assets with a total estimated value of $47
    million, including three islands near the coast of Panama.
                Heroin
        The overall demand for heroin in the United States is lower than
    for other major drugs of abuse such as cocaine, marijuana, and
    methamphetamine.\6\ However, one cause for concern is the recent
    increase in heroin usage. According to the 2005 NSDUH, 379,000 people
    aged 12 and older reported using heroin during the past 30 days in CY
    2005; a slight decrease from 398,000 in CY 2004.\7\ Heroin remains
    readily available in major metropolitan areas and is the third most
    frequently mentioned illegal drug reported to DAWN by participating
    emergency departments after cocaine and marijuana, accounting for
    162,137 mentions in CY 2004.\8\
    ---------------------------------------------------------------------------
        \6\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. (2006). Results from the
    2005 National Survey on Drug Use and Health.
        \7\ Ibid.
        \8\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. Detailed Emergency
    Department Tables from DAWN: 2004. April 2006.
    ---------------------------------------------------------------------------
        Most of the heroin entering the United States is produced in South
    America and Mexico. Although heroin production in these areas has
    decreased in recent years, the production capacity remains sufficient
    to meet U.S. demand for the drug.\9\ In 2004, Afghanistan produced more
    than 90 percent of the world's heroin supply.\10\ However, Afghanistan
    is not currently a major heroin supplier to the United States; only
    about eight percent of the U.S. supply comes from that country. The
    majority of the heroin entering the United States is produced in
    Colombia and Mexico.
    ---------------------------------------------------------------------------
        \9\ U.S. Department of Justice, National Drug Intelligence Center.
    (2006). 2006 National Drug Threat Assessment.
        \10\ Ibid.
    ---------------------------------------------------------------------------
        DEA Operational Highlight--November 2006.--DEA arrested seven
    individuals, resulting in the dismantlement of the Shakur MUHAMMAD
    heroin trafficking organization. This organization distributed
    fentanyl-laced heroin, brand named ``Get High or Die Trying'' and
    ``Burn Out,'' which was directly responsible for six deaths and 27
    overdoses. During the past two years, the MUHAMMAD organization
    distributed over three kilograms of heroin per month in the Pittsburgh,
    Pennsylvania area. This six-month OCDETF investigation has resulted in
    the arrest of nine individuals, including MUHAMMAD, and the seizure of
    one kilogram of heroin and two firearms.
        DEA Operational Highlight--June 2006.--DEA arrested 12 individuals
    in Las Vegas, Nevada, Palm Springs, California, Caguas, Puerto Rico,
    and New York City, resulting in the dismantlement of the Javier MONROY
    heroin trafficking organization. Since 2004, the MONROY organization
    has been responsible for importing more than 200 kilograms of heroin
    into the United States. MONROY is a former Bogota, Colombia police
    officer. The MONROY organization used couriers to smuggle heroin from
    several foreign countries, including Ecuador, Venezuela, Trinidad and
    Tobago, Colombia, Brazil, and Mexico, to New York for distribution. The
    organization employed more than a dozen drug couriers, many of whom
    made multiple drug trips and most of whom were based in the Las Vegas
    area. Typically, the drug couriers smuggled between three to five
    kilograms of heroin per trip concealed within the lining of clothes. To
    date, this ten-month OCDETF investigation has resulted in the arrest of
    22 individuals, including MONROY, and the seizure of 28 kilograms of
    heroin and $220,000 in U.S. currency.
                Marijuana
        Marijuana continues to be a significant threat. The 2005 NSDUH
    found that marijuana was the most commonly used illicit drug with 14.6
    million users (6.1 percent of the population 12 and older) during the
    past month in CY 2004--the same as in CY 2003.\11\ More teens seek
    treatment for marijuana dependency than for all other drugs combined
    including alcohol, and marijuana was involved in 215,665 emergency
    department visits \12\ in CY 2004, second only to cocaine among drug-
    related visits.\13\
    ---------------------------------------------------------------------------
        \11\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. (2006). Results from the
    2005 National Survey on Drug Use and Health.
        \12\ A visit to the emergency room is referred to as an episode,
    and every time a drug is involved in an episode it is counted as a
    mention.
        \13\ U.S. Department of Health and Human Services, Substance Abuse
    and Mental Health Services Administration. Detailed Emergency
    Department Tables from DAWN: 2004. April 2006.
    ---------------------------------------------------------------------------
        Marijuana trafficking is prevalent across the nation, with both
    domestic and foreign sources of supply. The most recent supply
    availability estimates indicate that between 10,000 and 24,000 pure
    metric tons of marijuana are available in the United States,\14\ and
    that Americans spend more than $10.4 billion every year on
    marijuana.\15\ Since the demand for marijuana far exceeds that for any
    other illegal drug and the profit potential is so high, some cocaine
    and heroin drug trafficking organizations traffic marijuana to help
    finance their other drug operations.
    ---------------------------------------------------------------------------
        \14\ Drug Availability Steering Committee, Drug Availability
    Estimates in the United States, December 2002.
        \15\ Executive Office of the President, Office of National Drug
    Control Policy. What Americans Spend on Illegal Drugs 1988-1998.
    December 2000.
    ---------------------------------------------------------------------------
        Mexican drug trafficking organizations dominate the transportation
    and wholesale distribution of the majority of foreign-based marijuana
    available in the United States and cultivate marijuana on U.S. public
    lands throughout California. High grade marijuana from Canada, commonly
    referred to as ``BC Bud,'' is also available in every region of the
    United States.
        DEA Operational Highlight--December 2006.--DEA arrested two
    individuals, resulting in the dismantlement of the Shon SQUIRE
    marijuana trafficking organization. During the past 18 months, the
    SQUIRE organization distributed 300 pounds of marijuana per month
    through its store, the Local Patient Cooperative, which was granted a
    permit to operate as a medical dispensary by the city of Hayward,
    California. The store serviced 200 customers per day, purchasing
    marijuana at $4,000 per pound and selling it at $6,500 per pound, in
    various products and quantities, for a gross profit of $750,000 per
    month. In addition to the arrests, this one-year investigation resulted
    in the seizure of 725 marijuana plants, $2 million in U.S. currency,
    five luxury vehicles and five firearms.
        DEA Operational Highlight--September 2006.--DEA arrested 30
    individuals, resulting in the dismantlement of the Manuel CARO
    marijuana trafficking organization. During the past 18 months, the CARO
    organization distributed 1,000 pounds of marijuana per month in
    Florida, New Jersey and New York. To date, this six-month OCDETF
    investigation has resulted in the arrest of 60 individuals, including
    CARO, and the seizure of 4,000 pounds of marijuana, $170,000 in U.S.
    currency, and a large amount of sophisticated indoor hydroponic grow
    equipment. Additionally, sixty residential properties are being
    reviewed for possible forfeiture action.
    Enforcement Challenges
                Transit Zones
        The Southwest Border area is the principal arrival zone for most
    illicit drugs smuggled into the United States. From that area, the
    smuggled drugs are distributed throughout the country.
        Most cocaine is transported from South America, particularly
    Colombia, through the Mexico-Central America Corridor via the Eastern
    Pacific transit zone (50 percent) and the Western Caribbean zone (40
    percent). Most of the cocaine transiting these two areas is ultimately
    smuggled into the country via the Southwest Border. The remaining 10
    percent of cocaine transported from South America mostly transits the
    Caribbean zones to Florida and the Gulf Coast.
        According to the 2006 National Drug Threat Assessment,
    methamphetamine seizures increased from 1.12 metric tons in CY 2002, to
    1.73 metric tons in CY 2003, to 1.98 metric tons in CY 2004. Most of
    the foreign-produced marijuana available in the United States is
    smuggled into the country from Mexico via the Southwest Border by
    Mexican drug trafficking organizations and criminal groups, as
    evidenced by CY 2004 seizures of 1,103 metric tons on the Southwest
    Border versus 9.2 metric tons on the Northern Border.
        In CY 2004, seizures for Southwest Border points of entry included
    22.4 metric tons of cocaine, 388 kilograms of heroin, 1,070 metric tons
    of marijuana, and 2.3 metric tons of methamphetamine. By comparison,
    seizures in the Florida/Caribbean arrival zone for the same time period
    included 10.5 metric tons of cocaine, 481 kilograms of heroin, 4.9
    metric tons of marijuana and no methamphetamine.
        DEA Operational Highlight--August 2005 through October 2005.--DEA
    oversaw Operation All Inclusive (OAI) 2005-1, the first initiative
    under the DEA-developed, multi-agency International Drug Flow
    Prevention Strategy. This strategy is designed to cause major
    disruption to the flow of drugs, money, and chemicals between source
    zones and the United States through the execution of joint enforcement
    operations that attack the main arteries and support infrastructure
    nodes of the drug trade. OAI 2005-1 focused on a predictive
    intelligence-based attack of the maritime, land, financial, and air
    smuggling vulnerabilities of drug trafficking organizations operating
    within the Mexico/Central America corridor. OAI 2005-1's success
    included nearly 47 metric tons of cocaine seized, which equates to 5 to
    10 percent of the estimated quantity of cocaine that was transported
    through the transit zones to the United States during all of 2005.
    Additionally, during the 65-day period of the operation, total cocaine
    seizures in the Mexico/Central American and Caribbean Corridors
    increased 119 percent compared to the 65-day period preceding the
    operation, from 36 metric tons to 79 metric tons. At the same time,
    cocaine seizures by DEA domestic offices decreased 29 percent compared
    to the 65-day period prior to the operation, from 31,789 kilograms to
    22,669 kilograms. Further, as a result of the operation, drug
    trafficking organizations were forced to delay or suspend their drug
    operations, divert their routes, change their modes of transportation,
    and jettison loads. Other results include 346 arrests and additional
    seizures of 88.56 kilograms of heroin, 26.28 metric tons of marijuana,
    990,200 tablets of pseudoephedrine, $16 million in currency, and 104
    weapons.
        DEA Operational Highlight--March 2006 through April 2006.--Building
    upon some of the lessons learned from OAI 2005-1, the second initiative
    under the highly effective International Drug Flow Prevention Strategy,
    OAI 2006-1, was conducted. OAI 2006-1 was comprised of a combination of
    staggered and simultaneous land, air, maritime, and financial attacks
    involving synchronized interagency counter drug operations designed to
    influence illicit trafficking patterns and increase disruptions of drug
    trafficking organizations. Some of the successes for OAI 2006-1 include
    over 130 arrests and the seizure of 43.77 metric tons of cocaine; 19.65
    metric tons of marijuana; 83.6 kilograms of heroin; 92.6 metric tons of
    precursor chemicals; and $4,079,894 U.S. currency. During the course of
    both OAI initiatives, DEA was able to determine through intelligence
    sources that traffickers postponed or canceled their operations,
    modified their methods of conveyance, varied smuggling routes, and
    jettisoned loads as a result of enforcement efforts.
                Gangs
        Gangs have become an increasing and pervasive threat to our
    nation's security and the safety of our communities. Seventy-five
    percent of the United States Attorneys report that parts of their
    districts currently have a moderate or significant gang problem. Gangs
    commonly use drug trafficking as a means to finance their criminal
    activities. Furthermore, many have evolved from turf-oriented entities
    to profit-driven, organized criminal enterprises whose activities
    include not only retail drug distribution but also other aspects of the
    trade, including smuggling, transportation and wholesale distribution.
        Criminal street gangs, outlaw motorcycle gangs, and prison gangs
    are the primary retail distributors of illegal drugs on the streets of
    the United States and the threat of these gangs is magnified by the
    high level of violence associated with their attempts to control and
    expand drug distribution operations. Gangs primarily transport and
    distribute cocaine, heroin, marijuana, and methamphetamine. Authorities
    throughout the country report that gangs are responsible for most of
    the serious violent crime in the major cities of the United States.
        DEA is committed to combating the gang problem within the United
    States. The agency targets gang drug trafficking activity through
    participation in a number of anti-gang initiatives with other law
    enforcement components, such as Violent Crime Impact Teams, Project
    Safe Neighborhoods, Weed and Seed Program, Safe Streets and Safe Trails
    Task Forces and the Attorney General's Anti-Gang Coordination
    Committee. In 2006, DEA targeted violent drug gangs, such as the Hell's
    Angels, Latin Kings, Bloods, Gangster Disciples, and Crips. Through
    state and local partnerships, DEA is able to target violent drug
    trafficking organizations in areas where state, local, and tribal law
    enforcement is challenged. In fiscal year 2006, DEA initiated 31
    deployments to state and local jurisdictions. Of these, nine (29
    percent) were gang related. Additionally, 6 percent (117) of DEA's
    total active PTO investigations (2,113) were gang-involved. There was a
    36 percent increase in active PTO cases involving gangs (from 86 in
    fiscal year 2005 to 117 in fiscal year 2006); 57 percent increase in
    cases initiated (from 56 in fiscal year 2005 to 88 in fiscal year
    2006); 120 percent increase in PTOs disrupted (from 10 in fiscal year
    2005 to 22 in fiscal year 2006); and 57 percent increase in PTOs
    dismantled (from 23 in fiscal year 2005 to 36 in fiscal year 2006).
        DEA Operational Highlight--February 2007.--DEA arrested 47
    individuals, resulting in the disruption of the Laton Spurgeon crack
    cocaine and heroin trafficking organization. Since August 2005, the
    Spurgeon organization distributed one kilogram of crack cocaine and six
    ounces of heroin per month at the Hamel Housing Projects, a New York
    City Housing Authority complex in Queens, New York. Sixteen of the
    defendants were charged with at least one count of selling drugs within
    a drug-free school zone. In addition to the arrests, this four-month
    PTO investigation resulted in the seizure of two firearms.
        DEA Operational Highlight--May 2006.--DEA arrested 23 individuals,
    resulting in the dismantlement of the Winfred Lorenzo HUNT and Carlton
    POTTS crack cocaine trafficking organization. During the past three
    years, the HUNT/POTTS organization was responsible for the distribution
    of 8-12 kilograms of cocaine per month in Palm Beach County, Florida.
    HUNT has been arrested 27 times previously and charged with several
    violent crimes, including attempted murder. POTTS' record includes 30
    prior arrests on charges such as battery on a police officer,
    aggravated assault, and attempted murder. Among those arrested was an
    employee of the Palm Beach State Attorney's Office who utilized her
    position to provide law enforcement information to the HUNT/POTTS
    organization. To date, this 15-month OCDETF investigation has resulted
    in the arrest of 53 individuals, including HUNT and POTTS, and the
    seizure of more than one kilogram of crack cocaine and two kilograms of
    powder cocaine, $172,000 in U.S. currency, and eight handguns.

                         United States Marshals Service

    STATEMENT OF JOHN F. CLARK, DIRECTOR
        Mr. Clark. Thank you Madam Chairman, Ranking Member Shelby,
    and members of the subcommittee. As a career deputy U.S.
    marshal, I consider it a privilege and an honor to serve as the
    ninth Director of America's oldest law enforcement agency.
        We appreciate your support of the Marshals Service and our
    programs and, thanks to the funding you have provided over the
    years together with the work of the dedicated men and women of
    the Marshals Service, we have made a significant impact on
    reducing violent crime, protecting the judiciary, and securing
    thousands of prisoners who are in our custody.
        Our fiscal year 2008 budget request addresses the Marshals
    Services' highest priority needs. In total, we are requesting
    140 additional positions and just over $25 million. These
    resources will be used to maintain the security of our judicial
    system, to handle the increased court and prisoner workload in
    the Southwest border region, and to make our streets safer for
    children.
        Protection of the judicial process remains the primary
    mission of the United States Marshals Service and deputy
    marshals protect over 2,000 Federal judges, over 5,000 U.S. and
    assistant U.S. attorneys, and many Federal employees who work
    within our courthouses. Last year, the Marshals Service safely
    handled over 200 personal protection details for Federal judges
    and Supreme Court justices and investigated more than 1,100
    judicial threats.
        However, in recent times, we have seen very violent acts
    committed against the judiciary, some resulting in death. Just
    last month a suspect pled guilty to mailing an actual explosive
    device to the courthouse in Richmond, Virginia. It was court
    security officers who discovered and dealt with both the
    explosive device and its contents, a powdery substance labeled
    as anthrax.
        Also last month, a Houston man began making numerous
    telephone calls to the chambers of a Federal judge. The man
    would not accept that his case had been dismissed and became
    angry and threatening toward the judge. After fully
    investigating the situation, deputy U.S. marshals and local
    police determined the man was a danger to himself and others.
    He was brought before a magistrate judge and, through
    psychiatric evaluation, was ordered help.
        In the last 10 years, the number of reported threats has
    increased 553 percent. To strengthen our ability to analyze and
    investigate threats against the judiciary and to adequately
    provide judicial and courtroom security, we're requesting 16
    positions and $5.3 million. The Marshals Service must maintain
    a secure courtroom environment especially when trials involve
    high profile and high threat defendants.
        Right now, there are 20 high threat trials going on in
    courtrooms throughout the country, involving defendants such as
    the Aryan Brotherhood, the Russian mafia, and the MS-13 gang.
    Last year, the Marshals Service provided security for over 130
    high threat trials. In order to continue to provide security at
    the increased number of high threat trials, the Marshals
    Service requests 17 positions and $5.1 million.
        Every day, our Southwest border districts try to determine
    how to best use our limited number of deputy marshals to
    successfully protect the Federal judiciary and safely transport
    the detainees. The average daily prisoner population at
    districts along the Southwest border has increased 78 percent
    from fiscal year 2000 to fiscal year 2006. To address this
    prisoner increase, the Marshals Service requests 53 positions
    and $7.5 million for our Southwest border district offices.
        The Marshals Service workload has also increased due to our
    newest enforcement mission. Last July, the President signed
    into law the Adam Walsh Child Protection and Safety Act which
    places the Marshals Service as the lead Federal law enforcement
    agency responsible for investigating sex offender registration
    violations. There are more than 500,000 registered sex
    offenders in the United States and estimates indicate that
    there are at least 100,000 unregistered or noncompliant sex
    offenders.
        We are requesting 54 positions and $7.8 million to more
    aggressively investigate violations of the Adam Walsh Act. With
    the requested resources, we'll also be able to partner with the
    National Center for Missing and Exploited Children at their
    national sex offender targeting center.

                               PREPARED STATEMENT

        Madam Chairman, Senator Shelby, and members of the
    subcommittee, I look forward to working with your subcommittee
    throughout the appropriation process and on behalf of the men
    and women of the United States Marshals Service, I thank you
    for your ongoing support and I'd be happy to answer any
    questions you have now. Thank you.
        [The statement follows:]
                    Prepared Statement of Hon. John F. Clark
        Madam Chairman, Senator Shelby, and Members of the Subcommittee, I
    appreciate the opportunity to appear before you today to discuss the
    President's fiscal year 2008 budget request for the United States
    Marshals Service (USMS). As a career Deputy U.S. Marshal, and the
    former United States Marshal for the Eastern District of Virginia, it
    is a very great honor to represent the Marshals Service as its
    Director.
        I appreciate this Subcommittee's support for the Marshals Service
    and our programs. Thanks to the funding that you have provided over the
    years, and with the good work of the dedicated men and women who wear
    ``America's Star,'' we are performing our missions with excellent
    results.
               the mission of the united states marshals service
        As you know, the primary mission of the Marshals Service is the
    protection of the federal judicial process. The nation relies on us to
    provide physical security to federal judges and U.S. courthouses; to
    protect witnesses, jurors, and members of the public; to safely and
    humanely transport and detain federal prisoners; and to catch violent
    fugitives. Our missions are diverse, and the challenges we face are
    significant. Our accomplishments are many, and I welcome the
    opportunity to share some of those accomplishments with you today.
                  summary of fiscal year 2006 accomplishments
        In fiscal year 2006, the Marshals Service:
      --Investigated more than 1,100 threats and inappropriate
            communications to the federal judiciary and others for whom the
            USMS has protective responsibility;
      --Provided more than 230 Personal Protection Details for federal
            judges and prosecutors under threat, as well as security for
            nearly 200 federal judicial conferences around the country, all
            without incident;
      --Completed home intrusion alarm surveys and pre-installation plans
            for more than 1,600 federal judges who requested an alarm
            system, with more than 90 percent of those installations now
            complete;
      --Cleared more than 39,000 federal felony fugitive cases and more
            than 55,000 state and local fugitive cases;
      --Established and began operating our sixth Regional Fugitive Task
            Force (RFTF), located in the Gulf Coast states of Alabama and
            Mississippi; since its inception in July 2006, the Gulf Coast
            RFTF has made more than 2,140 arrests;
      --Conducted two successful Fugitive Safe Surrender operations,
            resulting in the surrender of more than 2,150 individuals
            wanted on outstanding warrants;
      --Established the Sex Offender Apprehension Program and Sex Offender
            Investigations Branch to manage the implementation of the Adam
            Walsh Child Protection and Safety Act and support the Attorney
            General's ``Project Safe Childhood'' initiative;
      --Completed 685 international extraditions from a record 67 foreign
            countries;
      --Safely handled security operations for 135 high-threat trials
            nationwide, including the trial of convicted terrorist Zacarias
            Moussaoui;
      --Received more than 263,000 prisoners into our custody, with a daily
            average prisoner population of nearly 56,000;
      --Safely and securely produced an average of 3,000 prisoners every
            day for court appearances;
      --Moved an average of 1,200 prisoners each day through the Justice
            Prisoner and Alien Transportation System (JPATS);
      --Protected more than 17,000 witnesses and their families through the
            Witness Security Program;
      --Hosted the first International Witness Security Symposium, with 17
            countries participating;
      --Assigned Special Operations Group (SOG) Deputies to Iraq to secure
            the Saddam Hussein trial, assist in other high-threat trials,
            and provide court security training;
      --Deployed SOG Deputies to Kabul, Afghanistan, providing Judicial and
            Witness Security training for the Counter-Narcotics Police of
            Afghanistan, supporting the international effort to combat drug
            trafficking, narcoterrorism, and related crimes;
      --Managed more than $1.3 billion worth of seized assets through the
            Asset Forfeiture Program;
      --Disbursed more than $300 million worth of assets with state and
            local law enforcement agencies through the USMS Equitable
            Sharing program; and
      --Received and disposed of more than 17,000 seized assets.
                        fiscal year 2008 budget request
        For fiscal year 2008, the Marshals Service requests a total of
    4,486 positions, including 3,299 Deputy Marshals, and $899.875 million
    to fulfill its missions. Of this amount, 140 positions and $25.7
    million are program enhancements to address critical needs related to
    judicial threat intelligence and investigations; high-threat trial
    security; enforcement of the Adam Walsh Child Protection and Safety
    Act; and handling the increased workload in our Southwest Border
    district offices.
                judicial threat intelligence and investigations
        Protection of the judicial process--with a heavy emphasis on
    judicial security--remains the primary mission of the USMS.
    Regrettably, the attitude of a small segment of American citizens
    toward the judicial process has changed, as is evidenced by an
    increasing number of threats to federal judges throughout the country.
    As a result, the workload associated with both judicial and courthouse
    security has significantly increased in the last six years. This is
    due, in part, to the judicial families' heightened awareness of
    potential threats, which has resulted in an increase in reporting of
    such incidents to the USMS. We cannot forget what happened in March
    2005, when the mother and husband of U.S. District Judge Joan Humphrey
    Lefkow were brutally murdered in retaliation for her rulings. The
    tragic loss clearly illustrates why there is a real and continuing need
    to monitor and enhance security for all involved in the judicial
    process.
        Just last month, a Houston man began making numerous telephone
    calls to the chambers of a federal judge. The man would not accept that
    his case had been dismissed, and became angry and threatening towards
    the judge. After fully investigating the incident, Deputy U.S. Marshals
    and local police determined that the man was a danger to himself and
    others. He was brought before a magistrate judge on charges of
    threatening the federal judge and a thorough psychiatric evaluation was
    ordered.
        Potential threats against judicial participants are not always
    obvious. Because of this, Deputy Marshals must be constantly vigilant.
    Threats come not only from detainees in custody, but also from
    litigants in civil matters, members of the general public attending
    trials, and individuals related to or associated with litigants or
    trial participants. In the last ten years, the number of reported
    threats has increased 553 percent. In fiscal year 2006, the number of
    threat investigations undertaken by our Judicial Security Division
    increased 17 percent over 2005. As a result, we are making adjustments
    to our threat assessment capability to respond to this new reality.
        To strengthen our ability to analyze and investigate threats
    against the judiciary and to adequately provide judicial and courtroom
    security, we are requesting 16 positions and $5.3 million. The
    requested resources will allow the Marshals Service to hire 10
    additional Deputy Marshals to serve as District Threat Investigators,
    and five Deputy Marshals and one analyst to be assigned to the
    Technical Operations Group (TOG) to support judicial security. The
    requested funding also will allow for enhancements to our secure voice
    and data communications abilities.
        I am steadfast in my commitment to fulfill our primary mission:
    protecting the federal judiciary. I am pleased to report the Marshals
    Service has taken aggressive steps to further protect courthouses and
    secure courtrooms in order to increase our threat intelligence and
    analysis capabilities. In 2004, we established the Office of Protective
    Intelligence (OPI) to facilitate the day-to-day sharing of threat
    intelligence information with federal, state, and local law enforcement
    agencies. As a result of funds provided by Congress in the fiscal year
    2005 Emergency Supplemental Appropriations Act for Defense, the Global
    War on Terror, and Tsunami Relief, we hired 10 new Deputy Marshals and
    three intelligence research specialists to provide 24-hours-a-day/7-
    days-a-week threat response capability and to analyze and investigate
    all threats to the federal judiciary and others we protect. We
    appreciate the continuing support the Subcommittee provides us in
    fulfilling this crucial mission.
        In fiscal year 2006, the Marshals Service investigated more than
    1,100 judicial threats, staffed more than 230 Personal Protection
    Details, and provided security for nearly 200 judicial conferences. The
    year ended without a single violent incident.
        Deputy Marshals protect more than 2,000 federal judges, but we also
    protect Supreme Court Justices when they travel outside of the
    Washington, DC area. Highly-publicized confirmation hearings and
    controversial decisions have increased the visibility of these
    justices, and staged protests at both private and public functions have
    increased the demand for USMS protective details. We experienced an 80
    percent increase in the number of Supreme Court Justice Protective
    Details in fiscal year 2006 over the previous year. The Marshals
    Service is in the final stages of constructing our Threat Management
    Center, which will function as the nerve center for threats and
    inappropriate communications against judicial officials and other
    Marshals Service protectees. In addition, during fiscal year 2007, we
    plan to establish the National Center for Judicial Security (NCJS). The
    NCJS will provide a wide range of services and support to federal,
    state, local, and international jurisdictions as they seek advice and
    assistance on questions of judicial security. The Center will initiate
    programs and activities directly related to threat assessment,
    training, information sharing, and technology review.
        Outside of the courtroom, the Marshals Service has made tremendous
    progress in achieving the offsite security initiative funded through
    the fiscal year 2005 Emergency Supplemental Appropriations Act for
    Defense, the Global War on Terror, and Tsunami Relief. We are grateful
    for the support provided by Congress. Through the end of 2006, 1,616
    federal judges had requested or expressed interest in having a home
    intrusion alarm system installed in their residence. Working in
    conjunction with the Administrative Office of the U.S. Courts (AOUSC),
    the Marshals Service has scheduled or completed Pre-Installation Plan
    surveys for all of those residences. Installation has been completed in
    over 90 percent of these locations. The ongoing cost of these systems
    has been funded through the enacted fiscal year 2007 Joint Resolution.
        We have stepped up our training efforts. In fiscal year 2006, the
    Marshals Service conducted training in behavioral methodologies of
    investigation for 190 Deputy Marshals and Judicial Security Inspectors
    (JSIs) at the Federal Law Enforcement Training Center (FLETC) at
    Glynco, Georgia. A Judicial Protective Training Conference for 210
    Deputy Marshals and JSIs also was held in Baltimore, Maryland. These
    training seminars were led by experts from within the Marshals Service,
    as well as the United States Secret Service; the United States
    Attorneys' Office; the Diplomatic Security Service; the Bureau of
    Alcohol, Tobacco, Firearms and Explosives; and the Federal Bureau of
    Investigation.
        I am pleased to say that we are also taking a more aggressive
    approach to training Court Security Officers (CSOs) and exploring new
    screening technologies that CSOs can use in their efforts to secure
    federal courthouses. The CSO Orientation Curriculum has been completely
    updated, and training which formerly occurred on an annual basis is now
    being conducted quarterly at FLETC. Hands-on training is being
    conducted on new and current screening equipment, with added emphasis
    on detecting disguised weapons and explosives, and on response plans
    for dealing with weapons of mass destruction. Additionally, selected
    judicial districts are being asked to test next generation
    technologies, and the data obtained from these tests will assist the
    Marshals Service to select and procure the best possible screening
    equipment to support our judicial protection mission.
                           high-threat trial security
        The Marshals Service also has an obligation to ensure that the
    highest level of security is provided at U.S. courthouses during trials
    involving high-profile and high-threat defendants. High-threat trials
    generally involve international or domestic terrorists, drug kingpins,
    violent gang members, organized crime figures, or defendants in civil
    matters with a high degree of notoriety. An increasing number of these
    trials require enhanced security efforts to secure trial participants
    from internal and external threats, such as additional personnel, use
    of armored vehicles, and establishment of security perimeters around
    courthouses.
        Due to the potential for additional terrorist attacks, threats from
    extremist groups, intense media attention, the general public's
    concerns, and global interest in these proceedings, high-security,
    high-profile events require extensive operational planning and support
    from specially-trained and equipped personnel. The complexity of the
    operations and threat levels associated with these cases require
    additional Deputy Marshals for all aspects of USMS work. In order to
    continue providing the best security for the number of high-threat
    trials that we must handle, the Marshals Service requests 17 positions,
    including 15 Deputy Marshals, and $5.1 million for cellblock security
    enhancements, Supreme Court Protective Details, and our nationwide
    security maintenance contract.
        As the former U.S. Marshal in the Eastern District of Virginia, I
    can speak firsthand about the planning and resource requirements
    necessary to prepare for a high-threat trial. In fiscal year 2006, the
    extended legal proceedings involving terrorist Zacarias Moussaoui came
    to a close. The USMS provided security for this high-profile trial from
    2002 to 2006. Assisted by our Special Operations Group, we were
    successful in producing the defendant safely and securing the judicial
    proceedings without incident. In May 2006, Moussaoui was sentenced to
    life in prison, and on May 13, 2006, the Marshals Service transported
    him to Florence, Colorado, to begin serving his sentence at the United
    States Penitentiary Florence Administrative Maximum Facility.
        While Moussaoui is perhaps the most visible terrorist to be tried
    on U.S. soil, he will not be the last. The trial of terrorist suspect
    Jose Padilla in Miami, Florida, is just another case that will test the
    resources and resolve of the USMS. Preparations include evaluating
    logistical requirements such as: increasing perimeter security, setting
    up additional barricades, coordinating with local authorities to close
    street traffic, arranging armored motorcades for prisoner transport,
    upgrading surveillance cameras, and providing additional personnel
    through several rotations of specially-trained Deputy Marshals.
        The increase in gang-related trials also presents many challenges
    for the Marshals Service. For example, in Santa Ana, California, we
    have been securing the largest capital murder case in U.S. history.
    Forty defendants affiliated with the Aryan Brotherhood have been
    charged with a variety of violent crimes, including conspiracy to
    commit murder and drug trafficking. Not only were the defendants part
    of this gang, but so were many of the witnesses and trial observers in
    the public area of the courtroom. In July 2006, the jury convicted two
    Aryan Brotherhood leaders on a host of racketeering and murder charges.
    Both leaders were sentenced to life in prison without parole. Although
    federal prosecutors continue to achieve record convictions, out of the
    40 defendants, 14 are still pending trial and remain in our custody.
        Additional gang-related trials are currently taking place in
    Greenbelt, Maryland, where several very significant prosecutions that
    involve multi-defendant, high-threat trials of members of the notorious
    MS-13 gang are underway. The defendants were charged with a variety of
    offenses, including conspiracy, RICO, murder, carjacking, kidnapping,
    firearms violations and weapon charges. Many of the defendants also
    have been charged by U.S. Immigration and Customs Enforcement (ICE) for
    being in the United States illegally. These defendants are more violent
    than our average prisoner and require extra security when transporting
    and producing them for trial and various hearings. One trial involving
    seven defendants has already been completed and the second trial is
    currently in progress. The trials are scheduled to continue throughout
    2008, and additional arrests are expected as the investigations
    continue.
        Aside from the potential threats within the courtrooms when high-
    threat trials are underway, the increase in gang-related prosecutions
    and the growing number of gang members in federal detention place
    additional burdens on the Marshals Service. In many instances, we must
    not only separate co-defendants from one another, but we must also
    segregate prisoners within the courthouse cellblock due to their
    history of violence, potential violence with other detainees, or risk
    of escape. Support for the President's budget request in this area will
    assist in our ability to meet these additional responsibilities.
        High-threat trials provide special challenges for the Marshals
    Service. However, our Deputy Marshals are hard at work every day in
    every judicial district handling prisoners for court appearances.
    Agency-wide in fiscal year 2006, our personnel produced prisoners for
    642,000 court proceedings. I am proud to say that these productions
    were completed without any injury to a judge, witness, or prosecutor.
                   adam walsh child protection and safety act
        I am personally honored that last July, Congress named the Marshals
    Service as the lead agency to investigate sex offender registration
    violations. This important new enforcement role, outlined in the Adam
    Walsh Child Protection and Safety Act, grants us the authority to
    protect the most innocent among us--young children. Signed into law on
    July 27, 2006, the Adam Walsh Act is landmark legislation that will not
    only change the face of our communities by making them safer for
    vulnerable women and children, but it will also, in many respects,
    change the face of the Marshals Service.
        The Marshals Service has three distinct missions pursuant to the
    Adam Walsh Act: to assist state, local, and tribal jurisdictions in the
    location and apprehension of noncompliant sex-offenders; to investigate
    violations of non-compliance; and to assist in the identification and
    location of sex offenders relocated as a result of a major disaster.
        To carry out these new missions, we established the Sex Offender
    Apprehension Program and designated a program management office (the
    Sex Offender Investigations Branch) to direct and coordinate the
    implementation of the Act within the agency. The Marshals Service also
    designated sex offender investigations coordinators in each district
    office and Regional Fugitive Task Force to establish and maintain
    effective contacts with sex offender registration authorities,
    corrections officials, and other law enforcement agencies throughout
    the country. Last month, we trained 52 of these coordinators at the
    National Center for Missing and Exploited Children (NCMEC). There are
    three additional courses scheduled for this fiscal year, which will
    bring the total number of Deputy Marshals specially trained in sex
    offender investigations to approximately 200. To date the Marshals
    Service has opened 149 cases on convicted sex offenders for violations
    of the Act and we are participating in the Attorney General's ``Project
    Safe Childhood'' initiative.
        I am proud to say that the Marshals Service has a long-standing and
    mutually supportive relationship with NCMEC, which has been enhanced by
    the enactment of the Adam Walsh Act. One Deputy Marshal has been
    assigned full-time to NCMEC as a liaison to our Investigative Services
    Division, and this year we will be assisting NCMEC with their media
    campaign to encourage compliance with sex offender registration laws.
    In fiscal year 2008, pending the availability of resources, NCMEC and
    the USMS also will establish a National Sex Offender Targeting Center
    (NSOTC) to assist in identifying and prioritizing non-compliant sex
    offenders and to provide analytical support to federal, state, and
    local law enforcement agencies.
        Full implementation and enforcement of all provisions contained
    within the Act will require additional resources. Therefore, the
    Marshals Service requests 54 positions, including 43 Deputy Marshals,
    and $7.8 million to begin staffing areas of the country having large
    numbers of non-compliant sex offenders and to staff the NSOTC in
    partnership with NCMEC.
        It is estimated that there are nearly 600,000 registered sex
    offenders in the nation and as many as 100,000 non-compliant sex
    offenders. The requested resources will allow the Marshals Service to
    identify and apprehend non-compliant sex offenders--especially those
    who commit offenses against children--and to provide analytical support
    to federal, state, and local law enforcement agencies.
                          southwest border enforcement
        With the recent investment of resources to increase illegal
    immigrant apprehension along the Southwest Border, the Marshals Service
    is facing the daily challenge of utilizing our limited number of
    personnel to successfully protect and secure judicial personnel and
    federal detainees, and to safely transport those detainees. To
    alleviate this problem, the Marshals Service requests 53 positions,
    including 40 Deputy Marshals, and $7.5 million for Southwest Border
    (SWB) district offices.
        The prisoner population levels along the United States' Southwest
    Border have been an area of particular concern to the USMS since 1994,
    the start of intensified immigration initiatives in that region. The
    addition of thousands of agents from both ICE and U.S. Customs and
    Border Protection (CBP), together with increased enforcement of
    immigration laws by federal prosecutors, has caused another significant
    increase in the number of illegal immigrants captured and detained
    along the Southwest Border, further contributing to increases in the
    prisoner population. The average daily prisoner population in Southwest
    Border districts has increased by 78 percent from 2000 to 2006 and
    there are no signs of this upward trend abating. For example, the Del
    Rio office in the Western District of Texas is now handling an average
    of 400 prisoners a day.
        The CBP's fiscal year 2008 budget request includes funding to hire
    an additional 3,000 agents which, if approved by Congress, will
    drastically increase the Marshals Service workload. Without the
    resources requested in the President's budget, the USMS will have
    difficulty managing this increased prisoner population and the prisoner
    productions that will be required. When additional Border Patrol agents
    or border enforcement resources are added, the potential exists for
    creating massive criminal prosecutions in Southwest Border judicial
    districts. Additional Marshals Service resources, including Deputy
    Marshals and administrative positions to handle the resulting criminal
    workload, will be required to meet the growing burden.
        Statistics from the Drug Enforcement Administration demonstrate
    that drug-trafficking and drug-related gang activity along the
    Southwest Border is increasing, which also affects the USMS workload.
    The Marshals Service is handling prisoner productions for high-profile
    prosecutions such as trials involving the Arrellano-Felix drug cartel
    and the ``Mexican Mafia'' in Southern California. As a result of
    stepped-up enforcement and greater cooperation from the Mexican
    government in returning these individuals for prosecution in the United
    States, the USMS will continue to play a large role in these
    proceedings.
                            fugitive investigations
        The United States Marshals Service is the federal government's
    primary agency for conducting fugitive investigations. In fiscal year
    2006, more than 39,000 federal fugitive felons were apprehended through
    USMS-led task forces and warrant squads. Working with authorities at
    the state and local levels, USMS-led fugitive task forces also arrested
    more than 55,000 state and local fugitives. The ``force-multiplier''
    effect of the Marshals Service's network of six regional and 85
    district-based task forces provides results that are unmatched in law
    enforcement. In all, more than 135,000 federal, state, and local
    fugitives were apprehended by the USMS and its law enforcement partners
    during fiscal year 2006.
        The Marshals Service has responded to requests from the State
    Department and the Department of Justice to provide specialized
    fugitive investigative training to foreign law enforcement agencies. In
    fiscal year 2006, the USMS conducted seven training missions involving
    170 foreign police officials from ten countries. These training
    missions included courses that ranged in content from basic prisoner
    handling to advanced electronic and financial surveillance techniques.
    Since fiscal year 1999, the USMS has trained more than 400 foreign
    officers from 22 countries in fugitive investigation.
        The Marshals Service continues to improve strategies used to
    apprehend fugitives. In October 2006, we teamed with our state, local,
    and federal colleagues in the largest national round-up focused on
    violent sex offenders and gang members. Operation FALCON III (Federal
    and Local Cops Organized Nationally) resulted in the apprehension of
    more than 10,700 fugitives, including 1,629 sex offenders and 364
    documented gang members. Teamwork was the key during this seven-day
    initiative. More than 1,060 agencies participated, with an average of
    3,000 law enforcement officers working each day in Marshals Service
    districts primarily east of the Mississippi River. By removing some of
    the country's most dangerous sex offenders and gang members from the
    streets, Operation FALCON III made America's communities safer and
    contributed to the Attorney General's ``Project Safe Childhood''
    initiative. The operation also resulted in the safe recovery of a
    missing child, the arrest of a convicted sex offender who was
    babysitting three young children at the time of his arrest, and the
    seizure of child pornography.
        This success followed an earlier initiative, Operation FALCON II,
    which occurred in April 2006 in districts in the western half of the
    United States. More than 9,000 fugitives were arrested and more than
    10,400 warrants were cleared during Operation FALCON II. Since April
    2005, the three FALCON operations have resulted in the arrests of
    30,110 fugitives and the clearance of 37,603 warrants. Of those
    arrested, 3,314 were sex offenders and 681 were gang members. These
    results are a clear demonstration of what can be accomplished when law
    enforcement agencies pool their human resources and investigative
    assets to achieve a common goal.
        The success of these fugitive initiatives has been recognized by
    the Department of Justice, which will soon announce a series of mini-
    FALCONs designed to focus on violent gang members in high priority
    cities. The first of these initiatives occurred the week of February
    25, 2007, in Baltimore, Maryland. Coordinated by the USMS Capital Area
    Regional Fugitive Task Force, we worked with our state and local law
    enforcement partners to arrest 195 felons in just five days. Of this
    number, 24 were documented gang members and another 20 were suspected
    gang members. Task Force officers arrested four individuals who had
    been listed as among the City of Baltimore's Most Wanted fugitives.
        The Marshals Service also is fully engaged in the battle against
    violent crime perpetrated by gang members. We have assigned a
    supervisory criminal investigator and a criminal analyst to the
    National Gang Intelligence Center, and we are a full participant in the
    newly-formed Gang Targeting, Enforcement and Coordination Center
    (GangTECC), whose primary goal is to establish national coordination,
    intelligence, and enforcement mechanisms to disrupt and dismantle the
    most significant, violent, national and regional gangs.
        The Marshals Service's activities with regard to gangs are not
    limited to enforcement, however. I have directed our district offices
    to explore creative avenues to address prevention and have encouraged
    participation in initiatives such as the G.R.E.A.T. (Gang Resistance,
    Education, and Training) program, which focuses on providing life
    skills to students to help them avoid using delinquent behavior and
    violence to solve their problems.
        The Marshals Service intends to expand its Fugitive Safe Surrender
    program in fiscal year 2007 and fiscal year 2008. Authorized under the
    Adam Walsh Act, Fugitive Safe Surrender is a creative, non-violent, and
    highly-successful, approach to fugitive apprehension. The goal of
    Fugitive Safe Surrender is to reduce the risk to law enforcement
    officers who pursue fugitives, to the neighborhoods in which they hide,
    and to the fugitives themselves. It encourages persons wanted for non-
    violent felony or misdemeanor crimes to voluntarily surrender to the
    law in a faith-based or other neutral setting. Partnering with state
    and local law enforcement, the judiciary, and the religious community,
    the Marshals Service has undertaken two successful Fugitive Safe
    Surrender operations in Cleveland, Ohio, and Phoenix, Arizona, which
    resulted in the surrender of more than 2,150 individuals wanted on
    outstanding warrants.
        The next Fugitive Safe Surrender operation will take place in
    Indianapolis, Indiana beginning on April 25, 2007. Additional cities
    looking to host the program include Milwaukee, Wisconsin; Camden, New
    Jersey; Louisville, Kentucky; Nashville, Tennessee; Dallas, Texas;
    Albuquerque, New Mexico; Montgomery, Alabama; Jackson, Mississippi;
    Richmond, Virginia; and Washington, DC.
                            witness security program
        One of the most critical, and least known, responsibilities of the
    United States Marshals Service is the administration of the federal
    government's Witness Security Program. This Program provides for the
    security, health, and safety of government witnesses and their
    immediate dependents whose lives are in danger as a result of their
    testimony against drug traffickers, organized crime members, and
    terrorists. After the events of September 11, 2001, the Witness
    Security Program has assisted in the production and relocation of
    witnesses testifying in terrorism-related cases nationwide and abroad.
        Since the inception of the Program in 1970, more than 7,900
    witnesses and over 9,700 family members have entered the program and
    have been protected, relocated and given new identities by the U.S.
    Marshals Service. The successful operation of this program is widely
    recognized as providing a unique and valuable tool to the government's
    war against major criminal conspirators and organized crime, and I
    appreciate the Subcommittee's continuing support for this critical
    mission. I am pleased to report that no program participant who has
    followed the security guidelines of the program has been harmed while
    under the active protection of the U.S. Marshals Service.
        The fundamental principle of the Witness Security Program is the
    lifelong involvement with the witnesses and their families. As the
    program has evolved, the services provided to program participants
    continue to become more complex. For example, approximately 70 percent
    of new case participants are foreign-born. Relocating foreign nationals
    and ensuring their assimilation in a new community presents a host of
    difficult issues to overcome, including language and cultural barriers.
        In addition to its primary mission related to the nationwide
    protection and relocation of witnesses, the Witness Security Program is
    currently involved in many other foreign initiatives in conjunction
    with the Department of Justice, the Department of State, and the United
    Nations. As the recognized experts in this field, during the last three
    years, personnel assigned to the Witness Security Program have assisted
    countries such as Austria, Bahamas, Bosnia-Herzegovina, Chile,
    Colombia, Guatemala, Kosovo, Mexico, Panama, Russia, Serbia, and
    Thailand in the establishment and training of witness security units.
        In July of 2006, the U.S. Marshals Service sponsored the First
    International Witness Protection Symposium in Washington, DC.
    Participants included heads of witness security units and Senior Police
    Officials representing more than 17 countries across three continents.
    Additionally, the Marshals Service, in coordination with the Department
    of Justice, has posted a team of witness security specialists at the
    United States Embassy in Bogota, Colombia, to facilitate and provide
    consultation to the Colombian witness security program.
                     2007 global war on terror supplemental
        I would like to thank the Subcommittee for your continued support
    of our law enforcement and training efforts in Iraq and Afghanistan and
    for the Senate's recent passage of our request in the Global War on
    Terror Supplemental. The funds you have approved will be used to
    enhance security for two terrorist trials, the Jose Padilla trial in
    the Southern District of Florida, and the upcoming Babar Ahmed trial in
    the District of Connecticut.
        Last year, Congress provided $1 million directly to the Marshals
    Service as part of the Emergency Supplemental to fund our activities in
    Iraq. Other funding comes to us from the Department of State. Since
    2004, we have deployed Deputy Marshals from our Special Operations
    Group (SOG) to provide expertise in five key areas: security for
    judges, security for court facilities, security for witnesses,
    investigations tied to the Regime Crimes Liaison Office and the Major
    Crimes Task Force, and police training. To date, approximately 70 of
    our 98 Special Operations personnel have served on deployments of at
    least six months to Iraq.
        When enacted, the additional funding provided in the fiscal year
    2007 GWOT supplemental will be used to continue our operations in Iraq,
    and expand the Marshals Service's role in Afghanistan, where the
    Department of Justice has a significant role in combating organized
    crime and drug cartels. Funding will be used for logistical support and
    equipment to deploy Deputy Marshals to Afghanistan to establish a
    Judicial and Witness Security Protection Unit within the Counter-
    Narcotics Police of Afghanistan. The Unit will enable narcotics
    trafficking cases to be successfully prosecuted under the Afghan
    Counter-Narcotics law. Until a safe environment is created, Afghan
    judges may continue to resist holding trials because of the threats
    made against their lives. Currently, our Special Operations Group has
    four personnel assigned to Kabul for a six-month rotation.
                                   conclusion
        Madam Chairman, Senator Shelby, and Members of the Subcommittee, on
    behalf of the men and women of the United States Marshals Service,
    thank you for your ongoing support of our programs. In the last year,
    we have made significant progress in addressing the legitimate concerns
    expressed to us by Members of Congress concerning judicial security,
    and we have built upon our successful track record of reducing the
    number of violent felons in our communities. We also have achieved
    positive results in our less visible program areas, such as training of
    Deputy Marshals, criminal investigators, threat investigators, and
    administrative employees.
        However, I know that there is still much to do. I am committed to
    ensuring that we are efficient stewards of the resources you have
    entrusted to us, and I look forward to working with you to improve our
    performance in areas that are critical to domestic security and to
    build upon the successes we have already achieved. I would be happy to
    answer any questions you may have at this time.
                                     ______

                      Biographical Sketch of John F. Clark
        John F. Clark was appointed Director of the United States Marshals
    Service on March 17, 2006.
        Prior to his role as Director of the Marshals Service, Mr. Clark
    was appointed by President George W. Bush on November 12, 2002 to serve
    as the United States Marshal for the Eastern District of Virginia,
    which includes the Alexandria, Richmond, and Norfolk, Virginia offices.
    Prior to his appointment as U.S. Marshal, he was the Acting Marshal and
    Chief Deputy for the Eastern District of Virginia.
        Mr. Clark is a veteran of the Marshals Service, with over 20 years
    of experience. He began his career as a Deputy United States Marshal in
    the San Francisco, California office and later served in the San Jose,
    California; Richmond, Virginia; and Alexandria, Virginia offices. In
    addition to his field experience, Mr. Clark served in the Special
    Operations Group for seven years. During his tenure with the Marshals
    Service, Mr. Clark has held numerous senior management positions within
    the Headquarters organization, including Chief of the Internal Affairs
    Division and Chief of the International Fugitive Investigations
    Division. Prior to his employment with the Marshals Service, Mr. Clark
    was employed by the United States Capitol Police and the United States
    Border Patrol.
        Mr. Clark holds a Bachelor of Science degree from Syracuse
    University and an Associates degree from Hudson Valley Community
    College. He has completed the Executive Leadership programs at the
    Center for Creative Leadership and the Aspen Institute. He is married
    and lives in Virginia.

        Senator Mikulski. Well thank you very much, each and every
    one of your testimonies is much appreciated.
        Ordinarily we focus on numbers and the financial aspects of
    your agencies, but today I think is a little bit different and
    one of the things about each and every one of your testimonies
    talks about partnership, partnership, partnership. That your
    agencies stand sentry at a variety of threats facing the
    American people.
        The marshals from threats to our judges to pedophiles
    threatening their children on playgrounds, DEA at our borders
    and outside of our borders, working in world communities and of
    course, ATF, fighting gun crime, the trafficking of illegal
    guns, the trafficking of illegal bullets, and their whole
    effort to contribute to violent crime impact teams.
        Let me go to my question because we often talk about how do
    we connect the dots and how do we connect the people? How do we
    work together to amplify Federal resources at the local level?

                    ATF deg.VIRGINIA TECH SITUATION

        So I'm going to ask you if you could, tell me what you did
    in terms of the Virginia Tech situation. People would say what
    would the marshals be doing there? What about ATF, DEA? I'd
    like you to tell your story because I think it shows how you
    work and how you maximize your resources.
        Mr. Sullivan, why don't we start with you and just go down
    the line and then I'll have an additional question or two and
    then we'll come back to you on the issues related to innovation
    and staffing.
        Mr. Sullivan. Thank you, Madam Chairman, and I certainly
    don't want to understate the role of the State and local law
    enforcement in an event like that.
        Senator Mikulski. No, this is where we want to talk. People
    don't think of you as first responders and also the augmenting
    and appropriate role where there is no Federalization of the
    situation so we understand, we acknowledge a campus police
    force overwhelmed by an event of staggering magnitude, a local
    sheriff's department, et cetera.
        It's a series of circles that went out.
        Mr. Sullivan. Thank you for the question. ATF was notified
    shortly after the second event occurred and we responded
    immediately with 12 special agents from the Roanoke field
    office. They did a range of things that would typically happen
    in an event like this, from trying to restore some order in an
    environment where there was a lot of panic, a lot of fear, and
    a lot of chaos, partnering up with State and local partners,
    and identifying exactly where crime scenes were.
        You can imagine an event that took place over a several
    hour period with victims, both victims that were killed and
    surviving victims, had a crime scene that was extremely large.
    We tried to identify where the crime scenes are, what evidence
    might be available at those crime scenes to help in the
    investigation, and participated in interviews.
        So from a general perspective, we did everything that a
    general law enforcement response would be expected to do and
    then we focused in on some very specialized skills that ATF has
    to support State and local law enforcement in the area of gun
    tracing. We had identified at the scene two weapons that were
    believed to be used.
        The questions during the early stages of the investigation
    was whether these two crime scenes were linked, the earlier
    crime scene that happened in the dormitory and the crime scene
    that unfolded in the classrooms. So it becomes critically
    important if there is a connection between the two that you can
    make those connections with the weapons and also the ballistics
    evidence.
        So the early stages of the investigation were spent looking
    at the weapons and our ability to trace those weapons in terms
    of where they were purchased from, who purchased them, and when
    they were purchased. We also tied in the ballistics evidence,
    using representative samplings of the ballistics evidence that
    were secured during the early stages. We had an investigative
    lead based on evidence that was secured at the crime scene, a
    receipt in a backpack, that sent us to a FFL in Virginia.
        Senator Mikulski. What is an FFL?
        Mr. Sullivan. It's a Federal firearms licensed dealer.
        Senator Mikulski. Ok, just wanted to be sure.
        Mr. Sullivan. We had that investigative lead that we
    explored by going out and interviewing the FFL to determine
    whether or not there was some additional information that could
    be helpful. Beyond that, we had the two weapons and as it was
    reported in the media, the serial numbers on the weapons were
    obliterated, making it more difficult in the early stages to
    identify where those weapons were originally shipped to for the
    purpose of private sale.
        The weapons and the ballistics evidence were sent to the
    laboratory in Ammendale, Maryland, for the purposes of raising
    the serial number, and to do test firings of the weapons to
    compare ballistics evidence and establish that the two scenes
    and the two weapons were, in fact, connected.
        Senator Mikulski. Well, that's a stunning set of resources
    and I'm going to come back before our colleagues just to be
    clear that what ATF provided was people and expertise. They
    discovered there were multiple guns used in the crime. This was
    a human tragedy; the scene of human tragedy was also a crime
    scene.
        Now what was the Marshals Service doing there? Why would
    the marshals be involved in this and what were they doing?
        Mr. Clark. Thank you, Senator.
        Yes, we did have the opportunity to send several of our
    deputy marshals there. Six deputies from our Blue Ridge
    fugitive task force responded right after the shooting began
    and before the full knowledge of the single shooter became
    apparent. They were sent to help secure the crime scene, to
    support the State and local investigators that were also
    responding, and to offer our expertise in the event that this
    individual had fled the scene, before they realized that he had
    killed himself.
        We had several of our deputy marshals who responded to
    Virginia Tech. We also offered the assistance of our national
    headquarters using these additional resources to locate
    individuals, in case there was a second shooter on the loose.
    We immediately supplied some of our investigators to help. I
    would also note that they were very instrumental, during and
    shortly after the shooting ended, in helping to secure the
    crime scene, supporting the local officers, and getting injured
    victims to the hospital.
        Senator Mikulski. Well, I'm sure they thank you for it. Ms.
    Tandy, tell us about DEA.
        Ms. Tandy. DEA's work through all of our enforcement
    operations is done in conjunction with State and local law
    enforcement so as soon as the shootings occurred, DEA contacted
    the local police department as well as the State police to
    determine what kind of assistance they needed from us.
        We were told that they specifically needed us to assist the
    SWAT team in providing perimeter security as well as in
    conducting searches of the buildings and enforcement sweeps of
    the various campus buildings. DEA's entire Roanoke field office
    responded to the campus to conduct those two responsibilities.
    It's actually a small office for us in the Washington division.
        Senator Mikulski. How many were there?
        Ms. Tandy. Ten agents responded and stayed throughout the
    course until everything was secure.
        Senator Mikulski. Well, I wanted you to tell your story.
    I'm really proud of you because this was a terrible thing that
    happened and just imagine a small campus police force, a local
    community with a sheriff police force and rural communities who
    are never overstaffed. They had a tragedy unfolding of enormous
    proportion and needed outside help.
        They had to protect the students. They had to deal with the
    crime scene. They didn't know if there were multiple killers
    and they had to deal with the panic that was occurring. The
    fact that you all work together on a day-to-day basis on other
    issues, whether it's meth, drugs or other areas related to
    violent crime. You all knew how to react in mutual response. Is
    that right?
        So when you all came in they weren't suspicious of you.
    They knew you and were eager to have you.
        Well, I think what this shows though is several things,
    number one, really the job that you do. This is one of the
    reasons I wanted to have this hearing. I think you're
    undervalued and often overlooked in the Federal budget.
        I'm going to come back, others have questions that will go
    then to your budget because we need to support you so you can
    do your national mission and play such a unique role to local
    communities in terms of our community safety. Whether it's the
    brilliant forensics that's going on right in Maryland to
    identify the guns, the bullets and so on with their unique
    tracing to the staffing that provided and at the end of the day
    you could go back to your other jobs while this community is in
    the process of recovery and healing.
        I do have specific budget questions but I wanted you to be
    able to tell your story and with that I'm going to turn to
    Senator Shelby.
        Senator Shelby. Thank you Senator Mikulski. Director Clark,
    I understand that a former marshal's daughter was wounded in
    the shootings in Virginia Tech last Monday and that also her
    efforts saved the lives of some of her classmates. I believe
    the marshal was Jim Carney, former marshal. Tell us that story;
    tell us what happened from what you know.
        Mr. Clark. It's a remarkable and a scary story. I had a
    chance to talk to Jim Carney, the retired deputy marshal. His
    daughter was among the individuals who were in the classroom, a
    German class, where most of the individuals, regrettably were
    killed.
        His daughter was one of only four who survived in that
    particular room. She was struck in the hand and one bullet
    grazed her head. I'm told that she is due to be released from
    the hospital today so, thankfully, she is making a quick and
    steady recovery. She also is credited with the other three who
    survived by helping to block the doorway to the gunman who had
    returned and was intent on finishing them off. They were able
    to hold the door back and to stave off his attempts to get back
    into the classroom.
        When I heard the story and I talked to Mr. Carney
    personally, I just could not believe the story and, of course,
    was glad that his daughter was going to recover. He was quite
    broken up by the whole event so my heart went out to him and
    the many victims of who were caught in that terrible event.

     ATF deg.NATIONAL CENTER FOR EXPLOSIVES TRAINING AND RESEARCH

        Senator Shelby. Director Sullivan, the National Center for
    Explosives Training and Research, what's the status of this
    project at the moment? I believe that we had gotten $10 million
    and you need $40 million, is that correct?
        Mr. Sullivan. I think we've estimated that the total cost
    for the project is somewhere between $40 to $45 million and the
    2006 budget, thanks to your leadership, had $5 million set
    aside specifically to do some early stages of site selection
    and development. We're extremely excited. We think this is
    really visionary.
        Senator Shelby. What will it add to ATF's ability to work
    in this area?
        Mr. Sullivan. I think when you're looking at the potential
    future threat of explosives, we have to do everything we can,
    within our ability, to protect the American public and we have
    to do it on multiple fronts.
        Obviously, in the whole area of explosives, detection is
    critically important, as are research, regulation, and post
    blast investigation. The post blast investigation reflects
    failures of the regulatory piece that protects the explosives
    material and the detection piece. The NLETR project brings a
    wealth of expertise to one location that we can use for
    research and development and sophisticated training, not only
    for Federal law enforcement agencies but for all of our State
    and local partners. There's a huge demand for training in these
    areas.
        Senator Shelby. Absolutely.
        Mr. Sullivan. Because locals recognize the vulnerabilities
    concerning explosives, I think once this center is up and
    operational, it's going to draw our resources together from all
    around the country, specialized resources that we can share
    with others that require this training. Even though this is
    very preliminary, we haven't even done groundbreaking at this
    stage of the game, we already have 11 agencies that are
    committed to sharing their expertise as part of this model. So
    it's visionary. It's something I hope will be a legacy of mine.
        Senator Shelby. Sure.
        Mr. Sullivan. Thanks to your leadership, we would hope to
    have this facility fully funded at some point in time to go
    forward.
        We have done site selection, as you know. We think the
    location at Redstone is the most appropriate location because
    of all the other expertise that's there. We have sufficient
    funding at this point in time to do some work at a range to
    allow us to use a range facility on site, to construct, not
    sophisticated classroom space, but a modified building where we
    could do some classroom training, and we have some money
    available to do some parking facilities but certainly we don't
    have sufficient funding at this point in time to do everything
    that you say that you'd want the site to have.
        Senator Shelby. Absolutely. This would carry you to another
    dimension at ATF as far as explosives, detection and everything
    else is concerned. Is that correct?
        Mr. Sullivan. Absolutely. It recognizes the expertise that
    the ATF has developed in this area over the last number of
    decades, focusing on explosives detection because of the
    threats posed by domestic and international terrorism. The
    NLETR project would bring us to that next significant level in
    terms of continuing to develop that expertise, staying several
    steps ahead of those folks that have an interest in posing a
    threat to us and to our country and capitalizing and sharing
    our resources and expertise with our partners at the State,
    local, and Federal levels.
        Senator Shelby. And also you have synergy with the Army
    there and the FBI. Is that correct?
        Mr. Sullivan. Absolutely and both have been extremely
    supportive with regards to the concept, the location and
    willingness to be part of a joint effort in the area of
    developing and sharing that expertise.
        Senator Shelby. Thank you. Madam Chairman.
        Senator Mikulski. Thank you, Senator Shelby and Senator
    Lautenberg thank you. I was concerned that, I know that you
    have to get to the Holocaust Memorial service.
        Senator Lautenberg. I did want to, Madam Chairman, if I
    can.
        Senator Mikulski. Yes.
        Senator Lautenberg. If I can take a quick couple of
    minutes?
        Senator Mikulski. Yes, yes.
        Senator Lautenberg. Is that acceptable to Senator Stevens?
        Senator Mikulski. Yes.

                         ATF deg.VIRGINIA TECH

        Senator Lautenberg. Thank you very much. I look at what
    we're witnessing here Madam Chairman and in these days of gloom
    and shock pervades our country. There can't be anyplace on our
    soil that doesn't share a feeling of personal mourning as we
    look at this incredible tragedy, almost impossible to imagine.
    Friends, when I look at the departments that each of you is
    responsible for, I salute you and the people who work in those
    departments.
        We have this acceleration of crime in all phases whether
    it's from drugs or guns and I look at the budget and the
    request for all of the Departments of Justice within Justice
    and we have about a 1\1/2\-percent increase. The request is
    $21.8 billion for 2008 and the war in Iraq costs us $3 billion
    a week, a week, so we've got 7 weeks of that cost devoted to
    all of our internal law enforcement projects that you folks are
    responsible for. We've cut out the COPS program essentially
    that's down from a level of $432 million down to nothing. Madam
    Chairman, you know how valuable that COPS program has been.
        We have to examine the terrible events at Virginia Tech and
    it needs to be done perhaps in a more sober moment entirely
    devoting our energy at that hearing to that. What did we learn
    from that? We learned that mad people, insane people, deranged
    people can do such damage. I don't understand why we continue
    to require data derived from gun purchases to be destroyed in
    24 hours. Why it is that we have 3 days to approve or deny a
    gun sale when perhaps there is more time needed.
        These aren't criminals. I'm not saying that everybody that
    buys a gun is a criminal, heavens no. And I'm not saying that
    we should wipe out the ownership of guns. I'm saying that it
    should be responsibly done and we shouldn't be trying to hide
    information, for what purpose?
        I wrote a law in 1996 that said that any spousal abuser
    should not be permitted to own a gun. It was a tough fight and
    Senator Mikulski, Senator Shelby know that I put that into a
    budget to a supplemental bill so it was must-pass legislation.
    Fought like the devil to find a way to get it through.
        We have kept 150,000 guns out of the hands of bullies. Can
    you imagine anybody who can get into that kind of a rage that
    they want to beat up their wife or beat their kids or abuse
    them in any other way, if they had been able to get their hands
    on a gun conveniently? What might have happened?
        America, wake up, wake up. We've had 11,000 deaths,
    homicides in a single year of measurement and what we found is
    that four countries, Great Britain, Germany, Japan, and Canada
    had 650 deaths and what I did was took a group that population
    is approximately ours and they had 650 deaths from handguns,
    weapons. We had 11,000 in the same year, 11,000. Why? Why did
    more than 10,000 of our citizens perish because we have these
    rules.

                       ATF deg.CRIME GUN TRACES

        I ask you Mr. Sullivan, and I'm grateful to my colleagues
    for allowing me this time. I wrote to your agency last year
    requesting the number of crime gun traces of the five-seven
    pistol. We know what a terrible weapon that is, can penetrate
    body armor; a number of those guns were recovered in New
    Jersey.
        The answer I received was, ``ATF has determined that the
    requested information cannot be disclosed to you.'' Mr.
    Sullivan, do you agree with the policy of restricting gun trace
    information this way and are you concerned that this policy
    will limit efforts to fight illegal gun trafficking.
        Mr. Sullivan. Senator, thank you for the question, is it
    specifically to the information that you were requesting and
    limiting the information to you as a Member of Congress?
        Senator Lautenberg. The number of crime gun traces of the
    five-seven pistol, weapon that's out there and can penetrate
    body armor.
        Mr. Sullivan. I'm of the opinion that that information
    could be shared with you and with this subcommittee. I think
    you have a legitimate interest in learning that information.
        In terms of restricting gun tracing information, from my
    experience as a prosecutor, a State prosecutor, and more
    recently as a U.S. attorney, I think gun tracing information
    should be considered law enforcement sensitive information and
    should only be shared with law enforcement agencies that have a
    need to know that information. That's been my approach in
    dealing with law enforcement sensitive information generally
    and it's my approach in terms of dealing specifically with gun
    tracing information.
        Now, having said that, I don't see anything, in my
    understanding or interpretation of statutory language, that
    prohibits me from sharing the gun tracing information with law
    enforcement agencies that have ongoing investigations as it
    relates to gun trafficking, patterns within their jurisdiction
    or specifically as it relates to gun tracing data based on
    weapons that they've asked ATF to trace.
        So I would hope and I'm not aware that we aren't doing
    this, but I would hope that ATF is sharing as much gun tracing
    information with law enforcement agencies that are requesting
    that information to enhance their ability to protect the people
    within their jurisdiction.
        Senator Lautenberg. And not to be shared with the Congress
    of the United States?
        Mr. Sullivan. I'm sorry?
        Senator Lautenberg. And not to be shared with Senators or
    Representatives in our Government?
        Mr. Sullivan. No, I think I said earlier, Senator, the
    information.
        Senator Lautenberg. I heard what you said, Mr. Sullivan and
    then I heard you kind of make sure that that information
    continued to be restricted.
        Mr. Sullivan. As I understand the other question you asked
    Senator, and I apologize because I did not.
        Senator Lautenberg. That's alright.
        Mr. Sullivan. Because I did not study the letter you sent.
    I did have the opportunity to read it and the response that was
    provided by ATF. I think that's more general information as
    opposed to specific law enforcement trace information. That
    type of general information, if you and this subcommittee had
    an interest in learning about what's happening generally with
    regard to types of weapons that are being traced, unless I'm
    told otherwise, could be shared with you and the members of
    this subcommittee.
        [The information follows:]
                     ATF deg.Trace Data Disclosure
        As it is ATF's policy that aggregated firearms trace data may be
    shared with members of congressional committees with jurisdictional
    authority over the Bureau, a policy consistent with current law, ATF
    will be providing the information the Senator has requested.

        Senator Lautenberg. Madam Chairman, forgive me and I have
    such respect for Mr. Sullivan, his record and law enforcement
    but the reason that this information is not available is
    because a Congressman decided that every year he would put that
    into a bill, to an appropriations bill and there is no earthly
    reason in my view that that single person should be able to
    restrict this information.
        We want to find out everything we can about this instance,
    but this is only one of many, it's just the largest of them
    all. We start with Columbine High School and go through
    shocking events in our history and we've got to find out ways
    to stop this. Thank you very much and thank you also.
        Senator Mikulski. Mr. Sullivan, of course our colleague is
    referring to the Tiahrt legislation and one suggestion is if
    you can take the Lautenberg letter and look at it in terms of
    the consequences of implementing the Tiahrt. We'll talk about
    the Tiahrt later.
        The Senator raises questions not about, what he wants to
    know, about an individual case. Rather he wants to have the
    epidemiology of information, data.
        We're now going to move on though, our two other colleagues
    have been waiting, Senator Stevens and then Senator Domenici.
    And Senator Domenici, I'll stay here as long as you need us to
    stay.
        Senator Stevens. Senator Domenici doesn't have a timeframe,
    I do.
        Senator Mikulski. Okay.
        Senator Stevens. I do want to join in congratulating you. I
    think there's been a really upbeat feeling about law
    enforcement recently because of the successes you've had.
        It's unfortunate and we all mourn the situation down in
    Virginia but from the point of view of what was going on, I
    think that your people have all been doing a much better job in
    really trying to get to the bottom of many of the problems we
    face.

                DEA deg.METHAMPHETAMINE LABS IN ALASKA

        However, I am, Ms. Tandy, a little disturbed that the
    statistics show there are fewer meth labs in my State, our
    State, Alaska, now but there's a higher level of meth in the
    State. I talked to some of your people in Anchorage. I found
    that they feel that a great deal of that is coming in now from
    the islands of the Pacific and people aren't using labs anymore
    because it's cheaper just to bring the stuff in from some
    enormous lab that's really not even looked at as far as the
    Pacific Islands are concerned. Do you have people who check
    places like Samoa and other places that we believe a lot of
    this meth is coming from? Are you attentive to the problems of
    the west being now inundated by imported meth?
        Ms. Tandy. I share your concerns about the shift in local
    domestic production of methamphetamine, which has dropped
    through the basement, which is a great thing in terms of the
    environmental risks and social child services issues, to the
    shift to the production of methamphetamine elsewhere outside of
    this country and the smuggling into this country from outside.
        Most of that is being produced in Mexico and elsewhere. The
    production in the Pacific and the areas outside of China,
    Malaysia, Indonesia, the Philippines are all matters that DEA
    is focused on. We have the largest law enforcement presence of
    any U.S. law enforcement agency outside of this country. We
    have focused our resources on the foreign side in the very
    areas that you've talked about as well as in the western
    hemisphere and beyond.
        The production of methamphetamine by foreign trafficking
    organizations has been fueled by the fact that the precursor
    chemicals for the most part come from China and are then
    diverted and used to fuel those labs in the areas that you've
    mentioned as well as in Mexico and elsewhere.
        We conduct our investigations.
        Senator Stevens. I thought we were entitled to 7 minutes?
    The set there seems to be running awfully fast.
        Senator Mikulski. You can take your time.
        Senator Stevens. I don't want to interrupt you, but I am
    limited and I do have the problem about the number of people in
    the State like mine.
        We're one-fifth the size of the United States, have the
    largest cargo landing airport now in the country and we feel a
    lot of the meth is coming in by cargo and somehow or other
    getting off of those planes that come through our Anchorage
    airport.
        I would urge you to take a look at that because I think
    with the decrease in the number of meth labs your people
    generally felt happy about it and reduce some of the effort in
    our State but the good news was as you say the fewer labs but
    the bad news is there's an overwhelming amount of meth.
        Ms. Tandy it's in small villages of 20 and 40 families.
    It's finding its way all the way through the 240 small native
    villages in my State and it is the number one problem that we
    face. I would urge that somehow you take a look at the concept
    of how many agents you have left. You only have 11 agents left
    in the whole State now.
        Ms. Tandy. I understand Senator and this has been part of
    DEA's problem. We are in a hiring freeze and are unable to
    expand our agent presence. To the contrary we are having to
    reduce our number of agents in order to meet our budget. The
    agents in Alaska, to the extent that, actually beyond Alaska,
    everywhere in the United States, those agents that were focused
    on domestic labs have shifted their focus to assisting in these
    investigations for the smuggling of finished meth into Alaska
    and elsewhere in the United States but I appreciate the point
    that you're making. It has been a concern to all of us.
        Senator Stevens. Well, I would hope that you would take a
    look at the concept of working out some cooperation with the
    various local people. This meth has to be getting out to these
    small villages through the post office. The only thing that
    goes into those villages is what we call bypass mail. Now
    somewhere someone is putting together packages that contain
    meth and we're subsidizing the transportation of that package
    into every village in the State.
        I do think it's a matter of investigation and believe me
    those villages are primarily supported by the Federal
    Government. They're native people, unemployment is about 85
    percent. How they're getting this stuff is driving us nuts and
    those kids get on this meth and they start coming into town.
    They will come to the nearest town and then they'll try to find
    their way to Anchorage or Fairbanks and they're committing
    horrendous crimes. We've got drive by shootings that we've
    never had before. We have enormous, just enormous theft and
    burglary and attacks on the person and it's coming, we believe
    because of this just overwhelming presence of meth.
        I know the rest of the country has the same problem but
    it's accentuated in our State. They must be giving it away in
    those villages in order to get them on to this habit and they
    come to town to steal and commit crimes to get money to
    continue it. So I urge you to do something about finding a way
    to work out a cooperative program to get to the bottom of this
    thing. It's taken off in the last year to the point where it is
    really crisis stage.
        I think you probably add up all the crimes that these young
    people have done, committed in our State in the last year and
    it would equal the number of deaths that took place in
    Virginia. I'm serious. It's a very serious situation in Alaska
    and we end up with 11 agents. We end up with 15 marshals and
    eight ATF officers in an area one-fifth the size of the United
    States. They can barely take care of Anchorage alone.
        I understand what you're saying and we're going to do
    something about that freeze. I don't like that freeze at all.
        Senator Mikulski. Well, if I might just comment to the
    Senator. First of all, just know that we're sympathetic to your
    situation.

                         DEA deg.HIRING FREEZE

        The second thing is in the supplemental, we lift the hiring
    freeze. Working with the administration and DEA we lifted the
    hiring freeze and have provided DEA with an additional $25
    million. So that's just as a point of reference to you Senator,
    but second, we would encourage Ms. Tandy meet with the
    Senator's very able staff because he really raises something
    that's rising to a, I think, a crisis situation.
        So know we're working with that and then anything that we
    can be doing because we don't think you should have a hiring
    freeze.
        Ms. Tandy. Thank you.
        Senator Mikulski. And we'll come back to that even to talk
    about it in a more substantial form.
        Senator Stevens. Added to that is the problem of increased
    illegal immigration into our State. We've never had that
    before, but all of a sudden now we are just inundated with
    illegals following this meth. I think meth is the key so I
    appreciate your comments.
        Senator Mikulski. Senator, any way we work with you, we're
    happy to do it because I think it's also a story that's
    happening around the country. You bet, you bet.
        Senator Stevens. Those planes come right down to this, 70
    percent of the air cargo that's coming through from the Pacific
    is coming through Anchorage now. It's coming into the rest of
    the country. This is the place to shut it off. Thank you very
    much.
        Senator Mikulski. You are welcome, sir. Senator Domenici,
    we're glad to have you back.
        Senator Domenici. Thank you very much, Madam Chairman. I'm
    delighted to be back and I don't frequent this subcommittee as
    you know while I serve on it for quite some time, but meth
    brings me running over here because New Mexico as a border
    State is having an absolute.
        There's a rage occurring in reference to meth and New
    Mexico and I think most of you who are participants in anything
    to do with meth you know that our Congressman Pearce has a done
    a pretty good job at bringing that meth problem to the surface
    in New Mexico and it is not, there's not the same problem of
    marijuana.

       DEA deg.SOUTHWEST BORDER AND METH ENFORCEMENT INITIATIVE

        Marijuana may be bigger in numbers and the like and alcohol
    might be but this one is one of the worst we've ever seen. You
    know that. It's going after all kinds of people including many
    women and they're not young women. They're women with children
    whose children have been taken away because they can't maintain
    them and so you see women truly in terrible shape, who've had
    their children removed, who are living in isolated places and
    we just have to move with a little more resources and a little
    more knowledge to try to do something about it and I understand
    that the DEA is requesting $29 million for the Southwest border
    and meth enforcement initiative. Is that correct?
        Ms. Tandy. Thank you Senator. It is correct and that
    consists of aircraft as well as technology as well as
    surveillance enhancements, intelligence sharing, pieces also
    form part of that budget request that are specifically directed
    to methamphetamine and the trafficking, production, and
    transportation of that into the United States.
        Just to put into context, Senator, there have been a number
    of improvements along the way with this shift that has really,
    it's a recent shift of the production of methamphetamine
    outside the country and even with that we have seized two
    metric tons of methamphetamine just over the past year. That is
    an increase of 129 percent in seizures of meth along the
    Southwest border.
        In addition to that we have a partnership now with Mexico
    that frankly we have not enjoyed at this level at any time
    previously, where we are conducting joint operations, as well
    as targeting meth organizations. DEA has sent to Mexico eight
    clan lab trucks to assist in the meth production operations
    against these organizations, along with some of the other
    enforcement operations that have already been addressed at this
    hearing.
        Senator Domenici. Well, I'm very much appreciative of all
    of the effort that's taking place and I congratulate all of you
    for the extra effort that meth has added to your very strong
    and difficult task.
        I'm also concerned about the Native Americans. I think that
    we're just beginning to move into those areas where our Native
    Americans live and finding, it should not have been a surprise,
    but it was to many of us that meth has entered the Native
    communities in abundance and it's because it is cheap and
    quick. If they're looking for a fix, it's quick. If they're
    looking for the results, it's not very quick. It's everlasting
    it seems like, very hard to cure, but I want to thank you for
    that and I know.
        Mr. Sullivan, I don't know you, but I have gathered that
    congratulatory remarks are in order and I would feel remiss if
    I didn't join in saying the best of luck to you.
        Madam Chairman and my good friend from Alabama, let me
    choose to give you an observation and a prediction. I shouldn't
    do this but, starting 5 years ago because of my work with the
    mentally ill and we have accomplished a great number of things.
    We're waiting now for the last bill to get passed on parity.
        I've been privileged to work with some of the smartest
    people in the United States on what's going wrong with the
    mentally ill and the commission of serious crimes such as
    murder by those who are mentally ill and have been committed to
    the institutions for care and maintenance and I will predict
    for you that the final result of this investigation will be
    twofold.
        The United States of America does not have enough centers
    for taking care of people who are mentally ill who are assigned
    to inpatient clinics by judges. We have a total lack of
    facilities across this land because when we decided to go from
    the places where we held the mentally ill we did have; no new
    facilities were built as contemplated by then President
    Kennedy.
        Congress baulked and we built none essentially. We're
    living in a kind of hand to foot creation of facilities. We got
    policemen who house more mentally ill than do any facilities.
    You know that as of this morning, more of the serious mentally
    ill are in police stations and being assigned to police cells
    than anyplace else in any other facilities.
        So number one the report is going to say what's wrong with
    America. We better build inpatient facilities on some kind of a
    partnership with our States so we have a place to take care of
    the mentally ill.
        The second thing that's going to come out unequivocally is
    that the States have not worked together to find a simple
    approach to how you get people committed and how you keep them
    committed until they get well. Right now they get out very
    quickly. When they get out is that period of time that things
    like this happen.
        We're going to have to work on it and we won't escape it.
    The States will be criticized heavily and this State in which
    it happened will be looked at very much to see what they did
    and didn't do, but eventually we're going to have to have a big
    program to build facilities in conjunction with the States and
    we're going to have to have some uniformity of in-house
    commitment where people with serious mental illnesses will stay
    in facilities rather than be released so quickly and so easily
    because we don't want to exercise jurisdiction over sick people
    but that's going to have to happen.
        I regret this day as if it was 5 years ago when I started
    reviewing the best article ever written was by the New York
    Times where they reviewed some hundred plus cases of the type
    I'm telling you about and they found that's what precisely was
    happening that most of these murders were being done by sick
    people who were released too early under the most grotesque of
    facts.
        The neighbors knew they were doing things crazy, wild, all
    kinds of things to their relatives and nonetheless nobody could
    do anything about it because they could not get the kind of
    cooperation between law and those who wanted to help put them
    away and that's going to change within the next 1\1/2\ or 2
    years in my opinion big time and we'll be in the middle of it
    because we can't leave it up solely to the States.
        I look forward to presenting some more issues to talk about
    to this subcommittee as we move ahead. Thank you very much.
        Senator Mikulski. Senator we'd welcome that. First of all
    we want to salute you because you have been a long time
    advocate for mental health services. We note with affection
    your special relationship you had with our lately departed
    colleague, Senator Wellstone, on this issue. You continue to
    carry the torch. You're exactly right. We need to be looking at
    that, the whole Congress, in a variety of our subcommittees.
        The second thing is that at this time, this is not the time
    for finger pointing. This is the time for pin pointing what
    happened here and how we can make sure that it never happens
    again.
        Each and every man and woman in this room has made a
    difference but you know, and they make a difference every
    single day in terms of protecting our country from again,
    community security or national security, which you know if we
    all worked together. You've made a difference, Senator Shelby,
    all of us in this room. You know when we all work together we
    can make change and that's why we wanted to hear you today.
        We could talk so much again about your individual missions
    of the agency, the particular budget needs that have been
    raised by my colleagues and myself but know that we're on your
    side. We want to help you be you, and we know you have a tough
    job. You come in after everything goes wrong and whether it's
    people trying to kill our troops in Afghanistan and Mr.
    Sullivan, we know that you're there and in Iraq, where Ms.
    Tandy, fighting drugs, we know you're there. You U.S. marshals
    have to guard terrorists and give them the rights that they
    wouldn't give anybody and so we're ready to work with you.
        We also have discussed among ourselves, Ms. Tandy, that
    there's certain elements of your testimony we think would be
    better addressed in a closed or classified situation. We'll
    notify you of that because we would like to pursue some of
    these issues related to the international dealing of drugs as
    well as what this means to our borders.
        There's many questions we could ask today and they can go
    to everything from gun control to border control to self
    control, but I think we've covered our topics today unless the
    panel has anything else. We will recess until next week with
    the FBI.
        Senator Shelby. Madam Chairman.
        Senator Mikulski. Senator Shelby.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Shelby. Madam Chairman, I have a number of
    questions for the panel that I'd like to submit for the record
    and I would also, Madam Chairman, think it might be in order at
    the proper time sometime to have Director Sullivan in a
    classified hearing and that might cover some of the ground that
    Senator Lautenberg had raised because what you're talking about
    is very sensitive stuff in that area, are you not, Mr.
    Sullivan? Thank you, Madam Chairman.
        Senator Mikulski. My colleague raises a new point. In terms
    of the Tiahrt, would that be better in a round table or would
    it be better if, because there are classified things to talk
    about.
        Why don't you talk with us afterward about what is the best
    mechanism because what we want to do is, we want to have the
    right policies and we want to have those policies rightly
    restored?
        That's why we want to lift these freezing caps and get you
    the people you need, you need new technologies because the bad
    guys have new technologies and you've got to be, we've got to
    help you be as fit for duty as you can.
        Did you want to?
        Senator Domenici. Yes, I just want to say I hope my
    observations were not construed to be pin pointing.
        Senator Mikulski. No, please, Senator, that's what I was
    saying. No, you were pin pointing, you weren't finger pointing.
    You were saying we got to get real about providing a continuing
    of service for mental health.
        As you know sir, my professional background is that of a
    social worker and also my involvement whether it's been in
    preventing domestic violence to worrying about our police
    officers, I've got a well known and beloved police officer in
    Maryland 3 weeks before retirement, a guy shot through the door
    and killed him because he didn't take his meds.
        So, I mean, no, no, your points were well taken. They were
    right on the mark and we think that not only this subcommittee
    but the entire Senate.
        Senator Domenici. Oh, yes.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                   Questions Submitted to Michael J. Sullivan
               Questions Submitted by Senator Barbara A. Mikulski
                                tiahrt amendment
        Question. Since 2004, the CJS Bill has included language known as
    the Tiahrt Amendment, which restricts the sharing of ATF gun trace
    information. The President's budget continues this language with a
    modification.
        Please explain the Tiahrt language.
        Answer. Since 2003, ATF's annual appropriation has contained a
    nondisclosure provision applicable to firearms trace data which is
    referred to as the ``Tiahrt Amendment.'' This language prohibits ATF
    from expending funds to disclose any of the contents of the Firearms
    Tracing System (FTS) or any required Gun Control Act (GCA) information
    to anyone other than a law enforcement agency or a prosecutor solely in
    connection with and for use in a bona fide criminal investigation or
    prosecution, and then only such information pertaining to their
    geographic jurisdiction.
        As originally drafted, the Tiahrt Amendment codified ATF's
    longstanding policy to provide access to firearms trace results to the
    law enforcement agency that has jurisdiction over the trace request
    while safeguarding those results from third parties. This policy, which
    is supported by law enforcement organizations such as the Fraternal
    Order of Police, recognizes ATF's interest in deciding how to utilize
    and whether to disseminate its sensitive law enforcement information,
    since premature and indiscriminate disclosure of firearms trace results
    could compromise criminal investigations and potentially jeopardize the
    safety of witnesses, informants, and law enforcement personnel.
    Moreover, once law enforcement agencies receive trace data from ATF,
    they remain free to share their firearms trace data with other law
    enforcement entities, since such sharing is consistent with this
    policy.
        Question. How does the President's budget request modify the
    language?
        Answer. The revised language first clarifies and confirms that
    firearms trace data may be shared with tribal and foreign law
    enforcement agencies. This corrects an unintentional drafting error and
    is wholly consistent with ATF's law enforcement mission and the express
    purpose of the Gun Control Act.
        The revised language also clarifies and confirms that firearms
    trace data may be shared with Federal agencies for national security
    purposes. In the Department's view, Congress never intended to prohibit
    intelligence or security agencies from requesting firearms traces in
    the course of anti-terrorist or homeland security investigations.
    Sharing of information pursuant to such requests is wholly consistent
    with the Department of Justice mission.
        The revised language also removes the ``geographic jurisdiction''
    limitation. The current appropriations restriction allows ATF to share
    information ``as it pertains to the geographic jurisdiction of the law
    enforcement agency requesting the information.'' This requirement was
    removed to make clear that state and local law enforcement agencies
    that receive trace information may lawfully disclose that information
    to other law enforcement agencies within their investigative
    discretion. Despite the removal of the ``geographic jurisdiction''
    limitation in the President's fiscal year 2008 budget language, ATF
    will continue its longstanding policy of disclosing firearms trace
    results only to the law enforcement agency that requested ATF to trace
    the firearm. This policy prevents any indiscriminate disclosure of
    trace information that could jeopardize pending investigations and the
    safety of witnesses, informants, and law enforcement personnel.
        Finally, the revised language requires that law enforcement
    agencies or personnel ``certify'' that the trace information is being
    sought in connection with a bona fide criminal investigation or
    prosecution. The Department of Justice's position is that this
    requirement to ``certify'' does not impose any new responsibilities on
    law enforcement. Under the Gun Control Act, ATF can only require that
    federal firearms licensees respond to ATF with records for determining
    the disposition of firearms (i.e. ``trace information'') when ATF's
    request is connected to a legitimate law enforcement investigation. As
    a result, there has always been a requirement that local law
    enforcement trace requests to ATF also be connected to a legitimate law
    enforcement investigation. The current trace request form, which
    requires the requesting agency to enter an NCIC crime code, is already
    a form of certification that satisfies the requirement in the fiscal
    year 2008 budget request. If a law enforcement officer presently
    falsifies information on the trace data request form, he could be
    subject to prosecution under 18 U.S.C. 1001 in the same manner as
    others who violate the statute by lying on a federal form. That is true
    independent of the appropriations language.
        Question. As I understand the President's proposal--it is very
    detailed permanent authorizing language including--is that correct?
        Answer. The proposal does contain ``language of futurity'' which
    applies to the fiscal year in question and thereafter. Such language of
    futurity has also appeared in previous iterations of the Tiahrt
    Amendment.
        Question. Is the Administration working with the authorizing
    committees on this language?
        Answer. The Department of Justice is not currently, but would be
    pleased to work with the authorizing committees on this language.
                           federal firearms licensees
        Question. What are the tools available to put corrupt gun dealers
    out of business?
        Answer. Under 18 U.S.C. 923(e), ATF has the authority to revoke a
    Federal firearms license if a dealer commits a willful violation of the
    Gun Control Act of 1968 (GCA). ATF conducts FFL inspections to verify
    that FFLs are complying with the provisions of the GCA and its
    implementing regulations, and to detect and prevent the diversion of
    firearms from legal to illegal commerce. ATF also investigates any
    substantive information regarding illegal activity by a Federal
    firearms licensee (FFL), and may recommend criminal prosecution for
    willful violations of the GCA.
        Question. Isn't suing them an effective way of shutting them down?
        Answer. Suing an FFL is not an option available to ATF nor do we
    think it would be an effective tool for overseeing and regulating the
    firearms industry. ATF meets its statutory and regulatory obligations
    through criminal investigation of FFLs that commit illegal acts and
    through its regulatory inspection program. Therefore, an FFL that is
    not meeting its statutory and regulatory obligations could be ``shut
    down'' through criminal investigation and subsequent prosecution and
    through an administrative remedy, such as license revocation.
        Question. What is ATF doing to put these gun dealers who sell
    illegal guns out of business?
        Answer. ATF is committed to enforcing the Federal firearms laws as
    enacted by Congress. As allowed under the GCA, ATF revokes Federal
    firearms licenses for willful violations of the Act. Over the past
    several years, there has been an increase in license revocations,
    partially due to additional training for field managers, improved
    guidelines for conducting inspections, and better utilization of
    information to identify which licensees should be inspected. ATF
    typically revokes licenses where the FFL has willfully and repeatedly
    failed to account for firearms or to ensure buyer eligibility. In
    addition to these administrative actions, under certain circumstances,
    ATF may investigate firearms dealers for criminal violations of the
    GCA.
        ATF works on a daily basis to assist FFLs in their compliance
    obligations. The vast majority of inspections in which licensees are
    cited for violations do not result in revocation. In fact, the
    inspection process usually results in greater compliance and fewer
    violations during subsequent inspections. Overall, ATF revokes only a
    small percentage of FFLs where violations are found. In 2006, ATF
    revoked 115 licenses out of 7,000 inspected (1.4 percent) and a
    licensee population of approximately 108,000. The Department is
    currently developing a legislative proposal, the Violent Crime and
    Anti-terrorism bill, which proposes graduated sanctions for use against
    FFLs that are in violation of certain GCA provisions, but which do not
    rise to the level of license revocation. ATF believes that this will
    also promote greater FFL accountability and compliance.
        A review of the most current data in our case management systems
    indicates that the following number of criminal charges were brought
    against FFLs since fiscal year 2000:

    ------------------------------------------------------------------------
                                                                     Number
    ------------------------------------------------------------------------
    Fiscal year:
        2000.....................................................         14
        2001.....................................................         17
        2002.....................................................         20
        2003.....................................................         33
        2004.....................................................         42
        2005.....................................................         31
        2006.....................................................         32
    ------------------------------------------------------------------------

        Citations: 18 U.S.C. 1001; 18 U.S.C. (2); 18 U.S.C. 47; 18 U.S.C.
    111; 18 U.S.C. 371; 18 U.S.C. 844(h)(1); 18 U.S.C. 844(i); 18 U.S.C.
    922(a)(1)(A); 18 U.S.C. 922(a)(2); 18 U.S.C. 922(a)(5); 18 U.S.C.
    922(a)(6); 18 U.S.C. 922(b)(2); 18 U.S.C. 922(b)(3); 18 U.S.C.
    922(d)(1); 18 U.S.C. 922(d)(3); 18 U.S.C. 922(d)(5)(B); 18 U.S.C.
    922(d)(9); 18 U.S.C. 922(g)(1); 18 U.S.C. 922(g)(3); 18 U.S.C.
    922(g)(8); 18 U.S.C. 922(j); 18 U.S.C. 922(k); 18 U.S.C. 922(l); 18
    U.S.C. 922(m); 18 U.S.C. 922(o); 18 U.S.C. 922(s); 18 U.S.C. 922(v)(1);
    18 U.S.C. 922(w)(1); 18 U.S.C. 924 (a)(1)(A); 18 U.S.C. 924(c); 18
    U.S.C. 1341; 18 U.S.C. 1343; 18 U.S.C. 1503; 18 U.S.C. 1956(a)(1); 21
    U.S.C. 841(a)(1); 26 U.S.C. 5861(d); 26 U.S.C. 5861(e); 26 U.S.C.
    5861(f); 26 U.S.C. 5861(g); 26 U.S.C. 7206;
        Question. Does ATF have all the resources it needs to go after
    these corrupt gun dealers?
        Answer. After the implementation of the Safe Explosives Act in
    2002, ATF increased its total number of field IOIs from 420 to 650
    (fiscal year 2004-2005), and currently ATF has 594 IOIs on board. The
    Safe Explosives Act requires that ATF inspect each explosives industry
    member at least once every three years. This requirement places a
    significant demand on ATF's inspection force and it requires ATF to use
    flexibility in adjusting the total number of inspector hours dedicated
    to the firearms industry. ATF regularly reviews its programs and
    results to reduce inefficiency and increase effectiveness. This process
    includes the evaluation of all of our inspection procedures. In this
    way, ineffective procedures can be identified, and ATF's inspection
    efficiency is maximized.
        Recall inspections of FFLs have shown a resulting increase in
    compliance for those licensees who have previously been inspected. The
    increased compliance has resulted in fewer violations and license
    revocations. Fiscal year 2006 recall inspections resulted in an
    increased compliance rate of 91 percent for inventory discrepancies and
    an increased compliance rate for 64 percent for total violations.
        Question. What are the statistics on the number of rogue dealers
    selling illegal guns to criminals?
        Answer. A review of current data in our case management systems
    indicates that in fiscal year 2006, 32 gun dealers had criminal charges
    brought against them for violating Federal gun laws. In addition, 115
    licensees had their FFL revoked through the regulatory inspection
    process. It is important to note that the revocation of a FFL is not
    indicative of criminal activity. The graduated sanctions for FFLs
    proposed in the Department's draft ``Crime bill'' will help address
    this issue and revocations will continue to be reserved for the worst
    licensee violations. Below is a chart that shows the number of
    revocations for the past several years.

    ------------------------------------------------------------------------
                                                               FFLs Revoked
                              Year                               National
                                                                  Totals
    ------------------------------------------------------------------------
    2004....................................................              54
    2005....................................................             104
    2006....................................................             115
    ------------------------------------------------------------------------

                                     ______

                Questions Submitted by Senator Richard C. Shelby
                               funding shortfall
        Question. Your fiscal year 2008 budget requests were developed long
    before passage of the Joint Resolution.
        Can each of you tell this Committee if the 2008 budget request will
    meet your current operating needs? If not, can you tell the Committee
    if the Department has begun to engage in any cost savings to mitigate
    any negative impacts from 2007 to 2008?
        Answer. ATF supports the fiscal year 2008 President's budget
    request that is currently pending approval with Congress. The
    President's request was the result of an extensive deliberative process
    and strongly supports ATF's and the Department of Justice's mission to
    reduce violence and protect our citizens.
        Question. Do you expect to submit a budget amendment to ensure that
    your critical law enforcement operations are not negatively affected by
    any funding shortfall in your 2008 request?
        Answer. No.
                           gangs and gun trafficking
        Question. Mr. Sullivan, in 2006 the ATF referred more gang related
    defendants for prosecution than any other Federal law enforcement
    agency.
        Can you tell us more about ATF's success in going after gangs?
        Answer. ATF has approximately 2,000 special agents dedicated
    exclusively to investigating violent crime and gangs. In fiscal year
    2006, ATF initiated 2,023 gang related cases. This represents an
    increase of 157 percent from 2002. Additionally in fiscal year 2006,
    1,680 defendants in gang related cases initiated by ATF were convicted,
    an increase of 289 percent from fiscal year 2002. In total, ATF has
    referred more than 10,000 gang members for prosecution between fiscal
    year 2003 and fiscal year 2006.
        ATF has long been involved in investigations of groups such as the
    Mara Salvatrucha (MS-13), organized criminal Asian gangs, violent white
    supremacists, and outlaw motorcycle organizations such as the Hell's
    Angels and the Banditos. For example, an ATF-Baltimore investigation
    led to Racketeer Influenced and Corrupt Organization Act (RICO) charges
    in a MS-13 gang case against 23 subjects who have been arrested and
    indicted. The April 2006 indictment charged numerous RICO predicate
    acts including seven homicides and numerous shootings, beatings, and
    other violent crimes in aid of racketeering. ATF coordinates efforts of
    Federal, State and local law enforcement working through the Regional
    Anti-Gang Enforcement Task Force to combat violent Latino gangs in
    Maryland's Prince George and Montgomery Counties. Twenty-three MS-13
    gang members have been charged in a 36 count federal indictment
    including numerous shootings and other assaults, kidnapping, seven
    homicides, kidnapping, witness intimidation and other violent crimes.
        In January 2007, 13 members of the MS-13 street gang were arrested
    and indicted following a year-long joint investigation conducted by ATF
    and the Nashville Metropolitan Police Department. During the
    investigation, information was developed linking Nashville-based MS-13
    members and associates with seven shootings, three alleged murders,
    several planned murders, threats and intimidation, and other violent
    crimes that occurred in 2006. The defendants were indicted on
    racketeering conspiracy charges. If convicted, the defendants face a
    maximum penalty of life in prison on the RICO conspiracy charges.
        Question. What type of operational intelligence does ATF use to go
    after these criminals?
        Answer. ATF partners with other Federal law enforcement agencies
    and State and local law enforcement to investigate the most egregious
    violent criminals and violent criminal organizations. ATF special
    agents work with local police to try and identify the ``worst of the
    worst'' gang members and target these violent offenders first--using
    undercover operations, surveillance, wiretaps, and the controlled
    purchase of drugs, guns, explosives, and other contraband to identify
    and attack the gang's hierarchy. For example, in Chicago, ATF has used
    Title III wire taps in numerous gang investigations and recently
    completed a RICO case against the Aurora Insane Deuce gang. This case
    has been described by personnel at the U.S. Attorneys Office in Chicago
    as the template for future RICO gang investigations.
        ATF is also an active participant in the National Gang Targeting,
    Enforcement and Coordination Center (GangTECC), which is a DOJ-led task
    force with a mission to disrupt and dismantle the most violent gangs in
    the United States in the interest of national security, border
    protection, and public safety. Three ATF special agents, including one
    who is serving as the first Deputy Director, are supporting GangTECC
    activities. GangTECC serves as a central coordinating center for multi-
    jurisdictional gang investigations involving Federal law enforcement
    agencies.
        ATF's 23 Field Intelligence Groups (FIGs) provide intelligence
    services and support to ATF field offices throughout the United States.
    These Field Intelligence Groups are comprised of Special Agents,
    Intelligence Research Specialists, and Investigative Analysts who
    provide specialized support by producing crucial tactical and strategic
    intelligence products and other analytical services. FIGs provide
    investigative leads using gun trace data, multiple firearms sales, and
    firearms theft reports. Field Intelligence Groups also compare and
    share Tactical Intelligence collected in support of investigations with
    OSII IRS and National Gang Intelligence Center staff to help build on
    Strategic Intelligence that benefits gang investigations across the
    United States. They also serve as the conduit of information between
    field personnel assigned to the local Joint Terrorism Task Force (JTTF)
    and ATF.
         national center for explosives training and research--redstone
        Question. ATF now has $10 million of the more than $40 million
    necessary to build a permanent site for the National Center for
    Explosives Training and Research NCETR (pronounced N-seed-R).
        Can you tell us the status of this project?
        Answer. ATF has been working closely with the Redstone Department
    of Public Works and the Army Corp of Engineers on this project. An
    Exhibit 300 (Capital Asset Plan and Business Case Summary) for the
    NCETR project has been completed and submitted via the electronic
    Capital Planning and Investment Control (e-CPIC) system. ATF is
    finalizing the design for the National Center for Explosives Training
    and Research (NCETR) with the Army Corps of Engineers and is
    anticipating a final product in early July. Additionally, ATF is
    awaiting an environmental assessment to be completed by Redstone
    Arsenal. Once the environmental assessment is complete, ATF will begin
    construction of an explosives range on the south end of the base, as
    plans for the range have been completed. Upon completion, ATF will
    begin explosives training courses at Redstone.
        Question. Once completed what will this training center provide to
    the ATF that does not exist today?
        Answer. ATF is tasked with being the lead Federal agency on
    explosives incidents and has developed expertise and fostered a strong
    reputation on such matters. The demands placed upon ATF for Federal,
    State, local, international and military training and research are
    many. NCETR will ensure that we meet those demands.
        NCETR will provide a physical infrastructure for the experts in the
    explosives field to conduct advanced research, exploit intelligence
    related to explosives and improvised explosives devices, and train in
    the most advanced techniques to deter and prevent the criminal misuse
    of explosives. The number and types of classrooms and the range space
    at NCETR will allow ATF to substantially increase its training
    capacity. For instance, at our current facility we are generally
    limited to detonating explosives of 50 pounds or less. However, the
    future facility at Redstone will allow us to detonate a 500 pound
    explosive, which is equivalent to a vehicle bomb. This would give us
    the ability to train for real world applications. In addition, NCETR
    will provide a location to leverage our partnerships on a full time
    basis for training and research opportunities.
        Furthermore, this facility will provide the explosives community in
    law enforcement and DOD something that does not exist today. Current
    Federal resources primarily address render safe capabilities and only
    cover approximately 20 percent of the explosives field. NCETR will
    provide the venue and capacity to impact the other 80 percent of the
    explosives field, including advanced training, research, intelligence
    and investigations. ATF is uniquely positioned, as a result of its
    broad explosives related expertise, to manage and deliver comprehensive
    and progressive training programs with offerings of introductory,
    advanced, and specialized fire and explosives training programs to a
    diverse audience of domestic, military and international students.
    These students comprise a broad spectrum of learners, from first
    responders to prosecutors. The NCETR facility will be the first of its
    kind in size and scope related to explosives training.
        Question. Do you believe this center will add to ATF's operational
    expertise?
        Answer. Yes. As stated above, this facility will provide ATF with
    the opportunity to advance our explosives expertise through research
    partnerships, and share the results of that research with our law
    enforcement and military partners.
        NCETR, through collaboration, will further our understanding of
    explosives scenes to train crime scene personnel to identify, collect
    and process evidence necessary for a conviction of a suspected
    terrorist or other crime suspect. The ATF United States Bomb Data
    Center (USBDC), a nationwide and international database at the
    forefront of data collection and dissemination, also will be located at
    Huntsville. Finally, through our regulatory authorities, ATF will share
    its expertise with State and local entities to ensure consistency in
    reporting and gathering data.
                                   explosives
        Question. Director Sullivan your agency's fiscal year 2008 budget
    request includes $10 million to support ATF's arson and explosives
    programs.
        Answer. The $10 million in the fiscal year 2008 President's budget
    for the Explosives User Fee Offset is an increase that targets ATF's
    highest priorities which include Explosives Enforcement Activity,
    Explosive Industry Operations, Canine Enforcement Activity and Safe
    Explosives Act implementation.
        Question. Can you tell us more about ATF's role in enforcing
    Federal laws as they relate to destructive devices, explosives and
    arson and how this request will assist your agency in its critical
    mission requirements?
        Answer. ATF is the primary Federal agency responsible for
    administering and enforcing the regulatory and criminal provisions of
    the Federal laws pertaining to explosives, bombs and other destructive
    devices, and arson. ATF's mission includes deterring and investigating
    violations relating to destructive devices, explosives and arson. ATF
    is in a unique position to not only investigate arson and explosives
    related crimes and regulate commerce in explosives but also to provide
    intelligence and training to other law enforcement partners on these
    critical matters.
        Since 1978, ATF has investigated more than 28,000 incidents
    involving explosives. Since 1978, ATF has investigated 79,161 arson and
    explosives incidents. In fiscal year 2006, ATF initiated 4,060 arson
    and explosives investigations, of which 2,222 were explosives cases.
    These cases involved the investigation of over 13,000 bombings and
    15,000 incidents involving recovered explosives, including homemade
    explosives and improvised explosives devices. ATF initiated over 3,500
    investigations concerning thefts of explosives and explosives materials
    and has conducted thousands of regulatory inspections of licensed
    explosives dealers and manufactures. ATF personnel have also been
    involved in virtually every bombing incident in the United States
    including the 1993 World Trade Center Bombing; the UNABOMB
    investigation; the Oklahoma City Alfred P. Murrah Federal Building
    bombing; and the Centennial Park Bombing.
        Our Fire Research Laboratory (FRL) provides state-of-the-art
    forensic fire science expertise to aid fire investigations. The FRL has
    the capability of simulating fire scenarios approaching a quarter-acre
    in size, to scale, under controlled conditions, which allows for
    detailed analysis. It is the only such facility in the United States
    dedicated to providing case support in fire investigations using
    forensic fire science.
        All arson and explosives incident databases within the Department
    of Justice have been consolidated by ATF into the Bomb Arson Tracking
    System (BATS) which now has over 42,000 records from over 700 agencies
    and is accessible to Federal, State and local law enforcement agencies.
    In addition to its use as an incident database, BATS serves as a case
    management system by arson and explosives incident investigators at all
    levels of government.
        This budget request will ensure that the most advanced training
    opportunities will continue to be offered to all military and law
    enforcement agencies in the United States. Currently, several Federal
    entities, including the Hazardous Devices School (HDS) operated by the
    United States Army on behalf of the FBI, offer explosives related
    courses. However, these training facilities offer curricula that are
    narrowly focused along specific occupational requirements. For example,
    the HDS trains bomb technicians exclusively on basic electronics and
    how to render safe an explosive device. The NCETR training model will
    compliment these existing facilities through the delivery of training
    programs not available elsewhere and through applied research projects
    that will enhance the programs offered at other existing facilities.
        ATF provides specialized resources to train and assist other
    Federal, State, local and foreign law enforcement agencies in fire and
    explosives investigation, as well as explosives disposal. These
    training programs address all aspects of fire and explosives
    investigations including statutory and regulatory requirements, first
    responders, bomb technicians, post-blast reconstruction and
    investigation, forensic analysis, improvised explosives mixtures, IED
    electronics, explosives disposal, chemistry, and courtroom techniques.
        ATF has also partnered with DOD's Joint IED Defeat Organization to
    produce the Military Post Blast Investigation course provided to
    military EOD personnel preparing for deployment to combat. Currently,
    DOD funds ATF's detailee stationed at JIEDDO in Fort Irwin, California.
    DOD provides housing and per diem and finances all travel expenses
    related to JIEDDO training. ATF currently has one Special Agent
    Certified Explosives Specialist (SACES) on a not to exceed 1 year
    detail to Fort Irwin. Subsequent to the 1 year assignment, ATF will
    either PCS or detail another SACES to Fort Irwin. It is anticipated
    that DOD JIEDDO will fund any PCS costs, per the DOD/ATF MOU.
        ATF inspects the explosives industry to ensure compliance with
    storage, safety and security related requirements of federal law. ATF's
    relationship with the explosives industry also provides unique
    investigatory and technology resources to the Agency. ATF investigators
    are ideally positioned to thwart criminal activity at every level from
    the theft or illegal purchase of explosives to the interdiction and
    neutralization of these explosives.
        With this budget request, ATF will continue to utilize its
    expertise to help the explosives industry comply with federal law,
    prevent the unlawful acquisition of explosives, and promote industry
    and law enforcement partnerships to reduce public safety risks. ATF
    will also continue to draw upon its expertise in fire and explosives
    investigations to assist other Federal, State, local and foreign law
    enforcement agencies with training and investigations.
        Question. ATF trains canines to not only detect explosives but also
    to assist in the detection of accelerants used to start fires. Can you
    tell us more about the arson and explosives canine program?
        Answer. ATF trains accelerant detection canines for State and local
    fire departments, police departments, and State fire marshal's offices.
    Currently, there are 85 active accelerant detection teams in the United
    States. These canine teams are utilized in fire investigations to help
    identify potential points of origin started by ignitable liquids. Each
    year in the United States, deaths, injuries, and millions of dollars of
    property damage are caused by intentionally set fires. ATF-certified
    accelerant canines are an essential tool in detecting minute traces of
    substances which have been used to start fires. Accelerant detection
    canines also serve as a critical part of ATF's National Response Teams.
    These highly-trained canines serve side by side with trained fire
    investigators and forensic chemists to help solve some of the nation's
    costliest and deadliest arsons.
        ATF's canine programs produce extremely reliable, mobile, accurate,
    and durable explosives and accelerant detection tools, capable of
    assisting law enforcement and fire investigators with the escalating
    threat faced by communities worldwide. ATF has trained 519 explosives
    detection canines and 113 accelerant detection canines.
        In 1997, ATF began training explosives detection canine teams for
    State, local, and other Federal agencies. As of April 30, 2007, there
    are 120 active ATF-certified explosives detection canine teams working
    throughout the United States. Thirty-four of these teams include ATF
    special agent canine handlers, and 86 are explosives detection canine
    teams for other federal, State, and local agencies. ATF also trains and
    provides explosives detection canines for foreign countries, in
    conjunction with the U.S. Department of State, Office of Anti-Terrorism
    Assistance, to protect U.S. citizens and interests abroad. To date, ATF
    has trained 339 explosives detection canines for the following 17
    countries: Israel, Italy, Argentina, Cyprus, Greece, Chili, Egypt,
    Jordan, Malaysia, Australia, The Czech Republic, Poland, South Africa,
    Thailand, Bahrain, Qatar, and Mexico.
                                     ______

                     Questions Submitted to Karen P. Tandy
                Questions Submitted by Senator Patrick J. Leahy
                         dea state and local assistance
        Question. The Justice Department's Edward Byrne Memorial State and
    Local Law Enforcement Assistance Formula Grant Program (``Byrne
    grants'') helps state and local governments address the law enforcement
    needs in their own communities. Historically, a large share of this
    grant funding has targeted investigating and prosecuting major drug
    dealers, as well as fostering multi-state operations to support
    national efforts to reduce drug crimes.
        Since fiscal year 2002, funding for justice assistance programs in
    the Justice Department has fallen dramatically from $2.2 billion to
    $800 million--a cut of more than 63 percent. While reductions in crime
    and drug use rates over the past 10 years have been significant, they
    have leveled off in the past several years and, in some instances, have
    even begun to creep higher. The majority of the reductions occurred
    when state and local law enforcement assistance accounts were funded at
    high levels.
        State and local law enforcement have always been the lynchpins of
    community safety. Are you concerned that reducing federal involvement
    in Byrne assistance grants to state and local entities will lead to
    less effective law enforcement?
        Answer. Despite the reduction, we will continue to work side-by-
    side with State and local law enforcement through our domestic offices
    and task forces. We will also continue to share intelligence with and
    provide training to our State and local partners.
        There are two narcotics task forces in the State of Vermont--the
    Vermont State Police Task Force and the DEA Task Force. The Vermont
    State Police Task Force is made up of three squads--Southern,
    Northeast, and Northwest. It is staffed as follows:
      --2 State Trooper positions funded by the State of Vermont;
      --6 State Trooper positions funded by the federal Meth Grant;
      --3 State Trooper positions funded by the Byrne Grant;
      --4 local Police positions funded by the Byrne Grant;
      --2 local Police positions funded by the federal Meth Grant; and
      --3 local Police positions funded by the State of Vermont.
        The DEA Task Force is located in the Northwest part of Vermont. It
    includes two HIDTA positions and is staffed as follows:
      --6 DEA Special Agents;
      --1 Burlington Police Detective;
      --1 State Trooper (included in the above 20 positions);
      --1 Essex County Sheriff's Deputy;
      --1 Lamoille County Sheriff's Deputy; and
      --1 Border Patrol Agent.
        Although more difficult, DEA will seek to maintain the necessary
    coverage throughout the State and service the needs of the communities
    as drug cases expand. In a state such as Vermont, DEA relies heavily on
    State and local counterparts for assistance, therefore a reduction in
    the Byrne Grant positions will likely impact State and local
    participation. However, DEA has a strong partnership with State and
    local law enforcement and these relationships will work to service the
    communities of Vermont with or without the positions. State and local
    law enforcement organizations have always demonstrated a commitment to
    working with DEA, and this will not change.
        DEA will continue work with its task force and the remaining
    Vermont State Police Task Force positions. Currently, the Southern
    Vermont State Police Task Force conducts narcotic investigations in the
    Southern part of the state. The work of this task force has been
    extremely helpful to DEA because drug trafficking organizations come
    from Massachusetts or New York, conduct business in Southern Vermont,
    and then return to their originating states. Once these individuals
    have been identified, the U.S. Attorney's office becomes involved,
    along with DEA, and the investigation continues back into the source
    States resulting in the indictments of these individuals and groups
    impacting Vermont.
        The Northeast Vermont State Police Task Force conducts
    investigations along the I-91 corridor and they also coordinate with
    the U.S. Attorney's office and with DEA on apprehending the cross state
    and cross Canadian border drug traffickers. The Northwest State Police
    Task Force conducts investigations within the same immediate area as
    the DEA Task Force. When investigations overlap the two task forces are
    adept at coordinating, however they seldom cross paths, demonstrating
    the amount of work to be done in the area.
        Question. In Vermont, state and local entities have long
    collaborated with the national government in fighting drugs. How can
    state and local anti-drug entities partner with DEA to curb drug
    trafficking when your fiscal year 2008 budget request reduces federal
    assistance to states in this area?
        Answer. Despite the elimination of the MET program in fiscal year
    2008, DEA will continue to work side-by-side with our State and local
    law enforcement partners by sharing intelligence, providing training,
    and participating in task forces. DEA assists State and local law
    enforcement in many ways, for example:
      --DEA's EPIC Open Connectivity Project provides web-based access to
            approximately 1,800 Federal, State, and local partners on an
            annual basis. Users can query and access law enforcement data
            maintained by EPIC.
      --In fiscal year 2006, DEA shared $274 million in State and local
            proceeds with State and local law enforcement, a 25 percent
            increase over the $219 million shared in fiscal year 2005,
            including a 40 percent increase in the funds shared with
            Sheriffs. This level of sharing is expected to continue.
      --In fiscal year 2006, DEA trained over 41,000 S&L officers,
            including over 1,000 in meth lab clean up and training.
      --By the end of 2008, DEA plans to complete a clandestine laboratory
            training facility to better train more State and local
            officers.
        DEA will also continue to support State and local law enforcement
    through our domestic offices and task forces. DEA leads over 200 State
    and local task forces, including over 1,600 DEA Special Agents and over
    2,100 State and local task force officers, all of whom are dedicated
    full time to address drug trafficking, including trafficking in our
    local communities.
                            prescription drug abuse
        Question. In December 2006, the University of Michigan released a
    national survey, called ``Monitoring the Future''--the largest and most
    in-depth survey of youth drug use in the nation measuring drug, alcohol
    and cigarette use and related attitudes among teenagers. The study
    revealed, among other things, that there was a thirty percent increase
    in the use of the prescription drug OxyContin last year. I understand
    that in April of 2001 the DEA implemented a comprehensive National
    Action Plan to reduce the diversion and abuse of OxyContin.
        How many DEA investigations and arrests have led to successful
    prosecutions in OxyContin cases since 2001?
        From April 2001, when the OxyContin National Action Plan was
    implemented, to the end of fiscal year 2006, DEA initiated 970
    OxyContin (both brand name and generic) investigations and made 912
    OxyContin-related arrests. Though DEA databases do not comprehensively
    track prosecutions, the majority of DEA arrests result in successful
    prosecutions. The following are two examples:
      --On July 10, 2006, Thomas Merrill, MD was sentenced in the Northern
            District of Florida in Pensacola, to life imprisonment on six
            counts of over-prescribing OxyContin and other controlled
            pharmaceuticals resulting in the deaths of five individuals. He
            was also sentenced to concurrent twenty, ten, and five year
            terms of imprisonment on an additional 92 counts including wire
            fraud and defrauding health care benefits programs.
      --On September 1, 2004, Fred J. Williams, MD was sentenced in the
            Northern District of Florida to life imprisonment following
            conviction on 94 counts of drug offenses arising out of his
            illegal dispensing of OxyContin. Williams was writing
            prescriptions for known drug abusers using several variations
            of a patient's name in an apparent attempt to avoid attracting
            attention at local pharmacies. Williams wrote over 600
            prescriptions to 150 people, none of whom were identified as
            patients. At the time of sentencing, the judge admonished Dr.
            Williams for wreaking havoc on the community and destroying
            lives.
        Question. In 2002, the Justice Department Inspector General found
    that despite the widespread problem of controlled pharmaceutical
    diversion and abuse, ``the DEA had been slow to commit resources to
    address this problem.'' In a July 2006 follow up review, the Inspector
    General found that ``from fiscal year 2002 to fiscal year 2005, the DEA
    increased the percentage of time that diversion investigators spent
    investigating Internet diversion from 3 percent to 11 percent.''
        What percentage of time has DEA diversion investigators spent
    investigating Internet diversion from fiscal year 2005 to the present?
        Answer. Since the 2002 OIG report, DEA has worked diligently to
    address the growing problem of pharmaceutical drug abuse in the United
    States. DEA attempts to leverage all of its resources to address this
    serious problem. In addition to having Diversion Investigators conduct
    Internet and other types of diversion cases, Special Agents,
    Intelligence Analysts, and Task Force Officers routinely work on these
    types of investigations. DEA also prides itself in working shoulder-to-
    shoulder with our state and local counterparts on all investigations
    including diversion investigations.
        In fiscal year 2005, 11.4 percent of Diversion Investigator (DI)
    work hours were spent on Internet cases. During the first half of
    fiscal year 2007, 16.8 percent of DI work hours were spent on Internet
    cases, an increase of 47 percent over fiscal year 2005.
        In addition to investigative work, DEA has devoted significant
    resources to targeting efforts using ARCOS and SearchPoint, taking
    administrative action, such as Immediate Suspensions and Show Cause
    Orders, on pharmaceutical wholesalers and distributors found to be
    supplying Internet pharmacies. Further, DEA is also working closely
    with legitimate Internet-related businesses, such as credit card
    companies, express parcel carriers, and Internet Service Providers, to
    solicit their cooperation in shutting down illegal Internet pharmacies.
        Question. In its 2006 report, the Inspector General examined
    several investigative tools that are part of DEA's overall operational
    strategy, including the Online Investigations Project (OIP), telephone
    and online hotlines, undercover equipment, and training in conducting
    Internet diversion investigations. The Inspector General found that
    although the OIP has become a valuable investigative tool, ``it cannot
    automatically identify web sites with the highest volume of suspect
    pharmaceutical sales as originally intended.''
        Are you concerned that, contrary to the original intent of OIP, DEA
    may not possess the resources or capacity to identify rogue online
    pharmacies with the highest volume of suspect sales?
        Answer. Although the OIP has not provided DEA the originally
    intended capabilities to proactively search the Internet and identify
    major violators, it is used daily to provide background information on
    suspect websites. In addition, DEA analysts and diversion investigators
    have demonstrated a limited capability to produce more detailed link
    analyses of groups of related websites.
        DEA has recognized and acted upon the continuing requirement to
    proactively and efficiently search the Internet and identify illicit
    online pharmacies that are selling the greatest amounts of controlled
    pharmaceuticals. To this end, DEA in March of this year initiated a
    contract with an Internet search and analysis company to provide this
    capability. Although the identity of this company cannot be included in
    this response for reasons of investigative confidentiality, the company
    has over the past two years developed an excellent reputation providing
    Internet search and analysis services to leading credit card companies,
    Internet companies, and major banks for the purpose of enforcing
    company due diligence responsibilities in the field of Internet
    pharmaceutical sales, as well as several other areas of illegal
    commerce over the Internet. In particular, the company has been the
    leading provider of Internet search and analysis services to a
    coalition of financial companies working closely with the National
    Center for Missing and Exploited Children to identify and refer for law
    enforcement investigation Internet purveyors of child pornography--a
    more difficult Internet investigative challenge but also one that
    shares significant common traits with illicit Internet sales of
    controlled pharmaceuticals.
        This contract for Internet search and analysis services includes a
    four-month initial performance period with options for an additional
    eight months as well as a subsequent year. The contractor recently
    provided DEA an initial list of six prospective website targets along
    with an initial list of affiliated websites. These targets have already
    been evaluated by our Special Operations Division and forwarded to
    several DEA Field Divisions. Significantly, this contract requires, and
    the contractor has expressed confidence in its ability to deliver,
    identification of the leading Internet controlled pharmaceutical
    trafficking networks. This includes all associated payment websites,
    affiliate or portal websites, registration, web hosting, and server
    identifications, as well as key financial links including payment
    processors and merchant banks that provide website operators access to
    major credit card networks. If successful, this contract by March of
    2008 will have conclusively identified and mapped out the Internet
    ``footprint'' of the largest Internet controlled pharmaceutical
    trafficking organizations and DEA will have initiated investigations
    against those same organizations.
        Question. Do you believe that a DEA or a nongovernmental
    organization should regularly search the Internet to identify these
    websites and other locations that offer to sell controlled substances
    without a prescription?
        It is vital that the DEA and relevant private sector companies work
    together to proactively search the Internet to identify websites that
    are illegally selling controlled pharmaceuticals. Because the Internet
    is constantly changing, the search for illicit websites is inherently
    complex and must be undertaken on a proactive basis, not reactive.
        Question. Since 2002, the DEA has established telephone and online
    hotlines for reporting suspicious Internet pharmacies. The Inspector
    General's 2006 report found that ``these hotlines have yielded few
    leads that resulted in diversion investigations.'' Equally troubling,
    the Inspector General found that while the DEA has started to provide
    undercover equipment to its diversion groups, ``as of May 2006 most
    diversion groups still did not have this equipment.''
        Are you concerned that DEA lacks the resources to ensure that its
    intelligence, technological, and investigative tools operate
    effectively?
        Answer. DEA is working hard to integrate and optimize its
    intelligence, technology, and investigative resources for Internet
    pharmaceutical investigations. The technological and analytical
    challenges posed by Internet pharmaceutical investigations are many and
    complex, and have required DEA to reach out to the private sector for
    Internet expertise for search, analysis, and training support.
    Moreover, much of the available intelligence for identifying and
    targeting violators resides in the private sector among key industry
    groups whose services are used by online traffickers of controlled
    pharmaceuticals. This has placed a premium on fostering effective
    working relationships with leading Internet, financial, and parcel
    delivery companies. In this time of constrained budgets, both manpower
    and funding limitations directly impact Internet investigations, which
    require unusually large commitments of these resources.
        DEA has provided all field divisions with undercover credit card
    accounts in order to make online purchases of controlled
    pharmaceuticals for use as evidence in Internet investigations. DEA has
    also deployed undercover Internet workstations to all domestic field
    divisions.
        Question. What percentage of diversion investigators receive
    specialized training that can prove useful for conducting Internet
    investigations?
        Answer. As of March 1, 2007, 369 of the 520 (71 percent) on-board
    Diversion Investigators have completed Internet training conducted by
    DEA's Special Operations Division (SOD). Additional training classes
    have been scheduled during the remainder of fiscal year 2007. DEA is
    also developing an Advanced Internet Investigations course that is
    scheduled to begin in August of 2007. DEA has also added two Financial
    Techniques courses into the fiscal year 2007 training schedule that is
    designed to provide employees with the skills and knowledge to enhance
    their investigative skills to conduct financial investigations. DEA
    will also provide Diversion Investigators with courses on Complex
    Conspiracy Investigations.
        Question. I am concerned that curbing Internet prescription drug
    abuse may take collaboration between law enforcement and private sector
    companies (i.e., credit card companies, payment systems, Internet
    Service Providers, common carriers, etc.)
        What current methods of collaboration with private sector entities
    does DEA use to combat rogue online pharmacies?
        Answer. For the past two years, DEA has actively developed
    relationships with leading financial, Internet, and express parcel
    delivery companies whose services are used by Internet controlled
    pharmaceutical trafficking organizations. The purpose of this outreach
    has been threefold: (1) to raise awareness of the growing problem of
    pharmaceutical diversion via the Internet; (2) to elicit voluntary
    efforts to restrict legitimate business services from being used by
    illicit Internet controlled pharmaceutical traffickers; and (3) to
    identify potential sources of data maintained by businesses that may
    aid in targeting enforcement efforts against the largest illicit
    Internet drug trafficking organizations.
        These relationships provide an opportunity for government and the
    private sector to reach a better understanding of relevant federal laws
    and explore areas of cooperation and voluntary industry action to curb
    the expanding illicit sale of controlled pharmaceuticals over the
    Internet. The level of cooperation enjoyed by DEA with the various
    industries involved with Internet pharmacies is excellent. They
    understand the gravity of the problem and have been extremely
    cooperative with DEA's inquiries. These relationships are maturing even
    further around a systematic industry-based Internet search and analysis
    effort that will incorporate selected data inputs from key Internet,
    financial, and parcel carrier companies to proactively identify and
    target the largest Internet controlled pharmaceutical trafficking
    organizations. A coalition of leading financial companies is
    spearheading this effort.
        Question. Information sharing between private sector entities and
    the DEA may be critical to preventing online prescription drug abuse.
    While the number of occasions may be limited, the willingness for
    private sector entities to share information with DEA about locations
    to sell pharmaceuticals illegally and to act upon them may be
    diminished by the threat of law suits.
        Do you think that the private sector can play an important role in
    assisting DEA reduce online drug abuse?
        Answer. Yes. Private sector involvement is critical for two
    reasons. First, the private sector--most especially the Internet,
    financial, and express parcel delivery companies whose services are
    used by Internet traffickers of controlled pharmaceuticals--must
    establish rigorous business practices to preclude this illicit use of
    their services and then rigorously enforce those standards through
    internal fraud prevention efforts. Second, these same companies, which
    all rely intensively upon the Internet for their business, possess
    invaluable data needed to proactively identify, target, and investigate
    violators.
        Question. Do you support immunity from civil or criminal action for
    private sector entities that mistakenly identify websites in good
    faith? And do you support immunity from civil or criminal actions for
    private sector entities that refuse to do business with any
    organization mistakenly identified in good faith as offering to
    illegally sell a controlled substance?
        Answer. Yes, DEA would support legislation that furthers the
    ability of private sector companies to deny services to other companies
    involved in suspect activities, while minimizing liability for any
    mistaken actions made in good faith. It is vital that relevant
    Internet, financial, and parcel delivery companies aggressively police
    their own operations in this area of illegal commerce. This support
    from the private sector strengthens DEA's overall enforcement strategy.
    Private sector entities are acutely aware of their legal liability for
    denying services to suspect websites whose operators have not been
    legally convicted. For example, MasterCard has in the past two years
    denied services to several hundred suspect pharmaceutical website
    operators working through the merchant banks that issued the credit
    card retail accounts. FedEx suspended truck deliveries of suspect
    packages containing pharmaceuticals within portions of eastern Kentucky
    when it became apparent that illicit Internet sales of controlled
    pharmaceuticals had reached epidemic proportions in that part of the
    state. In general, businesses have the legal authority to suspend their
    services to clients that violate internal business practices codified
    in their contracts with clients.
                                    cocaine
        Question. The U.S. Sentencing Commission has expressed concerns
    about the amount of low-level drug offenders being dealt with
    excessively, particularly in the area of crack cocaine. In May 2002,
    the Commission found that in fiscal year 2000, 73 percent of all
    federal crack convictions were brought against low-level offenders, and
    only 6.1 percent of all federal crack convictions were brought against
    high-level dealers in crack cocaine cases.
        For powder cocaine, a similar disparity exists. The Commission's
    May 2002 report found that only 6.7 percent of powder cocaine cases
    were brought against high level offenders, while 68 percent of powder
    cocaine cases were brought against the lowest-level offenders.
        Are you concerned that the federal crack powder laws target ``small
    fish'' instead of drug kingpins of organized drug cartels?
        Answer. Federal statutes do not target ``small fish'' instead of
    large scale traffickers and organized cartels. Federal statutes carry
    strong penalties for trafficking in meaningful amounts of cocaine
    powder and cocaine base. Individuals who are first time offenders and
    are not leaders or managers of a drug organization are eligible for
    more lenient treatment pursuant to the ``safety valve'' provisions of
    18 U.S.C. 3553(f). Individuals who deal in large amounts of cocaine
    powder or cocaine base are subject to appropriately long sentences. An
    individual who deals in at least five kilograms or more of cocaine
    powder is subject to a mandatory minimum sentence of ten years, as is
    an individual who deals in at least 50 grams of cocaine base (crack).
    In addition, leaders and organizers of drug organizations are subject
    to the severe penalties of 21 U.S.C. 848, the Continuing Criminal
    Enterprise Statute, which carries penalties of from 20 years to life
    imprisonment.
        Question. Does the DEA focus its drug interdiction efforts on high-
    level traffickers? Please explain.
        Answer. DEA is committed to bringing those organizations involved
    in the illicit growing, manufacturing, diversion, laundering of
    proceeds, or distribution of controlled substances to the criminal and
    civil justice system of the United States, or any other competent
    jurisdiction. The DEA focuses a significant amount of its resources on
    attacking Priority Target Organizations (PTOs), which are major drug
    supply and money laundering organizations operating at the
    international, national, regional, and local levels having a
    significant impact upon drug availability.
        In addition, DEA works closely with key drug enforcement programs
    such as the Organized Crime Drug Enforcement Task Force (OCDETF)
    program to accomplish its mission. The OCDETF member agencies
    identified international command and control organizations representing
    the most significant international drug trafficking organizations
    threatening the United States. These targets are referred to as
    Consolidated Priority Organization Targets (CPOTs). Efforts to disrupt
    and dismantle CPOT and PTO organizations are primarily accomplished
    through multi-agency investigations mostly directed by DEA. In fiscal
    year 2006, DEA participated in approximately 90 percent of all OCDETF
    cases, and had the lead or co-lead in approximately 80 percent of
    OCDETF investigations.
        DEA also participates in enforcement-related programs such as
    specialized training for state and local law enforcement designed to
    improve their abilities to enforce state drug laws and target and
    dismantle street lead drug trafficking organizations and demand
    reduction programs designed to educate citizens concerning the dangers
    of drugs and emerging drug trends. These programs are aimed at reducing
    the availability of and demand for illicit controlled substances.
        Question. At the November 14, 2006 hearing before the Sentencing
    Commission, DEA Deputy Assistant Administrator for the Office of
    Diversion Control, Joseph T. Rannazzisi, testified that cocaine enters
    the United States in the form of powder cocaine, and powder cocaine is
    converted into crack cocaine once the powder cocaine reaches the street
    level. According to Mr. Rannazzisi, crack cocaine is usually trafficked
    at the street level.
        I understand that the DEA believes it is targeting street level
    crack or powder dealers to work up the chain to higher level dealers.
    What are the largest amounts of crack cocaine that the DEA has
    confiscated during a single drug arrest in the last five years?
        Answer. DEA's database does not distinguish between ``crack''
    cocaine and cocaine base because ``crack'' is a form of cocaine base.
    However, DEA does target street level drug dealers with the goal of
    working up the chain to the higher level trafficking organizations. DEA
    focuses on attacking the organizations which are the major drug supply
    and money laundering organizations operating at the international,
    national, regional, and local levels having a significant impact upon
    drug availability.
        For example, in May of 2006, the Seattle Field Division completed
    an eight-month investigation focused on decreasing the growing problem
    of ``open-air'' drug markets in the East and West precincts of Seattle.
    Over the course of this deployment, many individuals were arrested for
    selling small quantities of drugs to undercover officers. The Seattle
    Filed Division's Special Agent in Charge, Rodney Benson, stated that
    ``those street-level cases have resulted in a significant number of
    major, long-term investigations that we're working on right now,''
    which focus primarily on those individuals high-up on the drug
    distribution food chain. This investigation resulted in the disruption
    of two drug trafficking organizations; 311 arrests; and the seizure of
    approximately .41 pounds of powder cocaine, 3.46 pounds of crack
    cocaine, .02 pounds of methamphetamine, 3.56 pounds of heroin, .21
    pounds of marijuana, .46 pounds of steroids, .14 pounds of ecstasy, and
    .21 pounds of miscellaneous prescription pills, and over $150,000 in
    assets.
        Question. What are the largest amounts of powder cocaine that the
    DEA has confiscated during a single drug arrest in the last five years?
        Answer. The largest amount of powder cocaine that DEA has seized
    during the last five years was on November 5, 2004 in Key West, Florida
    for 11.9 metric tons of cocaine. DEA's database does not tell us if
    this occurred during a single drug arrest though, so potentially there
    could have been multiple arrests in this case that resulted in this
    amount of seized cocaine.
        Even larger seizures have been made by agencies that work with DEA.
    On March 17, 2007, the U.S. Coast Guard, acting on information provided
    by DEA and Panamanian law enforcement, seized approximately 22 metric
    tons of cocaine aboard a Panamanian flagged motor vessel off the coast
    of Panama. This record-breaking seizure was the result of actionable
    intelligence provided by Panamanian law enforcement officials and close
    collaboration through DEA's multi-agency cocaine interdiction program,
    Operation Panama Express.
        Previously, the largest cocaine seizures by the Coast Guard were:
    13.6 metric tons from the stateless-vessel Lina Maria, on Sept. 17,
    2004; and 11.9 metric tons from the Cambodian-flagged vessel Svesda
    Maru on May 1, 2001.
        Question. Crack is the only drug for which the first offense of
    simple possession can trigger a federal mandatory minimum sentence.
    Under 21 U.S.C.  844, possession of 5 grams of crack will trigger a 5
    year mandatory minimum sentence.
        Would reforming  844 allow the DEA's anti-drug efforts more
    effective by focusing its resources on preventing drug trafficking by
    drug cartels instead of wasting precious time and resources on low-
    level street dealers?
        Answer. As stated in the answer to the question above, DEA already
    focuses its resources ``on preventing drug trafficking by drug
    cartels.'' Increasing the amount of crack that will trigger a five-year
    mandatory minimum sentence would not augment DEA's ability to dismantle
    drug cartels. The value of mandatory minimum sentences such as the
    five-year mandatory minimum for crack cocaine is that they facilitate
    DEA's ability to gain cooperation. A recent example is an important
    investigation of a DEA Atlanta Division crack cocaine trafficking
    organization that was built upon purchasing just a few ounces of crack
    cocaine from several mid-level members of the organization. Some of the
    original cooperating sources were working to lessen their sentences for
    selling user amounts of crack cocaine and other drugs. The
    investigation resulted in the arrest of more than 15 violators and the
    seizure of cash, securities and property in excess of one million
    dollars. The leader of the organization entered a plea of guilty and
    received 20 years in jail. The guilty plea was obtained due to the high
    minimum mandatory sentences that his subordinates were facing for the
    sales of ounce quantities of crack cocaine; they were motivated to
    cooperate and potentially testify against their boss.
        Please note that while DEA believes that mandatory minimum
    sentences are a valuable tool in gaining cooperation and incapacitating
    dangerous drug traffickers and organizations, we do not agree that
    Federal law enforcement officers or prosecutors are devoting any
    measurable amount of resources to investigating or prosecuting cases of
    possession under 21 U.S.C.  844. The fiscal year 2005 statistics from
    the United States Sentencing Commission show that only 0.8 percent of
    powder cocaine cases were for simple possession, and only 1.1 percent
    of crack cases involved a simple possession charge. The percentages of
    actual drug trafficking charges in 2005 for powder and crack cocaine
    were 98.4 and 95.3, respectively.
                           international drug issues
        Question. Last year, the United Nations Office on Drugs and Crime
    (``UNODC'') reported that there has been a surge in opium cultivation
    in Afghanistan that is fueling the insurgency in that country.
    According to the report, opium production in Afghanistan has increased
    59 percent over last year, and in the southern region where Taliban
    insurgents have intensified their attacks on Afghan government and U.S.
    forces, opium cultivation has increased by 162 percent.
        What steps is the DEA taking to address the growing opium trade in
    Afghanistan?
        Answer. DEA is working to help the Government of Afghanistan
    establish the drug enforcement institutions and capabilities they must
    have to enforce the rule of law. This means successfully identifying,
    disrupting, and dismantling major drug trafficking organizations that
    fuel and profit from the narco-economy.
        Out of the six major Drug Trafficking Organizations (DTO) heads
    targeted by Operation Containment, four have been arrested to include
    Haji Bashir Noorzai and Haji Baz Mohammad who are being prosecuted in
    the United States. The operation has also led to significant seizures
    of narcotics and precursor chemicals and the dismantlement and
    disruption of organizations involved in the Southwest Asian drug trade.
        The four other major DTO heads targeted by Operation Containment
    are Shabaz Khan, who was arrested in the United Arab Emirates and is
    currently on trial, Urifi Cetinkaya, who is serving a prison sentence
    in Turkey, Cumhur Yakut, who has been indicted, and Haji Juma Khan, who
    has not yet been indicted.
        In October 2005, Haji Baz Mohammad--Drug Kingpin and CPOT--was
    extradited to the United States. This marked the first-ever extradition
    between the United States and Afghanistan.
        DEA's Foreign-deployed Advisory Support Teams (FAST) advise, train,
    and mentor their Afghan counterparts in the National Interdiction Unit
    (NIU) of the Counter Narcotics Police--Afghanistan (CNP-A), and
    directly augment the Kabul Country Office in conducting bilateral
    investigations to identify, target, and dismantle transnational drug
    trafficking operations in the region. The five FAST each consist of a
    Group Supervisor, four Special Agents, and one Intelligence Research
    Specialist.
        DEA has trained the NIU's 126 law enforcement officers in the
    conduct of drug enforcement operations.
        Question. Does DEA have the resources to be effective in curbing
    the Afghan opium trade? If yes, how are those resources being allocated
    and utilized? If not, where are increased resources needed?
        Answer. DEA's base funding for FAST program is $8.3 million, which
    is sufficient to fund continuing deployments to Afghanistan and refresh
    equipment.
        The following support for DEA's operations in Afghanistan is
    provided by DOD:
      --DOD is providing basing support at Bagram Air Base for DEA FAST
            members and facilities for the FAST teams remaining in the
            Continental United States (CONUS) at the Marine Corps Base at
            Quantico, Virginia; a hangar and fuel to support the DEA King
            Air 350 twin-engine turboprop aircraft currently in
            Afghanistan; two DEA King Air maintenance personnel in Kabul;
            and facilities to protect, house, feed, and operate at the
            National Interdiction Unit (NIU) site in Kabul, Afghanistan.
      --DOD is providing transportation support for the NIU, which is the
            Afghan counterpart to DEA and the Afghan unit with whom the
            FAST conducts counternarcotics operations. The NIU received its
            basic training from DOD and currently has more than 100
            personnel. DOD provides transportation for DEA FAST personnel
            and supporting equipment from CONUS to Afghanistan and back.
      --DOD is acquiring thirteen (13) MI-17 helicopters for the Afghan
            Ministry of Interior to support the Counter Narcotics Police--
            Afghanistan (CNP-A), NIU, and DEA Special Agents.
      --DOD is providing operational and logistical support and assistance
            through the U.S. Central Command (CENTCOM) and elements of the
            North Atlantic Treaty Organization (NATO) International
            Security Assistance Force (ISAF).
      --DOD is providing investigational support by providing Ring Flights
            to DEA Special Agents. Since February 2005, DOD has provided 26
            Ring Flights to DEA. These ring flights allow us to gather
            counter-narcotics intelligence, interview confidential sources
            and other sources of information in the outlying provinces,
            meet Afghan law enforcement counterparts to plan and coordinate
            investigations, meet local and provincial Afghan officials, and
            travel to Forward Operating Bases (FOBs) to meet Afghan
            counterparts and U.S. Military personnel.
      --DOD is constructing significant infrastructure for the NIU,
            including facilities to protect, house, feed, train, and
            operate. Facilities are also under construction for the
            Counter-narcotics Judicial Center, which will provide a secure
            location to detain and prosecute narcotics traffickers. DOD
            also provided weapons, night vision devices, and other
            equipment to the NIU.
      --DOD provides DEA FAST training at military installations in the
            United States prior to deployment.
      --DOD has provided communications equipment for FAST command and
            control in Afghanistan. Additional communications equipment is
            being provided to the NIU.
      --DOD has been actively working with the DEA, Department of State,
            U.S. Embassy Kabul, and Afghan Ministry of Interior officials
            to fund the expansion of the CNP-A.
      --DOD has provided 4.5 million rounds ammunition for FAST and the
            NIU.
      --DOD has provided contract medical, communications, logistical, and
            intelligence support to DEA and the NIU on a daily basis.
        DEA could not maintain its presence in Afghanistan without the
    support it receives from DOD. Unfortunately, DEA operations have been
    severely limited due to lack of air mobility and security.
        As a new and non-standard aircraft acquisition program, the MI-17
    Helicopter Program has suffered setbacks and benefited from product
    improvements as they have been fielded. As a result the program is
    behind its estimated operational target of CY 2005. As of May 2007,
    none of the 6 MI-17 helicopters have flown law enforcement operations
    with CNP-A/NIU officers or DEA Special Agents.
        Three Afghan pilots' classes have graduated from DOD training
    provided at Fort Bliss, Texas however aircraft delays have made it
    impossible for the Afghan pilots to keep their flight skills current.
    They are currently being checked by instructor pilots, prior to being
    qualified to fly pilots in command. Until that time, all crews will be
    mixed U.S./Afghan crews.
        Finding permanent space for DEA's Afghanistan based King Air 350
    and a second King Air, currently being modified for aerial
    surveillance, has proven to be a challenge. DEA and DOD are currently
    working to secure permanent space at the Bagram Airfield. If
    unsuccessful, the removal of the King Airs would significantly
    undermine DEA enforcement efforts.
        Question. I am concerned whether the price and availability of
    cocaine has changed significantly as a result of DEA's international
    eradication efforts. Our country has given $5.4 billion in aid to
    support Plan Colombia. Yet, if you compare the price and availability
    of cocaine now to the price and availability of cocaine in 2001--at the
    start of Plan Colombia--there has been no significant change in either
    the availability or the price of cocaine on America's streets. In fact,
    according to ``Connecting the Dots: ONDCP's (Reluctant) Update on
    Cocaine Price and Purity,'' an April 2007 report by the Drug Policy
    Program of the Washington Office on Latin America, preliminary U.S.
    government data indicates that cocaine's price per pure gram on U.S.
    streets fell in 2006, while its purity increased.
        These latest estimates, continuing a 25-year trend, suggest that
    cocaine supplies are stable or even increasing. Congress was told that
    Plan Colombia would cut cocaine production by half, but it obviously
    has failed to do that. Do you believe it is now time for DEA to rethink
    its international eradication strategy?
        Answer. DEA does not have an international eradication strategy for
    Colombia. The U.S. Department of State's Narcotics Affairs Section
    (NAS) is responsible for the aerial eradication program in Colombia.
    The mission of DEA's Bogota Country Office and Cartegena Resident
    Office is to conduct bilateral investigations and enforcement
    operations to reduce the drug supply by targeting, disrupting or
    dismantling the most wanted international drug trafficking
    organizations impacting the United States. Thus, DEA's operations in
    Colombia are concerned with interdiction rather than eradication.
        Question. President Uribe has extradited about 400 people indicted
    for drug crimes in the United States, which I commend. However, none of
    them are top paramilitary leaders nor, with a couple of exceptions, are
    any of them FARC leaders. As you indicated at the last budget hearing
    in April 2006, it is one matter to indict someone and another to
    extradite and convict them.
        Do you support the suspension of extradition of paramilitary
    leaders who have been responsible for the shipment of tons of cocaine
    to the United States?
        Answer. If Autodefensas Unidades de Colombia (AUC) members
    currently involved in the peace process continue to traffic drugs and/
    or commit other crimes, DEA and the Department of State believe they
    should be extradited. Although suspension of extraditions is not
    consistent with the U.S. government's goal of bringing violent,
    transnational criminals to justice, such a peace plan would further our
    interests of attaining political stability throughout the region and
    strengthening the democratic institutions of Colombia. The Government
    of Colombia has indicated to DEA that if an AUC member is indicted in
    the United States for drug trafficking since the time they surrendered
    to the Justice and Peace process, then that member is subject to
    extradition.
        Although the Uribe Administration continues to support extradition
    requests by the United States for paramilitary AUC members, there is a
    concern that it may be difficult for the Administration to follow
    through with the extradition of some key AUC leaders, particularly
    those who are critical to the peace and demobilization process. While
    engaged in the peace and demobilization process, the Colombian
    Government has suspended their extradition warrants. DEA anticipates
    that if these individuals comply with the Justice and Peace Law, they
    will receive a sentence of between 5-8 years and the extradition
    warrants will continue to be suspended. Under Colombian Law 975, known
    as the Justice and Peace Law, the demobilized members of the AUC who
    have committed massacres, drug trafficking, and other crimes are
    eligible for reduced sentences if they comply with the requirements of
    confessing to their crimes and making restitution to their victims.
    However, the Uribe administration has assured the U.S. Embassy that if
    there is evidence that an individual is continuing to engage in drug
    trafficking and other illegal activities after the July 25, 2005
    signing date, they will be removed from the process and their
    extradition warrant will again become active.
        Question. Has the DEA or the State Department told the Colombian
    Government that the United States agrees with these suspensions? Has
    the DEA or State Department told the Colombian Government that the
    United States disagrees?
        Answer. Please see DEA's response to question above.
        Question. What are the total numbers of FARC indictees that have
    been actually extradited?
        Answer. Since the amendment to the Colombian Constitution on
    December 17, 1997, the Colombian Government has extradited 539
    fugitives to the United States. Of that number, 7 were FARC members and
    8 were AUC members.
        Of the 50 FARC indictments unsealed on March 22, 2006, three have
    been captured and are awaiting extradition. To date, none have been
    extradited.
                                methamphetamine
        Question. According to a November 2006 report by the U.S. National
    Drug Intelligence Center, cartel labs in Mexico and California now
    produce about 80 percent of the methamphetamine in the United States.
        What steps has DEA taken to decrease the amount of methamphetamine
    produced in Mexico?
        Answer. DEA is working hard with the Government of Mexico to target
    the criminal organizations involved in the diversion of precursor
    chemicals and the producing and trafficking of methamphetamine. Mexico
    has imposed import quotas tied to estimates of national needs. The
    Mexican Government limited pseudoephedrine, ephedrine, and combination
    product importation permits to 70 tons during 2006; this is a reduction
    of 53 percent from the 2005 level of imports (150 tons). This quota has
    made it more difficult for traffickers to obtain precursor chemicals.
    Prices have increased and traffickers have been forced to resort to
    traditional diversion methods, including smuggling and the use of third
    countries to procure their chemicals. In addition, intelligence
    indicates that traffickers have also turned to alternate production
    methods for methamphetamine and the apparent use of substitute
    chemicals as the traditional precursors are becoming more difficult to
    obtain. Mexico has discussed revising their quota downward even further
    in 2007.
        In May 2006, at the National Methamphetamine and Chemicals
    Initiative (NMCI) Strategy Conference in Dallas, Attorney General
    Gonzales announced important new anti-methamphetamine domestic
    initiatives, as well as new partnerships between the United States and
    Mexico in fighting methamphetamine trafficking. These initiatives will
    improve enforcement and information sharing, increase law enforcement
    training, and increase public awareness both domestically and
    internationally. Since this announcement, methamphetamine enforcement
    teams have been formed on both sides of the border and DEA, with the
    assistance of the U.S. Department of State, has donated eight
    refurbished clan lab trucks to Mexico.
        Additionally, DEA and the Department of State, Bureau of
    International Narcotics and Law Enforcement Affairs trained over 2,000
    Mexican officials in fiscal year 2006 on a variety of investigative,
    enforcement, and regulatory methods related to methamphetamine
    trafficking and manufacturing. This training included instruction on
    clandestine laboratory investigations, precursor chemical
    investigation, and drug identification. As a result of this training,
    Mexican law enforcement officials have had significant success in
    identifying labs.
        In fiscal year 2006, DEA also trained over 41,000 State and local
    law enforcement officers, including over 1,000 in how to conduct
    investigations and dismantle seized methamphetamine labs. By the end of
    2008, DEA also plans to complete a clandestine laboratory training
    facility to better train more state and local officers.
        DEA has expanded the role of its Clan Lab Enforcement Teams to
    target Mexican methamphetamine trafficking organizations. These teams
    use their lab expertise to trace chemicals, finished methamphetamine,
    and drug proceeds to drug trafficking organizations in the United
    States and Mexico. These teams also work to identify and dismantle
    U.S.-based methamphetamine transportation and distribution cells.
        DEA has also developed an intelligence collection program,
    Operation White Fang, to assist in the identification and targeting of
    organizations responsible for producing and trafficking methamphetamine
    across the entire Southwest Border. The operation focuses particularly
    on the groups responsible for the drug related violence facilitated by
    the major Mexican cartels operating along the U.S./Mexico border. In
    the fiscal year 2008 President's budget, DEA requests $325,000 for this
    operation.
        Question. Recent reports show an increase in drug gang activity in
    the area of methamphetamine and over-the-counter medicines. I am
    concerned that this may be leading to an increase in violence in some
    communities.
        Has DEA taken any steps to address this situation?
        Answer. Recently, DEA has seen an increase in cases involving
    violent organized gangs, such as MS-13 and La Familia. Many of these
    gangs are typically, poly-drug and poly-criminal opportunists. Some of
    them are involved in trafficking various quantities of methamphetamine
    and precursor chemicals in states such as California. Historically,
    domestic motorcycle gangs, such as the Hell's Angels, have been the
    primary gangs involved in the manufacturing and trafficking of
    methamphetamine. As part of its mission, DEA targets violent gangs
    involved in drug trafficking activity, such as the Hell's Angels, Latin
    Kings, Bloods, Crips, Mexican Mafia, and Gangster Disciples.
        To handle this problem DEA participates in a number of anti-gang
    initiatives with other law enforcement components, including the
    National Gang Intelligence Center, ATF's Violent Crime Impact Teams
    (VCIT) and Project Safe Neighborhoods, FBI's Safe Streets and Safe
    Trails Task Forces, DOJ's Weed and Seed Program, and the Attorney
    General's Anti-Gang Coordination Committee \1\ (GangTECC) which
    oversees all of the above listed programs.
    ---------------------------------------------------------------------------
        \1\ In the fiscal year 2008 President's budget, DEA is requesting 1
    Special Agent position in support of Gang TECC.
    ---------------------------------------------------------------------------
        Question. According to a March 25, 2007, article in the USA Today,
    ``reports of candy-flavored methamphetamine are emerging around the
    nation stirring concern among police and abuse prevention experts that
    drug dealers are marketing the drug to younger people.'' The article
    reports that among the new flavors are strawberry, known as
    ``strawberry quick,'' chocolate, cola, and other sodas. And, the
    article reports, that a DEA agent reported a red meth that has been
    marketed as a powdered form of energy drink.
        Given these recent reports, how widespread has flavored crystal
    meth products become?
        Answer. With the continual stream of negative press regarding
    methamphetamine, drug traffickers are trying to lure new customers by
    making meth seem less dangerous. Since the early 1980s there have been
    regional occurrences of different colors and better tasting
    methamphetamine. ``Strawberry Quick'' and other flavors are just the
    latest of the trends in the marketing of methamphetamine. According to
    intelligence, the flavored crystals are available in California,
    Nevada, Washington, Idaho, Texas, New Mexico, Missouri and Minnesota.
    Normally, methamphetamine is white or brownish and bitter-tasting.
    Strawberry Quick may be popular among new users who snort
    methamphetamine because the flavoring can cut down the taste.
    Traffickers are savvy marketers, and they continue to create new ways
    to market their drug of choice, especially to young people.
        Question. According to the National Survey on Drug Use and Health
    by the Substance Abuse and Mental Health Services Administration, the
    number of people 12 and older who used meth for the first time in the
    previous year decreased from 318,000 people in 2004 to 192,000 people
    in 2005.
        Are you concerned that drug traffickers are trying to lure in new
    customers, particularly young people, by making meth seem less
    dangerous? If so, what steps is DEA taking to address this issue?
        Answer. While the primary function of DEA is to enforce the
    nation's federal drug laws, we understand that law enforcement alone
    cannot solve America's drug problems. DEA works with the youth
    concerning the abuse and awareness of drugs including the serious
    hazards of methamphetamine. Through DEA's Demand Reduction program, DEA
    shares drug law enforcement expertise and intelligence on the nature
    and extent of the national, regional and local drug threat and on
    emerging drug enforcement priorities. In conjunction with its
    prevention partners, DEA engages in aggressive public messaging
    campaigns to illustrate the consequences of drug use, particularly for
    non-users who suffer collateral damage as a result of the illegal drug
    trade. For example, in August of 2005, DEA launched a new website for
    teens, justthinktwice.com. Since its inception the justthinktwice.com
    website has averaged over 200,000 hits per month. This website provides
    teens with straightforward information on the consequences of drugs to
    users and non-users and gives teens the tools they need to make sound
    decisions about drugs. Included in the site is information on
    methamphetamine, prescription drugs, drugged driving, drug endangered
    children, marijuana, drug legalization, and the federal penalties for
    drug trafficking and manufacturing. Justthinktwice.com also dispels
    many of the myths that teens have about drugs by giving them the facts
    about drug legalization, ``medical'' marijuana, and other topics.
        Question. Last year, the Combat Methamphetamine Epidemic Act became
    law as Title VII of the USA PATRIOT Improvement and Reauthorization Act
    of 2005 (Public Law 109-177), and which was designed to retail over-
    the-counter sales of certain precursors that are common ingredients in
    cold medicines. Under this law, consumers purchasing cold medicines
    containing ephedrine, pseudoephedrine and phenylpropanolamine must show
    identification and sign a log book at pharmacies. DEA, along with state
    and local law enforcement entities, are responsible for monitoring
    these log books in order to identify if any one person has purchased
    more than 9 grams within a month's time.
        Do you believe the log book is working as hoped to support
    investigations?
        Answer. As a result of state and CMEA legislation, which was
    implemented in September 2006, the downward trend in seizures of
    clandestine laboratories is unmistakable. In 2005 there were a total of
    12,619 reported incidents involving clan labs. Calendar year 2006 saw a
    decrease of 43 percent, or a total of 7,180 incidents. Through April
    25, 2007, only 720 incidents involving clan labs have been reported.

    ----------------------------------------------------------------------------------------------------------------
                                                                            All                  Super    California
                                    Year                                 Incidents  Labs Only     Labs    Super Labs
    ----------------------------------------------------------------------------------------------------------------
    2005...............................................................     12,619      5,879         34          28
    2006...............................................................      7,180      3,346         13          10
    2007...............................................................        720        361          1           1
    ----------------------------------------------------------------------------------------------------------------

        Question. Could federal enforcement efforts be more effective if
    the log book was electronic?
        Answer. Logbooks in and of themselves serve are an effective
    enforcement tool because they deter illegal purchases of products
    containing ephedrine, pseudoephedrine, and phenylpropanolamine. Persons
    who might be considering the purchase of these products for diversion
    to the illicit production of methamphetamine are deterred by the
    requirement to provide personal information (name and address) and
    their signature. Logbooks could be more effective as an enforcement
    tool if the data was collected electronically. If the data was
    collected electronically, aggregation of the data across retail
    locations and between states would be easier and potentially more
    effective.
        Question. What enforcement resources has DEA dedicated to this
    area?
        Answer. Investigative authority to enforce CMEA rests with a
    general workforce of approximately 500 Diversion Investigators and
    5,000 Special Agents agency-wide. DEA also leads over 200 state and
    local task forces with over 2,100 state and local task force officers.
    DEA will investigate violations of not only the CMEA, but any violation
    of the Controlled Substance Act as necessary.
        Question. The Combat Meth Act required DEA to establish production
    quotas and import quotas for ephedrine, pseudoephedrine, and
    phenylpropanolamine. This effort was done in order to prevent the
    illicit use of these three chemicals in the clandestine manufacture of
    methamphetamine.
        Do you believe the system for establishing import quotas is working
    smoothly?
        Answer. Although the quota regulations for the CMEA have not yet
    been fully implemented, DEA's 30+ years experience establishing quota
    for other pharmaceutical will ensure smooth administration of the
    import quota applications.
        Question. Can you give us your assurance that the quotas
    established are adequate for medical use?
        Answer. DEA's experience with the schedule I and II controlled
    substances quotas provides a solid foundation for the application and
    implementation of quotas to the list I chemicals: pseudoephedrine,
    ephedrine and phenylpropanolamine as outlined in the CMEA. DEA's
    diligent oversight of the quota applications and process will ensure an
    uninterruptible supply of medicine is available in the United States
    once this law is fully implemented.
        In accordance with 21 U.S.C. 826, DEA is required to establish
    limits on the production of Schedules I and II controlled substances.
    The total quantity for each basic class of controlled substance in
    Schedules I and II is required to be determined on an annual basis. The
    quotas for controlled substances are established each calendar year to
    provide sufficient material for the estimated legitimate medical,
    scientific, research and industrial needs of the United States, for
    lawful export requirements and for the establishment and maintenance of
    reserve stocks. In addition, quotas are intended to limit the
    availability of legitimately manufactured controlled substances which
    can be diverted into the illegitimate market.
        There are three types of quotas that are established pursuant to 21
    CFR Part 1303: Aggregate production quotas, manufacturing quotas and
    procurement quotas. Procurement quotas are issued to DEA registered
    manufacturers who purchase Schedule I or Schedule II material and use
    that material to formulate finished dosage forms i.e. legitimate
    medicine. Manufacturing quotas are issued to DEA registered bulk
    manufacturers. A manufacturing quota is the amount of substance a
    company may produce in a calendar year. Aggregate production quotas
    (APQ) reflect the maximum amount of each controlled substance in
    Schedule I and II which may be produced in a given calendar year. The
    APQ is historically established once and revised mid-year, but the
    administrator has the authority to adjust individual APQ at any time.
    Similarly, the DEA establishes manufacturer's individual manufacturing
    and procurement quotas after careful consideration of the registrant's
    application, legitimate needs and prior year's year end inventory.
        The DEA utilizes two types of information when establishing quotas:
    evidence of legitimate need and evidence of diversion abuse and illicit
    trafficking. The evidence of legitimate need is provided primarily by
    industry and the Food and Drug Administration (FDA) and actual
    pharmaceutical sales trend data supplied by an independent unbiased
    source. Companies submit yearly applications and data to DEA that
    includes actual sales, exports, actual production, customers, product
    development (FDA requirements), batch size, losses, retains and
    inventories of their controlled substances.
        DEA must take into consideration the total net disposal (sales and
    national trends), inventories, projected demands and other factors
    affecting medical, scientific, research and industrial needs in the
    United States and lawful export requirements before adjustment are made
    to individual procurement and manufacturing quotas. Due to changing
    needs of industry, a registrant may request an increase in their
    established quotas at any time. There has never been an occasion in
    which this process has led to a disruption in a patient's access to
    necessary medications.
        Specifically regarding the three substances controlled under the
    CMEA, the DEA developed proposed estimates of the medical need of the
    United States for ephedrine, pseudoephedrine and phenylpropanolamine.
    The methodology used was developed with the assistance of an
    independent contractor that utilized three parallel data sets.
        In establishing the 2007 estimates, DEA also considered exports,
    known industrial uses of these substances, and inventory requirements.
    The establishment of quotas is published as a Notice of Proposed
    Rulemaking in the Federal Register with an opportunity for public
    comment.
        In addition, FDA and the Pharmaceutical Industry are working to
    develop new and reformulated products to insure that there has been no
    interruption of the supply of OTC products containing a nasal
    decongestant, because drug companies have reformulated some of their
    OTC products by replacing pseudoephedrine with phenylephrine, a nasal
    decongestant. FDA has determined that products which contain
    phenylephrine are safe and effective and have effects similar to
    pseudoephedrine.
                                    drug use
        Question. At the last April 5, 2006, budget hearing, I asked you
    whether the price and availability of cocaine has changed significantly
    as a result of DEA's efforts. In response, you stated that there have
    been ``statistically significant'' changes in certain areas, and ``It's
    measurable.''
        Since 2001, have the arrests and cocaine seizures by DEA had a
    sustained impact on the availability of cocaine?
        Answer. DEA's large-scale Drug Flow Attack enforcement operations
    have had a major impact on the domestic drug markets. From the first
    quarter of 2007 through the second quarter of 2007, the average price
    per pure gram of all domestic cocaine purchases increased 24 percent.
    DEA's Operation All Inclusive, the centerpiece of DEA's Drug Flow
    Attack Strategy, has caused major disruption in the flow of cocaine,
    money, and chemicals between source zone areas and the U.S. Operation
    All Inclusive 2007 resulted in the seizure of 115 metric tons of
    cocaine which is 12 to 28 percent of the estimated quantity of cocaine
    transported through the transit zones to the United States during 2006.
    Also, in comparing the three month periods before and after Operation
    All Inclusive 2005, the average price per pure gram of cocaine
    increased 43 percent.
        Furthermore, DEA in conjunction with ONDCP, commissioned a 16-month
    study by the CNA Corporation (CNAC) to determine the impact of law
    enforcement activities on cocaine availability in Atlanta, Chicago, and
    Dallas for the period 1999 through 2003.\2\ The study, which was
    completed in April, 2006, sought to (1) to develop a model to identify
    and quantify the relationship between law enforcement activities
    (primarily DEA) and cocaine availability, and (2) to determine whether
    a common model was appropriate for all three cities. The study
    concluded that it is the cumulative or sustained impact of law
    enforcement activities that seem to best explain price and purity
    changes.
    ---------------------------------------------------------------------------
        \2\ Impact of Law Enforcement Activities on Cocaine Availability:
    Atlanta, Chicago, and Dallas, The CNA Corporation for ONDCP and DEA
    with Department of Health and Human Services, IPR 11781, April 2006.
    ---------------------------------------------------------------------------
        The study confirmed that DEA's priority targeting system did have
    some temporary impact on availability as observed by price and purity
    proxy measures in the selected cities. A sustained increase in arrests,
    arrests per case, and cocaine seizures are each associated with a
    statistically significant increase in cocaine price and decrease in
    cocaine purity. However, if increased levels of these law enforcement
    measures are not maintained, price and purity will return to their
    previous levels. Moreover, while prices were not higher in 2003 than in
    1999, CNAC inferred that the prices would have been lower and the drug
    problem worse in the absence of law enforcement activities.
        CNAC researchers concluded further that it is impossible to create
    a single model to assess availability at the national level, or even
    between the selected cities. Not only are there simply no accurate
    measures of the quantity of cocaine available locally, regionally, or
    nationally, but there are too many variables that can have a
    significant effect on availability.
    Selected key findings
        Arrests, arrests per case, and cocaine seizures have an impact on
    price and purity, and, by inference, on cocaine availability, although
    the impact may not materialize for several months. In addition to the
    quantity of arrests, the concentration of arrests (i.e., targeting
    specific organizations) in a specific case had an impact on price and
    purity. Ten arrests in 1 case, rather than 1 arrest in 10 cases, caused
    bigger disruption or dismantlement than arrests spread across several
    cases.
        The CNAC study concluded that it is the cumulative or sustained
    impact of law enforcement activities that seem to best explain price
    and purity changes: ``Another way to think about this is that price and
    purity were at about the same level in 2003 as in 1999. All of the law
    enforcement activities in those five years did not drive price to a new
    permanent high or purity to a new permanent low. What we observed were
    often substantial, but temporary, price and purity changes following
    short-lived increases in arrests or cocaine seizures. For example,
    prices were relatively high and purity relatively low in Chicago and
    Atlanta in 2000 following a substantial increase in the number of
    arrests in those cities.'' In Chicago, for example, a sustained 20-
    percent increase in arrests was associated with an 8 percent ($13.00)
    increase in the price per pure gram for powder cocaine and a 4 percent
    ($6.00) per gram increase for crack cocaine. To the degree that powder
    prices are more indicative of the wholesale market and crack the retail
    market, DEA arrests impacted the wholesale market more than the retail
    market.
        Question. At that same hearing, I asked you whether you agreed,
    that in Washington, D.C., the prices of crack cocaine have not
    increased and the availability of cocaine is about the same as it was
    three years ago. In response, you stated that you would get back to me.
    A year later, we still have not received a response.
        Does the evidence show that the price and availability of cocaine
    in Washington, D.C. has changed significantly as a result of DEA's
    efforts?
        Answer. The following is a brief overview of the cocaine pricing
    and availability situation in Washington, D.C.
    Cocaine Prices
        DEA's Washington Division reports that cocaine prices in
    Washington, D.C. have remained stable over the past six years, as have
    cocaine availability and abuse patterns. Cocaine price data for the
    period January through March 2006 indicate that cocaine hydrochloride
    sold for $1,100 per ounce in the Washington, D.C. metropolitan area
    compared to a price range of $900-$1,250 in 2001. Kilogram and gram
    powder cocaine prices and crack cocaine prices were not reported for
    2006.
        Prices are derived from undercover buys, Confidential Source (CS)
    information, and defendant information. Price data is not a completely
    accurate indicator of supply and demand. Much of this information is
    anecdotal, and prices cannot be validated through any scientific
    methodology. The greater the quantity, the more anecdotal the
    information, since DEA does not often purchase kilogram quantities.
        The following chart provides the latest data available on cocaine
    prices for Washington, D.C. The national price range is provided for
    comparison.

                                                         WASHINGTON, D.C. COCAINE PRICE RANGES 2001-2006
                                                         [National Price Range Provided for Comparison]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                   Quantity                        2001               2002               2003               2004               2005               2006
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Powder Cocaine (cocaine HCl):
        Kilo--DC..........................      16,500-35,000      17,500-35,000      17,000-35,000      24,000-25,000      23,000-27,000      19,000-26,000
        Kilo--National....................      13,000-35,000      10,000-35,000      10,000-35,000      10,000-35,000       7,000-34,000       9,000-52,000
        Ounce--DC.........................          900-1,250          600-2,000          825-1,300          900-1,100          650-1,250              1,100
        Ounce--National...................          400-1,600          400-3,500          375-1,800          350-1,800          300-1,600          300-2,000
        Gram--DC..........................             50-100              30-80             50-100                100            ( \1\ )            ( \1\ )
        Gram--National....................             20-200             24-150             25-100              9-200             20-200             13-350
    Crack Cocaine (cocaine base):
        Kilo--DC..........................      28,000-34,000             30,000      28,000-34,000      28,000-34,000      28,000-34,000            ( \1\ )
        Kilo--National....................      13,000-50,000      13,000-35,000       7,500-35,000       8,000-38,000      14,000-34,000      13,000-32,000
        Ounce--DC.........................          900-1,300          900-1,750        1,000-1,300        1,000-1,200          550-1,250          900-1,200
        Ounce National....................          300-2,800          325-2,800          325-2,000          325-2,000          325-2,000          210-3,800
        Gram--DC..........................             80-100             80-100             80-100            ( \1\ )            ( \1\ )            ( \1\ )
        Gram--National....................             10-200             10-130             10-130             18-200             20-200             12-200
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ N/R.

    Source: Quarterly Trends in Traffick Report--DEA Washington Division.

    Changes in the Washington, D.C. Cocaine Market
        The main change in cocaine trafficking in the metropolitan area
    pertains to cocaine sources of supply. Over the past several years,
    cocaine smuggling from North Carolina and from the Southwest Border
    (especially Texas and Arizona) has increased. This mainly impacts
    Southern Virginia, but still affects Northern Virginia and Washington,
    D.C. Drug trafficking organizations in New York City, however, still
    appear to be the principal cocaine suppliers for Washington, D.C.
    Cocaine Availability
        The Washington, D.C. Metropolitan Police Department (MPD) indicates
    that cocaine availability has remained stable over the past several
    years. The MPD also reports that drug-related violence remains static,
    with the exception of homicides, which have decreased over the past
    five years.
        Cocaine Hydrochloride (HCl).--Kilogram quantities of cocaine HCl
    continue to arrive in the DEA Washington Division area of
    responsibility (Washington, D.C., Maryland, Virginia, and West
    Virginia). Powder cocaine sold on the mid- to retail level remains
    widely available. The quantities of cocaine HCl available in any given
    area greatly depend on abuse patterns, the level of distribution at
    which a particular dealer conducts business, and the prevalence of
    cocaine abuse in that area. Cocaine HCl most commonly is found in gram
    and ounce quantities for resale in suburban and rural areas, but in
    larger quantities (i.e., quantities appropriate for redistribution
    after conversion to crack) in urban areas of the Division.
        Crack Cocaine.--Crack cocaine is available throughout the
    Washington Division are of responsibility in quantities ranging from
    rocks up to one kilogram. Most of the crack cocaine distributed within
    the Division is brought in as cocaine HCl and subsequently converted to
    crack. Generally, significant quantities of crack cocaine are not
    stockpiled and are manufactured according to demand.
        Question. Two months ago, Administrative Law Judge Mary Bittner
    ruled that University of Massachusetts Professor Dr. Lyle Craker could
    grow marijuana for medical research purposes. Judge Bittner found a
    ``minimal risk'' that the marijuana would be diverted to the black
    market. And she found that the government's current use of one medical
    marijuana research facility insufficient to meet the needs of
    legitimate medical researchers. DEA must now review Judge Bittner's
    ruling granting Dr. Craker approval to cultivate medical marijuana.
        What procedures will DEA follow in reviewing Judge Bittner's
    ruling? Will DEA solicit the input of governmental and non-governmental
    organizations in this process?
        Answer. DEA has never denied a registration to a person seeking to
    conduct clinical research with marijuana whose research protocol has
    been deemed meritorious by the Department of Health and Human Services.
    By law, DEA must--prior to granting a registration to conduct such
    research--seek the input of the Department of Health and Human Services
    (DHHS) as to the scientific merit of the proposed research. If DHHS
    finds the proposed research to be scientifically meritorious and the
    researcher to be competent, DEA must assess whether the research will
    have in place sufficient safeguards against diversion. Provided the
    diversion controls are sufficient and the proposed research is
    otherwise in conformity with the Controlled Substances Act, DEA will
    grant the research registration. Under the Administrative Procedure Act
    and the Controlled Substances Act, the Administrative Law Judge issues
    recommendations rather than final decisions. Ultimately, the Deputy
    Administrator of DEA makes the final determination.
        The University of Massachusetts case has been submitted to the
    Deputy Administrator for a final determination. While the case remains
    pending before the agency, it would inappropriate for DEA to comment on
    it.
        Question. In May of 2006, DEA arrested five Mexican nationals
    during a raid at a heroin lab in Toluca, Mexico. The lab was suspected
    of being the principal source of fentanyl pushed into the U.S. drug
    supply of heroin and cocaine, causing deaths in eight states. U.S. Drug
    Czar John Walters estimated that there could be 1 million doses of the
    tainted drug on the streets.
        Are you concerned that drug traffickers have substantially poisoned
    the U.S. drug supply?
        Answer. DEA is deeply concerned over the illicit distribution of
    fentanyl, which has caused an unprecedented outbreak of fentanyl-
    related overdoses. Between April 2005 and February 2007, at least 972
    confirmed fentanyl-related deaths, and an additional 162 suspected
    fentanyl-related deaths have occurred primarily in Delaware, Illinois,
    Maryland, Michigan, Missouri, New Jersey, and Pennsylvania. A total of
    903 confirmed fentanyl-related deaths occurred during 2006.
        DEA has responded by hosting a coordination meeting of federal,
    State, and local law enforcement officials in Chicago in June of 2006
    to address this recent fentanyl outbreak. Several DEA Field Divisions,
    including DEA's Mexico City office, the Department of Justice, and the
    Office of National Drug Control Policy (ONDCP), state chemists, and
    public health and treatment officials attended this event. DEA has
    assisted the interagency response to the fentanyl threat by
    participating in numerous teleconferences with SAMSHA (Substance Abuse
    and Mental Services Health Administration), CDC (Centers for Disease
    Control) and other agencies regarding fentanyl-related deaths.
        Question. Is there any indication that traffickers may be building
    more labs? And do you believe Congress needs to tighten controls on the
    precursors used to make fentanyl?
        Answer. Because of recent clandestine laboratory activity and the
    serious threat illicitly produced fentanyl poses to the public safety,
    DEA will regulate or control the chemical precursors used in the
    illicit manufacture of fentanyl. These precursors are 4-anilino-N-
    phenethyl-4-piperidine (ANPP), (CAS# 21409-26-7) and N-phenethyl-4-
    piperidone (NPP), (CAS# 39742-60-4). Both of these precursors are
    required to produce fentanyl. NPP produces ANPP which is not
    commercially available and is the direct precursor to fentanyl.
        DEA has controlled the intermediary precursor, N-phenethyl-4-
    piperidone (NPP) as a List I chemical under the Controlled Substances
    Act (CSA) through an Interim Rulemaking, effective April 23, 2007. The
    new rule subjects handlers of NPP to the chemical regulatory provisions
    of the CSA. The designation of NPP as a List I chemical subjects NPP
    handlers to all of the regulatory controls and administrative, civil,
    and criminal sanctions applicable to the manufacture, distribution,
    importing, and exporting of a List I chemical. Persons potentially
    handling NPP, including regulated chemical mixtures containing NPP, are
    required to comply with the List I chemical regulations including
    registration, records and reports, import/export, security, and
    administrative inspection.
        DEA is also moving to control the precursor chemical, 4-anilino-N-
    phenethyl-4-piperidine (ANPP) as a schedule II controlled substance,
    because it is an immediate precursor in the production of fentanyl and
    warrants the stricter DEA controls applicable to schedule II drugs. DEA
    is in the process of preparing a Federal Register Notice to propose
    this control. As a schedule II controlled substance, ANPP will be
    subject to the same registration, recordkeeping, security and import/
    export controls as fentanyl.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                                methamphetamine
        Question. Administrator Tandy, methamphetamine use has become a
    severe and very worrisome problem in Alabama. While the number of labs
    seized in Alabama has decreased significantly the problems related to
    this drug continue to worsen.
        Can you tell the Committee how methamphetamine distribution has
    changed?
        Answer. Methamphetamine is unique from other common drugs of abuse
    in that it is a synthetic drug, and its precursor chemicals have
    historically been easy to obtain and inexpensive to purchase. These
    factors contributed to methamphetamine's rapid sweep across our nation.
    However, State legislation, the Federal Combat Methamphetamine Epidemic
    Act, and law enforcement efforts have all contributed to a significant
    decline in methamphetamine labs inside the United States. The number of
    methamphetamine laboratory incidents reported in the United States has
    decreased from 17,857 in 2004 to 7,385 in 2006, a 59 percent
    decrease.\3\ The number of ``super labs'' seized in the United States
    dropped from 144 in 2002 to 20 in 2006, a decrease of 86 percent.
    ---------------------------------------------------------------------------
        \3\ Methamphetamine laboratory incident data is current as of
    August 28, 2007.
    ---------------------------------------------------------------------------
        Current drug and lab seizure data suggests that roughly 80 percent
    of the methamphetamine used in the United States now comes from larger
    laboratories run by Mexico-based trafficking organizations operating on
    both sides of the border. The proliferation of methamphetamine across
    the United States, and its spread to states such as Texas, Georgia, and
    Alabama, has required our offices, in concert with their State and
    local counterparts, to gear the majority of their methamphetamine
    enforcement efforts towards the targeting of poly-drug trafficking
    organizations, rather than small lab operators. These drug trafficking
    organizations have distribution networks throughout the United States,
    as well as access to drug transportation routes to smuggle the
    methamphetamine from Mexico into the United States.
        Question. How are you attacking this problem?
        Answer. DEA is working hard with the Government of Mexico to target
    the criminal organizations involved in the diversion of precursor
    chemicals and the producing and trafficking of methamphetamine.
    Relations between Mexican authorities and DEA are at an all time high
    in terms of chemical control. Mexico has imposed import quotas tied to
    estimates of legitimate national needs. The Mexican Government limited
    pseudoephedrine, ephedrine, and combination product importation permits
    to 70 tons during 2006; this is a reduction of 53 percent from the 2005
    level of imports (150 tons). Mexico has discussed revising their quota
    downward even further in 2007.
        In May 2006, at the National Methamphetamine and Chemicals
    Initiative (NMCI) Strategy Conference in Dallas, Attorney General
    Gonzales announced important new anti-methamphetamine domestic
    initiatives, as well as new partnerships between the United States and
    Mexico in fighting methamphetamine trafficking. These initiatives will
    improve enforcement and information sharing, increase law enforcement
    training, and increase public awareness both domestically and
    internationally. Since this announcement, methamphetamine enforcement
    teams have been formed on both sides of the border and DEA has donated
    eight refurbished clan lab trucks to Mexico.
        Additionally, DEA and the Department of State, Bureau of
    International Narcotics and Law Enforcement Affairs trained over 2,000
    Mexican officials in fiscal year 2006 on a variety of investigative,
    enforcement, and regulatory methods related to methamphetamine
    trafficking and manufacturing. This training included instruction on
    clandestine laboratory investigations, precursor chemical
    investigation, and drug identification. As a result of this training,
    Mexican law enforcement officials have had significant success in
    identifying labs.
        In fiscal year 2006, DEA also trained over 41,000 State and local
    law enforcement officers, including over 1,000 in how to conduct
    investigations and dismantle seized methamphetamine labs. By the end of
    2008, DEA also plans to complete a clandestine laboratory training
    facility in Quantico, Virginia to better train more State and local
    officers.
        DEA has expanded the role of its Clan Lab Enforcement Teams to
    target Mexican methamphetamine trafficking organizations. These teams
    use their lab expertise to trace chemicals, finished methamphetamine,
    and drug proceeds to drug trafficking organizations in the United
    States and Mexico. These teams also work to identify and dismantle
    U.S.-based methamphetamine transportation and distribution cells.
        DEA has also developed an intelligence collection program,
    Operation White Fang, to assist in the identification and targeting of
    organizations responsible for producing and trafficking methamphetamine
    across the entire Southwest Border. The operation focuses particularly
    on the groups responsible for the drug related violence facilitated by
    the major Mexican cartels operating along the U.S./Mexico border. In
    the fiscal year 2008 President's budget, DEA requests $325,000 to
    expand this operation.
        Question. How has the DEA adjusted its enforcement activities to
    meet this threat?
        Answer. In addition to the efforts mentioned above, DEA has used a
    multi-tiered approach over the last several years to enhance its attack
    on the diversion of bulk quantities of key precursors needed to
    manufacture methamphetamine, ephedrine, and pseudoephedrine. On the bi-
    lateral front, through our offices based in the United States and
    overseas, we are making headway by actively targeting, through joint
    investigations and initiatives, the diversion of precursor chemicals
    and the organizations involved in this activity. On the multi-lateral
    front, we are working with relevant international organizations and
    engaging both source and transit countries through international forums
    to target the diversion of these substances and to promote and
    promulgate good practices to prevent their diversion in the future.
        In March 2006, the United States successfully sponsored a
    resolution at the United Nations Commission on Narcotic Drugs (CND)
    that requests countries to provide and share voluntary information
    relating to their annual requirements for key methamphetamine
    precursors and urges countries to provide information to the
    International Narcotics Control Board (INCB) on shipments of these
    precursors in both bulk and tablet forms. This data will serve to allow
    the international community to observe where potential areas for
    diversion of these precursor chemicals are occurring. At present, some
    80 nations have provided estimates of their annual licit requirements
    for bulk ephedrine and pseudoephedrine to the INCB who in turn will
    publish this information on a yearly basis in their annual precursor
    report. Importantly, the resolution also requests that countries permit
    the INCB to share information regarding suspicious shipments with law
    enforcement authorities, so that appropriate measures can be taken in
    order to prevent or interdict those shipments of concern.
        During a meeting of the CND in March 2007, the United States joined
    the European Union (EU) in co-sponsoring an EU-drafted resolution which
    contained many useful and potentially important provisions regarding
    methamphetamine precursor control. Among other things, the resolution
    requests member states to voluntarily recognize the heightened threat
    of diversion of ephedra and phenylacetic acid, to exercise increased
    vigilance regarding their movement, to apply available monitoring
    measures regarding the trafficking of non-controlled derivatives and
    substitute chemicals, and to develop further national guidelines and
    training programs in consultation with industry with respect to
    precursor chemical control.
        While theses resolutions on precursor chemical control are
    important steps, they are voluntary measures which will take several
    years to be fully implemented and, as such, we do not see them as the
    sole solution to our obtaining information regarding diversion of these
    precursors from licit trade. We do see the CND resolutions as important
    steps in the sharing of information to which, heretofore, we were not
    privy.
        Question. Would you explain the toxic and environmental challenges
    that DEA agents face when they find these labs?
        Answer. Clandestine drug laboratories are a unique law enforcement
    challenge to DEA agents, our State and local law enforcement
    counterparts, and any peripheral support personnel providing assistance
    to the investigation and dismantlement of a lab. Methamphetamine's
    addictive characteristics produce devastating effects on all of its
    victims. These victims are not limited to those who choose to use this
    poison, but include others who become part of what could be considered
    the drug's ``collateral damage''. Those who suffer the ``second-hand''
    effects of meth include the victims of methamphetamine-related crimes,
    innocent children whose homes have been turned into toxic clandestine
    lab sites, law enforcement officers who work with the hazardous
    materials found at lab sites, and the environment from the
    approximately five pounds of toxic waste produced for every pound of
    methamphetamine cooked.
        Poisons and other highly toxic materials are often used in the
    illicit manufacturing of methamphetamine. The potentially hazardous
    elements that agents face when addressing a clandestine lab may include
    corrosive chemicals in combination with flammable chemicals. The
    corrosives may be both acidic and caustic in nature and in liquid,
    solid, or gas form. Aside from the volatilization of acids and solvents
    due to the introduction of heat, other more lethal compounds may be
    created at various stages in the clandestine production process.
    Chemical reactions between these ingredients may also generate reaction
    by-products that present a significant toxic danger. Additionally, the
    fire and explosion hazards in clandestine lab environments are
    considerable as a result of the solvents used in the chemical
    processing and extraction of the methamphetamine.
        During clandestine laboratory investigations, aside from evidence
    collection, DEA and law enforcement in general only dismantle and
    remove the chemicals, glassware, and apparatus. Law enforcement
    conducts only gross contaminant remediation and virtually no site
    decontamination. Currently, no national standards for remediation and
    decontamination exist. However, the U.S. House of Representatives
    recently passed legislation to change this. The legislation charges the
    Environmental Protection Agency with the development of guidelines to
    assist State and local authorities in cleaning up former
    methamphetamine lab sites.
                            financial investigations
        Question. Administrator Tandy, when we met earlier this year we
    discussed the fact that Americans spend up to $65 billion annually on
    illegal drugs. DEA is making a renewed effort to go after the cash
    profits in the drug business. You stressed in our meeting that DEA is
    looking at the drug trade as a business and attacking the flow of drug
    proceeds with financial and money laundering initiatives.
        Can you tell the Committee more about what you are doing in these
    financial investigations?
        Answer. DEA has set a five-year plan that by fiscal year 2009 we
    will be taking $3 billion per year away from all drug trafficking
    organizations (DTOs). The cumulative targets over five years total $10
    billion. In just the first two years we have denied traffickers $3.5
    billion in revenue. We count not only the money and property seized,
    but also the value of the drugs seized--that is the amount of funds
    invested in the drugs by the owner computed at production cost levels,
    which are very conservative.
        To accomplish these goals, DEA makes use of its authority to
    conduct undercover operations, known as Attorney General Exempted
    Operations (AGEO), which employ sensitive activities delineated by the
    Department of Justice (DOJ). In order for DEA to participate in these
    undercover money laundering investigations, the operation must undergo
    review by the Sensitive Activities Review Committee (SARC) and be
    approved by both the DEA Administrator and by a Deputy Assistant
    Attorney General of DOJ's Criminal Division.
        There are two possible types of SARC approved operations. The first
    is a Shelf Account operation. This operation enjoys the authority to
    establish undercover corporations and to open related undercover bank
    accounts to assist in ongoing narcotics investigations. A DEA office
    may then conduct transactions with a cap of $1.5 million.
        The second type of SARC approved operation is a Full Exemption.
    This type of operation allows for the establishment of an undercover
    corporation and bank account, but also affords the operation the use of
    any commissions collected to offset reasonable undercover expenses and
    to enter into an undercover lease of property. These types of
    investigations allow DEA Special Agents, acting in an undercover
    capacity the ability to infiltrate drug organizations through the use
    of financial transactions.
        Both types of operations are approved for a period of six months,
    each must call DEA's Office of Financial Operations (FO) in advance of
    any undercover pickup for a FO transaction number for tracking purposes
    and to assure FO that they have received prior approval from the DEA
    Country Attache (CA) from any affected foreign office. The individual
    CA approval will also include documentation of the U.S. Ambassador and
    host counterpart's prior approval as well. All three approvals must be
    secured before any enforcement activity takes place in the foreign
    country, to include the wire transferring of funds which have been
    laundered, thus insuring compliance with DEA's Memorandums of
    Understanding with the Department of State as well as the host
    government counterparts. Each of the operations must also submit
    monthly statistical reports and undergo onsite inspections every six
    months.
        A Fully Exempted operation will have a cap of $10 million, which
    may be increased upon a written request with an appropriate
    justification to the SARC committee. Each Fully Exempted operation must
    also be target specific, precluding DEA from operating open ended
    umbrella operations. Before extensions are granted for Fully Exempted
    operations, a review of the operation's arrests, seizures, and Title
    IIIs (lawful communications intercepts) conducted during the current
    reporting period are taken into consideration.
        Question. How do drug cartels get their cash profits out of this
    country and how is the DEA dealing with this threat?
        Answer. According to current estimates from the National Drug
    Intelligence Center, between $13 billion and $47 billion per year in
    drug trafficking profits leave the United States, mostly in the form of
    bulk currency, bound for international sources of supply. The smuggling
    of large sums of cash across our borders is the primary method used to
    expatriate drug proceeds from the United States. To target this flow of
    cash, DEA has initiated the following national financial initiatives:
        The Bulk Currency Initiative, a Special Enforcement Operation,
    coordinates all U.S. highway interdiction money seizures to develop the
    evidence needed to identify, disrupt, and dismantle large-scale
    narcotic trafficking organizations. When DEA is notified of a cash
    seizure by a State or local municipality, agents respond to the scene,
    assist with debriefing the defendants, and coordinate potential
    controlled deliveries of currency. Special Agents also assist in
    follow-up investigations, seizure and forfeiture of currency, and
    provide guidance on federal prosecution. DEA's El Paso Intelligence
    Center (EPIC) conducts research and analyzes evidence and intelligence
    relating to PTOs and other types of investigations.
        The Bulk Currency Initiative is aimed at assisting in the
    development of new investigations pertaining to seizures of large
    amounts of United States currency, as well as linking these seizures to
    ongoing drug investigations. This initiative endeavors to bring
    together all of the information and intelligence from existing
    interdiction programs through cooperative and collaborative sharing of
    information between federal, State, and local initiatives, and includes
    currency seizures made on United States highways through the highly
    successful Operation Pipeline program, and currency seizures made at
    various United States commercial airports through Operation Jetway.
    Additionally, DEA relies on its extensive foreign operations apparatus
    to identify instances where bulk United States currency is introduced
    into a foreign country's local economy.
        The Bulk Currency Initiative attempts to coordinate investigations
    that will be initiated in the field and assist in obtaining evidence
    and intelligence that may be shared among the various DEA field
    divisions. The DEA has found that the transportation of large amounts
    of United States currency from within the United States to various
    border locations continues to be one of the primary methods utilized by
    large scale trafficking organizations to launder narcotics proceeds.
    After arrival at any of the numerous border crossing points throughout
    the United States, this bulk currency is easily transported into a
    foreign country where it can be placed into the financial system with
    less risk of detection or reporting to law enforcement authorities, and
    eventually be utilized for a variety of illegal purposes. This movement
    of bulk cash presents an opportunity for law enforcement entities to
    disrupt an important facet of the narcotic trafficking process.
        The Concealment Trap Initiative, a Special Enforcement Operation
    program, targets those vital service providers who build concealed trap
    compartments in conveyances and residences for DTOs. The initiative has
    a two-fold objective. The first is to identify, prosecute, and/or gain
    the cooperation of the trap builders to identify the DTOs for whom they
    have previously built concealed traps. The second is, through the use
    of these cooperators and/or DEA Special Agents who have already been
    specially trained in the art of building concealment traps, to offer to
    build traps or provide trapped out vehicles (within the legal
    framework). These traps will have installed tracking devices to enable
    law enforcement to monitor the movement of these vehicles. These
    trapped vehicles will act as pointers to identify stash houses or
    locations where drugs and money are picked up and dropped off. Once
    these locations are identified, surveillance, controlled deliveries,
    communications intercepts, and other investigative techniques will
    enable the investigators to identify and seize millions in additional
    drug proceeds. Interdiction stops of vehicles using independent
    probable cause, with no reference to DEA's current investigation, will
    also be performed whenever possible. The vehicle with a concealed
    compartment will also be used to track bulk currency shipments back to
    the source of the drugs.
        Operation Highwire, a Special Enforcement Operation program, funds
    undercover sting operations targeting money remitters and others who
    offer money laundering services. Operation Highwire focuses on
    individuals involved in laundering drug proceeds through money remitter
    companies or individuals providing remitter-like services. DEA is
    targeting the finances of drug trafficking organizations operating
    along the Southwest Border, in the transit zone, and in source
    countries. DEA is also expanding financial investigations beyond the
    Western Hemisphere. Through its presence in Afghanistan, Dubai, and the
    surrounding region, DEA is targeting the flow of drug revenue suspected
    of financing terrorist activities. For example, DEA is developing
    intelligence on Afghanistan-based Hawaladars.
        The Hawala system is the principal method through which money is
    moved from, to, and throughout Afghanistan. Hawala is an established
    and accepted facet of the licit Afghan financial services industry.
    Legitimate Hawala brokers exist in Afghanistan and throughout the
    Islamic world. Afghan legislation requires hawalas to register with and
    be regulated by the Government of Afghanistan. The underground system
    thrives particularly due to the dearth of a legitimate banking industry
    in country. Approximately eleven banks have opened in Afghanistan since
    the fall of the Taliban. To date, these banks enjoy only a small
    portion of business typically reserved for banks. In zero sum fashion,
    Hawaladars often replace existing banks as providers of financial
    services. The principal service provided by Hawaladars is the transfer
    of money from one place to another. That traditional service does not
    preclude others, such as: currency exchange, check cashing,
    safeguarding of monies (i.e. acceptance of deposits), and other
    services. Moreover, it is believed that a significant percentage of
    Hawaladars also work in the import/export field.
        By working closely with our host nation counterparts, such as the
    Counter Narcotics Police-Afghanistan, DEA enjoys the access it needs to
    learn how traditional systems like Hawala operate. This knowledge,
    combined with DEA's institutional expertise in international drug
    investigations and drug intelligence will allow DEA to demonstrate that
    the Hawala system is not invulnerable. DEA's initial objective is to
    identify illicit money remitters operating in Afghanistan, and the
    Hawaladars with whom they work worldwide.
        Specific attention will be paid to identifying linkages to the
    United States. Acquisition of Hawaladar identifying information such as
    telephone/cell phone contact information, names, and possibly addresses
    will be the first step towards homing in on those involved with drug
    money laundering and with the provision of financial services to
    terrorists. Hawala transaction data is obtained through various means.
    Some is obtained through arrests and/or the execution of search
    warrants by DEA's foreign counterparts, who share the data with us.
    Communication intercept operations also yield hawala transaction data.
    Hawaladars in the United Arab Emirates are required by the government
    to file suspicious activity reports and to make their books available
    for inspection. Afghan authorities are implementing similar measures.
    Frequently, legitimate hawaladars form guild-like organizations,
    generally referred to as Hawala Unions, which set and enforce business
    standards and guarantee customers' rights. The Afghan government has
    established liaison relationships with a number of these unions in
    furtherance of developing market watch intelligence. Upon
    identification of a hawaladar participating in illicit activity,
    operational personnel will pass communications and other identifying
    information to the DEA's Special Operations Division and OCDETF's
    Fusion Center for exploitation. Between DEA, FBI, and other U.S.
    government database checks, and SOD communications exploitation, those
    Hawaladars determined to be involved with narcotics trafficking and/or
    terrorism will become potential targets of investigation.
        The Money Trail Initiative (MTI) is a Special Operations Division
    (SOD) supported multi-jurisdictional, multi-agency, Organized Crime
    Drug Enforcement Task Force (OCDETF) initiative targeting various DTOs
    that attempt to avoid law enforcement detection by smuggling multi-
    million dollar amounts of U.S. currency within and out of the United
    States to further their criminal enterprises. The MTI includes attempts
    to identify new bulk currency smuggling techniques and has already
    demonstrated a tangible impact from several operations. To date,
    $126,098,915 in cash and $22,667,016 in assets have been seized. A
    total of 14,719 kilograms of cocaine, 161,447 pounds of marijuana, 538
    kilograms of methamphetamine, 300 pounds of ice, and 35 kilograms of
    heroin have been taken off the streets under this initiative. The MTI
    involves the coordination of national bulk currency wire tap
    investigations and employs a ``Follow-The-Money'' strategy that enables
    domestic and Mexico-based DEA offices to utilize a more systematic and
    proactive approach to respond to techniques and trends in bulk currency
    operations. Through a coordinated operation, agents track the movement
    of currency forward to intended recipients and backward from the
    couriers to identify the breadth and scope of the DTOs that generate
    money. The MTI allows investigators to identify the money and drug
    transportation coordinators, couriers, and facilitators that are often
    shared between multiple DTOs.
        DEA Financial Investigative Teams focus on the flow of drug
    proceeds and how they can be identified and seized. While DEA will lead
    these efforts, they will involve cooperation with our federal, State,
    local, and foreign counterparts.
        The National Trucking Initiative, a Special Enforcement Operation
    program, is aimed at assisting in the development of relationships
    between DEA and the United States trucking industry. This will allow
    DEA access to the industry's assets and intelligence, which will assist
    DEA in disrupting the method for transporting drug proceeds via rogue
    trucking companies or transportation groups, in collaboration with
    several major truck lines.
        The License Plate Reader (LPR) Initiative combines the DEA, HIDTA,
    and U.S. Customs and Border Protection (CBP) database capabilities with
    new technology to identify, interdict, and/or develop intelligence on
    conveyances being utilized to transport drugs and bulk cash. DEA has
    implemented capabilities to exploit data collected from the LPR in
    Texas where the DEA Houston Division Office is currently operating LPRs
    in Falfurrias and Laredo. Use of the data from LPRs will be expanded
    nationally as funding becomes available. DEA exploits data collected
    from the LPR devices to tip-off DEA and other law enforcement agencies
    to suspect vehicles moving both to and from the Mexico border and
    identify conveyances being utilized to transport drugs and bulk
    currency. This is accomplished using the El Paso Intelligence Center as
    the recipient of all tactical requests. In addition, DEA has set an
    internal requirement to determine what strategic value and uses are
    being gained from the program to assure the program is best utilized.
    Once the proper network is funded, LPR data will be funneled to the
    OCDETF Fusion Center where it will be used for a comprehensive
    analytical research project.
        In the Fiscal Year 2007 Global War on Terror Supplemental, DEA
    requested and received $3,000,000 in non-personnel funding for
    Financial Investigations to support a proactive attack on the financial
    infrastructure of drug trafficking organizations operating in
    Afghanistan and within the region to help prevent Afghanistan from
    becoming a narco-terrorist state. This funding will support two
    initiatives: the first is an operation to develop a precise
    understanding of the Hawala system, and the second is to establish an
    ongoing, coordinated, regional Financial Investigation Training
    Program. The training program is being done in conjunction with the
    Department of State, the Department of Defense, and on a country by
    country basis with pertinent Operation Containment allies.
        Question. Under the Bank Secrecy Act, the Departments of Treasury
    and Homeland Security administer a number of enforcement activities and
    regulatory restrictions on money remitters. How are you collaborating
    with these Departments to jointly stop the flow of money?
        Answer. Money remitters are classified as Money Service Businesses
    (MSB) under the Bank Secrecy Act (BSA). As a MSB, money remitters fall
    under the Currency Transaction Report (CTR) filing requirements of the
    BSA. IRS is designated as the regulatory monitoring authority for MSBs
    for BSA regulatory compliance. Additionally, IRS-Criminal Investigation
    (CI) has sole jurisdiction over the enforcement of the CTR reporting
    requirements. Since both domestic and international drug trafficking
    organizations exploit the vulnerabilities of the money remitting
    industry, DEA works very closely with the IRS on both case specific and
    industry-wide programs relating to money remitters. DEA also works with
    DHS/Immigration and Customs Enforcement (ICE) on case specific matters
    involving money remitters when the facts of the case involve the cross
    border transmission of drug money. For example, a DEA group is assigned
    to the ICE-led El Dorado Money Laundering Task Force in New York.
        In addition to the flow of money through MSBs, it is likely that
    each year $8.3 billion to $24.2 billion in Mexican and Colombian
    wholesale drug proceeds generated in the United States are moved into
    Mexico via bulk cash smuggling by vehicles.\4\ To combat this illicit
    drug money transiting the Southwest Border (SWB) into Mexico, DEA field
    divisions along the border are actively working with Customs and Border
    Protection (CBP), ICE, and IRS-CI on proactive investigations and money
    flow initiatives:
    ---------------------------------------------------------------------------
        \4\ U.S. Department of Justice National Drug Intelligence Center
    (2006). Prepaid Stored Value Cards: A Potential Alternative to
    Traditional Money Laundering Methods. Assessment, Product No. 2006-
    R0803-001, 9 pages.
    ---------------------------------------------------------------------------
      --DEA, ICE, and IRS-CI all participate in the Texas Department of
            Public Safety (DPS) Post Seizure Analysis Team in Austin,
            Texas.
      --DEA, ICE, and the Arizona DPS are working together on a large
            multi-jurisdictional investigation targeting the DTOs utilizing
            concealed traps to transport money throughout the United States
            and into Mexico.
      --DEA is working very closely with the Treasury Office of Foreign
            Assets Control (OFAC) through real-time access to sensitive
            case related intelligence to assist OFAC in its Kingpin and
            Tier II designation of Mexican drug traffickers and their
            associated entities.
      --ICE and CBP are working with DEA's Houston Field Division on
            investigations into Mexican drug trafficking organizations
            responsible for sending thousands of kilograms of cocaine and
            methamphetamine into the United States, and tens of millions of
            drug dollars back to Mexico.
      --ICE is working with the DEA Phoenix Field Division and Arizona DPS
            on initiatives aimed at interdicting the flow of bulk cash
            across the SWB. For example, the Arizona Money Trap Initiative
            was designed by the Phoenix Field Division to form a
            partnership with the various federal, State, and local law
            enforcement entities in Arizona. This partnership attacks as
            many facets as possible of the transportation and smuggling of
            bulk currency across the State. At the core of the initiative
            is the concept that information from various cash seizures will
            be shared, and acted upon by the member entities in a
            coordinated manner The initiative has several ongoing cases.
      --EPIC, through its new National Seizure System (NSS), will act as a
            central repository for bulk cash interdiction intelligence
            information. ICE has tentatively agreed to place its bulk cash
            information in the NSS.
      --ICE and IRS-CI are participating agencies at the DEA Special
            Operations Division (SOD). SOD coordinates DEA's largest and
            most sensitive investigations on drug money flow across the
            SWB. As participants at SOD, both ICE and IRS-CI have access to
            the SOD databases for deconfliction and coordination of their
            money flow investigations with DEA's.
      --DEA and CBP are working on a number of initiatives aimed at fusing
            intelligence to identify and interdict money flowing across the
            SWB by and on behalf of DEA targets of investigation. DEA and
            CBP Headquarters are working with the Fusion Center to test the
            LPR program by combining indices from each organization. DEA
            and CBP are also working in Texas on the Divisional use of the
            LPR system. Additionally, DEA and CBP are working at the
            Headquarters level in the trial stages of using CBP
            international parcels data to target and interdict bulk
            currency and other contraband being shipped via parcels out of
            the United States.
      --IRS-CI is assisting the DEA Las Vegas District Office in the
            follow-up investigation of the recent seizure of $207 million
            in Mexico City from a supplier of precursor chemicals used in
            the production of methamphetamine.
                                    internet
        Question. Drug traffickers, like virtually every other industry,
    legal or illegal, use the internet to conduct business.
        What is the DEA doing to attack this problem?
        Answer. The Internet is the fastest growing source of diverted
    controlled pharmaceuticals. DEA is working hard to attack this problem
    on many fronts:
      --DEA has provided all field divisions with undercover credit card
            accounts in order to make online purchases of controlled
            pharmaceuticals for use as evidence in Internet investigations.
      --From October 2002 through December 2006, a total of 3,924
            individuals (3,327 federal participants and 597 State and local
            participants) have completed DEA's online investigations
            training program. This training is provided to DEA Special
            Agents, Diversion Investigators, and Intelligence Analysts, as
            well as State and Local Task Force Officers.
      --DEA's Online Investigations Project is used to provide Whois
            (registration information relative to domain names) and trace
            route information on suspect websites that might be illegally
            distributing controlled substances and link them to other
            associated websites.
      --In order to identify and shut down Internet pharmacies violating
            the Controlled Substances Act, DEA's Diversion Control Program
            is using all regulatory tools possible, including
            Administrative Inspection Warrants, registration suspensions,
            and criminal/civil charges.
      --DEA is using the Automated Reports and Consolidated Order System
            (ARCOS) to identify high volume purchasers of narcotic
            controlled substances and to determine which retail pharmacies
            and practitioners are most likely involved in the illicit
            distribution of controlled substances over the Internet.
      --In August 2005, DEA began its Distributor Initiative Program. Since
            that time DEA has been meeting with representatives of the
            pharmaceutical industry to educate them on the issue of illegal
            diversion via the Internet. Through this program DEA has sought
            the cooperation of the distributors of controlled
            pharmaceuticals to increase their due diligence in order to
            prevent further diversion of controlled substances. As a result
            of this program, 24 distributors working out of 129
            distribution outlets have voluntarily stopped selling or
            voluntarily restricted sales of controlled substances to
            hundreds of domestic pharmacies that were attempting to make
            suspicious orders from the distributors. Each distribution
            outlet is registered with DEA and each can loose its
            registration independently of the other outlets.
      --DEA has worked with Internet search engines such as Google, AOL,
            and Yahoo to create links to DEA's Diversion Website. These
            links are designed to appear when consumers attempt to buy
            controlled substances online without the requisite medical
            exams and prescriptions. In 2005 and 2006, these links appeared
            more than 72.9 million times.
      --DEA has initiated over 218 investigations of online sales of
            controlled substances without a prescription through the end of
            fiscal year 2006. DEA initiated an additional 11 investigations
            during the first quarter of fiscal year 2007.
      --As a result of Internet investigations, DEA seized approximately
            $30 million in cash, bank accounts, property, and computers
            during fiscal year 2006. In fiscal year 2005, Internet
            investigations resulted in $34.5 million in seizures, a 190
            percent increase over fiscal year 2004 ($11.9 million).
            Internet investigations have resulted in the seizure of $13
            million during the first quarter of fiscal year 2007.
      --DEA has developed a close working relationship with Internet
            Service Providers (ISPs), Voice over Internet Protocol (VoIP)
            providers, and email providers from around the world to include
            Microsoft, Vonage, Google, Time Warner, and AT&T. These
            providers have supplied DEA with a secure method to deliver
            data from the provider to DEA field agents for an immediate
            enforcement response.
      --DEA routinely meets with other members of the law enforcement
            community from around the world. DEA has built an extensive
            cooperative relationship with other federal agencies to include
            FBI, Secret Service, ICE, and the U.S. Marshals Service. With
            the cooperation of these federal counterparts, DEA is able to
            leverage unparalleled engineering expertise for the design and
            implementation of technical solutions that ensure law
            enforcement's ability to lawfully intercept emerging
            technologies.
      --DEA implemented a Technology Working Group (TWG) to address
            technical issues associated with Internet intercepts. The TWG
            routinely meets with members of the Internet industry and
            becomes educated on new technologies that could affect DEA,
            either positively or negatively. The TWG gathers and reviews
            reports from our field offices that discuss technologies and
            the obstacles associated with these technologies. The TWG
            follows up with the respective field agents to become more
            familiar with the technologies and how they effect DEA's
            operations. If the collected intelligence needs to be
            disseminated to additional sections within DEA or the law
            enforcement community, the TWG is responsible for ensuring that
            data is disseminated appropriately.
      --In 2005, DEA hosted interagency meetings with executive level
            representatives from over two-dozen corporations in three key
            industry groups (Internet, express parcel delivery, and
            financial) used by Internet pharmaceutical traffickers. Since
            those meetings, DEA has developed progressively closer working
            relationships with the leading corporations in each industry
            sector and has coordinated interagency outreach to these same
            corporations. These industry relationships are intended to: (1)
            promote information sharing within the private sector and with
            DEA to proactively identify and target major Internet
            controlled pharmaceutical traffickers; and (2) identify and
            share best practices across industry groups to more effectively
            deny the use of business services by Internet controlled
            pharmaceutical traffickers.
        Question. Given the large number of new encrypted communication
    devices entering the market, how does DEA stay up with this evolving
    technology?
        Answer. The use of encrypted communications by drug trafficking
    organizations is becoming more prevalent. To counter this, DEA is an
    active participant in a number of technology working groups and
    routinely meets with law enforcement and intelligence agencies from
    around the world to discuss intercept solutions for emerging encryption
    devices. DEA also employs a highly specialized staff of engineers that
    test, develop, and evaluate solutions to defeat or minimize the impact
    of encrypted communications in use by criminal organizations.
        DEA's Office of Investigative Technology, is responsible for the
    design, development, and implementation of technical solutions for the
    lawful intercept of Internet-facilitated communications utilized by
    drug trafficking organizations. However, the complexity and costs of a
    single data network intercept is often overwhelming for law
    enforcement. Furthermore, traditional technologies available to law
    enforcement for data network intercepts are vulnerable to organizations
    that utilize multiple access points for data communications or encrypt
    their communications using high level encryption protocols.
        In the fiscal year 2008 President's budget, DEA requests $1,000,000
    to improve and expand its Internet investigative technologies to combat
    the evolving methods used by drug trafficking organizations. This
    funding will be used to develop and purchase intercept solutions for
    emerging Internet technologies, including data intercept solutions that
    can be placed on a targeted computer to covertly capture all
    communications authorized by a Title III court order. Since the
    intercept solution actually resides on a subject's computer, mobility
    of a target that accesses the Internet through multiple service
    providers can be overcome. Also, encrypted communications can be
    intercepted as the software is able to capture communications in their
    unencrypted state, rather than when they are in transit and secure.
        Ongoing investigations limit DEA's ability to provide specific
    details on the methods and use of this encrypted communication
    technology. However, this enhancement will provide DEA with the
    technical capacity to address certain types of communications that
    cannot be intercepted through conventional methods. The challenge
    facing DEA on these ongoing investigations is that the drug trafficking
    organizations increasingly communicate by means of encryption among
    their associates regarding transportation, distribution routes, and
    money laundering activities. To make it more difficult, some of these
    encrypted email service providers and peer-to-peer communication
    networks are foreign based companies not subject to our laws.
    Therefore, the inability of domestic law enforcement to exploit these
    encrypted communications has allowed the criminal organizations to
    operate with impunity and prohibit the intercept from realizing its
    full investigative potential.
        There are several ongoing investigations that have been adversely
    impacted by the use of encryption by the targeted organizations. For
    example, drug trafficking and money laundering organizations have
    directed members of their organization to use encrypted email service
    providers and peer-to-peer communication networks to facilitate,
    organize, and conduct criminal acts. Drug traffickers have also learned
    to converse over the Internet and on their cell phones using one or
    more encrypted methods. These methods range from sending and receiving
    calls, sending instant messages, and viewing information over an
    encrypted email service and/or peer to peer communication network.
    Additionally, the drug trafficker or money launderer has the ability to
    use a cell phone or computer device with minimal knowledge, identity,
    and cost.
        Question. In your testimony, Administrator Tandy, you identify a
    problem with online pharmacies. What are the challenges these online
    drug stores present to the DEA?
        Answer. The illicit trafficking of controlled pharmaceuticals has
    been facilitated by the wide use of the Internet and the anonymity it
    provides. The existence of readily available drugs on the Internet is a
    great concern because of the potential for abuse and the potential
    safety issues that revolve around what is largely an unregulated
    process. A July 2006 Department of Justice, Office of the Inspector
    General report states, ``The increase in the diversion of controlled
    pharmaceuticals has coincided with the emergence of the Internet as a
    significant source for diverted pharmaceuticals. Hundreds of Internet
    pharmacies have been established through which large amounts of
    pharmaceuticals can be easily purchased with a credit card and without
    a prescription.'' \5\ Much of the problem revolves around third-party
    businesses operating websites that facilitate a doctor's ability to
    write, and a pharmacy to fill, numerous prescriptions without a face-
    to-face visit.
    ---------------------------------------------------------------------------
        \5\ Follow-Up Review of the Drug Enforcement Administration's
    Efforts to Control the Diversion of Controlled Pharmaceuticals. DOJ,
    Office of the Inspector General, July 2006.
    ---------------------------------------------------------------------------
        DEA investigations indicate the Internet is the fastest growing and
    one of the largest sources of diverted controlled substances. The
    volume of controlled substances being diverted by a single rogue
    pharmacy dispensing via the Internet poses a major threat. For example,
    in fiscal year 2006, DEA identified 34 known or suspected rogue
    pharmacies dispensing controlled substances via the Internet.
    Cumulatively, these pharmacies dispensed 98,566,711 dosage units of
    hydrocodone-based products in 2006. It would take 1,118 legitimate
    pharmacies to dispense the same amount of hydrocodone-based products as
    these 34 rogue Internet pharmacies did in 2006.\6\
    ---------------------------------------------------------------------------
        \6\ Source: ARCOS data. In 2006, the average U.S. pharmacy
    dispensed 88,178 dosage units of hydrocodone.
    ---------------------------------------------------------------------------
        Online investigations also require more resources than traditional
    diversion investigations because a large amount of data is retrieved
    and processed during online investigations. For example, Internet
    online pharmacy cases require a cadre of highly skilled engineers to
    develop customized intercept solutions. On average, a major online
    investigation conducted by DEA costs $1.5 million (including salaries
    and operational costs) and requires 27,800 work hours (based on five
    recent major online investigations). In comparison, a typical diversion
    investigation costs $220,000 and requires 3,800 work hours. However,
    online investigations may not require the same amount of resources as
    large non-diversion cases with extensive Title III investigations. For
    example, the recent Operation Three Hour Tour cost $2.4 million and
    required 48,000 work hours.
        One lawful intercept or Title III can reveal hundreds to thousands
    of users. Operation CyberRX was one of DEA's largest Internet
    intercepts and intercepted over 6,500 individuals purchasing
    pharmaceuticals illegally. The volume of data collected during this
    investigation required the deployment of additional resources. As a
    result, the Fort Worth Resident Office has seized over $19 million in
    cash and assets and 19 individuals were arrested.
        Finally, online pharmacies that operate outside of the United
    States and its territories pose legal and technical issues for DEA.
    Internet Service Providers (ISPs) operating within the United States
    are generally responsive to lawful orders issued by U.S. courts.
    However, DEA's regulatory authority and Administrative Subpoena
    authority does not extend to the foreign-based ISPs, companies, or
    pharmacies. Furthermore, DEA is unable to measure the exact number of
    rogue ``pharmacies'' operating outside the United States. A Google
    search may reveal thousands upon thousands of ``sites'' that offer
    controlled pharmaceuticals however many of these sites are transient
    and illusive, taking advantage of the anonymity afforded by the
    Internet. Experience has also shown that many of these are referral
    sites and are not ones that would ultimately fill an order. It is
    usually difficult, if not impossible, to trace where international
    sites are physically located. Some investigations have revealed that
    the web site may be located in one country, while the ``pharmacy'' is
    located in another, and the money is received in yet a third country.
    Often times the international ``pharmacy'' is not a pharmacy at all and
    the products that are shipped may be diluted or counterfeit substances.
        Question. Are there additional legal authorities you need to assist
    you in this war?
        Answer. The Administration is looking at a wide range of potential
    legislative measures. DEA wants to stop the illegitimate online
    pharmacies while ensuring that legitimate pharmacies and doctors are
    able to effectively use the Internet.
        Since the advent of the Internet law enforcement has encountered
    numerous obstacles and challenges. The ``Technological Revolution'' has
    opened new and evolving legal hurtles never before faced by any
    previous generation. Though designed for the benefit of society, the
    Internet has allowed criminals the ability to continue their activities
    while maneuvering through cyberspace under the cloak of anonymity.
    Traditional crimes such as child pornography, identity thefts, drug
    diversion, and fraud are able to flourish in cyberspace. Daily, law
    enforcement, attorneys, legislators, and the courts are all faced with
    new issued brought about by the Internet. Yesterday's laws are often
    inappropriate, outdated, or inadequate to deal with crimes that evolve
    so quickly. Compounding the problem is the fact that often there are
    parallel issues involving the use of the Internet for legitimate and
    well intended purposes. It is therefore vital that when laws are
    drafted to deal with matters as important as the diversion of
    controlled substances that they will withstand the test of time. The
    Drug Enforcement Administration is always willing to provide Congress
    with whatever technical assistance it can for legislators to determine
    what laws they deem appropriate and necessary.
                                  surveillance
        Question. The drug cartels are spending millions to overcome your
    surveillance, even conducting counter surveillance activities on the
    DEA.
        What are the cartels doing to make surveillance more difficult?
        Answer. DEA has gathered intelligence that traffickers both in the
    United States and outside the United States have become more
    technologically advanced in an effort to divert law enforcement.
    Devices that are used everyday as a secure means of communication pose
    a threat to law enforcement and its capability to conduct lawful
    intercepts. These devices provide a secure means of viewing and sending
    data over a handheld device (such as a Blackberry) via a foreign based
    company server. This is further accomplished utilizing proprietary
    company software that has the ability to encrypt the data, sent over a
    U.S. based cellular provider's network to a recipient's communication
    device that contains the proprietary software needed to decrypt the
    data. Should U.S. law enforcement intercept this encrypted data
    anywhere between the sender and the recipient, we would not be able to
    decrypt the communications due to its high level encryption algorithms.
        Drug cells operating around the world are aware of the complexity
    in conducting intercepts, whether it is on a telephone or a computer.
    The availability of wireless ``hotspots'' and cybercafes adds to the
    complexity of conducting intercepts because a target is able to utilize
    a laptop computer or an Internet enabled device to access the Internet
    where he/she can use email, oversee financial assets, and make Voice
    over Internet Protocol (VoIP) calls using multiple Internet Service
    Providers (ISPs). Law enforcement does not have the ability to deploy
    mobile intercept equipment from ISP to ISP due to the complexity of
    these intercepts. However, if intelligence is able to determine a
    pattern on a subject's use of the Internet, we can then begin to target
    the provider in hopes of deploying an intercept.
        The use of VoIP services is becoming more common mainly because of
    the low cost of these services. Although DEA is able to intercept VoIP
    communications and routinely does so, providers are beginning to offer
    features such as encryption and peer-to-peer communications for added
    security. One of the most recognizable vendors in this area is Skype
    Communications. Skype is free software that is downloaded off of the
    Internet which allows for encrypted VoIP and instant messaging
    communications between customers that have also downloaded Skype's
    software. The communications only require Internet connectivity to
    facilitate the communications. The communications are not delivered
    through a traditional ISP server but rather each Skype user allows for
    the facilitation of communications over a peer-to-peer network. The
    data delivery of these communications takes an unpredictable route
    making it almost impossible to intercept. Furthermore, if the data was
    intercepted it would be in an encrypted format that would be almost
    impossible to crack. DEA has also observed several additional email
    providers that market their encrypted email features for little or no
    charge.
        Traffickers transiting the high seas on commercial maritime
    vehicles and the Caribbean on go-fast boats also make surveillance
    difficult by communicating by satellite telephones. While DEA has used
    satellite telephone intercepts and maritime tracking devices to
    successfully locate and seize vessels laden with drugs, satellite
    telephone intercepts are extremely costly. For example, there are
    instances where satellite telephone companies are not CALEA compliant
    and DEA must engineer an intercept solution to glean investigative
    information.
        In the fiscal year 2008 President's budget, DEA requests $3,100,000
    for improved satellite telephone and maritime tracking resources, as
    well as additional linguist funding and data collection capabilities.
        In fiscal year 2008, DEA also requests $2,000,000 for tracking,
    sensor, and audio/video surveillance equipment. Surveillance equipment
    is particularly crucial in areas such as the Southwest Border (SWB)
    because it is a major point of entry with few realistic controls.
    Cartels are also building sophisticated encrypted radio networks along
    the SWB for command and control. Surveillance equipment, such as remote
    cameras, tracking devices, and alarms, are one of the only ways to
    cover such an expansive area. DEA field divisions along the SWB employ
    a variety of sophisticated audio and video surveillance equipment
    including mobile surveillance platforms, digital equipment with
    Internet connectivity, mobile x-ray equipment, microwave automated
    repeater systems, and scanners for monitoring radio frequencies. Much
    of this equipment is a ``force multiplier'' because agents do not need
    to be physically present to monitor the surveillance, which enables
    them to be more productively used elsewhere.
        In regards to counter surveillance, it has become more commonplace
    for drug traffickers and drug trafficking organizations to use
    sophisticated countermeasures to detect electronic surveillance
    signals. The most frequently used countermeasure devices are radio
    frequency (RF) detectors, frequency counters, and scanners.
        A radio frequency detector identifies devices which transmit RF
    signals within the operating parameters of the detector. RF
    transmitters used by law enforcement agencies for surveillance purposes
    convey audio, video, and data from one location to another. RF
    detectors are commonly used by legitimate industry technicians to
    locate frequencies, identify unwanted signals, and interference which
    contribute to degradation of RF signals. These devices are also used
    for more nefarious purposes by criminals for the purpose of identifying
    electronic surveillance by law enforcement. RF detectors, from basic
    inexpensive types to expensive sophisticated models, are widely
    available through Internet vendors as well as stores commonly referred
    to as ``spy shops.''
        A frequency counter is a device that determines the frequency
    emitting from a transmitter. The are two basic types of frequency
    counters, one that will determine the exact frequency of analog
    transmissions, and one that will determine the exact frequency of
    either analog or digital transmissions. A scanner is used to identify
    radio emissions in a given area.
        RF detectors, frequency counters, and scanners are used in concert
    to complete an effective, electronic ``sweep'' of an area for RF
    signals. Criminal organizations are known to retain highly paid private
    detective firms or other vendors specializing in providing electronic
    ``sweeps'' of homes, offices, vehicles, or other conveyances and
    locations to identify electronic surveillance devices.
        Question. What is DEA doing to overcome these obstacles?
        Answer. DEA employs a cadre of Engineers and Telecommunications
    Specialist to develop, test, and implement technical intercept/
    surveillance solutions. The equipment that is utilized to develop these
    solutions is very complex and very costly. The skill set these
    employees possess is very unique and requires a great deal of training
    in order to evolve as quickly as technology dictates.
        DEA has also developed minimization software for data intercepts
    that enables law enforcement to view or listen to intercepted
    communications just as a target would view or listen to it. The
    software that is utilized during Internet intercepts is constantly
    being updated to conform to the Internet's constantly changing
    protocols. DEA provides this software to other federal agencies, as
    well as State and local law enforcement agencies.
        The ISPs that DEA routinely works with also advise DEA of new
    technologies prior to their release to the general public. This enables
    DEA to proactively develop solutions which will allow DEA to have
    intercept solutions in place should an investigation require them. This
    provides minimal turnaround time and allows the data to be expedited to
    the field.
        Finally, DEA continues to work with industry, the field, and other
    federal, State and local agencies to research, develop, and employ both
    active and passive surveillance countermeasures.
                                  met program
        Question. Administrator Tandy, the Mobile Enforcement Team (MET)
    program has proven to be very successful in assisting State and local
    law enforcement agencies in addressing their communities' drug threats.
    The Budget proposed to eliminate the MET program.
        How will DEA respond to requests for assistance from State and
    local law enforcement without the MET program?
        Answer. MET is not the only DEA program that benefits State and
    local law enforcement. In addition to the MET program, DEA leads over
    200 State and local task forces, including over 1,600 DEA Special
    Agents and over 2,100 State and local task force officers, all of whom
    are dedicated full time to address drug trafficking, including
    trafficking in our local communities.
        Despite the elimination of the MET program, DEA will continue to
    work side-by-side with our State and local law enforcement partners by
    sharing intelligence and providing training to them. DEA assists State
    and local law enforcement in many ways, for example:
      --DEA's EPIC Open Connectivity Project provides web-based access to
            approximately 1,800 Federal, State, and local partners on an
            annual basis. Users can query and access law enforcement data
            maintained by EPIC.
      --In fiscal year 2006, DEA shared $274 million in State and local
            proceeds with State and local law enforcement, a 25 percent
            increase over the $219 million shared in fiscal year 2005,
            including a 40 percent increase in the funds shared with
            Sheriffs. This level of sharing is expected to continue.
      --In fiscal year 2006, DEA trained over 41,000 S&L officers,
            including over 1,000 in meth lab clean up and training.
      --By the end of 2008, DEA plans to complete a clandestine laboratory
            training facility to better train more State and local
            officers.
                       united states/mexico collaboration
        Question. Administrator Tandy, State and local law enforcement
    officers are the ``end-users'' that deal with the drugs and violence
    proliferated by Mexican drug trafficking organizations. Historically,
    the government of Mexico has not been a strong ally in addressing this
    threat.
        What is your assessment on America's current working relationship
    with the Mexican government on combating drug trafficking
    organizations?
        Answer. Under the Calderon Administration, our relationship with
    Mexico has experienced unprecedented levels of cooperation and
    solidarity in combating drug trafficking organizations. Specifically,
    DEA is working hard with the Government of Mexico to target the
    criminal organizations involved in the diversion of precursor chemicals
    and the producing and trafficking of methamphetamine. Relations between
    Mexican authorities and DEA are at an all time high in terms of
    chemical control. Mexico has imposed import quotas tied to estimates of
    national needs. The Mexican Government limited pseudoephedrine,
    ephedrine, and combination product importation permits to 70 tons
    during 2006; this is a reduction of 53 percent from the 2005 level of
    imports (150 tons). This quota has made it more difficult for
    traffickers to obtain precursor chemicals. Prices have increased and
    traffickers have been forced to resort to traditional diversion
    methods, including smuggling and the use of third countries to procure
    their chemicals. In addition, intelligence indicates that traffickers
    have also turned to alternate production methods for methamphetamine
    and the apparent use of substitute chemicals as the traditional
    precursors are becoming more difficult to obtain. Mexico has discussed
    revising their quota downward even further in 2007.
        In May 2006, at the National Methamphetamine and Chemicals
    Initiative (NMCI) Strategy Conference in Dallas, Attorney General
    Gonzales announced important new anti-methamphetamine domestic
    initiatives, as well as new partnerships between the United States and
    Mexico in fighting methamphetamine trafficking. These initiatives will
    improve enforcement and information sharing, increase law enforcement
    training, and increase public awareness both domestically and
    internationally. Since this announcement, methamphetamine enforcement
    teams have been formed on both sides of the border and DEA has donated
    8 refurbished clan lab trucks to Mexico. Additionally, DEA and DOS/INL
    trained over 2,000 Mexican officials in 2006 on a variety of
    investigative, enforcement, and regulatory methods related to
    methamphetamine trafficking and manufacturing. This training included
    instruction on clandestine laboratory investigations, precursor
    chemical investigation, and drug identification.
        DEA has also expanded the role of its Clan Lab Enforcement Teams to
    target Mexican methamphetamine trafficking organizations. These teams
    are using their lab expertise to trace chemicals, finished
    methamphetamine, and drug proceeds to drug trafficking organizations in
    the United States and Mexico. These teams are also working to identify
    and dismantle U.S.-based methamphetamine transportation and
    distribution cells.
        The United States also enjoys an excellent extradition relationship
    with Mexico, which has served both countries well in the administration
    of justice. In 2006, for the fifth consecutive year, Mexican
    authorities extradited a record number of fugitives to the United
    States. In 2006, there were 60 extraditions from Mexico to the United
    States. Twenty-six of these extraditions were for drug charges,
    including 24 Mexican nationals. In 2005, Mexico extradited 41 fugitives
    to the United States--up from 34 in 2004.
        The new administration of President Calderon has taken a strong,
    proactive stance against drug traffickers and the associated violence.
    On January 19, 2007, Mexico extradited 15 offenders to the United
    States, a significant number of which have U.S. narcotics trafficking
    and related charges. Notably, the leader of the Gulf Cartel, Osiel
    Cardenas-Guillen, two high-level members of the Tijuana Cartel, two
    mid-level members of the Juarez Cartel, and three high-level and two
    mid-level members of the Federation were extradited.
        DEA works closely with its Sensitive Investigative Unit (SIU) in
    Mexico. As of December 31, 2006, the Mexican SIU consists of nearly 300
    Federal Investigations Agency, Federal Preventive Police, and SIEDO
    (federal prosecutors). Furthermore, during 2006, under DEA direction,
    2,161 agents of the AFI and the Policia Federal Preventiva and other
    Mexican personnel were trained by DEA and State Department funded
    contractors on clandestine laboratories, officer/first responder
    safety, and chemical identification. DEA also provided training to both
    Mexican prosecutors and law enforcement as part of a month-long course
    at the DEA Training Academy in Quantico, Virginia.
        The Bilateral Intercept Program is an unparalleled initiative
    between DEA and the Government of Mexico which has developed a
    comprehensive wire intercept program by utilizing the SOD methodology
    of simultaneously targeting international drug trafficking
    organizations throughout the United States and Mexico. Early successes
    have indicated cooperation between DEA and Government of Mexico will
    only continue to expand coordinated law enforcement efforts.
        Operations All Inclusive 2005-1 and 2006-1 is another example of
    DEA and Government of Mexico cooperation. These operations ran from
    August 5, 2005 through October 8, 2005, and March 4, 2006 through April
    26, 2006, respectively, and targeted South American source regions,
    Eastern Pacific and Western Caribbean vectors of the Mexico/Central
    America transit zones, and the Mexico and Central America land mass, by
    attacking the drug trade's main arteries and support infrastructure
    with innovative, multi-faceted, and intelligence-driven operations.
    Both operations exploited the maritime, overland, commercial air, and
    private air smuggling vulnerabilities in the movement of drugs, money,
    and chemicals. DEA and other federal, State, and host nation law
    enforcement and military agencies supported both operational and
    intelligence aspects of these operations.
        Operation All Inclusive 2005-1 seizure highlights in Mexico include
    21.05 metric tons of marijuana, 108 kilograms of cocaine, 35.2
    kilograms of heroin, and nearly 1 million tablets of pseudoephedrine.
    Of particular importance were two currency seizures at the Mexico City
    Airport totaling $8.7 million. One seizure totaling $7.8 million, which
    was eventually linked to members of the Mexican ``Federation,'' is the
    largest currency seizure to date at the Mexico City International
    Airport. During this operation, over 46 metric tons of cocaine were
    interdicted and seized before they could reach Mexico, where the drugs
    are normally broken down into smaller quantities for transshipment
    north and to make them more difficult to interdict. Additionally, 3.5
    metric tons of cocaine seized from the fishing vessel Vega in the
    Eastern Pacific Ocean on August 15, 2005, was linked to Colombian PTO
    Herman Vasquez-Sanchez and an alleged Mexico City-based recipient who
    were identified through wire intercepts. Operation All Inclusive 2006-1
    highlights included the arrest of three pilots and the seizure of a DC-
    9 and Dassault Falcon Jet aircraft and 5.6 tons of cocaine at the
    Ciudad de Carmen Airport, Campeche, Mexico. Also, nearly 17 metric tons
    of marijuana and 10.4 kilograms of heroin were seized. Thirty-eight
    metric tons of cocaine were interdicted and seized before they could
    reach Mexico.
        Question. What does the future hold for increasing DEA-Mexican
    cooperation?
        Answer. In addition to enforcement assistance and the development
    of new enforcement strategies, DEA will continue to offer training to
    the Government of Mexico. In fiscal year 2006, under DEA direction,
    over 2,000 agents of the AFI and the Policia Federal Preventiva and
    other Mexican personnel were trained by DEA and State Department funded
    contractors on clandestine laboratories, officer/first responder
    safety, and chemical identification.
        DEA will also continue to work with the Government of Mexico to
    obtain the extradition of high value targets such as occurred on
    January 19, 2007; when Osiel Cardenas Guillen, a CPOT and the leader of
    the notorious Gulf Cartel which is headquartered in Matamoros, Mexico;
    who was responsible for much of the ``narco-violence'' on the Southwest
    Border was turned over to the DEA by the Government of Mexico to face
    drug charges in U.S. Federal Court.
        DEA will also continue working with the Government of Mexico on
    future iterations of Operation All Inclusive. Recognizing that the
    United States cannot control its borders by merely enforcing the
    immediate border, DEA's International Drug Flow Attack Strategy
    incorporates a ``defense in depth'' component by attacking the source
    and transit zone. This model has successfully been applied
    internationally in two deployments and is in the beginning stages of a
    third operation (Operation All Inclusive 2007-1). A fourth iteration
    focuses on the Southwest Border and is called Operation Doble Via.
    Operation Doble Via is a combination of staggered and simultaneous
    U.S./Mexico enforcement operations combined with intelligence driven
    enforcement operations designed to influence illicit trafficking
    patterns and increase disruptions to violent DTOs.
        Operation All Inclusive was developed to attack an entire region in
    hopes of not simply displacing cartels but eliminating them. Operation
    All Inclusive causes major disruption to the flow of drugs, money, and
    chemicals between the source zones and the United States. To
    effectively combat drug trafficking in Central America, Mexico, and the
    transit zone, the United States must maintain a sustained, multi-agency
    approach. The DEA focuses on improving the region's counter drug
    capabilities through developing personal liaisons with host nation law
    enforcement authorities, institution building with host nation
    governments, and by attacking the command and control structures of
    major drug trafficking organizations.
                                   marijuana
        Question. Administrator Tandy, marijuana abuse is one the most
    significant drug challenges currently faced by law enforcement
    agencies. The majority of domestically cultivated marijuana is being
    grown on public lands in our national parks and forests. These
    marijuana plots are being aggressively defended by armed Mexican drug
    cartels, making our national treasures unsafe for public use.
        Do you agree with this assessment?
        Answer. The Department of Agriculture, Forest Service (USDA, FS)
    and agencies of the Department of the Interior (DOI) continue to detect
    significant increases in marijuana cultivation on federal public lands
    nationwide. These findings correspond to reports of expanded domestic
    cannabis cultivation and marijuana production. Domestic cannabis
    eradication data for 2005 shows the highest level of cannabis
    eradication ever recorded. In 2005, 4.2 million plants were seized
    compared to 3.7 million in 2003, the next highest level in the years
    2000-2005.\7\
    ---------------------------------------------------------------------------
        \7\ National Drug Threat Assessment 2007. National Drug
    Intelligence Center, U.S. Department of Justice, October 2006.
    ---------------------------------------------------------------------------
        The cultivation of marijuana on public lands is dominated by
    loosely organized, poly-drug Mexican drug trafficking organizations
    (DTOs) employing illegal Mexican aliens for the production and
    distribution of marijuana and methamphetamine nationwide. The violence
    and environmental risks associated with this cultivation is growing,
    therefore DEA is striving to halt the spread of marijuana cultivation
    in the United States by focusing various federal, State, and local law
    enforcement efforts towards identifying and dismantling the DTOs
    directing and controlling this activity.
        Question. What is DEA's strategy to address this growing threat?
        Answer. To address this threat, DEA has initiated a public land
    working group comprised of affected federal land management agencies.
    DEA is examining how best to leverage the available resources of our
    federal partners through better sharing of intelligence and targeting
    of these DTOs. Critical to this strategy will be the collection and
    sharing of intelligence concerning the communications devices and
    techniques used by those growing marijuana on our public lands. Federal
    land management agencies have confirmed their commitment to sharing
    intelligence with DEA. With the intelligence gathered, DEA will
    identify and attack the Mexican organizations that direct and control
    the cultivation and distribution.
        Marijuana cultivation on public lands presents a number of
    enforcement challenges, including the need for air support and large
    numbers of law enforcement personnel to safely and successfully
    accomplish eradication missions. DEA has the mechanisms in place
    through the Special Operation Division, the Fusion Center, and the El
    Paso Intelligence Center to add value to intelligence from marijuana
    enforcement operations on public lands and to coordinate and expand
    investigations beyond simple plant eradication to attacking the
    controlling DTOs. DEA has offered this established strategy and
    available resources to the FS and DOI, as well as additional training
    and access to intelligence information.
        DEA is also working with the Park Service and Forest Service to
    cross-designate selected Park Service and Forest Service law
    enforcement officers to work on specific cases with DEA, or to serve on
    DEA task forces. Unilateral Title 21 investigations by the DOI or the
    Forest Service would lack the coordination necessary to ensure the
    safety of law enforcement personnel, and would not permit de-
    confliction with other domestic and foreign investigations.
        In addition to enforcement efforts, DEA's Domestic Cannabis
    Eradication/Suppression Program (DCE-SP) works with our participating
    State and local partners to target marijuana wherever it is produced
    throughout the United States and its territories, on both public and
    private lands. The DCE/SP is an enforcement activity which provides
    funding, operational support, and training to participating State and
    local agencies. The program strives to halt the spread of marijuana
    cultivation throughout the United States and is responsible for the
    investigation and eradication of both indoor and outdoor cultivation of
    the illicit crop.
                                     ______

                 Question Submitted by Senator Pete V. Domenici
                                dea nm resources
        Question. I believe that the DEA plays a critical role in law
    enforcement activities in New Mexico. State and local law enforcement
    agencies reap vast benefits while working alongside these federal
    agents. I am concerned that the smaller communities in my home state
    may not be able to take advantage of these federal partnerships. This
    is especially problematic because community population is neither a
    variable nor a predictor of drug use.
        Can you please explain what type of interaction DEA agents have
    with smaller communities and what we might be able to do to ensure that
    all our communities benefit by working with federal law enforcement
    agents?
        Answer. As with all federal agencies, the DEA concentrates the bulk
    of its offices and agents in the highest population areas in an attempt
    to maximize our efforts and effectiveness. DEA has limited manpower and
    resources, as do all other law enforcement agencies throughout the
    United States. DEA has found that the most effective method to increase
    productivity, improve our responsiveness to State and local agencies,
    and ensure that all communities benefit from a federal law enforcement
    presence is through the employment of multi-agency task forces. The
    task force concept provides several advantages to all participating
    agencies: DEA is able to draw on the expertise of State of local law
    enforcement; DEA can share resources with State and local officers,
    thereby increasing the investigative possibilities available to all;
    State and local officers can be deputized as federal drug agents, thus
    extending their jurisdiction; State and local participating agencies
    can receive an equitable share of forfeited drug proceeds; and DEA can
    pay overtime and investigative expenses for the State and local
    agencies.
        In New Mexico, DEA has two offices located in Albuquerque and Las
    Cruces. The Albuquerque District Offices (DO) is staffed with 33
    Special Agents (including four supervisory Special Agents). The Las
    Cruces Resident Office (RO) is staffed with 17 Special Agents
    (including three supervisory Special Agents). The Albuquerque DO and
    the Las Cruces RO each support two federally funded multi-agency task
    forces. The addition of ten task force officers in Albuquerque and nine
    task force officers in Las Cruces provides DEA with a more than 35
    percent increase in agent strength, which is subsequently leveraged to
    cover a vast area of responsibility. The addition of task force
    officers also prompts parent agencies to regularly interact with DEA.
    This representation of local community concerns also often promotes the
    presentation of cases for extended federal investigation and
    prosecution.
        Additionally, the State of New Mexico is currently divided into
    seven Bureau of Justice Assistance regions. Throughout New Mexico,
    State and local law enforcement agencies are provided with federal
    funds to organize and implement multi-agency task forces within each
    respective region. Again, the task forces permit State and local law
    enforcement agencies--within a specific geographic area--to pool
    resources and information that consequently maximize effort and
    effectiveness. DEA Special Agents are designated by management to
    interact with each regional task force. This practice encourages
    smaller and more isolated local agencies to interact more meaningfully
    with DEA.
        Task forces, by their very nature, are designed to facilitate the
    exchange of information at the federal, State and local levels. This
    information exchange allows for the development, coordination, and
    prosecution of targeted members and their criminal organizations. In
    order to avoid duplicative efforts, agents and task force officers
    routinely rely on the free exchange of information between our State
    and local counterparts, coupled with DEA information systems, such as
    NADDIS, to identify potential conflicts between competing
    jurisdictions. Moreover, current DEA policy mandates that communication
    devices suspected to be used by targets in DEA investigations be
    checked against DARTS prior to any enforcement operation.
        The task force concept has proven to be very successful. In fiscal
    year 2006, the New Mexico DEA offices conducted investigations from
    Raton to Las Cruces and Gallup to Portales, as well as in nearly every
    modestly populated area within proximity. The two DEA offices in New
    Mexico initiated 468 cases, effected 659 arrests, and seized over
    70,000 pounds of marijuana, 1,898 pounds of cocaine, 159 pounds of
    methamphetamine, 16 pounds of heroin, and over 4.5 million in drug
    trafficker currency and assets.
                                     ______

                   Question Submitted by Senator Ted Stevens
                                methamphetamine
        Question. What is DEA doing about methamphetamine in Alaska?
        Answer. DEA's Anchorage District Office (DO) prioritizes its assets
    by targeting the highest level drug trafficking organizations (DTOs)
    which can be identified in the state of Alaska. Recognizing the
    devastation caused by methamphetamine, the Anchorage DO puts forth
    considerable effort to combat the methamphetamine problem through a
    coordinated strategy that includes a comprehensive interdiction effort,
    conducting complex investigations into organizations responsible for
    trafficking drugs into Alaska, targeting clandestine methamphetamine
    laboratories, conducting methamphetamine training and certification to
    State and local counterparts, funding and coordinating all hazardous
    waste clean-ups of clandestine methamphetamine laboratories, as well as
    keeping up a strong demand reduction program that educates youth, bush
    villages, and civic groups.
        The Anchorage DO is part of the Seattle Field Division (FD).
    Historically, Anchorage was a Resident Office (RO) with one GS-14
    supervisor and 6 Special Agents (SA), for a total of 7 SA positions.
    However, in March 2002, DEA upgraded the Anchorage RO to a DO through
    the addition of a second GS-14 supervisor and a GS-15 Assistant Special
    Agent in Charge (ASAC), for a total of 9 SA positions. Additionally, in
    September 1999, DEA opened a Post of Duty in Fairbanks, Alaska. This
    office has two Special Agent positions.
        Prior to the March 2002 upgrade, the Anchorage office operated a
    Drug Task Force with 5 Task Force Officers (TFOs). The Anchorage DO now
    has 7 TFOs. Furthermore, at any given time 10-15 additional State and
    local officers are deputized (on a case specific basis) to assist in
    major investigations. As of May 2007, 12 State and local officers are
    deputized. The Anchorage DO is co-located with the Anchorage Police
    Department (APD) Metro Narcotics Unit and the Alaska State Troopers
    (AST) Major Offenders Unit (MOU).
        DEA intelligence indicates that, in accordance with national
    trends, most of the methamphetamine found in communities throughout
    Alaska originates from the Southwest Border of the United States. DTOs
    following trafficking routes through cities such as Las Vegas, NV,
    Tucson, AZ, and Seattle, WA, where the meth is repackaged and
    distributed through parcel service to Anchorage. Methamphetamine
    wholesale prices in Seattle range from $3,000 to $4,000 per pound
    compared to wholesale prices of $18,000 to $20,000 per pound in
    Anchorage, making Alaska a lucrative destination.
        The Anchorage DO Airport Interdiction Task Force (AITF) covers the
    entire State and is supervised and staffed by DEA Special Agents, as
    well as AST Investigators, Airport Police Officers, and National Guard
    Counterdrug Support Program personnel. It prioritizes resources to stop
    drugs as they come into the state of Alaska through interdiction at all
    parcel sorting facilities (FedEx, UPS, U.S. Postal Service, etc.), the
    Port of Anchorage, and the Anchorage International Airport. The AIFT
    has supported several operations in Southeastern Alaska to include a
    joint operation with the Southeastern Alaska-Narcotics Enforcement Team
    and the U.S. Postal Service targeting the parcel shipping facilities in
    Juneau and Ketchikan. Additionally, the AITF targets outgoing flights
    to the bush in an attempt to interdict drugs before they arrive in the
    villages. The Anchorage DO coordinates these efforts very closely with
    State and local counterparts including the AST and the U.S. Postal
    Service.
        In late 2006, the AITF initiated Operation Dip Net in order to
    better coordinate the interdiction efforts of law enforcement agencies,
    and to target those facilities/routes of smuggling that result in the
    seizure of significant contraband. The identified trends allow
    management to better direct law enforcement efforts by physically
    placing interdiction officers in the prevailing illicit drug supply
    route. Since the inception of Operation Dip Net, 14 pounds of
    methamphetamine, over 32 kilograms of cocaine, a half pound of crack
    cocaine, nearly 10,000 Ecstasy tablets, and a bottle of liquid LSD have
    been seized in Alaska. Additionally, approximately $310,000 in U.S.
    currency has been seized, 20 defendants have been arrested, and 23
    firearms recovered or seized as a direct result of the interdiction
    efforts. Operation Dip Net has also put ``look outs'' on particular
    locations with cargo companies.
        Due to its highly lucrative nature, methamphetamine can make its
    way into distribution cells that distribute retail amounts to local
    gangs who further distribute to the user population. To date, there is
    no evidence of methamphetamine making its way into Samoan gang
    distribution cells from sources originating in Samoa. The Anchorage DO
    did seize and subsequently conducted a controlled delivery of four
    ounces of methamphetamine to an individual of Samoan decent, however
    the methamphetamine had been sent to Alaska from Las Vegas.
                                     ______

                      Questions Submitted to John F. Clark
                Questions Submitted by Senator Richard C. Shelby
                             gulf coast task force
        Question. Director Clark, for fiscal year 2006, the United States
    Marshals Service (USMS) was authorized by Congress to establish a
    Regional Fugitive Task Force in Alabama and Mississippi. Just last
    week, this Task Force arrested Gerald Campbell who was previously
    convicted and sentenced to life in prison for murdering his wife but
    escaped in 1978 from the Alabama Department of Corrections. The Gulf
    Coast Task Force tracked Campbell down and arrested him after 23 years
    on the run.
        Mr. Director what is the status of this task force, and can you
    tell us about some of the other good work they have accomplished?
        Answer. The Gulf Coast Regional Fugitive Task Force (GCRFTF) began
    operations on July 1, 2006. It is the sixth RFTF within the USMS. The
    GCRFTF expects to be fully operational by the end of fiscal year 2007.
    There are five office locations in Alabama: Birmingham, Huntsville,
    Montgomery, Mobile, and in the future, Dothan. The Birmingham office
    serves as task force headquarters and includes a training center
    similar to other RFTFs. There are three office locations in
    Mississippi: Oxford, Jackson, and Gulfport.
        Supporting the GCRFTF are USMS Technical Operations Group (TOG)
    facilities and personnel in Birmingham, Montgomery, and Jackson. There
    are 32 USMS positions authorized and all of these positions have been
    filled. In addition, 100 investigators from 30 law enforcement agencies
    are working in conjunction with the GCRFTF.
        Since its inception, the GCRFTF has made a tremendous impact on the
    region. Below are the statistics from July 2006 to April 2007:

    ------------------------------------------------------------------------
                                                                    Number
    ------------------------------------------------------------------------
    Felony Fugitives Arrested..................................        1,700
    Warrants Cleared...........................................        2,246
    Arrested Individuals Wanted for Homicide...................          100
    Arrested Individuals Wanted for Sex Offenses...............          471
    Arrested Individuals Who Were Not in Compliance with Sex             187
     Offender Registry Requirements............................
    Firearms Seized............................................           84
    ------------------------------------------------------------------------

        In addition to arresting Gerald Raye Campbell, a convicted murderer
    who was wanted for escape from the Alabama Department of Corrections
    after 23 years on the run, the GCRFTF has made several significant
    arrests. Below are two additional notable arrests during the month of
    April 2007:
        On April 4, 2007, Jerone Bussey was arrested in Athens, Alabama, by
    members of the GCRFTF and officers from the Athens Police Department
    (APD). Authorities in Indianapolis, Indiana, wanted Bussey for murder
    after he allegedly shot and killed two people with an AK-47 assault
    rifle. One of Bussey's alleged victims was seven and one-half months
    pregnant at the time of the shooting. USMS investigators in the
    Southern District of Indiana developed information indicating that
    Bussey fled to the Athens area. The GCRFTF responded by identifying
    Bussey's probable location in Athens, and established surveillance. The
    GCRFTF, with assistance from marked APD units, conducted a felony stop
    on Bussey's vehicle and took him into custody without incident.
        On April 11, 2007, Kent Steward, a registered sex offender, was
    arrested in Ozark, Alabama, by members of the GCRFTF and officers from
    the Ozark Police Department. Authorities in Ozark wanted Stewart for
    kidnapping and rape of a minor after he allegedly abducted and sexually
    assaulted a ten year old girl. After authorities identified Stewart as
    a suspect, GCRFTF established covert surveillance outside his probable
    location. When investigators later observed a male subject matching
    Stewart's description, they moved in and safely took Stewart into
    custody. Stewart has a previous conviction for rape. If convicted,
    Stewart faces life imprisonment with no possibility of parole.
        Question. The Alabama Mississippi Task Force is the 6th such force
    created by the USMS. Does the agency have a plan to expand this concept
    into other regions of the country?
        Answer. USMS Regional Fugitive Task Forces (RFTFs) consisting of
    ``Federal, State and local law enforcement authorities in designated
    regions of the United States'' were established by the Presidential
    Threat Protection Act of 2000 (Public Law 106-554) to locate and
    apprehend fugitives. RFTFs supplement the 85 district-managed, multi-
    agency task forces already operating throughout the country. To date,
    six RFTFs are in operation and USMS is exploring areas of the country
    where RFTFs would have the greatest impact based on the warrant
    workload, but there are no immediate plans for additional RFTFs. The
    city in parenthesis indicates where the task force headquarters office
    is located:
      --Capital Area Region (Washington, DC)--in operation.
      --Great Lakes Region (Chicago, IL)--in operation.
      --Gulf Coast Region (Birmingham, AL)--in operation.
      --New York/New Jersey Region (New York, NY)--in operation.
      --Pacific Southwest Region (Los Angeles, CA)--in operation.
      --Southeast Region (Atlanta, GA)--in operation.
        Question. What types of fugitives do these task forces investigate?
        Answer. RFTFs target the ``worst of the worst'' fugitives who have
    a history of violence. They include murderers, gang members, drug
    traffickers, and violent sex offenders. The USMS approach in assisting
    state and local agencies with their fugitive warrants has been twofold.
    First, the USMS reviews all fugitive warrants to determine their
    ability to be executed. During the review process, many warrants are
    determined to be unserviceable because of the age of the warrant,
    witnesses have disappeared, police officers or agents have retired,
    evidence is missing, or the prosecuting attorney dismisses the warrant
    upon review. Second, the USMS prioritizes based on the severity of the
    charge. Once a warrant is pursued by an RFTF, all resources are brought
    to bear to locate and apprehend the fugitive.
                                   adam walsh
        Question. The National Center for Missing and Exploited Children
    (NCMEC) estimates that there are approximately 600,000 sex offenders in
    the United States that are required to register. As many as 100,000 are
    not in compliance with their registry requirements.
        How does the passage of the Adam Walsh Act affect the USMS?
        Answer. The Adam Walsh Child Protection and Safety Act of 2006
    directs the Attorney General to use the resources of federal law
    enforcement, including the United States Marshals Service (USMS), to
    assist jurisdictions in locating and apprehending sex offenders who
    violate registration requirements. It further provides that sex
    offenders who violate registration requirements are deemed to be
    fugitives for purposes of the Marshals Service's fugitive investigation
    functions, and it provides federal penalties for sex offenders who
    violate registration requirements under circumstances supporting
    federal jurisdiction (such as interstate travel). See  142 of the Adam
    Walsh Act and 18 U.S.C. 2250. The reforms of the Sex Offender
    Registration and Notification Act--i.e., title I of the Adam Walsh
    Act--generally strengthen the minimum national standards for the sex
    offender registration and notification programs of the states and other
    covered jurisdictions, and the national database and website system
    which make sex offender information obtained under the individual
    jurisdictions' programs more widely available to law enforcement and
    the public. See generally 72 FR 30209 to 30234 (May 30, 2007) (proposed
    National Guidelines for Sex Offender Registration and Notification
    issued by the Attorney General). The Adam Walsh Act reforms increase
    the capacity of responsible officials at all levels of government to
    track sex offenders effectively following their release into the
    community through enhanced registration standards and requirements, and
    the USMS serves as the lead federal law enforcement agency in
    investigating violations of these requirements and helping to locate
    and apprehend non-compliant sex offenders.
        Question. How long would it take the Service to fully enforce this
    law, and what kind of resources would be required?
        Answer. It will take several years to fully enforce this law
    because the existing network of sex offender registries must first be
    improved and the Sex Offender Registration and Notification Act (SORNA)
    must be implemented by all jurisdictions. Most, but not all, states
    have some form of registry already in place, however, these registries
    are not well integrated with each other or with the National Sex
    Offender Registry. In the interim, the USMS has begun a two-part
    approach: enforcement and compliance.
        With regard to enforcement, the USMS has established the Sex
    Offender Investigations Unit at headquarters. A full-time liaison has
    been stationed at the National Center for Missing and Exploited
    Children (NCMEC). The USMS is working with NCMEC to develop and
    establish the ``National Sex Offender Targeting Center'' which will:
      --Identify and prioritize targets by using analytical tools;
      --Aid the USMS and other agencies with investigative leads;
      --Provide a valuable data source for state and local agencies;
      --Operate a national tip line and web site;
      --Provide analytical support to law enforcement;
      --Serve as a national point of contact for sex offender registration
            issues; and
      --Provide a source to share other criminal leads.
        Designated Sex Offender Investigations Coordinators have been
    identified in all 94 USMS district offices and within the Regional
    Fugitive Task Forces. The first 50 coordinators have already been
    trained and an additional 150 personnel will be trained by the end of
    fiscal year 2007. The USMS is currently establishing contacts with
    state, local, tribal, and territorial sex offender registries. At the
    same time, the USMS is coordinating efforts with the Department of
    Homeland Security's ``Operation Predator'' to ensure that illegal alien
    sex offenders are referred to the Bureau of Immigration and Customs
    Enforcement for removal.
        With regard to compliance, the USMS is planning a media campaign to
    educate sex offenders about their registration requirements and the
    enhanced penalties for non-compliance, in an effort to encourage them
    to register or update their registrations.
        Question. How many additional positions are being created in the
    USMS to help you track down non-compliant sex offenders?
        Answer. The USMS has designated three positions from existing
    resources to establish the Sex Offender Investigations Unit at
    headquarters, which includes the full-time liaison at NCMEC. Until
    additional resources are provided, the USMS will rely on the six
    existing Regional Fugitive Task Forces and 85 district-managed task
    forces to aggressively pursue unregistered sex offenders and offenders
    against children. The USMS is committed to enforcing the Adam Walsh Act
    in addition to pursuing fugitives wanted for violent federal and state
    crimes.
        The fiscal year 2008 President's budget includes a request for 54
    positions (including 43 Deputy Marshals), 27 FTE, and $7,845,000 to
    begin deploying Deputy Marshals to areas of the country that have large
    numbers of non-compliant sex offenders.
                          marshals d.c. superior court
        Question. This Committee is concerned about the health, safety and
    security of the U.S. Marshal Service employees at the D.C. Superior
    Court. The cellblock and workspace there are below any acceptable
    standards and are in desperate need of renovation.
        Are you working with the D.C. Courts to fix the U.S. Marshals
    Service occupied space at the D.C. Superior Court?
        Answer. Yes, the Marshals Service is working with the D.C. Courts
    Executive Office on a memorandum of agreement (MOA) to delineate the
    responsibilities for repairing and maintaining the space provided to
    the USMS in the Moultrie Courthouse. The space provided to the USMS by
    the D.C. Courts belongs to the D.C. Government. The MOA between the
    USMS and the D.C. Courts will identify responsibilities much in the
    same way that tenant/landlord agreements are established.
        Question. Does the $10 million that the Senate provided in the
    fiscal year 2007 supplemental appropriations bill help begin to
    alleviate the Superior Court situation?
        Answer. The $10 million would provide a short-term remedial
    solution until the Executive Office of the D.C. Courts obligates the
    resources to make long-term renovation to improve the cellblock
    physical infrastructure and USMS office space. Health, safety, and
    security improvements in the cellblock and prisoner receiving areas
    would have a positive multi-agency impact as this environment is
    utilized by the USMS, Metropolitan Police Department, Department of
    Corrections, and numerous law enforcement officers who transfer
    prisoners to and from USMS custody.
        Question. Do you give this subcommittee your commitment to ensure
    that the USMS employees at Superior Court are taken care of?
        Answer. Yes, the Marshals Service will take the necessary steps to
    ensure the health, safety and security of USMS employees at Superior
    Court. The majority of administrative personnel, warrant squad, writ
    squad, and prisoner coordination section have been relocated to another
    building because adequate space was not available in the Moultrie
    Courthouse. Remaining USMS personnel who manage court support and
    cellblock operations continue to work out of the Moultrie Courthouse
    and the USMS continues to request additional space from the Executive
    Office of the D.C. Courts to ensure that USMS court operations has
    adequate and safe office space. Until additional space is obtained, the
    USMS will ensure that personal protective equipment and gear are
    supplied so that USMS personnel can operate safely.
        Question. Does this workspace meet any Federal standard for health,
    safety or security?
        Answer. The Marshals Service surveyed the Moultrie Courthouse and
    it does not meet GSA, OSHA (Occupational Safety and Health
    Administration), and USMS standards for security, safety and health.
    The USMS identified the following as problem areas: vehicle prisoner
    loading--sallyport, main detention area--cellblock, main detention
    area-fixtures and construction, detention area-processing room, main
    cellblock-interview rooms (prisoner) side, detention facilities,
    prisoner circulation from cellblock to court floors, courtroom holding
    facilities and circulation, support and special purpose space. The USMS
    is committed to working with the Executive Office of the D.C. Courts to
    ensure that all security, safety, or health issues are addressed in a
    manner that is mutually beneficial.
                               homeland build up
        Question. The Department of Homeland Security (DHS) is in the
    process of hiring up to 2,000 new border agents.
        How does this escalation in DHS personnel correspond to the
    Marshals' responsibilities to produce prisoners for trial and provide
    courtroom protection?
        Answer. As DHS increases the number of border patrol agents along
    the Southwest Border and in other areas of the country, arrests will
    increase which will in turn increase the number of detainees in USMS
    custody. The USMS average daily prisoner population continues to
    increase, particularly in the five districts that comprise the
    Southwest Border:

    ------------------------------------------------------------------------
                                                   Fiscal year--
                                      --------------------------------------
                                           2004         2005         2006
    ------------------------------------------------------------------------
    Ave Daily Prisoner Population--         49,400       53,000       56,000
     Total...........................
    Ave Daily Prisoner Population--         16,600       17,500       18,700
     SWB Only........................
    ------------------------------------------------------------------------

        For example, the Del Rio suboffice in the Western District of Texas
    has an average daily prisoner population of over 2,600. In comparison,
    the District of Maryland has just over 450 per day. The three judicial
    districts in Alabama combine for just over 600 per day.
        Question. How does this hiring at DHS affect the USMS budget?
        Answer. As DHS increases its hiring, the impact on the USMS budget
    is felt approximately 18 months later. It takes about 18 months for DHS
    to recruit, train, and fill its new positions. Once on board, new
    border patrol agents begin making arrests which drives up USMS
    workload.
        Question. How will this affect court operations?
        Answer. The immediate impact to court operations is that the USMS
    must produce prisoners before magistrate judges for all criminal court
    proceedings. Even if these defendants do not reach trial, the USMS is
    required to produce them for all attorney interviews, medical trips,
    and court-related appearances. This is an enormous strain on USMS
    resources because Deputy Marshals must ensure the safety of all judges,
    attorneys, witnesses, and the public at all court hearings.
                                     gangs
        Question. The increase in gang-related trials around the nation
    creates security concerns, not only for members of the judiciary, but
    also for witnesses and trial observers. Recent examples include the MS-
    13 trials in the D.C. area and the Aryan Brotherhood trials in
    California.
        How is the Marshals Service tracking violent gangs?
        Answer. The USMS uses the combined resources of its six Regional
    Fugitive Task Forces and 85 district-managed task forces to investigate
    and apprehend violent fugitives which include violent gang members.
    Investigative information gleaned from these fugitive cases is
    maintained in an automated fashion and is accessible by USMS judicial
    security inspectors who are responsible for the operational planning of
    high-threat trials. Many of these trials involve violent gangs,
    including prison gangs. This information is also used to separate
    detainees within the cellblock and on any JPATS air transportation
    movements to ensure the safety of Deputy Marshals and other prisoners.
        Question. What more could you do if you had additional resources?
        Answer. The 2008 President's budget includes a request for 17
    additional positions, including 15 Deputy U.S. Marshals, and $5.1
    million for high threat trial security. This request will provide surge
    capacity that can be deployed to high threat trials throughout the
    country. If fulfilled, USMS will have the flexibility to deploy
    additional personnel or security resources for trials related to gangs,
    terrorism, or any other purpose requiring additional security.
          former marshal's daughter heroic efforts in campus shooting
        Question. Director Clark, I understand that a former Marshal's
    daughter was wounded in the shootings on the Virginia Tech campus
    Monday morning. Her heroic efforts saved the lives of her classmates.
        Would you tell us about Jim Carney and his daughter Katie's story?
        Answer. On April 16, 2007, Katelyn Carney, the daughter of retired
    Deputy U.S. Marshal Jim Carney, was shot in the left hand and a second
    bullet grazed her head during the shooting rampage at Virginia Tech
    University. Ms. Carney and three other students blocked the doorway to
    their classroom to prevent the gunman from returning. Ms. Carney is
    expected to make a full recovery.

                              SUBCOMMITTEE RECESS

        Senator Mikulski. Yes. This subcommittee stands in recess
    until next Thursday, April 26, at which time we will take the
    Federal Bureau of Investigation. It will be followed the
    following week by the EEOC and then we will come back to the
    Justice Department.
        [Whereupon, at 11:29 a.m., Thursday, April 19, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                            THURSDAY, APRIL 26, 2007

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:30 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Patrick J. Leahy presiding.
        Present: Senators Mikulski, Leahy, Kohl, Lautenberg, and
    Shelby.

                             DEPARTMENT OF JUSTICE

                        Federal Bureau of Investigation

    STATEMENT OF HON. ROBERT S. MEULLER III, DIRECTOR

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Let me mention before we start that, I've
    often used the expression that Senators are merely
    constitutional impediments for their staffs. And, in the United
    States Senate, if it wasn't for the superb staff members of
    both Republican and Democratic Senators, we would not be able
    to exist in this subcommittee. I've served on most of my years
    in the Senate to various integrations.
        We've seen some wonderful people here, but Paul Carliner,
    who's sitting here to my left, this is his last hearing as
    clerk. He's spent 16 years in the Senate, but 8 years on this
    subcommittee. Paul is one of the reasons why the rest of us can
    do our work. He has shown the ability to reach out to Members
    on both sides of the aisle on very difficult things. Everybody
    on this subcommittee wants something, usually something
    different. And he's the one that's trying to do that. So, Paul,
    congratulations to you.
        Mr. Carliner. Thank you, Senator.
        Senator Leahy. And, Director Mueller, thank you for joining
    us today to testify before this subcommittee.
        I also want to thank the Chair of our subcommittee, Senator
    Mikulski, for allowing me to open the hearing on her behalf.
    She's going to be joining us shortly, but she's on her way back
    from the formal send off for the 1,300 Maryland National
    Guardsmen that are going to be deployed to Iraq in the next few
    months.
        Having attended too many of such events in my own State of
    Vermont, I know how hard the send off is for the guardsmen,
    their families, and friends, for Senator Mikulski, and all
    those attending. And our hearts and prayers are with those
    brave Maryland soldiers and all our brave men and women
    preparing to leave and our hearts and prayers are with their
    families. I hope they come back safely.
        Now, I know in the wake of the terrorist attacks, the
    Justice Department's focused much of its attention in the
    prevention of terrorism and the promotion of national security.
    I worry, however, that the budget proposal, if it's enacted, is
    going to divert critical resources and staffing from
    traditional law enforcement matters. We've seen a spike in
    violent crime, which is something I know concerns the Director
    very much. And, if we shift money into counterterrorism, we
    take it away from traditional criminal matters.
        The fiscal year 2008 budget requests a realignment of 100
    criminal agents, counterterrorism work. That would leave
    traditional criminal law enforcement significantly understaffed
    in the Bureau. If you realign these agents further it may
    further erode the Federal Bureau of Investigation's (FBI)
    ability to combat violent crime. It has been cited by the
    Office of Inspector General (OIG) as one of the top management
    challenges at the Justice Department.
        And, since the FBI announced the Virtual Case File
    successor, the Sentinel Program, I really have not been
    confident of the Bureau's ability to manage the status and cost
    of this project. The FBI estimates that Sentinel will
    ultimately cost the American taxpayers $425 million. A December
    2006 OIG audit questioned the reliability of the total
    estimated cost of the program. It was originally expected the
    full Sentinel system would be deployed in 2009. Recently,
    however, we hear a familiar piece of news regarding the FBI's
    computer upgrade project. Apparently there will be delays in
    the deployment of phase one of the Sentinel upgrade, which
    jeopardizes the schedule for this much-needed computer system.
        And, I worry--as one baseball great once said, it's deja vu
    all over again--we tried Trilogy, we scrapped that. We were
    told that Virtual Case File would meet the FBI's needs and
    that's been scrapped. Now that delays in Sentinel have been
    announced, is not clear at all the third time's going to be the
    charm. It's been an expensive series of lessons, costing nearly
    $423 million for these programs so far.
        Another recent report by the Office of Inspector General
    found the FBI can't account for 160 laptop computers, and an
    equal number of weapons that were lost or stolen over a 3\1/2\-
    year period. And, this comes 4 years after a recommendation
    that they take steps to ensure the security of this equipment.
    And, even more troubling, in many cases, it was found the FBI
    could not even determine whether these lost or stolen computers
    contained classified or sensitive information, putting Bureau
    employees and other individuals at risk of becoming victims of
    identity theft.
        I am deeply troubled by, as I've discussed with the
    Director and I know of his concern in this, the OIG's report
    finding widespread illegal and improper use of national
    security letters. We had a hearing on this in the Judiciary
    Committee.
        So, we're at a crossroads. And, I think if we don't learn
    from the mistakes, progress won't be made.
        I'll put my full statement in the record. It's quite a bit
    longer.
        [The statement follows:]
                 Prepared Statement of Senator Patrick J. Leahy
        Director Mueller, welcome and thank you for joining us today to
    testify before the Appropriations Subcommittee on Commerce, Justice and
    Science regarding the fiscal year 2008 budget request for the Federal
    Bureau of Investigation. You and I get to see each other from time-to-
    time when you come before the Judiciary Committee for oversight
    hearings. Today, however, I am here wearing my appropriator's cap and I
    look forward to hearing you make the case for the budget the President
    has proposed for the FBI in the coming year.
        I also want to thank the chair of our subcommittee, Senator
    Mikulski, for allowing me to open this hearing on her behalf. She will
    be joining us shortly, but is on her way back from the formal send-off
    of the 1,300 Maryland National Guardsmen who will be deployed to Iraq
    in the next few months. Having attended several such events in my own
    home state of Vermont, I know how hard this sendoff must be for the
    Guardsmen, their families and friends, Senator Mikulski and all those
    attending. Our hearts and prayers are with those brave Maryland
    soldiers--and all of our brave men and women preparing to leave--and
    their families during this difficult time. We hope they will be
    returning home soon.
        During recent years, the FBI has confronted the daunting challenge
    of protecting our nation against international terrorism in the wake of
    the attacks of September 11, 2001, the subsequent anthrax attacks and
    other threats. Director Mueller, you deserve credit for your efforts to
    assure the safety of the American people.
        In the wake of terrorist attacks, I recognize that the Justice
    Department focused much of its attention on the prevention of terrorism
    and the promotion of national security. Its top priorities continue to
    be the prevention, investigation and prosecution of terrorist
    activities against U.S. citizens and interests, which is evident in the
    request for more than $417 million in new investments for the FBI,
    including counterintelligence activities and justice information
    systems technology.
        Nonetheless, I am concerned that this budget proposal, if enacted,
    would divert critical resources and staffing from traditional law
    enforcement matters, such as reducing the spike in violent crime, to
    support the Bureau's counterterrorism work. The fiscal year 2008 budget
    requests the realignment of one hundred criminal agents to
    counterterrorism work. This would leave traditional criminal law
    enforcement significantly understaffed at the Bureau. Realigning these
    agents may further erode the FBI's ability to combat violent crime and
    has been cited by the Office of Inspector General (OIG) as one of the
    top management challenges at the Justice Department. We must not allow
    daily responsibilities that keep our citizens safe to fall aside.
        It has been over two years since the FBI announced it would scrap
    the three-year $170 million effort to develop a modern case management
    system, known as the Virtual Case File, or VCF. I have repeatedly
    expressed to you, Director Mueller, my deep frustration over the
    millions of dollars wasted on ``lessons-learned,'' and the fact that
    more than three years have passed since the original deadline while
    these technology goals are not met.
        Since the FBI announced the VCF's successor, the Sentinel program,
    I have seen nothing to boost my confidence in the Bureau's ability to
    manage the status and cost of this project. While the FBI estimates
    that Sentinel will ultimately cost the American taxpayers $425 million,
    a December 2006 OIG audit report questioned the reliability of the
    total estimated costs for the program. It was originally expected that
    the full Sentinel system would be deployed in 2009. Just recently,
    however, we learned a familiar piece of news regarding the FBI's
    computer upgrade project. Apparently there will be delays in the
    deployment of Phase I of the Sentinel upgrade, which jeopardizes the
    schedule for this much-needed computer system.
        This latest setback is one of a string of costly delays in the
    FBI's efforts to upgrade its computers. Sentinel was launched after the
    FBI wasted five years and millions of taxpayer dollars on the failed
    Trilogy program. By my calculations, at least $253 million has been
    invested in Sentinel alone from fiscal year 2005 to fiscal year 2007
    between reprogramming dollars and Congressional appropriations. The
    President's fiscal year 2008 Budget proposes no funding for the
    project. The first of four program upgrade phases has yet to be
    completed, although we expected the entire Sentinel program to be up
    and running by 2009.
        Director Mueller, this committee has to ask: Is this deja vu all
    over again? You tried Trilogy and scrapped that. You told us that
    Virtual Case File would meet your needs and you scrapped that. Now that
    delays in Sentinel have been announced it's not clear at all that the
    third time will be the charm. This has been an expensive series of
    lessons--costing nearly $423 million for these three programs so far--
    learned on the backs of American taxpayers.
        We must ensure that the FBI's technological capabilities keep pace,
    and to do so requires not only an emphasis on providing funds but also
    effective use and implementation. I hope the latter is not neglected
    and I remain seriously concerned about this project.
        The pattern of incompetence and lack of accountability within the
    Bureau is also on display with its treatment of its own equipment and
    weapons. Another recent report by the DOJ OIG found that the FBI cannot
    account for 160 laptop computers and an equal number of weapons that
    were lost or stolen over a 3\1/2\ year period. This finding comes 4
    years after the Inspector General recommended that the FBI take steps
    to ensure the security of this equipment. Even more troubling, in many
    cases it was found that the FBI could not even determine whether its
    lost or stolen computers contained classified or sensitive information,
    putting Bureau employees and other individuals at risk of becoming
    victims of identity theft and potentially compromising national
    security information
        I am deeply troubled by the DOJ OIG's report finding widespread
    illegal and improper use of National Security Letters (NSLs) to obtain
    Americans' phone and financial records. As Chairman of the Senate
    Judiciary Committee, I convened a hearing on NSL abuse several weeks
    ago. Inspector General Fine testified that his office found 22 separate
    instances where the FBI improperly abused NSLs in the review of just 77
    FBI files. Not a single one of these violations had been reported by
    the FBI. On top of that, because the FBI still lacks the information
    technology that it needs to function efficiently in the Information
    Age, OJG found that the FBI database used to track NSLs malfunctioned,
    making it impossible to keep track of these letters. I fear that the
    violations the Inspector General uncovered are probably just the tip of
    the iceberg and that there could be thousands of additional violations
    among the tens of thousands of NSLs that the FBI is now using each
    year.
        The FBI finds itself again at a crossroads. Acknowledging
    shortcomings is well and good, but the Bureau--and the Justice
    Department as a whole--must also learn from its mistakes if progress is
    to be made. The time has come for demonstrable progress by the Bureau
    on a learning curve that has gone on and on for far too long. Much work
    remains to be done and I have no doubt that the leaders and members of
    this Subcommittee will fulfill their obligation to the American people
    to carefully examine all of these issues.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Mr. Chairman. We appreciate you
    being here in place of Barbara Mikulski. We know Senator
    Mikulski, the Chair, is tied up, but she's very involved in
    these issues.
        Paul, I want to just say to you, we wish you well. As
    Senator Leahy said, you've served the Senate well, you've
    served this subcommittee very, very well and we wish you the
    very best in whatever your next step is. We'll miss you here.
    You have--on this side of the aisle--I know you work with the
    Democrats, but you have, when I was chairman of this
    subcommittee, you were a valuable resource to getting the job
    done here, for everybody, and we owe you a lot. And, we thank
    you for your service to the Senate and to the Nation.
        Mr. Carliner. Thank you, sir.
        Senator Shelby. Director Mueller, thank you for joining us
    today to discuss the Federal Bureau of Investigation's 2008
    budget request. One week after your arrival as the sixth
    Director of the FBI, our Nation suffered its worst terrorist
    attack ever on U.S. soil. The September 11, 2001 attack--
    attacks on the World Trade Center and the Pentagon signified
    the transformation of a new FBI, focusing more on national
    security. Congress has tasked the FBI with more responsibility
    than any other Federal law enforcement agency, resulting in
    more challenges and changes than ever before.
        The FBI is the Nation's premier law enforcement
    counterterrorism and counterintelligence agency that
    investigates criminal activity and includes terrorism, foreign
    intelligence, operations, espionage, cyber-crime, public
    corruption, national criminal organizations, white-collar
    crimes, and significant violent crime. The FBI request for 2008
    is $6.4 billion. This is a $391 million increase over the 2007
    joint resolution funding level.
        It has come to my attention, Mr. Director, that the FBI has
    a $139 million shortfall in the 2008 budget request. Chairman
    Mikulski and I want to work with you to ensure that the FBI has
    sufficient resources to protect our Nation. Based on my review
    of your request, combined with the likely fiscal constraints of
    this subcommittee, we will need your assistance as we face
    tough funding decisions regarding the allocation of resources
    in your budget.
        This subcommittee and the Bureau share the difficult task
    of targeting these limited resources in a manner that
    safeguards taxpayers' dollars, while preserving public safety.
    The Department of Justice's inspector general (IG) recently
    issued a report critical of the FBI's use of national security
    letters (NSL). The IG's review found that more than 60 percent
    of the files examined, including--included violations of the
    FBI's own policies and procedures.
        The report also identified significant abuses in the use of
    exigent letters. The FBI regularly issued them when no
    emergency existed, often when there was not even a criminal
    case open. The lack of controls in the use of national security
    letters and exigent letters is very troubling, but as the
    former chairman of the Senate Select Committee on Intelligence,
    I also know that they're critical in your mission of keeping
    America safe.
        Director Mueller, in our meeting last month, you committed
    to fix the deficiencies identified in the IG report and to
    implement its 10 recommendations. The FBI must carefully
    balance the privacy protections and civil liberties of
    Americans against the need to provide its agents critical
    information that's pivotal to mission success.
        Chairman Mikulski and I have provided the FBI $10 million
    in the current war supplemental bill to carry out the IG's
    recommendations to fix these problems.
        We're extremely saddened, as you were, by the tragedy that
    took place on the Virginia Tech campus last week. I understand
    that the FBI dispatched 20 agents, four victim assistant
    specialists, and one terrorism victim specialist. I look
    forward to hearing from you, Mr. Director, about the FBI's
    role, and what these men and women are doing to assist those
    affected by this terrible event.
        While I wholeheartedly support bringing the FBI into the
    21st century and realize the importance of information
    technology in the FBI's mention--mission, I have a number of
    unanswered questions about Sentinel's phase one implementation.
    Given your Trilogy failure, I will not support unlimited and
    unchecked resources and will not tolerate broken promises for
    the results of information technology (IT) projects that are
    not fulfilled or delivered.
        I understand that things are on track and within budget,
    but I expect the questions of this subcommittee to be answered
    in a timely and complete manner. This has not occurred, but I'm
    hopeful that with your commitments here today, we'll be able to
    continue our support for this needed, important project.
        The FBI's Hazardous Device School, HDS, at Redstone
    Arsenal, is the crown jewel of the Federal Government's effort
    to provide training to Federal, State, and local bomb
    technicians. In partnership with the Army, this facility has
    trained over 20,000 bomb technicians in the past 36 years.
    That's a proven record of success.
        HDS is the only pre-blast explosive training school in the
    United States. With the continued construction of the National
    Center for Explosive Research, Redstone Arsenal will become the
    home of Federal law enforcement explosives training and
    research. I'm working collaboratively to expand the Federal
    Government's explosive infrastructure and expertise here. I
    look forward to hearing from you, Director Mueller, to ensure
    that Redstone Arsenal is, and will continue to be, the law
    enforcement capital of explosives research and training.
        There are other issues I'd like to discuss this morning,
    including the use of resources for the FBI's priority missions.
    In addition, I would like to talk about the relationship of the
    FBI Director to the new Director of National Intelligence and
    the financial and manpower implications for the FBI. I remain
    concerned that this new arrangement, while important, is
    placing additional personnel stresses on an overburdened FBI. I
    fear that some of the FBI's traditional law enforcement
    responsibilities will not be sufficiently supported by this
    budget request.
        Director Mueller, I look forward to hearing your thoughts
    on the FBI's budget request and we also look forward to working
    with you on these and other important issues facing our Nation.
        And, Madam Chairman, I just want to thank the men and women
    who work at the Federal Bureau of Investigation for what they
    do to keep this country secure.
        Thank you.
        Senator Mikulski [presiding]. Thank you very much, Senator
    Shelby, and good morning to everybody. I'm going to say just a
    few quick thanks before we go right into our hearing.
        First, thank you, Senator Leahy, for opening this hearing
    and advising everyone that I was with our Governor, Governor
    O'Malley, to see off the first phase of National Guard
    deployment from the State of Maryland, 1,400 Marylanders have
    been called up, and will all be leaving in 90 days. So, we
    wanted to be there for them this morning.
        So, Senator Leahy, thank you for that.
        And, Director Mueller, thank you for accommodating the
    delay of starting this hearing.
        I want to advise my colleagues that the Director must leave
    at noon. So we're going to go right into allowing you to
    testify, so I ask that during the questions, if you have things
    you want to incorporate from your opening statement, do.
        I also want to thank Senator Leahy for acknowledging that
    today is the last hearing--the last public appearance of Paul
    Carliner--Ace Aide who's served me for 12 years. He has served
    the Nation for 12 years in his role as my clerk on
    Appropriations. We wish Paul well. We know wherever he goes, he
    will be outstanding. But also, it's a goodbye for the FBI's
    legislative Ace Aide as well, Eleni Kalisch.
        Eleni, please stand up so people can know who you are.
        Ms. Kalisch is going to be leaving the FBI. She has been
    the Director's liaison to this subcommittee and has done an
    outstanding job. We always appreciated your candor and your
    cooperation, as you appreciated Paul's candor, we'll call it
    candor these days because we're being kind. But really, we wish
    you very well, Ms. Kalisch, in your new life. Because I think
    all of us know, we can't do our job without the worker bees and
    we thank our staff and again, reiterate how much we appreciate
    the FBI itself.
        Senator Shelby outlined the budget concerns. I'm going to,
    essentially, agree with the issues that he's raised, and ask
    unanimous consent that my full statement be in the record.
        And, note the fact that we've asked the FBI to essentially
    be two agencies, but the same agency. One agency to fight the
    global war against terrorism, to have an agency within the
    agency, our own, kind of American, uniquely American version of
    MI5, to really work in protecting our homeland, and at the same
    time to continue fighting violent crime, protecting children
    against exploitation, whether it's on the Internet or in the
    playgrounds, from despicable, heinous sexual predators. We are
    working to give them the resources to do both, which requires
    new people, requires new training, and requires us to stand
    sentry against those things that sometimes get out of our
    control.
        So, in the course of this hearing, we're going to come back
    to know if you have the real resources to fight this new
    emerging spike in organized crime. How is it working to take on
    what we're asking you to deal with, the exploitation of
    children? Cyber-crime is despicable, whether it's a hacker
    against our national lab or whether it's a cyber-stalker
    against our kids. And, at the same time, the FBI is fighting
    the global war against terrorism.
        I was recently in London and had the chance to meet with
    MI5, but while I was meeting with MI5 I was also meeting with
    the FBI office there. And I saw how the FBI and our intel
    agencies worked with a very treasured ally in disrupting that
    very ghoulish airline plot of last summer.
        So, you've got a big job, we know that your budget has
    increased, but we want to make sure we're matching resources
    with mission and also standing sentry on our accountability
    issues. So, having said that, the statement I wanted to make on
    the details of the budget, I'll put into the record.
        Why don't you go ahead and present your testimony, Director
    Mueller, and then we'll get right into the questions, which I
    think is the meat and potatoes of the hearing.
        [The statement follows:]

               Prepared Statement of Senator Barbara A. Mikulski

        This is the second in our series of hearings focusing on
    security. Unfortunately, this comes in the aftermath of two
    tragedies--the tragic events at Virginia Tech last week and the
    death of FBI Special Agent Barry Lee Bush, a 20-year veteran of
    the FBI, who was killed in the line of duty in New Jersey three
    weeks ago. In both cases, we were reminded that violent crime
    is a growing problem in this country and the FBI's own
    statistics show it is on the rise.
        The number one job of government is to keep our communities
    safe from violence. But the rise in violent crime and the
    critical ongoing fight against terrorism have placed new
    pressure on the FBI. Just look at the FBI's top priorities:
    combating terrorism, preventing the acquisition of weapons of
    mass destruction, stopping violent crime on our streets,
    stopping foreign intelligence operations, stopping the
    exploitation of children, and fixing their information
    technology infrastructure.
        The FBI is both an intelligence and a law enforcement
    agency. It is no longer just a domestic law enforcement agency.
    It is now a global intelligence and law enforcement agency
    operating in over 50 foreign countries. Unfortunately, compared
    to other intelligence agencies, the FBI share of the overall
    intelligence budget is small.
        Yet, the FBI is charged with protecting 300 million
    Americans from a terrorist attack. In January, the President
    increased the FBI's role in counterterrorism by transferring
    the Render Safe mission from the Defense Department to the FBI.
    This means the FBI is now responsible for dismantling a nuclear
    device in the United States.
        This has increased the FBI's responsibility and placed
    added pressure on its budget. I am very concerned about the
    rising rate of violent crime. Just look at the most recent
    statistics from the FBI: robbery is up by 9.7 percent,
    aggravated assault is up by 1.2 percent, murder has increased
    by 1.4 percent and for cities with populations of 500,000 to 1
    million--the murder rate has increased by 8.4 percent.
        However, since 9/11, the FBI has shifted almost 2,000
    agents from violent crime into counterterrorism. This forced
    state and local law enforcement to take up the slack, because
    of rising crime rates, state and local law enforcement are
    stretched to the limit.
        I believe we need more resources dedicated to violent
    crime. State and local law enforcement needs the FBI to help
    them fight street gangs like MS-13 and other types of organized
    crime plaguing our communities. Joint federal-state task forces
    are the most effective means to combat violent gangs, drug
    dealers and others who have a predatory intent. We should
    expand federal-state task forces to help locals fight crime on
    the streets.
        Unfortunately, the President's budget cuts $1.5 billion
    from state and local law enforcement. You cannot cut the COPS
    program when violent crime is on the rise. Our communities need
    federal resources to keep them safe.
        In addition, I am concerned about the recent disclosure of
    abuses in issuing National Security letters. The Justice
    Department Inspector General [IG] found the FBI had no tracking
    or compliance procedures. This is unacceptable.
        That's why we added $500,000 to the IG's budget in the
    Supplemental Appropriations bill to continue oversight of the
    FBI on this subject. In addition, we directed that $10 million
    of the FBI's budget be dedicated to implementing the IG
    recommendations to make sure the FBI fixes the problem.
        The FBI must not only protect us from terrorists, they have
    to protect our privacy and our civil rights. I commend Director
    Mueller for his swift response to this problem and I look
    forward to hearing his long-term plan to correct these abuses.
        This subcommittee will also maintain it's vigilance on
    Sentinel, the FBI's long-delayed IT program. After the collapse
    of Trilogy, the FBI must stay on track, and see that this
    program does not fail.
        At the Congress' request, both the GAO and the Justice
    Department IG are monitoring and overseeing this program. We
    will maintain our vigilant oversight to ensure that this
    program stays on track and that no taxpayer dollars are wasted.
        The President's proposed budget for the FBI for 2008 is
    $6.4 billion, a 5 percent increase over fiscal year 2007. The
    proposed budget for fiscal year 2008 provides funding for
    11,868 special agents and 17,500 professional support
    personnel.
        I want to point out to my colleagues that since 2001, the
    FBI's budget has increased by over 100 percent. Few other
    agencies have had a 100 percent increase to their budget in
    just six years. But given the critical mission of the FBI, even
    a 100 percent increase may not be enough to fulfill its mission
    of protecting the American public.
        In counterterrorism, the budget proposes $2.5 billion, a
    $160 million increase over last year. This increase will pay
    for 176 additional special agents and 111 additional
    intelligence analysts in the counterterrorism division.
    Counterterrorism now accounts for 40 percent of the FBI's
    budget.
        In the area of violent crime, the fiscal year 2008 budget
    proposes to spend $2.1 billion, which is a $50 million increase
    over 2007. This is just a 2.5 percent increase over 2007.
        I have two concerns with this budget. First, the FBI's most
    recent statistics show a rise in violent crime across the
    country. When you add the $1.5 billion cut to state and local
    law enforcement in the President's budget, it becomes a double
    cut. Second, a 2.5 percent increase is not enough, given the
    needs of our communities all across this country. State and
    local law enforcement want to expand their cooperation with the
    FBI.
        The budget proposes to spend $22 million to fight crimes
    against children, a 5 percent increase over last year. We must
    do more to fight sexual predators. Our neighborhoods and
    communities need to be protected from these horrible predators.
    Since many of these predators use the internet and come from
    other states, only the FBI can mount a national fight against
    these predators, in cooperation with state and local law
    enforcement.
        Given all of these important roles and responsibilities, we
    must ensure that the FBI has the resources it needs. The lives
    of 300 million Americans depend on it.

        Mr. Mueller. Thank you and good morning, Madam Chair,
    Chairman.
        And, let me also start off by thanking Paul Carliner for
    his service. Looking at it, not from either side of the aisle,
    but from this side of the bench, let me tell you that our
    relationship has been terrific. You have been tremendously
    helpful and understanding the needs of the FBI and translating
    them into pieces of legislation to give us the funds that we
    need to do our mission. And, I also want to join the others in
    thanking you for the service and tell you that there are also,
    always employment opportunities at the FBI.
        And, let me also mention with Eleni Kalisch here, who has
    been, I must say, my strong right arm in what is an
    exceptionally important position in the FBI and that is a
    liaison with Congress. She has done a remarkable job. I hate to
    see her go, but I wish her good sailing and we will miss her.
    So, thank you, also for your service.
        I appreciate the opportunity, Madam Chairman, to be here
    today to discuss our 2008 budget request. I'd also like to
    thank this subcommittee for its continued oversight and support
    of the Bureau, as we work together to keep the Nation safe,
    while preserving the privacy rights and civil liberties of all
    Americans.
        As I said, the subcommittee is aware, and has pointed out,
    the FBI has been undergoing significant restructuring,
    realignment, and transformation for the past 5\1/2\ years. All
    designed to better position the Bureau to meet the threats and
    challenges of the future. And, the men and women of the FBI
    have demonstrated the ability and the willingness to embrace
    change for a better, stronger, and more effective organization.
    In order to continue to meet the evolving challenges facing the
    Nation, our 2008 budget request totals almost 30,000 positions
    and $6.4 billion.
        I would like to briefly address the five key challenges
    that are the focus of this budget request. First is combating
    terrorism; second, preventing the acquisition of weapons of
    mass destruction; third, defeating foreign intelligence
    operations; fourth, reducing child exploitation and violent
    crimes; and five, strengthening infrastructure and information
    technology.

                              COMBATING TERRORISM

        The first challenge continues to be addressing the current
    terrorist threat environment. It is clear that the FBI's
    operational and analytical commitment to combating terrorism
    must continue to grow. And, therefore, our budget requests 231
    new positions, 126 of which are agents. These resources will
    enable the Bureau to conduct investigations to prevent,
    disrupt, and deter acts of terrorism.
        Our intelligence-driven focus in addressing terrorism, at
    this point, is taxing our physical surveillance and electronic
    surveillance intelligence-gathering capabilities. Therefore, we
    are seeking enhancement of 118 new positions, including 12
    agents, $65 million, to strengthen surveillance and technical
    collection capabilities.
        The capacity to carry out extended covert surveillance of
    subjects and targets is essential to the FBI's counterterrorism
    and counterintelligence programs. Additionally, we must be able
    to develop and deploy new operational technologies and
    techniques to counter a more technically sophisticated
    adversary and to exploit and share the information that we
    gather.

                          WEAPONS OF MASS DESTRUCTION

        The second challenge that we are facing, addressed in the
    2008 budget, is the intent of terrorists to seek the means and
    capability to use weapons of mass destruction against the
    United States.
        In July of last year, we established the Weapons of Mass
    Destruction (WMD) Directorate to better integrate and leverage
    FBI counterproliferation and WMD intelligence analysis and
    prevention programs. We must continue to build this Directorate
    and we have requested 146 new positions toward that end, as
    well as $19 million to continue to enhance our capabilities to
    prevent, prepare for, and respond to the threat of WMD.

                        FOREIGN INTELLIGENCE OPERATIONS

        The third significant challenge addressed in our 2008
    budget is, or budget request, is the foreign intelligence
    threat to the United States. Foreign powers continue their
    efforts to establish economic, military, and political
    preeminence and to position themselves to compete with the
    United States in economic and diplomatic arenas. Foreign
    adversaries are increasingly employing nontraditional
    collectors, such as students, visiting scientists, scholars,
    businessmen, as well as cyber-based tools, to target and
    penetrate U.S. institutions.
        Our budget request includes a request for 119 positions, 55
    of which are agents, and $26.5 million to address these
    activities.

                               CHILD PORNOGRAPHY

        The fourth program area included in our 2008 budget request
    is combating child pornography and obscenity, and protecting
    children from trafficking and other forms of exploitation. One
    of the most important and successful programs is the innocent
    images national initiative, which for 10 years, has targeted
    sexual predators who use the Internet to exploit children.
        We have ongoing undercover operations across the country
    with more than 240 agents who investigate cases with their
    State and local counterparts. Unfortunately, there is no
    shortage of work in this arena. Our caseload has spiked from
    just 113 cases in 1996 to more than 2,100 last year. Our budget
    request proposes 14 new positions and $2.4 million for the
    Crimes Against Children and Innocent Images Programs.
        As this subcommittee is aware and has been pointing out in
    the opening statements, the country is experiencing an uptick
    in violent crime, particularly as it relates to gang violence.
    By our own estimates, there are now over 30,000 gangs across
    America and over 800,000 gang members. The FBI has established
    131 violent gang task forces across the country, enabling FBI
    agents to work in lockstep with police on the street, sharing
    information, and conducting investigations together.
        While combating violent crime remains a priority, the shift
    in resources from our criminal programs to our national
    security programs has been significant. And, in this current
    budget process, I'm looking forward to working with the
    subcommittee to ensure that our criminal programs may be
    restored to appropriate resource levels.
        I might add that, in this context, the budget process
    started 2 years ago. And consequently, when we sat down and
    addressed our priorities 2 years ago, we did not have the
    benefit of information that may have come along afterward, such
    as the recent statistics that indicate the uptick in violent
    crime. And so, as we go through this process, we want to work
    with the subcommittee to take into account those factors that
    may have come about over the last couple of years since we
    started this budget process.
        I might also add in this context, that in addition to our
    investigative capabilities, the Bureau brings to local, State,
    and national efforts, efforts against violent crime, a number
    of proven crime fighting technologies, services, and tools that
    are used every day by law enforcement agencies throughout the
    country. Whether it be forensics, identification and
    information technologies, all are crucial for leveraging the
    capabilities of our State and local law enforcement partners in
    the fight against violent crime. This also, should be taken
    into context as we go through this budget process this year.

                   INFRASTRUCTURE AND INFORMATION TECHNOLOGY

        Finally, the overall success of the FBI's mission requires
    the appropriate work environment and updated information
    technology. The 2008 budget includes $15 million to provide
    technology support, and to prevent information technology
    obsolescence. This funding will enable us to upgrade networks
    and encryption to comply with mandated intelligence community
    protocols and to begin bringing desktops, laptops, servers,
    printers, into a 3-year technology refreshment cycle.
        Our request also includes a total of $11.5 million to
    address critical space requirements, including requirements
    associated with the FBI headquarters annex and $4 million for
    the central records complex. The annex will provide additional
    space to ease existing fragmentation of headquarters, divisions
    and offices. The central records complex will consolidate most
    of our records into a single facility, moving from a system of
    paper records to digital records.
        This covers, Madam Chairman, the five key areas, including
    violent crime, that are addressed in our 2008 budget request.
        But before concluding my remarks, I would like to provide
    an update on the development of our information management
    system, known as Sentinel. As has been pointed out by Senator
    Leahy, Sentinel is being developed in four phases, and will be
    delivered in increments beginning this year. We have attempted
    to keep your staffs briefed, every 2 weeks, at this juncture,
    on the status of that project. Our contractor, Lockheed Martin,
    has completed the critical design and build of the software
    application and is presently in the testing phase. Once this
    testing is complete, we will begin piloting phase one at
    headquarters, followed by piloting in several field offices,
    during which time ourselves and Lockheed Martin will correct
    any additional issues that surface. And, shortly after we
    complete the testing in pilot offices, we will begin the
    rollout of Sentinel training and the software application
    across the organization.
        We had hoped to begin deployment this month. Currently, we
    anticipate beginning deployment next month. I will tell you
    that the schedule has shifted, as a result of some unforeseen
    technicalities, a total of 5 weeks. I will also tell you that
    we are on budget. We will continue to keep the subcommittee
    updated on our progress in the weeks ahead.
        Madam Chairman, Senator Shelby, members of the
    subcommittee, I thank you for the cooperation and the support
    you have given to the FBI in the past and I ask for your
    support in providing the resources requested, not only in the
    2008 budget, but also resources that may be necessitated by a
    change of circumstances over the last several months or years.
    Again, I appreciate the opportunity to testify this morning and
    look forward to answering your questions.
        Thank you, Madam Chairman.
        [The statement follows:]

                  Prepared Statement of Robert S. Mueller III

        Good morning, Madam Chairman, Senator Shelby, and members of the
    subcommittee. I appreciate the opportunity to appear before you today
    to discuss the President's Fiscal Year 2008 Budget for the Federal
    Bureau of Investigation (FBI). I would also like to thank you for your
    continued oversight of the Bureau and your efforts to ensure our
    success as we pursue the shared goal of making America safer.
                              2008 budget request
        The fiscal year 2008 budget for the FBI totals 29,373 positions and
    $6.4 billion. The net fiscal year 2008 program increases total 714 new
    positions (231 agents, 121 intelligence analysts, and 362 professional
    support) and $313.8 million. Our fiscal year 2008 budget is focused on
    improving the FBI's capabilities in addressing five key challenges:
    combating terrorism; preventing the acquisition of weapons of mass
    destruction; defeating foreign intelligence operations; reducing child
    exploitation and violent crimes; and strengthening infrastructure and
    information technology.
        I recognize that there are many competing requirements for limited
    funding. Nonetheless, the FBI must continue the progress it has made to
    implement the President's directives and the recommendations of the 9/
    11 Commission and the Weapons of Mass Destruction Commission. At the
    same time, the FBI must be resourced to discharge its critical criminal
    investigative mission that also contributes to the overall safety and
    security of the Nation. In addition, for the FBI to be a full partner
    in the intelligence community it must have the tools, capacities, and
    capabilities to work closely with other members of the community.
    Finally, the FBI must find the proper balance between expanding our
    workforce and supporting on-board employees with the technology and
    infrastructure necessary to accomplish our mission. I believe the
    fiscal year 2008 budget will go a long way toward achieving these
    goals.
                              combating terrorism
        The current terrorist threat environment shows no signs of abating
    in the near term. Consequently, the FBI's operational and analytical
    commitment to combating terrorism is not expected to decrease. The FBI
    must remain vigilant for indications of terrorist groups shifting focus
    from the insurgency in Iraq and Afghanistan to acts that could be
    carried out against United States interests outside the current theater
    of operation and/or against the United States homeland. The FBI must
    also continue its efforts to deny terrorist groups and sympathizers the
    ability to raise funds and to carry out other operational and
    logistical support from the United States.
        This budget requests 231 new positions (126 agents) and $44.4
    million to conduct intelligence-drive terrorism investigations and
    operations. Additionally, the fiscal year 2008 budget proposes the
    reallocation of 100 field special agents from criminal investigations
    to counterterrorism. These resources will enable the FBI to conduct
    investigations to prevent, disrupt, and deter acts of terrorism and
    continue to strengthen working relationships with our Federal, State,
    and local partners; enhance our capacity for analyzing and exploiting
    information from growing volumes of seized terrorist digital media and
    communications; enhance the Terrorist Screening Center operations
    center; provide support to the National Virtual Translation Center,
    which serves as a clearinghouse to facilitate timely and accurate
    translation of foreign intelligence for elements of the intelligence
    community; and address growth in the number of terrorism and
    counterintelligence-related computer intrusion cases.
        Shifting from a reactive criminal prosecution approach to a more
    prevention and intelligence-driven focus in our counterterrorism
    program is taxing the FBI's physical surveillance and electronic
    surveillance intelligence gathering capacities. The capacity to carry
    out extended covert surveillance of subjects and targets is absolutely
    critical to the FBI's counterterrorism and counterintelligence
    programs. Surveillance capacities--physical and electronic--give us
    insight and awareness of our adversaries. Insight and awareness, in
    turn, create opportunities to identify sleeper cells, disrupt support
    networks and communications, and recruit assets. We need a robust
    surveillance capacity to keep on top of known and emerging targets.
    Additionally, we must be able to develop and deploy new operational
    technologies and techniques to counter a more technically sophisticated
    adversary and to exploit and share the information we gather.
        In fiscal year 2008, we seek an enhancement of 118 new positions
    (12 agents) and $65 million to strengthen surveillance and technical
    collection capacities. These resources will enable the FBI to increase
    the number of physical surveillance teams; address growing workload for
    electronic surveillance involving broadband and other data network and
    internet communications; develop new techniques and tools to address
    emerging technologies; meet demands for new audio and data collection
    and upgrade existing and/or obsolete digital collection system
    equipment and components; address growing workload for covert entries
    and searches; and develop new techniques and tools for tactical
    operations.
        An integral part of our national security program is the
    development and operation of human intelligence. Our budget request
    includes 85 new positions (6 agents) and $22.3 million to strengthen
    human intelligence capacities. This funding will enable the FBI to
    provide staffing for field intelligence groups to comply with new human
    source validation standards and perform continuous assessments;
    continue development and deployment of Delta to support management of
    over 15,000 FBI human sources; deliver and deploy comprehensive human
    source targeting and development training; and remediate human source
    handling deficiencies. The intelligence derived from FBI human
    intelligence source collection also enables other agencies' success in
    their counterterrorism, counterintelligence, and counterproliferation
    missions.
        We are fortunate that there has not been another major terrorist
    attack within the United States since September 11, 2001. This reflects
    positively, in part, on the hard and diligent work of FBI employees and
    those individuals who work alongside them, such as prosecutors and our
    partners in law enforcement and intelligence. However, we cannot afford
    to lessen our guard against the threat from terrorism. We must continue
    to invest in the resources and capabilities to counter an ever adapting
    and agile adversary.
    preventing the acquisition of weapons of mass destruction (wmd)/render
                                      safe
        The National Counterterrorism Center WMD Threat Assessment, 2005-
    2011, reaffirmed the intent of terrorist adversaries to seek the means
    and capability to use WMD against the United States at home and abroad.
    Denying these adversaries access to WMD is a top administration
    counterterrorism strategy priority. Within the U.S. Government, the FBI
    has been assigned responsibility for Render Safe operations involving
    all WMD in the National Capital Region. The responsibility to render
    safe WMD throughout the remainder of the United States belongs to the
    FBI, supported by the Department of Defense. To fulfill its critical
    responsibilities in the area of WMD, the FBI must continue to build to
    the capacities and capabilities of its WMD Directorate and the Render
    Safe Program.
        The WMD Directorate was created in July 2006 to better integrate
    and leverage FBI counterproliferation and WMD intelligence analysis and
    prevention programs. The fiscal year 2008 budget seeks 146 new
    positions (29 agents) and $19 million to continue to enhance the
    Directorate's capabilities to prevent, prepare for, and respond to the
    threat of WMD. These resources will allow the FBI to enhance strategic
    partnerships with foreign intelligence, law enforcement, security,
    public health, agricultural, chemical, and other public and private
    sector agencies and organizations that are vital to the early detection
    of a potential WMD incident.
        The fiscal year 2008 budget also includes enhancements of 9
    positions (3 agents) and $11 million to enhance the FBI's Render Safe
    Mission, which encompasses both the tactical and technical response to
    incidents involving WMD within the United States and its territories.
    The complete development of a robust render safe crisis response for
    the directed contingencies requires the FBI to develop command and
    control capabilities to support deployments and to provide the FBI and
    United States Government leaders with the information required to make
    time-critical decisions. The requested funding will allow the FBI to
    enhance its National Asset response staffing beyond current minimum
    levels and provide program personnel with adequate training, equipment,
    supplies, and services. Additionally, the requested funding will allow
    the FBI to upgrade its Render Safe technical tools so the operators
    will have the latest and most effective technology at their disposal to
    meet and dispose of this challenge.
                   defeating foreign intelligence operations
        The foreign intelligence threat to the United States is increasing
    as foreign powers continue their efforts to establish economic,
    military, and political preeminence and to position themselves to
    compete with the United States in economic and diplomatic arenas.
    Foreign adversaries are increasingly employing nontraditional
    collectors--e.g., students and visiting scientists, scholars, and
    businessmen--as well as cyber-based tools to target and penetrate U.S.
    institutions. The fiscal year 2008 budget includes 119 positions (55
    agents) and $26.5 million to address these activities.
        In November 2005, the FBI launched a Domain Management Initiative
    to focus attention on whether the FBI is conducting the right
    investigations to have the greatest impact on threats to national
    security. Continued implementation of the domain initiative will
    provide FBI leaders with a comprehensive and context decision-making
    environment. It will allow field office executive management to examine
    its target and regional environment and discuss the relative priority
    and focus of different activities. In addition, resources are needed to
    transform and leverage the capacities and capabilities of the Foreign
    Terrorist Tracking Task Force (FTTTF) into a National Security Analysis
    Center that would provide expanded analytical support to all FBI
    National Security programs by leveraging data and services residing in
    both FTTTF and the Investigative Data Warehouse.
                  reduce child exploitation and violent crimes
        The FBI remains committed to fighting child pornography and
    obscenity, and to protecting children from trafficking and other forms
    of exploitation.
        The fiscal year 2008 budget proposes 14 new positions and $2.4
    million for the Crimes Against Children (CAC) and Innocent Images
    National Initiative (IINI) programs. These resources will enhance
    field-based Child Abduction Rapid Deployment (CARD) Teams that provide
    onsite response and investigative and technical assistance in child
    abduction cases. The funding will also enable the IINI, which targets
    child prostitution, to enhance its capacity to disseminate intelligence
    regarding unregistered sex offenders and innocent images
    investigations.
        In addition to its investigative capabilities, the FBI brings to
    local, State, and national efforts against violent crime a number of
    proven crime-fighting technologies, services, and tools that are used
    every day by law enforcement agencies throughout the country to solve
    crimes and put criminals in jail. FBI forensic, identification, and
    information technologies and tools are critical for leveraging the
    capabilities of our State and local law enforcement partners in the
    fight against violent crime. Access to these crime-solving services and
    capabilities is even more important in a post 9/11 environment where
    the FBI may not always be able to devote the level of special agent
    resources to violent crime as it has in the past. Over the past several
    years, State and local agencies have been provided grant funding to
    improve their digital forensic, DNA, automated fingerprint
    identification, and information sharing capabilities.
        One of the consequences of these improved State and local
    capabilities is increased demand for services and access to the
    underlying and unifying FBI systems and connectivity. For fiscal year
    2008, the FBI is requesting a total of $90.5 million to improve its
    capacities and capabilities for providing forensic, identification, and
    information technologies and services for law enforcement, including
    IDENT/IAFIS Interoperability ($10.0 million); Next Generation
    Identification ($25 million); Law Enforcement Information Sharing/R-DEX
    ($5 million); DNA forensic services, including Walsh Act implementation
    ($14.6 million); Combined DNA Index System ($7 million); Regional
    Computer Forensic Laboratories ($6 million); and Computer Analysis
    Response Teams ($22.8 million).
            strengthening infrastructure and information technology
        Critical to the success of the FBI mission are a safe and
    appropriate work environment and information technology (IT). Over the
    past several years, the FBI has made substantial investments to upgrade
    its underlying IT architecture, including the purchase of computer
    workstations and software for employees and networks for connectivity
    both within the FBI and with our external partners. Having made these
    investments to bring IT in the FBI to near current state-of-the-art, it
    is now necessary to keep these investments current with technology.
        The fiscal year 2008 budget includes $15 million to provide
    enterprise IT support and prevent IT obsolescence. This funding will
    enable the FBI to address increased costs of software license/
    maintenance agreements, upgrade networks and encryption to comply with
    mandated intelligence community protocol, and begin bringing desktops,
    laptops, servers, and printers into a 3-year technology refreshment
    cycle.
        Additionally, $7.5 million is requested to continue to build and
    strengthen the FBI's IT program management capabilities. The Inspector
    General and others have repeatedly criticized the FBI for ineffective
    program management of IT projects. Funding requested will enable the
    FBI to increase management and oversight of critical IT projects,
    ensure compliance with FBI Life Cycle Management Directives, and
    enhance FBI IT policy and planning capacities.
        The FBI requests a total of $11.5 million to address critical space
    requirements, including $7.5 million for fiscal year 2008 requirements
    associated with the FBI Headquarters (HQ) Annex and $4 million for the
    Central Records Complex (CRC). The FBIHQ Annex will provide additional
    office space to ease existing fragmentation of headquarters divisions
    and offices. This funding will support the build-out of annex space,
    including furnishings, UNet and FBINet connectivity, equipment, locks,
    alarms, and access control. The CRC will consolidate most of the FBI's
    records, which are currently dispersed in FBI locations across the
    Nation, into one single facility. The funding requested will support
    non-standard requirements associated with the construction of the
    permanent CRC facility, such as fencing, vehicle barriers, and guard
    booths. Construction of the CRC, a GSA build-to-suit/leased facility,
    is planned to begin in fiscal year 2008.
                           ``unfunded fte'' reduction
        The fiscal year 2008 budget reflects a reduction of 2,700 positions
    (576 special agent and 2,124 professional support) for the FBI. This
    reduction is part of a Department of Justice-wide effort to remove
    ``unaffordable work-years'' and to recast positions and work-years
    consistent with available funding. Let me assure you that the
    ``unaffordable work-years'' reduction is being targeted against vacant
    positions and that no on-board FBI employee's position will be affected
    by this action. The underlying causes for the accumulation of
    ``unaffordable work-years'' are the results of both internal workforce
    management decisions by the FBI and external decisions on the Bureau's
    budget.
                                   conclusion
        Madam Chairman, Senator Shelby, and members of the subcommittee,
    today's FBI is part of a vast national and international campaign
    dedicated to defeating terrorism. Working hand-in-hand with our
    partners in law enforcement, intelligence, the military, and diplomatic
    circles, the FBI's primary responsibility is to neutralize terrorist
    cells and operatives here in the United States and help dismantle
    terrorist networks worldwide. Although protecting the United States
    from terrorist attacks is our first priority, we remain committed to
    the defense of America against foreign intelligence threats as well as
    enforcing Federal criminal laws while still respecting and defending
    the Constitution.
        I recognize that the fiscal year 2008 request will require
    difficult decisions with respect to meeting the competing demands among
    the Department of Justice components as well as those of other
    agencies. At the same time, even in times of fiscal restraint, there is
    a strong public expectation that the government provides our Nation's
    safety and security. Protecting the Nation from terrorist attacks, the
    threat of WMD, foreign intelligence agents, and violence requires a
    strong and well-resourced FBI.
        I ask for your support in providing the resources requested in the
    fiscal year 2008 budget so that we can fulfill our mission to safeguard
    the American people. I look forward to working with you on this budget
    proposal and other issues.
        Once again, I thank you for your continued support of the FBI. I am
    happy to answer any questions you may have.

        Senator Mikulski. Thank you very much, Mr. Director, and
    we're going to follow very closely our time. I'm going to get
    right to my questions. I'm going to go into three areas. The
    FBI fighting crime, the FBI fighting terrorism, and then making
    sure that the FBI has an accountability system for, not only
    Sentinel, but also the national security letters, where there
    seems to have been a big problem.

                                 VIOLENT CRIME

        I'd like to go right to the violent crime issue because,
    again, we'll come back to the fact that you're two agencies,
    but you're one agency. Violent crime is on the rise, we've
    heard about the data. Robbery is up 9 percent, aggravated
    assault is up. It's not just about the crime, it's also who's
    doing the crime, the new gangs, and the threat of meth.
        As I looked at your budget, 60 percent of the FBI's money
    goes to counterterrorism, counterintelligence, and the intel
    function. Thirty-four percent goes to traditional crime-
    fighting responsibilities. My first question is, is that the
    right ratio? Or is it that as we scrambled to fight the global
    war against terrorism and the massive need to shift resources,
    have we kind of left fighting crime a little bit behind? What
    would you say would be the actual resources you need, or are
    they pretty well amplified in this statement?
        Mr. Mueller. First of all, let me say the percentage that
    you give in terms of dollars may be roughly accurate. I will
    tell you that in terms of agents assigned to national security
    responsibilities as opposed to the criminal responsibility,
    it's almost 50/50 on the street. I will tell you that since
    September 11, understandably I believe, we have taken
    resources--substantial resources--from the criminal side of the
    house to address the counterterrorism mission. We have tried to
    establish priorities that maximize our capabilities to augment
    State and local law enforcement and other authorities in
    particular areas.
        I have always believed that when it comes to violent crime,
    the FBI should play a substantial role, because of our
    capabilities of reaching across jurisdictions. And, we have set
    up, as I----
        Senator Mikulski. But Director, do you feel that the
    President's budget is enough for you and your agents and
    analysts, and so on, to do the job of fighting crime and having
    the important linkages to local law enforcement with the unique
    role the FBI plays?
        Mr. Mueller. I believe at this juncture, we ought to
    revisit, as will happen through the budget process--normally
    within the administration, with the Department of Justice, with
    the Office of Management and Budget (OMB), but also with the
    subcommittee, our allocation of resources, given the uptick in
    violent crime with the possibility, given the budget
    constraints, of augmenting the FBI. I absolutely believe that
    we would benefit from additional resources.
        Senator Mikulski. Once we have this information, we'll talk
    with you about that in more detail.

                                   TERRORISM

        Let's go to the global war against terrorism. One of the
    things that I've noted, that in addition to the very important
    intel function that you perform, that you're also now playing a
    very important role in the issue of weapons of mass
    destruction, some of which is too sensitive for a public
    hearing.
        But again, our question is--this requires very
    sophisticated people. These are people that require enormous
    scientific and technical backgrounds often more usually found
    in the Department of Defense (DOD), and it also takes a lot of
    money to do this. Could you share with the subcommittee, that
    as you do the surveillance and things that are important
    domestically and internationally, what about this new role of
    fighting the weapons of mass destruction? Should it be with
    you? And do you have the resources that you need to do this?
        Mr. Mueller. Well, responding to an attack of weapons of
    mass destruction in the United States is a responsibility of
    the FBI. I think it is appropriately a responsibility of the
    FBI, in large part because of the extent of integration we have
    with State and local law enforcement around the country, our
    presence around the country, and the expertise that we develop
    in this arena, some of it at Redstone Arsenal, as pointed out
    by Senator Shelby. So, I do believe we should have this
    mission.
        But it is an expensive mission. It requires contributions
    from a number of different skill sets and, as the Senator is
    well aware, those who are on the intelligence side of the house
    as well as this side of the house understand that we have
    requested substantial funding in that regard and my
    understanding is we're getting substantial funding to assist in
    that. But it is an expensive proposition, but I do believe we
    appropriately have that mission.
        Senator Mikulski. Well, my time has expired and I want to
    go by the rules. I would just like the subcommittee to
    understand, the FBI has now been given a very important
    responsibility, which is to, number one, make sure that a
    weapon of mass destruction does not fall into the hands of
    people who would want to use them in the United States of
    America. This is a pretty big job, against chemical,
    biological, and nuclear, big and small.
        Mr. Mueller. That's correct.
        Senator Mikulski. That's a pretty big deal. Then, in
    addition, there is something that is in your materials and that
    is an open document, but Senators could also get a briefing on
    this, called Render Safe, which means the FBI has also the
    job--that if a nuclear weapon, big or small, is detected, their
    job is to defuse it. This is big deal and it, and again,
    requires enormous sophistication.
        And, then also, for those who would want to bring these
    despicable and horrific weapons into our country, or seize them
    within our country, the stress, and the number, and the
    scientific and technological capability, even for surveillance
    is pretty significant. So, this isn't J. Edgar Hoover's FBI any
    more. And it's not like, let's hear a hoo-hah for gumshoe. So,
    we're talking about one, fighting gangs, dealing with meth,
    partnering with local law enforcement, and then these very
    sophisticated things.
        I'm going to yield now to Senator Shelby, but I would hope,
    also, that perhaps Senator Leahy will be picking up on the
    question of those national security letters.
        Senator Leahy. We are, yeah, we are.
        Senator Mikulski. Okay, thank you. Because that was a
    question I was going to go into.
        Senator Shelby.

                           NATIONAL SECURITY LETTERS

        Senator Shelby. Director Mueller, the inspector general
    issued a report critical of the FBI's use of national security
    letters. While I understand the critical need for these tools,
    the lack of supervision in the use of the national security
    letters and exigent letters is very troubling. Can you tell us
    what steps you're taking to correct the deficiencies and when
    those steps will be completed? You've testified previously that
    you would prefer administrative subpoena authority in
    counterterrorism cases to the existing national security
    letters (NSL) authority. Why do you prefer one tool over the
    other?
        Mr. Mueller. Let me start with what steps we've taken to
    address the issues with regard to NSLs.
        One of the first immediate steps we took was to expand on
    the audit that was done by the inspector general and to go
    across the country. I had 150 special agents, inspectors, visit
    every office to look at the use of national security letters.
    They have come back with information relating to the use around
    the country. I do not believe that, in the end, as we go
    through the information, there will be any startling
    differences between what we found and what the IG found. But
    nonetheless, it enables us to look at potential problems with
    more particularity.
        We are reviewing those findings now and my expectation is
    that, in working with the IG in the next several weeks, we will
    have some conclusions from that 10 percent audit. We are going
    back and looking at the numbers reported, our software and
    databases, to determine how we can retroactively identify, with
    more precision, the numbers that may have been left out. And
    again, we are working with the IG on that.
        I would say the third, well, let me talk about the third
    area, and that's the exigent letter issue. We have undertaken a
    joint investigation with the inspector general to determine how
    this happened, who was involved, and to make recommendations as
    to what further steps must be taken as a result of our
    findings. Again, it's a joint investigation with the inspector
    general. I think that will take several weeks, if not months,
    to follow-up thoroughly on that.
        Most importantly, what we did not have in the FBI was a
    compliance system, a compliance program. Large corporations
    have compliance programs. And, we had put into place
    procedures, but we had no way of assuring, on a daily basis,
    that those procedures were being followed.
        The $10 million that you mentioned in your opening remarks,
    with regard to following up on the NSL issue, will be used to
    establish a compliance office, reporting to the highest levels
    of the FBI, and addressing--not just the issues that we found
    with NSLs--but other issues to make certain that, whether it be
    NSLs or other circumstances, where Congress has given us the
    capabilities, that we are handling them appropriately, that the
    reporting to Congress is accurate and to make certain that what
    happened with NSLs does not happen again. And, I look at this
    as not just addressing the NSL issue, but addressing other
    issues within the Bureau that we can anticipate better and
    address, before the inspector general or Congress needs to
    address them.
        The last step I would say that we're taking is
    understanding--and agreeing with--the concerns of privacy
    groups, legitimate concerns, about the use of NSLs. We have
    undertaken outreach to the privacy groups and the civil
    liberties groups, to explain what steps we're taking and to get
    input. We may not always agree and, quite obviously, there'll
    be occasions where we disagree, but we will have a dialogue as
    to how we can do better in this regard, and have elicited input
    from these privacy and civil liberties groups. Those are the
    five steps that we are taking.
        Senator Shelby. What would--you mentioned administrative
    subpoena authority in counterterrorism cases.
        Mr. Mueller. One of the issues with the national security
    letters is the authorities are spread across a number of
    statutes. The predication for it and understanding the use of a
    particular NSL may depend on the type of records requested and
    falls under separate statutes. Administrative subpoenas would,
    hopefully, put in one place this authority. It would give, as
    the latest iteration of the Privacy Act has given, the right
    for somebody to contest it, as well as us to enforce it. And,
    so my hope would be that the administrative subpoena process
    would replicate, somewhat, the NSLs, but be much simpler for us
    to operate under.

                                 BUDGET REQUEST

        Senator Shelby. Mr. Director, can you tell this
    subcommittee if the 2008 budget request, in your judgment,
    would meet your current operating needs?
        Mr. Mueller. My belief is there should be further
    discussion with the Department of Justice, with OMB and also
    with this subcommittee, as to the budget, because circumstances
    have changed in the last couple of years that, in my mind,
    warrant a revisiting of the issues.
        Senator Shelby. Madam Chairman, I have a number of
    questions that I would like to--because of the interest of time
    and the Director's schedule--submit to the record, for the
    record, that I think are important.
        Senator Mikulski. Without objection.
        Senator Shelby. Thank you.
        Senator Mikulski. Thank you very much.
        Mr. Mueller. Can I add one thing? I'm sorry.
        Senator Shelby. Sure.
        Mr. Mueller. In response to Senator Shelby's last question,
    in terms of the budget formulation, one of the things we've
    been asked to do, and believe it's important to do, is have a
    strategy in the Bureau, a long-term strategy. Not a year-to-
    year strategy, but a long-term strategy.
        We are looking at budget requests over a 5-year period and
    believe that, for us, we should be on a 5-year cycle of budget
    requests. And, as we have developed the strategy, we are
    putting in place the requests over a 5-year period. That also
    will help, I believe, in supporting the discussion as to the
    budget request for 2008.
        The last point I'd make, I have to correct myself, I said
    the Privacy Act, I did mean the Patriot Act, in terms of the
    changes of the abilities of persons to contests NSLs and for us
    to enforce them.
        Senator Shelby. A 5-year budget plan would help you to plan
    more readily, would it not?
        Mr. Mueller. It would.
        Senator Shelby. Thank you.
        Senator Mikulski. Well, not only a 5-year budget plan,
    which we would certainly recommend because we could then look
    at how to pace this. But also the fact, that when we look at
    the funding of the intel agencies, you have to have more
    visibility to be at the table.
        Let me turn to Senator Leahy and, subcommittee members
    we'll come back for a second round. Senator Leahy.
        Senator Leahy. Thank you, Madam Chair. I had the privilege
    of serving on the Appropriations Committee and also, as the
    Director knows, I serve on the Judiciary Committee. And, I just
    want to take this opportunity to note, the Judiciary Committee
    still has not received answers to the written questions that we
    gave in connection with your March 14 appearance, or your
    appearance last year on December 6.
        Now, I understand that your responses have been submitted
    to the Department of Justice. That's all well and good, but we
    still don't have last year's responses or this year's
    responses. I don't think you would tolerate this kind of
    response time in FBI investigations.
        Before you leave, I will give you a copy and resubmit these
    as questions from the Appropriations Committee. Maybe that will
    help you get it through the Department of Justice quicker,
    because their budget will also come before this subcommittee.
        I've also raised with the Attorney General why they take so
    long clearing your answers to get them to us. We found last
    week that we will not get answers from him, but I would like to
    at least get answers from you.

                                    SENTINEL

        Now, we're a year into the Sentinel computer upgrade, the
    costs go up all time. The FBI informed the Judiciary Committee
    you'd encountered unexpected problems with the deployment of
    phase one that could delay it. What is the current status of
    Sentinel? Do you anticipate additional delays, or cost
    overruns?
        Mr. Mueller. We are on budget, in fact we're under budget
    at this juncture on the first phase of Sentinel. In terms of
    the time, as I indicated in my opening remarks, we had hoped
    that we would start deployment in April. It looks like it will
    be deployed next month.
        We are in the final stages of the approval process with the
    contractor on phase one. One of the mistakes made by me, I
    would say early on, in terms of the computers, was pushing the
    process and the schedule. I had pushed hard, but I want to make
    certain that when it is deployed--my expectation is next
    month--that it works. I meet every week with the Sentinel team.
    I monitor it.
        Senator Leahy. That's just phase one. That's phase one.
        Mr. Mueller. Phase one. That is phase one. Now phase two,
    which is the more--in some senses, is the more important
    phase--because it addresses more of our business practices. We
    have started the planning on phase two. And we will have to--
    there are a number of lessons we learned in phase one that
    we'll have to implement in phase two.
        Senator Leahy. When do you think phase two, the more
    important part, will be fully deployed?
        Mr. Mueller. I cannot give you an answer now on that.
        Senator Leahy. This year?
        Mr. Mueller. I would be concerned in giving you an answer.
        Senator Leahy. But you don't see it as happening this year?
        Mr. Mueller. Not this year. The original expectation was it
    would take another year to 18 months after the deployment of
    phase one to deploy phase two. But one of the things we learned
    in the development of phase one is that some of the things we
    anticipated deploying in phases two, three, and four, could
    better be moved up and other aspects of it moved down to phase
    four. Consequently, we are reviewing the lessons learned in
    phase one and over the summer and the fall we'll be determining
    how we proceed with phase two, three, and four.
        But, at this point, we have no belief that it is over
    budget or will be over budget. We have every belief, at this
    juncture, that we can do it under budget, in the timeframe that
    was originally set out for Sentinel.
        Senator Leahy. Well, are you still using Computer Sciences
    Corporation and CACI International?
        Mr. Mueller. No. Lockheed Martin is our contractor on
    Sentinel.
        Senator Leahy. Were Computer Sciences Corporation and CACI,
    in any way, part of the Sentinel contract team?
        Mr. Mueller. There was one aspect--let me just check--there
    was one aspect that one of the corporations that was involved
    in Virtual Case File is involved with Sentinel. I believe it
    was training, but it was a separate company, not part of the
    original company handling Virtual Case File. That is the case,
    there is one business element of one of those companies, at
    this point, that has a small role in Sentinel.
        Senator Leahy. Which one?
        Mr. Mueller. I believe it's, and I'd like to get back to
    you and firm it up, but I think it's Computer Sciences
    Corporation, it was bought by DynCorp.
        Senator Leahy. Well, please fill that for the record.
    Because I think if Computer Sciences and CACI were involved in
    the failed Virtual Case File project, I would hate to see them
    involved again. I'm also going to ask questions for the record
    on the integrated wireless network, 6 years in development,
    $195 million already being spent, an anticipated overall cost
    of $5 billion, and nobody has anything that works yet.
        [The information follows:]

               Sentinel Contractors Involved in Virtual Case File

        Two vendors are common to both Trilogy and Sentinel:
    Computer Science Corporation (CSC) and CACI. The division of
    CSC that worked on Trilogy, however, was part of a separate
    company at the time and not acquired by CSC until after the
    Trilogy contract ended. Furthermore, the after-acquired
    division of CSC will not be working on Sentinel, thus we
    anticipate little or no overlap of services or personnel. We
    have contracted with CACI to provide training for Sentinel,
    which was also CACI's role in the Trilogy contract. Training
    was not an issue in the execution of the Trilogy contract.
        The FBI has strengthened its internal controls to avoid a
    repeat of problems experienced with Trilogy. Among other
    things, we have improved our contract oversight in two major
    ways. First, the Sentinel contract has clear reporting
    requirements and severable deliverables. In other words, we can
    stop work if we are not satisfied with a contractor's progress.
    Second, we have structured our contract management with clearly
    defined roles and responsibilities, so accountable personnel
    are reviewing all documentation and expenses. That process will
    be supplemented by internal audits of our financial management,
    as well as external oversight from Congress and the
    Administration.

        Mr. Mueller. Can I respond briefly, Senator, if we have
    time? The Trilogy project was, as you know, three pieces. The
    networks, the computers, and two-thirds of it was successful,
    the other third was not successful. But I will also say in the
    development of the Sentinel project, we have had the inspector
    general review us day in and day out, and the Government
    Accountability Office (GAO), and we have endeavored to keep the
    committees apprised of the status of Sentinel, offering weekly
    briefings, now giving bi-weekly briefings, too, so that there
    is no miscommunication in terms of where we are at any
    particular point in time in the development of this project.
        Senator Leahy. Thank you, Madam Chair.
        Senator Mikulski. Thank you, Senator Leahy. You know,
    what's so great is, on our subcommittee now, we have the
    chairman of the Judiciary Committee, who has oversight of the
    FBI. We welcome you and your expertise.
        Senator Leahy. You might think it's greater than some of
    the witnesses might.
        Senator Mikulski. And Senator Kohl is also a member of the
    Judiciary Committee. Senators, I think the Director would also
    be wiling to brief both you and also your Judiciary Committee
    staff about the status of Sentinel. I think you'd be heartened
    about the progress.
        Senator Leahy. He does, he does.
        Senator Mikulski. Okay, thank you.
        Senator Kohl.
        Senator Kohl. Thank you, Madam Chairman.

                                 VIOLENT CRIME

        Director Mueller, violent crime, as you've said, is on the
    rise across the country. When we ask State, local, and Federal
    officials in all our communities what needs to be done to get
    this problem under better control, they all give the same
    answer. They ask for greater Federal funding for State and
    local law enforcement. This administration is not giving our
    law enforcement officials the help that they need.
        For example, in Wisconsin, our share of Byrne funding went
    from more than $9 million in fiscal year 2002, all the way down
    to less than $3 million in fiscal year 2006. As a result of
    cuts to the COPS hiring programs, support to Milwaukee's Police
    Department to put more cops on the beat, went from more than $1
    million in 2002, down to zero these past 2 years.
        It's no surprise that the rise in violent crime has come on
    the heels of reductions in this administration's financial
    assistance to State and local law enforcement.
        Mr. Director, don't you agree that more Federal support for
    local law enforcement would greatly help our local communities
    in the battle against violent crime?
        Mr. Mueller. Well, I certainly am supportive of funding for
    State and local law enforcement from a variety of sources,
    including Federal. And, I would tell you that I believe that we
    work most efficiently when we work together with our State and
    local counterparts.
        And, what I'd like to see is the funding tied into working
    in task forces. We have 131 Safe Street task forces around the
    country. It harnesses our ability to reach across jurisdictions
    to obtain evidence, to provide forensics help and the like, but
    also provides the prioritization of what needs to be addressed
    in the community and a task force concept, I think, is
    tremendously important when you address gangs and some of the
    contributing factors to violent crime.
        So, I am, I have been and will continue to be, supportive
    of enhanced funding to State and local law enforcement in hopes
    that that funding will also be tied to participation on task
    forces, so that we maximize our work together.
        Senator Kohl. Well is this an ongoing kind of a process?
    Because, as I said, the direct funding for things like Byrne
    and COPS has gone down. Has it been augmented in some other way
    to local law enforcement?
        Mr. Mueller. Again, I am supportive of funding the State
    and local law enforcement.
        Senator Kohl. Right.
        Mr. Mueller. And, I'll leave the details up to the
    Department of Justice, that is the conduit for those grants.
        Senator Kohl. But the problem is so severe out there, you
    know, that the question of where does it come from is not
    nearly as important as getting the money out there so that our
    local law enforcement people can do their job more effectively.
    Not 2 or 3 or 4 years from now, but yesterday and today. Isn't
    that true?
        Mr. Mueller. I am absolutely supportive of funding for
    State and local law enforcement and, as I said I believe, I am
    also supportive in the context of doing it so that we work
    together.
        What we find, I will tell you, is it is increasingly
    difficult for State and local law enforcement to assign
    personnel to task forces because of the reduction in personnel.
    My belief is that task forces are tremendously important, and
    we ought to focus on the funding for State and local law
    enforcement in such a way that it enhances our joint efforts to
    address violent crime or counterterrorism or other threats,
    including cyber-crime and crimes against children, in a way
    that enhances our ability to work together and serves as an
    incentive for us to work together.

                                  COPS PROGRAM

        Senator Kohl. All right. Just talk about the COPS program
    and get some comment from you. The overall COPS program was
    funded just a few years ago at more than $1 billion and this
    year the President's request for $32 million really means,
    basically, the end of the program. Last year in my home town of
    Milwaukee, the police department had approximately 200
    vacancies in an ideal force of 2,000. We used to have a program
    to deal with that problem and it was called, The Cops Universal
    Hiring Program. And, that program was instrumental at reducing
    crime in the 1990s.
        Unfortunately that program has been entirely eliminated in
    this administration. So, would you agree that we need a new
    commitment to the COPS program? Especially when we're
    witnessing a surge in violent crime in our mid-size cities and
    other sized cities all across our country. Don't you agree that
    we need to increase Federal funding in order to help put more
    police on the streets?
        Mr. Mueller. Without regard to a particular program, I am
    supportive of enhanced funding for State and local law
    enforcement, particularly funding to working cooperatively
    between ourselves, the Bureau of Alcohol, Tobacco, Firearms and
    Explosives (ATF), and the Drug Enforcement Administration
    (DEA), without regard to a particular vehicle.
        I think the vehicle is less important than the fact that we
    address the threats that are out there, when it comes to the
    uptick in violent crime. I attended a meeting a couple days ago
    at the National Academy of Sciences. One of the issues
    discussed by a number of very influential and capable
    professors from around the country was why this uptick. You can
    look at the statistics across the Nation, but then every
    community is somewhat different.
        What you do not want to do is, necessarily, just throw in
    resources without understanding what the problem is, what the
    solution is, and then assign those resources to effect that
    solution.
        In my own mind, most of the threats cross jurisdictional
    borders now. The solution comes from working together,
    ourselves with State and local law enforcement. To the extent
    that local communities cannot afford the participation of State
    and local law enforcement on task forces, I believe there has
    to be a mechanism someplace, through some vehicle, so that
    there is an incentive for us to work together and that we
    address these issues, together, as opposed to addressing them
    individually. Because I think we're far more effective when we
    do it jointly.
        Senator Kohl. I thank you so much.
        And, I thank you, Madam Chairman.
        Senator Mikulski. Senator Lautenberg.
        Senator Lautenberg. Thank you, Madam Chairman.
        And, thank you, Director Mueller, for being here and for
    providing the leadership that you do for this important arm of
    our protection and safety in our society.
        Oddly enough, Senator Kohl, my friend and colleague, hit on
    the subject, COPS. And, as I was looking over my notes, the
    thought occurred to me and I found out that at one point there
    were 120,000 police on the streets, 5,000 in my State of New
    Jersey from COPS. And, then your notes, Director, in your
    comments you say access to local law enforcement partners in
    the fight against violent crime, access to these crime-solving
    services and capabilities are more important in a post-9/11
    environment. So, it's hard to understand why that program might
    be eliminated when we need all the help we can get.

                               GUNS TO TERRORISTS

        Let me get on to something that's come about. A GAO report
    that I requested in 2005 revealed that 35 known or suspected
    terrorists bought guns in a 5-month period of 2004. And, then I
    asked you to review what legislative changes might be needed,
    and you wrote me in March 2005--so, we're looking back more
    than 2 years--that Department of Justice create a working group
    to look into this.
        Yesterday, the Department of Justice sent me, Vice
    President Cheney, and House Speaker Pelosi, a proposal to give
    the Attorney General the discretion to deny guns to terrorists.
    Do you think 2 years to move on something as sensitive and as
    helpful as this could be, borders on either outright neglect or
    lack of interest in the proposal? Should known terrorists be
    allowed to buy guns at all?
        Mr. Mueller. I can't speak to the delay, Senator. I think
    before one reaches any conclusion as to the delay, one would
    want to know what kind of dialogue there has been, whether it
    be within the administration, or between the administration and
    Congress. I see it was submitted yesterday. I would ask the
    opportunity to go back to look at this and then, to the extent
    that you have further questions in terms of what this
    legislation does, I'd be happy to answer them.
        Senator Lautenberg. Okay. But, and the last part of my
    question, should one's name on a terror list be sufficient
    evidence to not allow a gun to be purchased? What do you think?
        Mr. Mueller. I think it depends on the circumstances. There
    are gradations. I do not want guns in the hands of terrorists.
    You look at what happened at Virginia Tech recently, and it
    calls for a revisiting of the legislation, not just at the
    national level, but at the State level in terms of the
    production of medical records and particular mental health
    records----
        Senator Lautenberg. Okay. Thanks.
        Mr. Mueller [continuing]. When it comes to purchasing a
    weapon.
        Senator Lautenberg. Thanks, Mr. Mueller. The one thing that
    we do know is that you're an intelligent, educated man, and I
    find it surprising that we can't get a specific answer that
    says, ``No, they're terrorists.'' If you were good enough to
    use a somewhat humorous description, to get, to make it to the
    terrorist list and you can still buy a gun in this country, I
    think that suggests that there's a weakness there someplace.

                     BACKGROUND CHECKS TO INVESTIGATE CRIME

        I want to get on to something else. Would there be any
    value, Mr. Mueller, to permit law enforcement to use background
    check records to investigate crime, perhaps even in the case of
    terrorism?
        Mr. Mueller. I'm somewhat uncertain of the question.
        Senator Lautenberg. Well, that is----
        Mr. Mueller. Because, quite obviously, we use background
    information, to investigate allegations of terrorism.
        Senator Lautenberg. All right. Let me go to the little,
    expansion of that. Do you think that destroying records that
    were used in approving a gun purchase in just 24 hours, is a
    good idea? Perhaps you can explain--well, let me get the answer
    to part a, then we'll go to part b.
        Mr. Mueller. Well, I know there's been substantial debate
    on how long records are retained. There's a substantial
    argument in my mind for retaining records for a substantial
    period of time, but this is an area where the policymakers will
    advise and then we will follow.
        Senator Lautenberg. Fair enough. I'm glad that you concur
    with my view. Okay.
        Thank you, Madam Chairman. Thanks.
        Senator Mikulski. Thank you.
        Well, Director, we are moving expeditiously to get you to
    where you need to go.
        Mr. Mueller. Thank you.
        Senator Mikulski. I have two questions, one related to
    intelligence analysts and then the other to what we need to be
    able to train them.

                             INTELLIGENCE ANALYSTS

        I am tremendously impressed with the FBI intelligence
    analysts that I've met, both overseas and here. But here goes
    to my questions. Two years ago, the IG released a report that
    nearly one-third of the intelligence analysts positions were
    unfilled because of rapid turnover and other problems and also,
    at that time morale was low, and there was a difficulty in
    retention. Can you tell us what you've been able to do over the
    last 2 years with the issues raised by that? Do you remember
    that?
        Mr. Mueller. Yes.
        Senator Mikulski. And, then what are you doing to improve
    the training and retention of the intel analysts, particularly,
    you know, you had the agents on the street, but it is the
    analyst that's supposed to help the policymakers and the
    enforcers to connect the dots.
        The so-called ``connect the dot'' problem.
        Mr. Mueller. We have tremendously talented analysts. We've
    doubled our analyst cadre since September 11, and the
    qualifications and capabilities of the analysts are superb.
    They have become an indispensable asset not just at
    headquarters, but in every office around the country.
        The inspector general recently had a further report, in
    which, it was pointed out that we had a shortfall of 400
    analysts in 2006 that we had not brought onboard. He indicated
    part of it was attributable to the length of time it took to
    get an analyst onboard. But, I will tell you, part of it, also,
    was our recalibration of our strength in what was called
    ``hollow work-years'' that had developed over a period of time.
    And so, we have a shortfall, currently, of approximately 160
    analysts who we're trying to bring onboard. And, we will over
    the next months and into next year.
        The delay in bringing people onboard that the IG mentioned,
    as well, is in some part attributable to the fact that we want
    to give them training. We want them to start the job with the
    training, and without slots for the training, we're delayed
    longer than we would like. And, I will tell you also, we are
    revamping the training. We have continuously done so--
    particularly in the wake of September 11, but we continue to
    revamp the training to make it more successful, I will tell
    you, more effective.
        The other thing that the IG, I think, pointed out is that
    most of the analysts we brought onboard are exceptionally happy
    working at the FBI, enjoy their job, anticipate staying, so
    we're not, we are not where we would like to be. I'm not
    certain we would ever be there. I think we've made substantial
    strides with the analytical cadre.
        Senator Mikulski. Yes, because that will go to training in
    Quantico.
        Senator Shelby, you want to jump in here?
        Senator Shelby. Director Mueller, we realize it's--it's
    difficult and tedious to train analysts and, but in the
    recruitment area, because--how are you doing there? Because
    you're recruiting in the marketplace with everybody else?
        Mr. Mueller. Very well, very well.
        Senator Shelby. And, that's very important.
        Mr. Mueller. In the training, we have structured training
    so the analysts train with the agents for much of their time at
    Quantico, so there is an understanding of the kind of
    contributing skills that make us more successful.
        The fact of the matter is, as the organization grows, the
    credibility and the capability of the analysts will impress the
    rest of the organization and bring us into more of a team than,
    perhaps, we've been in past years. And, both through the
    training, the working together, and the types of cases, whether
    they be intelligence or criminal that we're working, I think
    we're making strides there.
        Senator Shelby. Thank you.
        Thank you, Madam Chairman.

                              TRAINING AT QUANTICO

        Senator Mikulski. Which takes me to Quantico. Because all
    FBI agents and analysts, regardless of their responsibility are
    trained at Quantico, am I correct?
        Mr. Mueller. Well----
        Senator Mikulski. Well, is it prime? Is my question.
        Mr. Mueller. All agents are trained at Quantico. There are
    areas of training that we do outside of Quantico, but certainly
    all new agents and analysts go through Quantico.
        Senator Mikulski. Right. So, but, Quantico is the starting
    point?
        Mr. Mueller. It is.
        Senator Mikulski. It is the starting point. Now, from what
    I understand from staff visits to Quantico, that Quantico
    because of when it was built, its original mission, which was
    the pre-9/11 FBI, that this is pretty dated, both in terms of
    being able to handle the number of people you wish to train,
    and what is required in unique training facilities now, with
    technology, et cetera. Could you share with the subcommittee
    what you think we need to do to help you, to kind of,
    reinvigorate Quantico? So that when these talented people come
    to serve, and you have the curriculum to do it, that we're all
    helping you move in the direction we want you to move in?
        Mr. Mueller. We've had problems with the buildings at
    Quantico. It's years and years, I can't tell you exactly, but
    tens of years old. We've had problems, for instance, with
    information technology and instituting it there because it was
    not set up with the modern capabilities.
        As we look 5 years down the road to the FBI, training is
    going to have to be expanded at Quantico, but also other places
    in the country. One of the gems, the jewels of the FBI is the
    National Academy, where every year we educate somewhat more
    than 1,000 State, local and, as important if not more
    important, foreign officers who become colleagues of ours, and
    my hope is that we could expand the National Academy. Because I
    think it's a jewel and it's tremendously important to the
    United States, not just domestically to have the capacity, but
    for the intersection of ourselves and the future with our
    counterparts overseas, to have that type of, not only dialogue,
    but building of relationships.
        So, whether it be National Academy, the agents, the
    professional staff, analysts, we are going to be looking at our
    5-year plan for expanding--not just renovating at Quantico--but
    looking at opportunities elsewhere as well.
        And, we cannot continue to build a national security
    function, and continue to do what we do on the criminal side
    without enhanced facilities.
        I will make one last plea, if I could, and that is, we are
    asked to be and appropriately so, I believe, the domestic
    intelligence agency for national security.
        Senator Mikulski. That's a pretty big deal.
        Mr. Mueller. Part of the intelligence community. We have a
    single funding stream that comes through Commerce, Justice, and
    Science, as opposed to being looked, from the funding
    perspective, as part of the intelligence community. And, my
    request is that, if we have the responsibility and the role
    that I believe we should have, we should be looked at as a
    member of the intelligence community from the perspective of
    funding.
        Senator Mikulski. You mean through an intel authorization?
        Mr. Mueller. Yes.
        Senator Mikulski. Well, you know we can't get one through
    the Congress, so you actually get a better deal coming through
    us. We hear what you say.
        Mr. Mueller. Well, when I look at the various budgets, I'm
    not----
        Senator Mikulski. Well, no, we understand that it, and
    again, this is an environment we can not discuss it.
        Mr. Mueller. Right.
        Senator Mikulski. Senator Shelby chaired the Intel
    Committee and, of course, I'm a very proud member. And,
    Director, we would suggest that this is something we three
    could talk about, about what is the most effective way.
        One quick question. When is this 5-year plan going to be
    done?
        Mr. Mueller. I believe we could start briefing you on it,
    probably, in a month.
        Senator Mikulski. Well, one of which, too, will be the
    issue related to facilities because if we have to get started,
    then those things, as you know, are an extensive look ahead.
    So, we'll look forward to that.
        But, listen, we promised you you'd be on your way and we
    want to thank you today for your testimony.

                         ADDITIONAL COMMITTEE QUESTIONS

        If there are no further questions, Senators may submit
    questions for the record. We would appreciate the FBI's written
    response within 30 days. We, Mr. Director, we look forward to
    an ongoing conversation with you, once we get our allocation
    and so, we want to get you on your way.
        And, we say to Eleni and Paul, good luck as they go on
    their new ways.
        [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 Patrick J. Leahy
                                    sentinel
        Question. Now a year into the Bureau's Sentinel computer upgrade
    program, I remain concerned about the prospect of this program and its
    ballooning costs to American taxpayers. Last month, the FBI informed
    the Judiciary Committee that it had encountered unexpected problems
    with the deployment of Phase 1 of the Sentinel program that would delay
    the program. Even more troubling, the FBI could not tell Judiciary
    Committee staff how long it would take to remedy these problems, or how
    the delay would impact the overall schedule for Sentinel.
        Director Mueller, what is the current status of the Sentinel
    program and do you anticipate that there will be additional delays in
    deploying the program or costs overruns?
        Answer. The FBI has implemented Phase 1 of the Sentinel Project and
    our agents are now using it. The prime contractor, Lockheed Martin, has
    completed the design, development, and testing of the Phase 1
    functionality and the FBI administered a two-week system acceptance
    test, which was followed by user acceptance testing. The system was
    then incrementally deployed and piloted in the Baltimore, Washington,
    and Richmond Field Offices and in one Division at FBI Headquarters
    (FBIHQ). In addition to testing the system's functionality, the pilot
    also assisted in testing the load of users on the system and in
    assessing the adequacy of the training materials.
        After changing the deployment approach to allow for a pilot period,
    the system was delivered to all users. Changes in the deployment
    approach and delivery schedule were made to ensure an accurate
    measurement of performance by testing it with actual users, rather than
    through controlled testing.
        The Sentinel Program Management Office and Lockheed Martin prepared
    users for training and deployment, training nearly 250 field office and
    FBIHQ users as Sentinel Training Advisors. This group is assisting
    contract instructors in providing training and assisting users in their
    divisions when questions arise. The training curriculum and materials
    continue to be refined to incorporate system updates and trainee
    feedback.
        Question. What impact have the delays with Sentinel--and Trilogy
    before it--had on the Bureau's ability to fulfill its core mission?
        Answer. The delays in updating the FBI's computer systems have had
    very little impact on the Bureau's ability to fulfill its core mission.
    All components of the FBI's Automated Case Support (ACS) system have
    continued to be operational and this information will be migrated to
    Sentinel. Phase 1 provides Sentinel's foundational base and enhanced
    access to the information contained in ACS. Phase 2 will bring
    additional capabilities to the users, including automated workflow,
    document and record management, public-key infrastructure, digital
    signatures, and role-based access controls.
        Question. The December 2006 OIG audit report questioned the
    reliability of the total estimated costs for the program. How confident
    are you about the final cost estimate for the Sentinel program?
        Answer. The estimated costs for the Sentinel program were developed
    consistent with the Federal Acquisitions Regulations (FAR), the
    Department of Justice (DOJ) Information Technology Investment
    Management (ITIM) process, and the FBI's Life Cycle Management
    Directive (LCMD) process. The FBI anticipates total program costs of
    approximately $425 million, including costs for development, program
    management, Independent Verification and Validation, and two years of
    Operations and Maintenance (O&M) after we reach full operating
    capability. Any changes to those estimates will be vetted through the
    ITIM and LCMD boards, documented in accordance with the FAR, and
    provided to Congress.
        Question. Based on this cost estimate, how much additional funding
    or reprogrammed funds will the FBI require to complete this program? If
    reprogramming is required, what programs do you anticipate will lose
    funds?
        Answer. The FBI determined that no additional reprogramming was
    required for fiscal year 2007 Sentinel operations. The funding
    requested in the President's fiscal year 2007 budget, in combination
    with the fiscal year 2007 reprogramming for Sentinel, funded O&M for
    Phase 1 and system development, training, and program management costs
    budgeted for Phase 2. Funding for Phases 3 and 4 and for the remainder
    of O&M for all Phases will be requested in future budget submissions.
    As noted in the response to the Office of the Inspector General (OIG),
    the FBI evaluates the operational impact of any proposed reprogramming
    and takes that impact into consideration in all reprogramming
    decisions. The FBI routinely provides this impact assessment and other
    relevant information to DOJ, the Office of Management and Budget (OMB),
    and Congress.
        Question. I am troubled by reports that two of the companies that
    are part of the Sentinel contract team--Computer Sciences Corp. and
    CACI International Inc.--also played roles in the earlier failed
    Trilogy effort. How do you justify entrusting these companies with
    taxpayer funds again?
        Answer. Two vendors are common to both Trilogy and Sentinel--
    Computer Science Corporation (CSC) and CACI International, Inc. The
    division of CSC that worked on Trilogy (and actually a separate firm at
    the time of its Trilogy work, acquired by CSC thereafter) will not be
    working on Sentinel, so we anticipate little or no overlap of services
    or personnel. We have contracted with CACI to provide training for
    Sentinel, which was also the purpose of the Trilogy contract.
        The FBI has strengthened its internal controls to avoid a repeat of
    the issues cited by the Trilogy auditors with respect to all vendors.
    Among other things, we have improved our contract oversight in two
    major ways. First, the Sentinel contract has clear reporting
    requirements and severable deliverables. In other words, we can stop
    work if we are not satisfied with a contractor's progress. Second, we
    have structured our contract management with clearly defined roles and
    responsibilities, so accountable personnel are reviewing all
    documentation and expenses. That process will be supplemented by
    internal audits of our financial management, as well as by oversight
    from Congress and the Administration.
                                 violent crime
        Question. Recently, the Seattle Post-Intelligencer reported that
    since the terrorist attacks of September 11 the number of criminal
    investigations conducted by the FBI has declined significantly, and
    white collar investigations in particular have dropped precipitously.
    Many cases that would have been pursued in the past are simply going
    unsolved. I have asked you in the past about declining prosecutions of
    public corruption cases and this study shows that the problem is even
    broader than was previously known. While it is crucial that the FBI
    devote all necessary resources to protecting the country from
    terrorism, that effort should not be at the expense of protecting the
    country from crime.
        Americans count on the FBI to aggressively investigate crime,
    particularly those types of crime that cannot always be adequately
    addressed by the states, like corruption, fraud, civil rights offenses,
    and the most serious violent crime. The FBI's apparent retreat from
    fulfilling these core duties comes at a time of rising violent crime
    rates in the country and dwindling public confidence in the
    Department's objective handling of corruption cases.
        Is the FBI capable of handling the dual tasks of protecting the
    country from terrorism and aggressively enforcing the nation's criminal
    laws at the same time? Why have you not been getting the job done?
        What steps is the FBI taking to make sure that it does not
    sacrifice crucial criminal investigations and prosecutions as a result
    of increased emphasis on terrorism?
        Answer. The number of FBI Special Agents (SAs) assigned to criminal
    cases has decreased by 1,335, or 21 percent, since the attacks of 9/11/
    01. Despite the loss of those SA positions, protecting the nation from
    traditional criminal offenses has always remained a core function of
    the FBI, and 53 percent of all FBI SAs remain assigned to these
    criminal matters.
        To address this decrease, the FBI has made difficult choices in
    determining how to most effectively use the available agents. In 2002,
    the FBI established as its criminal program priorities: public
    corruption, civil rights, transnational and national criminal
    enterprises (which include violent gangs and the MS-13 initiative),
    white collar crimes (which include corporate fraud and health care
    fraud), and violent crimes (which include crimes against children).
        Since the designation of public corruption as the top criminal
    priority, over 280 additional agents have been shifted from other
    criminal duties to address corruption cases. The FBI is singularly
    situated to conduct these difficult investigations, and our
    effectiveness is demonstrated by the conviction of more than 1,000
    corrupt government employees in the past two years.
        The FBI has also maintained a steady commitment to addressing civil
    rights matters. Pending Color of Law (excessive force) investigations
    increased 25 percent from 2001 to 2007, and Human Trafficking cases
    increased 323 percent during the same period. FBI investigations of
    Human Trafficking resulted in 29 indictments in 2001; since then there
    have been an average of 48 each year.
        The FBI has addressed violent street gang matters through the
    establishment of Violent Gang Safe Streets Task Forces (VGSSTFs) that
    leverage Federal, state, and local law enforcement resources to
    investigate violent gangs in large, medium, and small cities and towns.
    There are currently 135 VGSSTFs composed of 600 FBI SAs and 1,170
    state/local law enforcement officers.
        Although the FBI has had to reduce the number of SAs working
    Governmental fraud matters since 9/11/01, FBI agents still respond to
    serious crime problems, as demonstrated by the FBI's current
    initiatives to address hurricane-related fraud and Iraq contract fraud.
        The FBI also prioritizes investigations within its White Collar
    Crime Program, emphasizing corporate/securities fraud and health care
    fraud. The corporate fraud cases, in particular, are very labor
    intensive, but they are a priority for the FBI because so many
    represent the private industry equivalent of public corruption, where
    the dishonest actions of a few people in leadership positions cause
    tremendous monetary losses and undermine investor confidence, both of
    which can threaten economic stability.
        The FBI's priorities have resulted in less of an emphasis on
    investigating traditional drug trafficking cases and more emphasis on
    assigning SAs to established Organized Crime Drug Enforcement Task
    Force (OCDETF) strike forces and High Intensity Drug Trafficking Area
    (HIDTA) initiatives that target violent gangs whose members are
    involved in drug trafficking.
        The FBI has also shifted criminal resources to implement the child
    prostitution initiative and the Violent Crime Task Force initiative.
    The child prostitution initiative is a coordinated national effort to
    combat child prostitution through joint investigations and task forces
    that include FBI, state, and local law enforcement, along with juvenile
    probation agencies. This initiative has resulted in more than 500 child
    prostitution arrests (local and Federal combined), 101 indictments, 67
    convictions, and the identification, location, and/or recovery of 200
    children. To address violent crime, the FBI has partnered with other
    state and local law enforcement agencies to create 24 Violent Crime
    Task Forces throughout the United States. The FBI also funds and
    operates 18 Safe Trails Task Forces (STTFs) to address violent crime in
    Indian Country (IC).
        In addition to the above initiatives, the FBI has continuously
    worked to use technology, intelligence analysis, and enhanced response
    capability to leverage criminal program resources. In October 2005, the
    National Crime Information Center's fugitive database was integrated
    with the Department of State passport application system, resulting in
    automatic notification when fugitives apply for United States
    passports. In December 2005, eight Child Abduction Rapid Deployment
    Teams were established in four regions of the United States. These
    teams are available to augment field office resources during the
    crucial initial stages of a child abduction. The FBI is currently
    developing a means of integrating sex offender registries and other
    public databases to better identify sex offenders in the vicinities of
    child abductions and to ``flag'' sex offenders who have changed
    locations without satisfying registration requirements.
        Question. Congress has always been willing to support both of these
    core missions. We have up to now been given the impression that the FBI
    was getting sufficient resources to do these jobs effectively. What
    more does the FBI need to live up to its responsibilities?
        Answer. The FBI has appreciated the support of Congress in ensuring
    that we have the necessary resources to deter and respond to terrorism
    and other crimes. We will continue to work with DOJ, the Office of the
    Director of National Intelligence, OMB, and the Congress to assess what
    resources are necessary to meet our responsibilities, consistent with
    Executive Branch priorities.
                          integrated wireless network
        Question. I was interested to see the March 2006 audit report by
    the Justice Department's Office of the Inspector General regarding the
    progress of the joint Integrated Wireless Network (IWN) for the
    Departments of Justice, Homeland Security, and Treasury. The OIG found
    that despite over 6 years of development and more than $195 million
    being spent on the IWN--out of an estimated $5 billion in total
    estimated costs with a goal of supporting 81,000 federal agents by
    2021--DOJ law enforcement agents have received little in the way of
    new, secure, compliant radio equipment through IWN. The causes for the
    risk of failure include uncertain funding to complete the project,
    disparate departmental funding mechanisms, a fractured IWN partnership,
    and the lack of an effective governing structure for the project. What
    results from this partnership likely will not be the seamless,
    interoperable system that was originally envisioned and therefore the
    communication systems may not be adequate in the event of another
    terrorist attack or national disaster.
        The OIG offered four recommendations for the Justice Department in
    attempting to avoid the IWN train wreck looming on the horizon.
        Do you feel that those recommendations should be followed in order
    for the IWN to become the seamless, interoperable system originally
    envisioned? If not, why and how best do you feel the goal of a
    seamless, interoperable system would be reached?
        Answer. While a valid goal, seamless interoperability does not
    address the immediate needs of DOJ components. The nationwide trunked
    network originally envisioned by some has not been a simple or easy
    undertaking (as demonstrated by the challenges encountered in
    Washington State). A single nationwide system would put those users on
    the same network, but this would not always make the best use of the
    available spectrum. Using trunked networks within a single band (which
    are more spectrally efficient than large-scale, multi-channel
    conventional systems) would not resolve the interoperability issues
    inherent in a system in which Federal, state, and local users use
    alternate frequency bands.
        Evolutionary solutions would provide opportunities for components
    to address their own internal requirements while addressing
    interoperability needs and unnecessary redundancy among DOJ components.
    Current FBI Land Mobile Radio (LMR) systems using the Digital
    Encryption Standard (DES), which is no longer approved for use in
    Sensitive but Unclassified systems, put users at risk for potential
    compromise. These antiquated component systems must be upgraded to meet
    security requirements (such as the Advanced Encryption Standard) while
    satisfying the narrowband mandate and providing enhanced feature sets.
        Future capabilities will include not only multiband, multimode
    radios, but the ability to interoperate with state and local partners
    through multiple gateways.
        Question. What part, if any, has the FBI played in implementing
    those recommendations? How would you define the Bureau's commitment and
    funding requirements to support the network?
        Answer. The FBI has been working with others in DOJ since 1999,
    providing both technical expertise and personnel in their planning,
    design, infrastructure installation, site leasing, spectrum
    coordination, equipment testing, and decommissioning efforts, among
    others. For example, FBI personnel in both Seattle and Portland have
    played an active role in Integrated Wireless Network (IWN)
    implementation, providing expertise and support in order to help make
    the network there a functional reality.
        The FBI's current network infrastructure includes over 3,000 sites
    nationwide, and the cost of system maintenance, site leases, and
    circuit costs are directly affected by IWN's size and capabilities.
    Reduction of the FBI's maintenance costs depends on the installation of
    new equipment as part of either IWN or FBI system/network upgrades.
    Cost savings can be realized either by fully implementing IWN as
    envisioned and decommissioning FBI sites or by downsizing DOJ
    components where permitted by system sharing.
        Question. Through fiscal year 2006, approximately $772 million has
    been appropriated to fund the DOJ Narrowband Communications Account.
    However, instead of funding new technological solutions and upgrades,
    nearly two-thirds of this funding has been used to maintain DOJ's
    antiquated legacy systems. The OIG report found that the majority of
    DOJ's communications systems are obsolete because the manufacturers no
    longer support them, maintenance is difficult and spare parts are hard
    to find. As the DOJ equipment continues to age, these costs are
    expected to increase by five percent each year.
        Between a lack of money because funds that should be used for new
    technology solutions and upgrades are being poured into DOJ's antiquate
    legacy systems, and the rising cost of operating and maintaining legacy
    communications, can you tell me when you expect the IWN to be up and
    running so that the Bureau's agents can access and use the latest in
    interoperable technologies to communicate and coordinate with their
    fellow federal, state and local law enforcement partners?
        Answer. Full migration to a new, DOJ-level, trunked VHF network
    requires not only extensive planning and spectrum coordination, but
    also site preparation and circuit leasing, and these to a much greater
    extent than if the upgrade were to a single organization's system. In
    order to deploy new systems, several issues must be addressed. For
    example, we must upgrade radios in the field as necessary; address
    licensing limitations and the need for compatibility with
    manufacturers' infrastructures; either negotiate new site leases or
    modify existing leases based on new requirements; address access and
    security requirements; and realign and approve spectrum allocations
    while formulating transition schedules. In the interim, although aging
    wideband legacy LMR systems are antiquated, they can be upgraded to
    newer, narrowband, conventional equipment relatively easily, networks
    can be expanded, and capabilities enhanced.
        O&M expenses are a significant part of the cost of any large-scale
    system or network. Site repairs, security upgrades, network expansion,
    radio installations, personnel, and training are among the areas funded
    by DOJ components before the consolidation of those individual
    resources. The integration of multiple systems requires experienced
    engineers and government personnel who understand implementation needs
    to ensure proper oversight, control, and system availability. For
    example, even following integration, these networks must remain
    functional at key local levels during times of crises to ensure the
    public is protected if one agency or one part of the system is
    compromised.
        Question. What impact has the lack of a functioning IWN had on the
    FBI's ability to carryout its counterterrorism mission?
        Answer. Absent the ability to communicate securely with other
    investigative personnel, FBI personnel use other alternatives, such as
    commercial services. Commercial devices operate on commercial networks,
    which may have inadequate capacity in times of crises, may not meet
    security requirements, and may operate only in areas with adequate
    infrastructure. For example, commercial LMR peer-to-peer (device-to-
    device) capabilities usually require that the infrastructure be
    operational at the time of attempted communication. In the absence of
    secure communications capabilities, outsiders (including suspects) can
    use frequency monitoring devices (scanners) to track unencrypted online
    communications. Unlike most portable devices currently used by the FBI
    in the field, newer radio models are smaller, can be used to send e-
    mails and broadcast messages, provide greater voice clarity, and regain
    range that is lost to systems using DES encryption.
                       intellectual property enforcement
        Question. By some government estimates, U.S. companies suffer $250
    billion in annual losses due to intellectual property theft, which also
    causes U.S. workers to lose millions of jobs. Aggressive investigation
    and prosecution of IP crimes is clearly needed to deter such massive
    infringement. In recognition of this need, the Justice Department's IP
    Task Force, in its October 2004 Report and a subsequent June 2006
    Progress Report, recommended increasing the number of FBI agents
    investigating intellectual property crimes.
        Would you agree with the Task Force's recommendation that, to
    effectively deter rampant IP infringement, there should be an increase
    in the number of FBI agents dedicated to investigating IP crimes?
        Answer. The FBI SAs assigned to cyber crime programs in the FBI's
    field offices address intellectual property (IP) infringement matters
    in the same manner as they address other FBI violations, which is based
    upon FBI investigative priorities. IP infringement matters that pose a
    threat to national security (such as certain thefts of trade secrets)
    are the FBI's highest IP infringement priority. The number of SAs
    working IP matters has decreased since fiscal year 2005 due to the
    November 2004 re-ordering of cyber priorities, pursuant to which
    Innocent Images matters were placed in a higher priority than IP
    rights. In fiscal year 2005 there were approximately 56 SAs working IP
    investigations, while in June 2007 there were 48.
                           national security letters
        Question. Director Mueller, as you know, I am very concerned about
    the widespread abuse of National Security Letters (``NSLs'') at the
    FBI. Last month, the Justice Department's Inspector General recently
    reported on a pattern of unacceptable abuses of NSLs by the FBI, where
    time and time again the FBI did not follow the law, or even its own
    rules, in obtaining sensitive personal information about thousands of
    ordinary Americans and others. According to the Inspector General's
    report, one in every five of the NSL files reviewed contained
    violations of the law, and more than half of the NSLs reviewed did not
    even meet the FBI's own standards. During the FBI Oversight hearing
    that the Judiciary Committee held last month, you promised to promptly
    address the serious lapses with NSLs.
        Director, what are you doing to make sure that the FBI follows the
    law--and its own policies--when issuing National Security Letters going
    forward?
        Answer. As a result of the OIG report, the FBI has prepared
    comprehensive guidance concerning the use of National Security Letters
    (NSLs). Every proposed NSL must be reviewed by the Chief Division
    Counsel in each FBI field office or by an attorney in the National
    Security Law Branch (NSLB) at FBIHQ, including review of the relevance
    of the request to an authorized investigation and the predication for
    that investigation. In addition, NSLB is developing a training
    curriculum, which will be mandatory for all employees involved in the
    NSL process, to address problems created by confusion and lack of
    familiarity with the provisions and requirements of the various
    statutes authorizing NSLs. Even before the OIG report was published,
    the FBI had begun work on a database, based on the successful ``FISA
    Management System,'' that will permit the electronic transfer of NSL-
    related data between databases (this transfer is currently being
    accomplished manually). Finally, the Inspection Division is
    investigating in more detail many of the problems identified in the OIG
    report. This review should identify any areas that require closer
    scrutiny. Taken together, these measures will both provide a more user-
    friendly business process for FBI personnel who use NSLs as an
    investigative technique and enhance management's audit and oversight
    capabilities. This system will also enhance the accuracy of the NSL
    reports provided to Congress.
        The FBI has also recognized the need to create a compliance program
    to ensure we have appropriate policies, procedures, audit capabilities,
    and training for all our activities. The FBI's compliance program will
    be modeled after similar programs in the public and private sectors.
    While it is too early to say with certainty what the program will look
    like, it will most likely incorporate features common to most
    successful programs, such as a written compliance policy, a central
    compliance officer and office, a senior-level compliance committee,
    access to and the ability to draw upon the resources of the
    organization, and an implementing strategy that adjusts as new threats
    and programs are identified. Audits of practices, not just procedures,
    will be an essential component of the program, as will effective ``two-
    way'' communication channels. In addition, OGC will continue to meet
    regularly with DOJ's National Security Division (NSD) to discuss
    appropriate policies in the national security arena. DOJ's NSD and the
    FBI's NSLB conducted 14 national security reviews of the FBI's field
    offices and one of an FBI Headquarters Division in calendar year 2007.
    There are 14 national security reviews of the FBI's field offices and
    one of an FBI Headquarters Division planned for calendar year 2008.
    Those reviews will include, but not be limited to, the use of NSLs.
        Question. One of the most disturbing findings in the Inspector
    General's Report was that the FBI improperly issued more than 700 so-
    called ``exigent letters,'' seeking telephone and financial records on
    an emergency basis, which contained blatant factual misrepresentations.
    Is the FBI still using these so-called ``exigent letters,'' and if so,
    based upon what legal authority?
        Answer. The OIG identified four problems with the so-called exigent
    letters as they were used by the FBI's Communications Analysis Unit
    (CAU): (1) although the letter asserted there were exigent
    circumstances, that was not always the case; (2) the CAU maintained no
    records supporting the claimed emergency; (3) although many of the
    letters asserted that a Federal grand jury subpoena had been requested,
    in fact, in most circumstances a grand jury subpoena had not been
    requested and the intent was to provide the carrier with an NSL; and
    (4) in many cases, although subsequent legal process had been promised
    to the carrier, no process (neither a grand jury subpoena nor an NSL)
    was delivered in a timely fashion.
        It was not until the FBI received the draft OIG report that
    executive leadership became aware of the full scope of the problems
    with the use of the so-called exigent letters. Upon learning of this
    matter, the FBI worked quickly to develop policy that would address the
    shortcomings identified in the OIG report without undermining the FBI's
    ability to receive information under 18 U.S.C.  2702(c)(4), a critical
    provision allowing communications service providers to give the
    government information in certain emergency circumstances. That policy,
    which was issued on 3/1/07, discontinued the use of ``exigent letters''
    of the sort described in the OIG report, but affirmed that the FBI may
    continue to receive information pursuant to section 2702. The new form
    2702 letter makes it very clear that: production of the records is at
    the carrier's discretion; no other legal process is promised; and, by
    policy, the emergency justifying this requirement must be documented.
    Accordingly, the FBI believes the new policy deals precisely with the
    problems identified by the OIG and appropriately balances privacy
    concerns with investigative needs in case of dire, life-threatening
    emergencies.
                              privacy/dna sampling
        Question. Pursuant to a little noticed provision in the Violence
    Against Women and Department of Justice Reauthorization Act of 2005,
    the Justice Department is developing new guidelines that would greatly
    expand the government's ability to collect DNA samples--which reveal
    the most sensitive genetic information about an individual--from most
    individuals who are arrested or detained by federal authorities. Under
    this policy, the Government will store this sensitive biological
    information in a federal data base known as the National DNA Index
    System.
        I am very concerned about the privacy implications of this new
    policy because, unlike fingerprinting--which is commonly used as a
    means of identification--DNA profiles reveal all kinds of sensitive
    biological information about a person, including the presence of a
    physical disease or mental disorder.
        Director Mueller, what privacy protections are in place under these
    new guidelines to ensure that sensitive DNA data contained in the
    National DNA Index System will not be misused or improperly disclosed
    by the Justice Department?
        Answer. While the FBI is working with others in DOJ to finalize the
    regulations on DNA sample collection relative to federal arrestees and
    detainees, there are already a number of protections in place and they
    are vigorously enforced. When arrestee and detainee DNA samples are
    collected, they are placed in the National DNA Index System (NDIS)
    offender database. The offender and crime scene databases are populated
    by profiles from Federal, state, and local law enforcement agencies.
    The profiles within the database use only genetic markers that provide
    identification; no other genetic information, such as medical status,
    can be gleaned from these markers, and NDIS, which is in essence a
    pointer system, does not contain any names or personally identifying
    information. Instead, each profile is associated with a unique
    identifier that traces back to the laboratory that developed that
    particular profile and placed it in the database. Once a ``hit'' occurs
    and is confirmed, then the two laboratories involved will exchange
    information regarding the individual involved.
        Although all states participate in NDIS, they do not have direct
    access to the national database. NDIS is searched once a week at the
    FBI and a hit report is generated. If an individual lab wants to follow
    up on a particular hit (generally the lab that contributed the forensic
    sample), it contacts the laboratory that provided the offender
    information and a confirmation process begins. During that process, the
    laboratories follow written procedures to ensure the hit is related to
    the correct offender; these procedures include re-working a portion of
    the remaining sample and re-comparing results. Under procedures
    established by the NDIS Board, no names or other personally identifying
    information may be reported until the confirmation process is complete.
        Federal law also provides privacy protections, including criminal
    penalties. By law, NDIS may only include DNA information that is:
        Maintained by Federal, State, and local criminal justice agencies
    (or the Secretary of Defense in accordance with section 1565 of Title
    10) pursuant to rules that allow disclosure of stored DNA samples and
    DNA analyses only--
      --(A) to criminal justice agencies for law enforcement identification
            purposes;
      --(B) in judicial proceedings, if otherwise admissible pursuant to
            applicable statutes or rules;
      --(C) for criminal defense purposes, to a defendant, who shall have
            access to samples and analyses performed in connection with the
            case in which such defendant is charged; or
      --(D) if personally identifiable information is removed, for a
            population statistics database, for identification research and
            protocol and development purposes, or for quality control
            purposes. (42 U.S.C.  14132(b)(3).)
        These protections are further bolstered by provisions that
    reiterate these protections and provide criminal penalties for
    individuals who knowingly disclose DNA information from the database to
    a person or agency not authorized to receive it. (See, for example, 42
    U.S.C.  14133(c) and 42 U.S.C.  14135e(c).)
        Finally, we are conducting a privacy impact assessment to analyze
    how this DNA information will be handled, determine risks from
    processing this information, and identify protections to help mitigate
    any privacy risks.
        Question. Another concern that I have about this policy is that it
    will just add to the already notorious backlog at the FBI's laboratory.
    According to press reports, the FBI acknowledges that this new policy
    will result in an increase of as many as one million additional DNA
    samples a year. Is the Bureau's laboratory equipped to handle this
    additional workload?
        Answer. The FBI's Federal Convicted Offender (FCO) Program is
    responsible for collecting and processing DNA samples collected from
    those convicted of Federal felonies for the purpose of retention and
    cataloging in the FBI's National DNA Database. The FCO Program supplies
    collection kits and receives samples from over 500 collection sites
    across the country. Since the program's inception in June 2001, over
    225,000 samples have been received. The FCO Program currently receives
    7,000 to 8,000 samples monthly. To date, the FCO Program has uploaded
    over 34,000 samples into the National DNA Database, which has resulted
    in over 600 hits. The volume of sample submissions to the FCO Program
    has increased dramatically since 2001.
        While much of the DNA analysis process has been automated, a
    bottleneck continues to exist at the DNA data review stage, which is
    currently conducted manually. To alleviate this bottleneck, the FBI is
    evaluating data analysis software packages or expert systems to
    automate this part of the process. Once implemented, the resulting
    system would be able to assess 85 percent to 90 percent of the
    convicted offender data without manual intervention, reducing data
    analysis time from approximately 60 minutes (per 80 samples) to less
    than 15 minutes (a four-fold increase in efficiency).
    questions submitted by senator leahy pursuant to the december 6, 2006,
           senate judiciary committee hearing regarding fbi oversight
        The FBI's responses to the Questions for the Record (QFRs) posed by
    Senator Leahy to Director Mueller following the December 6, 2006,
    Senate Judiciary Committee hearing, and resubmitted following this
    hearing, were provided to the Senate Judiciary Committee by letter
    dated June 14, 2007, along with the rest of the QFRs posed to the FBI
    following that hearing. Please refer to the record for the responses to
    those questions.
    Iraq Study Group Recommendations
        1. In its recent report about the situation in Iraq, the bipartisan
    Iraq Study Group found that the Iraqi Police Service (``IPS'') is in
    dire straits. In particular, the report states (on pages 9-10):
        The state of the Iraqi police is substantially worse than that of
    the Iraqi Army. The Iraqi Police Service currently numbers roughly
    135,000 and is responsible for local policing. It has neither the
    training nor legal authority to conduct criminal investigations, nor
    the firepower to take on organized crime, insurgents, or militias . . .
    Iraqi police cannot control crime, and they routinely engage in
    sectarian violence, including the unnecessary detention, torture, and
    targeted execution of Sunni Arab civilians. . . . There are ample
    reports of Iraqi police officers participating in training in order to
    obtain a weapon, uniform, and ammunition for use in sectarian violence.
    Some are on the payroll but don't show up for work. In the words of a
    senior American general, ``2006 was supposed to be `the year of the
    police' '' but it hasn't materialized that way.
        In recommendation #54 of the report, the Iraq Study Group advocates
    having the Justice Department direct the training mission of the IPS
    forces that remain within the Iraq Ministry of the Interior.
        (a) Please state whether you agree with this recommendation and
    explain your response.
        (b) What role has the FBI had in the training of the Iraqi police,
    thus far?
        (c) What additional steps will the FBI take to train the IPS in
    light of the Iraq Study Group's report and in particular, this
    recommendation?
        2. In recommendation #57, the Iraq Study Group recommends that the
    practice of embedding U.S. police trainers with Iraqi police units be
    expanded and that the number of civilian officers training Iraqi police
    be increased.
        (a) Please state whether you agree with this recommendation and
    explain your response.
        (b) Are there currently any FBI agents embedded with the Iraqi
    Police Service? If so, how many?
        (c) Will the FBI provide additional police trainers to participate
    in the training of the Iraqi Police Service and, if so, how many?
        3. In recommendation #58, the Iraq Study Group further recommends
    that the FBI expand its investigative and forensic training and
    facilities in Iraq, to address both terrorism and criminal activity.
        (a) Please state whether you agree with this recommendation and
    explain your response.
        (b) How many FBI agents and personnel are currently providing
    investigative and forensic training in Iraq?
        (c) How many FBI agents and personnel are currently assisting with
    counterterrorism activities in Iraq?
        (d) Will the FBI expand its role in these programs as the Iraq
    Study Group recommends and, if so, what additional resources, including
    staff, equipment and funding, will be dedicated to that effort?
        4. Public corruption is a significant problem in Iraq. According to
    the Iraq Study Group's report, one senior Iraqi official estimated that
    official corruption cost the Iraqi Government between $5 and $7 billion
    per year. To address the rampant corruption in Iraq, the Iraq Study
    Group concludes that Justice Department programs to create institutions
    and practices to fight public corruption in Iraq ``must be strongly
    supported and funded.''
        (a) What resources, including staff, equipment and funding, does
    the FBI currently have dedicated to helping to fight public corruption
    in Iraq?
        (b) Will the FBI increase the resources that it currently has in
    Iraq to further assist the Iraqi government in fighting public
    corruption?
    Datamining/ATS and IDW
        5. At the hearing, I asked you about the Department of Homeland
    Security's Automated Targeting System (``ATS'') and recent revelations
    that, since 9/11, the Bush Administration has been using this program
    to secretly assign terror scores to millions of law-abiding Americans
    who travel across our borders. You were not prepared to answer my
    questions about ATS at the hearing; however, you stated that you would
    look into this matter. Please respond to the following questions:
        (a) During an unclassified briefing for Judiciary Committee staff,
    the Department of Homeland Security said that it shares the sensitive
    personal information in the ATS database with the FBI and checks the
    information in this database against the Terrorist Watchlist. Does the
    FBI receive the terror scores or assessments and the other information
    contained in the ATS database? Please describe the information that the
    FBI receives from ATS and explain how the Bureau uses this information.
        (b) Does the FBI use the information that it receives from ATS to
    assist it in investigating traditional criminal cases as well as
    counterterrorism matters?
        (c) What safeguards are in place at the FBI to ensure the accuracy
    of this information and to protect the privacy interests of the
    millions of law-abiding Americans whose sensitive personal data is
    contained in ATS?
        6. You also testified that you would check into whether the FBI's
    own Investigative Data Warehouse database (``IDW'')--which now contains
    more than 560 million FBI and other agency documents--shares
    information or data with ATS. Does the IDW database share information
    or otherwise interface with the ATS data-mining program?
        7. You further testified that the FBI has issued a privacy impact
    statement for IDW.
        (a) Has the Bureau publicly released this privacy impact statement
    for IDW and, if not when will the FBI do so?
        (b) Has the FBI filed a notice in the Federal Register regarding
    the IDW program? If not, why not, and when will the Bureau do so?
        8. What policies are in place to ensure the accuracy and security
    of the sensitive personal data contained in the IDW database?
    Detainee Treatment
        9. Last year's Detainee Treatment Act and this year's Military
    Commissions Act both set standards for what types of interrogation
    techniques are and are not permissible. In each case, though, the
    standards are general and open to interpretation.
        (a) Did the Office of Legal Counsel or any other legal office at
    the Justice Department or the FBI provide guidance to the FBI regarding
    how to interpret the provisions of the Detainee Treatment Act governing
    what interrogation practices are permissible?
        (b) What form did this guidance take? Did it dictate what specific
    interrogation techniques can and cannot be used?
        (c) What was the substance of this legal guidance? Will you share
    this document with the Committee?
        10. Has the Office of Legal Counsel or any other legal office at
    the Justice Department or the FBI provided guidance to the FBI
    regarding how to interpret the provisions of the newly passed Military
    Commissions Act governing what interrogation practices are permissible?
        (a) If so, what is that guidance? Please provide a copy of any
    legal guidance provided to the FBI regarding the Military Commissions
    Act.
        (b) If not, please explain how your agents know what is permitted
    or prohibited by the broad language of the Military Commissions Act
    without legal guidance. Do you expect to receive legal guidance in the
    future?
        11. An FBI Supervisory Special Agent at Guantanamo Bay wrote a memo
    in November 2002 entitled ``Legal Analysis of Interrogation
    Techniques,'' in which he or she concluded that rendering terrorism
    suspects to ``Jordan, Egypt, or another third country to allow those
    countries to employ interrogation techniques that will enable them to
    obtain the requisite information'' would violate 18 U.S.C. Sec. 2340
    (the torture statute). Specifically, the memo states:
        In as much as the intent of this category is to utilize, outside
    the United States, interrogation techniques which would violate 18
    U.S.C. Sec. 2340 if committed in the United States, it is a per se
    violation of the U.S. Torture Statute. Discussing any plan which
    includes this category, could be seen as a conspiracy to violate 18
    U.S.C. Sec. 2340. Any person who takes any action in furtherance of
    implementing such a plan, would inculpate all persons who were involved
    in creating this plan. This technique cannot be utilized without
    violating U.S. Federal law.
        Legal Analysis of Interrogation Techniques (available online at
    http://www.humanrightsfirst.org/us_law/etn/pdf/fbi-brief-inter-
    analysis-112702.pdf).
        (a) Do you agree that the ``technique'' of rendering suspects to
    third countries in order to allow those countries to use coercive
    interrogation techniques that violate U.S. law ``cannot be utilized
    without violating U.S. Federal law''?
        (b) Does the legal analysis contained in the November 2002 memo
    reflect the FBI's current thinking with respect to rendition and other
    interrogation techniques? If not, how does the FBI's current analysis
    differ from the analysis in the memo?
        12. You testified that the FBI is not investigating any of the
    allegations that have been made by German national Khalid El-Masri and
    others regarding possible violations of U.S. law in connection with the
    rendering of individuals to foreign countries. Why isn't the FBI
    investigating these allegations?
    Brandon Mayfield
        13. In December, the government agreed to pay $2 million to settle
    a case that had been brought by Oregon lawyer Brandon Mayfield. Mr.
    Mayfield was jailed for two weeks in 2004 as a material witness, in
    connection with the Madrid train bombing. As part of the settlement,
    the government made a formal apology to Mr. Mayfield and his family for
    the suffering caused by his mistaken arrest. Mr. Mayfield was arrested
    and held for two weeks on a material witness warrant. Under the
    material witness law, the government is authorized to arrest a witness
    to secure his testimony in a criminal proceeding. After the 9/11
    attacks, the Justice Department began using the material witness law
    not to secure testimony from possible witnesses, but rather to lock up
    possible suspects in counter-terrorism investigations without charge
    until there is enough evidence to indict. Is it accurate to say that
    this is what happened in the Mayfield case?
        14. The Second Circuit Court of Appeals wrote in 2003 [in the
    Awadallah case] that the purpose of the material witness law is to
    secure testimony where it may become impracticable to secure the
    presence of the witness by subpoena. The Court added: ``It would be
    improper for the government to use [the material witness law] for other
    ends, such as the detention of persons suspected of criminal activity
    for which probable cause has not yet been established.'' Do you agree
    that it is improper for the government to use the material witness law
    for purposes other than securing testimony?
        15. The government noted as part of the settlement with Mr.
    Mayfield that the FBI had taken steps ``to ensure that what happened to
    Mr. Mayfield and the Mayfield family does not happen again.'' What
    steps has the FBI taken? Do they include any new guidance respecting
    the use of the material witness statute?
    Sentinel
        16. You testified that there will be no cost overruns or budget
    shortfalls for the Sentinel program. However, in December 2006, the
    Department of Justice Office of Inspector General (``OIG'') released a
    report that found that the FBI will need an additional $56.7 million
    over what the President requested in his budget for next year to
    continue the Sentinel project, and that these additional costs could
    have an adverse impact on the FBI's counterterrorism and other
    programs. The OIG's report also calls the FBI's cost estimate for the
    Sentinel program into serious question.
        (a) Does the FBI need additional funds to pay for Phase II of
    Sentinel and if so, how much additional funding is needed?
        (b) You testified that the FBI has set aside $57 million to make up
    the difference between the President's $100 million budget request for
    Sentinel and the anticipated program costs for Phase II. What FBI
    programs will be cut back or eliminated in order to use these funds to
    pay for Sentinel?
        (c) Will you promptly inform Congress of Sentinel's operational
    impact on other FBI programs if reprogramming of funds is necessary to
    pay for Sentinel?
        17. Earlier this year, the Government Accountability Office
    (``GAO'') found that the FBI paid about $10.1 million in unallowable
    costs to contractors during the Trilogy program. You have said that the
    FBI would pursue these funds upon completion of a closeout audit of the
    Trilogy program by the Defense Contract Audit Agency. When will the FBI
    start to recover these taxpayer funds?
        18. Another concern raised by the GAO is the FBI's over-reliance on
    government contractors to complete Sentinel. According to the GAO, 77
    percent of the positions for Sentinel will be filled by contractors
    rather than by government personnel. Given the FBI's past experiences
    with contractors on the Trilogy program, is the Bureau overly relying
    on contractors for Sentinel?
    Arabic-speaking Agents and Translators
        19. Despite progress on hiring Arabic translators, the FBI lags far
    behind when it comes to the number of agents who are proficient in
    Arabic. Recently, The Washington Post reported that only 33 FBI agents
    have at least a limited proficiency in Arabic and only 1 percent of FBI
    agents have any familiarity with the language.
        (a) How can the FBI effectively fight the war on terror when most
    of its agents lack even a basic proficiency in the Arabic language?
        (b) How has the lack of Arabic speaking agents impacted the
    Bureau's ability to develop relationships with Arabic-speaking and
    Muslim communities within the United States?
        (c) How has the lack of Arabic speaking agents impacted the
    Bureau's ability to gather critical counterterrorism intelligence?
        20. You previously testified that the FBI can translate high-
    priority counterintelligence material within 24 hours. Is this still
    the case, and what are the realistic prospects for this type of
    material to be translated in something approximating real time?
    Afghanistan Opium Trade
        21. Earlier this year, the United Nations Office on Drugs and Crime
    (``UNODC'') reported that there has been a surge in opium cultivation
    in Afghanistan that is fueling the insurgency in that country.
    According to the report, opium production in Afghanistan has increased
    59 percent over last year and in the southern region where Taliban
    insurgents have intensified their attacks on Afghan government and U.S.
    forces, opium cultivation has increased by 162 percent. Given that the
    Bush Administration routinely describes the international narcotics
    trade as a national security issue, and that the production of opium
    has skyrocketed since the invasion of Afghanistan and removal of the
    Taliban, what does this mean for our national security at home and for
    the safety of our troops in Afghanistan?
    Terrorist Watchlist
        22. You recently disclosed that the Terrorism Screening Database
    (``TSDB'') contains 491,000 records and that the FBI's review of the
    database to ensure the accuracy of these records will take years. The
    glaring errors in the FBI's Terrorist Watchlist--including the names of
    Members of Congress, infants and even nuns--clearly make the case for
    why this review is needed. These errors also suggest that any review of
    the TSDB must also include finding out how the bad information that is
    in this database got there in the first place.
        (a) What is the FBI doing to find out how bad data got into the
    TSDB and onto the terrorist watchlist?
        (b) Is there any procedure in place that requires the FBI to
    conduct an internal investigation whenever errors are detected in the
    TSDB? Should there be?
    Cyber Security
        23. During the hearing, you testified that cyber crime is one of
    the FBI's top three priorities on the national security side. In late
    November, there were unconfirmed reports of a threatened attack on U.S.
    stock market and the Banking industry websites by a radical Muslim
    group. According to press reports, the attack would be in retaliation
    for the detention of Muslim prisoners at Guantanamo Bay.
        (a) What steps did the FBI take to respond to this threat?
        (b) What resources does the FBI currently have dedicated to U.S.
    cyber security?
    Public Corruption
        24. In your testimony at the hearing, you called public corruption
    the FBI's top criminal investigative priority and you asserted that
    there has been an increase in the number of agents investigating public
    corruption cases and the number of cases investigated. However, a
    September 2005 report by the Department of Justice Office of the
    Inspector General found that, from 2000 to 2004, there was an overall
    reduction in public corruption matters handled by the FBI. The report
    also found declines in resources dedicated to investigating public
    corruption, in corruption cases initiated, and in cases forwarded to
    U.S. Attorney's Offices. It further found that some field offices were
    not giving public corruption sufficient emphasis and had scaled back
    their anti-corruption efforts.
        (a) What have you done since the Inspector General's report came
    out to ensure that combating corruption gets the resources and
    attention it needs?
        (b) Would the FBI benefit from additional resources to combat
    public corruption? If so, what types of resources would be the most
    helpful?
        25. In your written testimony, you cited the Phoenix Division's
    Lively Green investigation as an example of the FBI's commitment to,
    and success in, investigating public corruption. The Arizona Republic
    reported earlier this year that FBI agents working on the Lively Green
    investigation paid for a room for informants to stay in a presidential
    suite at the MGM Grand Hotel in Las Vegas. According to a disclosure
    made by prosecutors, the informants and suspects staying in the room
    hired prostitutes and sexually abused an unconscious prostitute. Soon
    after, FBI personnel recorded conversations which included detailed
    descriptions of the incident, and agents reviewed lewd photographs from
    the incident. FBI personnel failed to report the incident to
    prosecutors, who learned of it only many months later from an
    informant, and one agent was found to have made statements apparently
    suggesting that the informants get rid of the incriminating
    photographs. Although the Lively Green prosecutions went forward
    successfully, these cases were placed in jeopardy by this conduct.
        (a) What is the FBI doing to ensure that the problems that plagued
    the Lively Green investigation and other past investigations--agents
    covering for their informants' misconduct--do not happen again?
        (b) Are you satisfied with the steps that the FBI took to
    investigate and respond to the misconduct in the course of this
    operation?
    FBI Computer System Failure
        26. According to several press reports, the FBI's National Instant
    Criminal Background Check System, which is used to screen gun buyers,
    crashed several times in November 2006--potentially allowing gun buyers
    to purchase firearms without being properly screened. According to the
    FBI, this background check system receives between 30,000 and 50,000
    background check request each day, so this is not an insignificant
    matter. I have three questions:
        (a) Has the FBI determined what caused the system to crash, and has
    this problem been fixed?
        (b) Does the FBI know how many gun sales were completed without
    background checks while the system was down?
        (c) What is the FBI doing to make sure that this problem never
    happens again?
    Mike German/Whistleblowers
        27. According to the Office of the Special Counsel (``OSC''), the
    average number of whistleblowers who have filed complaints with the
    government has increased by 43 percent since September 11, 2001. Yet,
    sadly, the number of whistleblowers who have filed reprisal complaints
    with the OSC because their employers have retaliated against them for
    coming forward has also increased by 21 percent during the same time
    period. For example, former FBI special agent Michael German has said
    that his reputation and career were ruined after he reported concerns
    about misconduct on the Bureau's terrorism investigations to his
    superiors. What is the Bureau doing to protect the rights of
    whistleblowers within the FBI to come forward and disclose government
    fraud, waste and abuse?
        28. Many whistleblowers in the intelligence community are
    discouraged from coming forward because intelligence agencies are
    exempted from the Whistleblower Protection Act. Would you support
    legislation to extend whistleblower protections to national security
    employees?
    Anthrax Investigation
        29. The Bureau's investigation into the 2001 anthrax attacks that
    killed 5, infected 17 others and terrified millions of Americans is now
    well into its fifth year. Many believe that the investigation has gone
    very cold and no arrests have been made in the case.
        (a) What is the current status of the anthrax investigation?
        (b) Do you expect that criminal charges will be brought in the case
    and if so, when?
        (c) You testified at the hearing that the FBI currently has 17
    agents and 10 postal inspectors assigned to the anthrax investigation.
    Has the number of personnel dedicated to the investigation changed?
    Will you consider increasing the number of agents and investigators
    dedicated to this investigation?
        (d) How much money has the FBI spent on the anthrax investigation
    to date?
        30. A frequent criticism of the anthrax investigation is that the
    FBI has made a number of incorrect assumptions about the source of the
    anthrax and refused to heed outside expert advice in the case. Will the
    Bureau be open to new theories about the case and more receptive to
    outside expertise and criticism going forward?
        31. You testified that the FBI has ``periodically'' provided
    briefings for the family members of the anthrax attacks. When was the
    Bureau's last briefing to victims and their family members? How often
    does the FBI provide these briefings?
    Combined DNA Index System (CODIS)
        32. A recent investigation by USA Today uncovered nearly three
    dozen cases during the past five years in which investigators failed to
    pursue potential suspects whose DNA matched evidence found at crime
    scenes. (``Many DNA Matches Aren't Acted On, Nov. 21, 2006). According
    to USA Today:
        The unpursued matches had this in common: All were recorded as
    ``hits'' by the CODIS system and added to the list of CODIS-aided
    investigations that the FBI makes public. Through September, the FBI
    counted 39,291 such matches since 1990. No one is certain how many of
    those matches resulted in arrests or convictions, however. In part
    that's because no law or regulation requires crime labs, the FBI or
    local law enforcement to follow through and determine what becomes of
    DNA matches after the CODIS system reports them to the police. Crime
    lab officials believe hundreds more matches have not been pursued by
    authorities. They say those matches might become evident only after a
    perpetrator is caught for a second time.
        (a) Does the FBI keep any data on how many CODIS matches are
    pursued by investigators?
        (b) Does the FBI keep any data on how many CODIS matches have
    helped solve crimes?
        33. The leader of the FBI's CODIS unit told USA Today that tracking
    the results of DNA matches would present a ``significant task'' that
    the FBI is not geared to undertake, and that accounting for CODIS
    matches should be the responsibility of local police and prosecutors
    who are given match information. Do you agree?
        34. Do you have any recommendations for improving accountability in
    this area? How can the federal government get an accurate measure of
    CODIS's real world value in solving crimes?
    Corporate Fraud
        35. You testified during the hearing that white-collar criminal
    cases were one of the FBI's top three priorities on the criminal side.
    Recently, Deputy Attorney General McNulty issued new guidelines for
    corporate fraud investigations to address growing concern about the
    Department of Justice's investigation and prosecution of corporate
    fraud cases and, in particular, criticisms of the Department's policy--
    embodied until recently in the so called ``Thompson Memorandum''--to
    request that corporate defendants produce attorney-client privileged
    and/or work product information in these investigations.
        (a) Does the FBI request or demand that corporate defendants turn
    over attorney-client privileged or work product information in its
    corporate fraud investigations? If so, would you describe such requests
    as routine in white collar fraud cases?
        (b) What will the FBI do to ensure that agents investigating
    corporate fraud cases conform their conduct to fit the standards set
    out in the new McNulty Memorandum?
    Gardner-quinn Murder Investigation
        36. During the hearing, you testified that the FBI agent who
    published details of the Gardner-Quinn murder investigation in a
    Vermont newspaper is under investigation. What is the status of this
    investigation and has the agent involved been disciplined by the FBI?
     questions submitted by senator leahy pursuant to the march 27, 2007,
           senate judiciary committee hearing regarding fbi oversight
        The FBI's responses to the below QFRs posed by Senator Leahy to
    Director Mueller following the 3/27/07 Senate Judiciary Committee
    hearing were to be provided to the Senate Judiciary Committee with the
    rest of the QFRs posed to the FBI following that hearing. Because we
    are not providing those responses here, we have ``grayed out'' these
    particular QFRs.
    National Security Letters
        1. Despite the recent report by the Department of Justice Inspector
    General finding illegal and improper use of National Security Letters
    and so-called ``exigent letters,'' I understand that the FBI may still
    be using exigent letters. Is the FBI still using exigent letters and if
    so, why have you not stopped this practice?
        2. The Attorney General's guidelines require that the FBI use the
    least intrusive investigative tools to obtain the information that it
    needs. During the recent hearing that the Committee held on NSLs,
    Inspector General Glenn Fine testified that the least intrusive NSL are
    the ones seeking telephone records and that NSLs for financial records
    and for credit reports are more intrusive of Americans' privacy. During
    the hearing, you testified that you believed that NSLs seeking credit
    reports could be intrusive, but less so than those seeking telephone
    toll records. Does the FBI have a policy in place requiring that agents
    first use the least intrusive types of NSLs--such as NSLs seeking
    telephone toll records--when conducting investigations? If not, will
    you adopt such a policy to better safeguard Americans' privacy?
        3. I am also concerned about the kind of information that the FBI
    is seeking in its National Security Letters.
        (a) Is it true that most of the FBI's NSLs seeking telephone or
    Internet records under the Electronic Communications Privacy Act
    (``ECPA'') seek only subscriber identifying information? What
    percentage of these NSLs seek other transactional information, such as
    toll records or billing records?
        (b) With regard to NSLs that seek bank or other financial records
    under the Right to Financial Privacy Act, the Fair Credit Reporting Act
    and the National Security Act, what percentage of these NSLs seek
    detailed financial transaction information, such as bank account
    records and/or full credit reports?
        4. During the hearing, you testified that the information that the
    FBI improperly obtained through unlawful NSLs has been placed into the
    FBI's database. What steps have you taken to track all of this
    improperly obtained information, and have you removed it from all of
    the FBI's files and databases?
        5. Has any of the information improperly obtained through unlawful
    NSLs been used in any criminal cases or investigations and, if so, have
    you notified appropriate authorities at the Justice Department in order
    to make sure none of this information has been improperly used in our
    justice system?
        6. Do you believe that the FBI's failure to follow the law in
    obtaining NSLs may be exculpatory, or Giglio information, that needs to
    be disclosed if the information is used in court?
        7. The Judiciary Committee has received letters and briefings from
    FBI and Justice Department officials in the past, assuring us that NSLs
    were being used properly, and that all appropriate safeguards and legal
    authorities were being followed. For example, in a November 2005 letter
    to this Committee (attached), the Justice Department asserted
    emphatically that the FBI was not abusing the process for seeking NSLs,
    and that all NSL activity was accurately being reported to Congress as
    required by law. In light of the Inspector General's report, will you
    review those letters and briefings to see if anyone at the FBI or the
    Justice Department has misled this Committee about NSLs?
        8. According to the Inspector General's report, one of the major
    reasons that the FBI failed to report thousands of NSLs to Congress was
    because of a malfunction in a FBI's computer database. Apparently, this
    breakdown occurred in 2004, causing the loss of information about more
    than 8,000 NSL requests. What was the cause of this malfunction, and
    have you corrected it? Why did you fail to report this problem to
    Congress?
        9. You testified during the hearing that the FBI has revised its
    internal policy on NSLs and adopted the recommendations contained in
    the Inspector General's report. But, in 60 percent of the NSLs that the
    Inspector General reviewed, he found widespread failure on the part of
    the FBI to comply with its own internal control policies. Given this
    track record, how can you assure Congress that the new policies that
    you are implementing will prevent future abuses of NSLs, when the
    Bureau clearly failed to follow its own policies in the past?
        10. During the hearing, you testified that ``[t]he relevant
    standard established by the PATRIOT Act for the issuance of National
    Security Letters is unrelated to the problems identified by the
    Inspector General.'' Yet, given the broad scope of the abuses uncovered
    by the Inspector General's report, it appears that there is a need for
    additional checks and balances on the authority to issue NSLs. Do you
    believe that an independent check on the NSL process, such as approval
    of NSLs by a judge, a Justice Department attorney, or an outside review
    panel, would improve the NSL approval process and prevent future
    abuses?
    Library Records
        11. I appreciate your March 30, 2007, letter responding to my
    question about how often the FBI has used NSLs to obtain records from
    libraries and educational institutions. In your letter, you state that
    the FBI's Office of General Counsel has maintained an informal list of
    the number of NSLs served on educational institutions or libraries;
    however, you also state that this list may not be complete or accurate.
    Given the importance of this issue to Americans' privacy and civil
    liberties, will the FBI agree to formally track the number of NSLs
    issued to libraries and educational institutions and periodically
    report this figure to Congress?
        12. During the hearing, you cited the Inspector General's Report on
    Section 215 of the PATRIOT Act, which found that the FBI rarely used
    this authority to obtain library records. However, I am concerned that
    the FBI is using other provisions in the PATRIOT Act to obtain this
    information, thereby circumventing the safeguards and reporting
    requirements of Section 215. For example in 2005, the FBI issued NSLs
    to four Connecticut libraries asking them to surrender ``all subscriber
    information, billing information and access logs of any person''
    related to a specific library computer during a specific time period,
    pursuant to Section 505 of the PATRIOT Act. These NSLs also prohibited
    the librarians from disclosing the fact that they had received the NSLs
    or their contents--the so-called ``gag order'' under the PATRIOT Act.
        (a) Please describe the circumstances surrounding the FBI's
    decision to issue these National Security Letters.
        (b) Please identify all of the PATRIOT Act provisions that the FBI
    has used to obtain library records from libraries and educational
    institutions?
        (c) Is the FBI circumventing the requirements of Section 215 by
    relying on other provisions in the PATRIOT Act to obtain this
    information?
    Arar/Watchlist
        13. I have asked before about Maher Arar, a Canadian citizen who
    when returning home from a vacation in 2002, was detained by federal
    agents at JFK Airport in New York City on suspicion of ties to
    terrorism, and was sent to Syria, where he was held for 10 months.
    After I pressed the Attorney General about the Arar case at a hearing
    in January, Senator Specter and I were finally granted a classified
    briefing. After that briefing, we wrote to request a Justice Department
    investigation into the matter and have learned that the Department's
    Office of Professional Responsibility is looking into the Department's
    legal decisions.
        (a) Is the FBI taking any steps to evaluate whether your agents and
    officials acted properly in the Arar matter, particularly with regard
    to the original decision to send him to Syria, rather than to Canada?
        (b) Given that a past OPR investigation of a politically sensitive
    matter, specifically the NSA's warrantless wiretapping program, appears
    to have been blocked, will you commit to cooperate with OPR's
    investigation of the Arar case?
        (c) What steps has the FBI taken to ensure that you do not
    participate in sending other people in the future to places where they
    will be tortured?
        14. Despite having been cleared of all terrorism allegations by
    Canada, Mr. Arar remains on a United States terror watch list. In fact,
    The Washington Post reported on Sunday that our watch lists keep
    growing, with the Terrorist Identities Datamart Environment
    (``TIDE'')--the master list from which other lists, like the No Fly
    list, are taken--now numbering about 435,000 people.
        (a) Doesn't such a large and constantly growing list actually make
    it harder for the FBI and others to use the information? Wouldn't the
    FBI and other agencies be able to do much more to protect us with a
    more controlled list, focused on serious and proven threats?
        (b) The Washington Post article also noted the difficulty that
    people on the list, or with names similar to people on the list, have
    in getting off of government lists--which restrict their travel and
    their lives. The Government Accountability Office issued a report last
    year setting out some of the failures throughout the government in
    allowing individuals effective redress if they are wrongly placed on
    these lists. In light of the Arar situation, Senator Specter and I
    asked the Government Accountability Office to update their review. What
    steps has the FBI taken to allow individuals who may be wrongly on
    watch lists to challenge and correct those designations?
    Sentinel
        15. Now a year into the Bureau's Sentinel computer upgrade program,
    I remain concerned about the prospect of this program and its
    ballooning costs to American taxpayers. Earlier this month, the FBI
    informed the Committee that it had encountered unexpected problems with
    the deployment of Phase I of the Sentinel program that would delay the
    program. Even more troubling, the FBI could not tell Committee staff
    how long it would take to remedy these problems, or how the delay would
    impact the overall schedule for Sentinel. What is the current status of
    the Sentinel program and do you anticipate that there will be
    additional delays in deploying the program or costs overruns? What
    impact have the delays with Sentinel--and Trilogy before it--had on the
    Bureau's ability to fulfill its core mission?
    Civil Rights Cold Cases
        16. In February 2006, the FBI established a nationwide initiative
    to re-examine civil rights era cold cases. At a press conference on
    February 27th, the FBI released a press statement announcing that
    although 100 cold cases have been referred to the Bureau, the FBI has
    prioritized only a dozen. I applaud the effort to reexamine these
    cases, but why has the FBI only prioritized a mere handful of civil
    rights era cold cases? How many agents, analysts, and other resources
    has the FBI committed towards this important effort?
        17. Earlier this year, I joined Senator Dodd in re-introducing the
    Emmett Till Unsolved Civil Rights Crime Act. This bill creates
    permanent unsolved civil rights crimes units within the FBI and the
    Civil Rights Division of the Justice Department to investigate and
    prosecute these crimes. This bill will also give law enforcement the
    resources to ensure that justice is served. As a former prosecutor, I
    strongly believe law enforcement should have the necessary tools to
    aggressively seek those who have committed these crimes, regardless of
    the time that has passed. Would you support the Emmett Till bill? Do
    you believe this bill gives the FBI the resources needed to thoroughly
    investigate unsolved civil rights murders?
    Lost Laptops/Data Security
        18. In February, the Inspector General for the Department of
    Justice released another troubling report finding that the FBI lost 160
    laptop computers--including at least ten computers that contained
    classified information and one that contained sensitive personal
    information about FBI personnel--during a 44-month period. Even more
    troubling, the report also found that the FBI could not even account
    for whether 51 other computers, including seven computers that were
    assigned to the Bureau's counterintelligence and counterterrorism
    divisions, might contain classified or sensitive data. What is the
    Bureau doing to address its problem of lost laptops and lax data
    security?
        19. Earlier this year, Senator Specter and I reintroduced our
    Personal Data Privacy and Security Act, which would, among other
    things, require federal agencies to give notice to the individuals
    whose data is lost or stolen, when a data breach occurs. Did the FBI
    notify the individuals whose sensitive personal information was lost in
    the case of the missing laptops? Would you support this legislation?
        20. After the VA lost a laptop containing sensitive personal
    information about millions of veterans and active duty personnel,
    Secretary Nicholson instituted a new policy requiring that all of the
    VA's computers contain encryption technology to prevent the
    unauthorized disclosure of sensitive information. Will you make a
    similar pledge to use encryption technology for all of the Bureau's
    computers?
    DNA Sampling
        21. Pursuant to a little noticed provision in the Violence Against
    Women Act reauthorization bill, the Department of Justice is currently
    developing new guidelines that would greatly expand the Government's
    ability to collect DNA samples--which reveal the most sensitive genetic
    information about an individual--from most individuals who are arrested
    or detained by federal authorities and to store this sensitive
    biological information in a federal data base known as the National DNA
    Index System. This new policy will allow the Federal Government to
    collect DNA samples from hundreds of thousands of illegal immigrants
    who may be detained by federal authorities and from individuals who may
    be arrested--in essence, making DNA collection as common as
    fingerprinting. What privacy protections are in place under the
    Department's new guidelines to ensure that sensitive DNA data contained
    in the National DNA Index System will not be misused or improperly
    disclosed by the FBI or other federal and state agencies?
        22. I am also concerned about this new policy because the new DNA
    evidence collected by the Government will add to the already notorious
    backlog at the Bureau's laboratory. According to press reports, the FBI
    acknowledges that this new policy will result in an increase of as many
    as 1 million additional DNA samples a year. Is the Bureau's laboratory
    equipped to handle this additional workload? What steps are you taking
    to make sure that the FBI's laboratory can keep up with the demand for
    DNA samples?
    Improper Reporting of Terrorism Statistics
        23. The Department of Justice Inspector General found in another
    recent report that the FBI failed to accurately report eight of the ten
    terrorism statistics that it reviewed for this report--that is an 80
    percent failure rate. Among other things, the FBI overstated the number
    of terrorism-related convictions for 2004, because it included cases
    where no terrorism link was actually found. This is no simple matter--
    the Congress relies upon these statistics to conduct oversight and to
    make funding and operational decisions regarding the Bureau. What steps
    have you taken to address the problems with reporting of terrorism
    statistics at the FBI?
    Staffing
        24. I also remain concerned about staffing at the Bureau. In
    January, your Deputy, John Pistole, told the Senate Intelligence
    Committee that the FBI expects to lose 400 agents and 400 intelligence
    analysts this year, due to retirement or attrition. Mr. Pistole also
    stated that approximately 20 percent (370) of the FBI's intelligence
    analysts have less than a year of experience with the Bureau. I cannot
    help but worry that the Bureau will not have the staffing and expertise
    that it needs to carry out its counterterrorism and counterintelligence
    mission, given these figures on staffing. What are you doing to address
    the shortage in intelligence analysts and agents? How many agents and
    analysts do you expect to hire by the end of 2007?
    FOIA
        25. I was disappointed to learn that the FBI has not met several of
    its goals to improve FOIA processing under the President's Executive
    Order 13392, including the important goal to complete all FOIA requests
    that are more than two years old by August 2006. What is the current
    status of the FBI's FOIA backlog?
    MI5
        26. After the horrific attacks of September 11th, I worked very
    hard with others in Congress to give the FBI the tools that it needed
    to combat terrorism and carry out its domestic intelligence functions.
    Given what we have learned about the widespread misuse of National
    Security Letters and chronic staffing problems in the Bureau's
    counterterrorism and counterintelligence offices, some are calling for
    the Congress to put the Bureau's domestic intelligence operations in a
    new MI5-styled domestic intelligence agency. Do you believe that
    Congress should create a domestic intelligence agency to carry out the
    Nation's domestic counterterrorism activities?
      political landscape ``informational briefings'' by white house for
                          senior government officials
        Question. A number of recent reports, including Tuesday's (April
    24, 2007) Los Angeles Times and today's Washington Post, suggest that
    White House staff, including Ken Mehlman, Scott Jennings and perhaps
    others, have provided what a White House spokesman calls
    ``informational briefings to appointees throughout the federal
    government about the political landscape.''
        Have appointees or employees at the United States Department of
    Justice received such ``informational briefings''?
        Answer. The Department queried components to determine whether any
    political appointees attended or were aware of any employees within the
    components attended a briefing with White House officials described in
    the inquiry. The Department's Office of Information and Privacy and the
    Executive Secretariat also conducted searches of the electronic and
    paper files.
        The Department's information indicates that employees attended
    briefings at the White House's Eisenhower Executive Office Building and
    in one instance, at the U.S. Department of Agriculture. The
    Department's records do not indicate whether all of the meetings
    actually included a political briefing regarding elections or
    candidates.
        Question. Have appointees or employees at the United States
    Department of Justice received briefings from White House staff that
    reviewed polling data?
        Answer. The Department's search efforts did not reveal information
    indicating that briefings of the type described in the inquiry were
    held at the Department of Justice. The Department's information
    indicates that DOJ employees attended briefings at the White House's
    Eisenhower Executive Office Building and in one instance, at the U.S.
    Department of Agriculture. The Department's records do not indicate
    whether all of the meetings actually included a political briefing
    regarding elections or candidates.
        Question. Have appointees or employees at the United States
    Department of Justice received briefings that mentioned congressional
    election or reelection campaigns?
        Answer. The Department's information indicates that DOJ employees
    attended briefings at the White House's Eisenhower Executive Office
    Building and in one instance, at the U.S. Department of Agriculture.
    The Department's records do not indicate whether all of the meetings
    included a political briefing regarding elections or candidates.
        Question. According to a front page story in today's Washington
    Post, before the last midterm election, White House staff conducted 20
    such briefings in at least 15 government agencies on the electoral
    prospects of Republican and Democratic candidates. If any such
    briefings have occurred at the Department of Justice, please provide me
    with the specifics on when they occurred, who attended, what was shared
    and said, and all documents reflecting such matters in the custody,
    possession or control of the Department.
        Answer. The Department's search efforts did not reveal information
    indicating that briefings of the type described in the inquiry were
    held at the Department of Justice. The Department's information
    indicates that DOJ employees attended briefings at the White House's
    Eisenhower Executive Office Building and in one instance, at the U.S.
    Department of Agriculture. The Department's records do not indicate
    whether all of the meetings included a political briefing regarding
    elections or candidates.
                                     ______

                Questions Submitted By Senator Pete V. Domenici
                    indian country methamphetamine problems
        Question. As you know, methamphetamine is a growing problem around
    the country, second only to alcohol and marijuana as the drug used most
    frequently in many Western and Midwestern states. Meth has become an
    epidemic because of its low cost and ready availability. Law
    enforcement officers continue to raid record numbers of clandestine
    labs. Despite these efforts, meth use in communities continues to
    increase. These labs present a clear and present danger to the citizens
    of my state and to people across the country.
        Congress has passed the Combat Meth Act to provide valuable new
    resources and tools to states, local law enforcement and prosecutors to
    combat the production and distribution of meth while at the same time
    educating our communities about meth. The DEA is requesting $29.2
    million for its Southwest Border and Methamphetamine Enforcement
    Initiative.
        I'm told by experts in my home state of New Mexico that many of our
    meth problems are the result of the drug being brought into the United
    States from Mexico. I have also been told that the decrease in illegal
    importation of Meth is directly correlated to the increase in
    clandestine labs. I am very concerned about meth production and use on
    the Native American lands in New Mexico. Knowing the FBI's jurisdiction
    in Indian Country, has the FBI seen an increase in violent crimes and
    felonies on the Navajo Nation and in the four-corners area of New
    Mexico that are meth related?
        Answer. The FBI has noted increases in the use of methamphetamine
    and in methamphetamine-related violence in this area over the past four
    years, and in some locations the increase in violence has included an
    increase in the number of assaults on law enforcement officers by
    methamphetamine traffickers and users. While the overall level of
    violent crime in Indian Country (IC) has remained relatively constant
    from 2004 to the present (based on the number of pending cases, cases
    opened, arrests, indictments, informations, and convictions for murder,
    assault, adult rape, and child physical abuse), the incidence of IC
    violent crime remains high.
        It is the FBI's understanding that research by the Office of
    National Drug Control Policy indicates a reduction in the number of
    methamphetamine laboratories in the United States, with much of the
    methamphetamine used in the United States being manufactured in Mexico.
    These drugs are often trafficked through IC for sale in the United
    States. These findings are consistent with the FBI's analysis and
    experience and, in an effort to address the surge in IC methamphetamine
    trafficking, the FBI has continued to expand its STTF initiative.
    Sixteen STTFs, comprised of Federal, tribal, state, and local law
    enforcement officers, operate throughout the IC. The interagency
    partnerships established in these task forces benefit IC law
    enforcement by leveraging resources. On many Native American Indian
    reservations, the STTFs provide the only effective narcotics
    investigation capabilities. Initial data for fiscal year 2007, indicate
    that STTFs obtained 69 indictments, arrested and/or located 96
    subjects, obtained 86 convictions, and disrupted two drug trafficking
    organizations.
        Question. What other trends are you seeing on Tribal Lands relating
    to felony criminal activity that is under the purview of the FBI's
    jurisdiction?
        Answer. FBI SAs assigned to IC continue to report high levels of
    violent crime on Native American reservations throughout the United
    States, including a marked increase in the number of IC child sexual
    assault cases in fiscal year 2007 as compared with fiscal year 2005 and
    2006. The number of child sexual assault cases opened in fiscal year
    2007 outnumbered those for fiscal year 2006 by 7 percent.
        In order to better equip Federal and tribal officials investigating
    IC child sexual assault allegations, the FBI has developed a course
    focused on forensic interviews of children in IC cases. This training
    was offered regionally on three occasions in fiscal year 2007 and will
    be offered again in fiscal year 2008. In addition, the FBI has worked
    to create a state-of-the-art child advocacy center on the Crow
    Reservation in Montana. This center, which opened on 4/24/07, provides
    child-appropriate interviewing services to IC investigators on the Crow
    and Northern Cheyenne Reservations. (This valuable resource has also
    been used by state officials investigating the alleged sexual abuse of
    non-Indian children.)
        Compounding the problems associated with high violent crime rates
    and drug trafficking in IC are increasing problems related to IC street
    gang structures, many of which engage in drug trafficking to enhance
    their gang influence. The majority of large Native American
    reservations suffer from some level of gang influence, ranging from
    ``emerging'' to established street gang structures engaged in organized
    criminal activity. In the past, Native American gangs engaged primarily
    in property-based crimes such as graffiti and vandalism. IC law
    enforcement officials are particularly concerned about the movement
    toward more violent criminal acts, including sexual assaults, gang
    rapes, home invasions, drive-by shootings, beatings, and elder abuse.
    During a 2006 assessment of gang activity on the rural Crow Indian
    Reservation in Montana, teenage gang members told FBI SAs of impending
    drive-by shootings on that reservation and acknowledged ``jumping in''
    (severely beating) and ``sexing in'' (requiring sexual activity from)
    prospective female gang members.
        The emergence of Native American gangs in IC has largely been
    attributed to the strained Native American social environment and
    pervasive media influences. Native American gangs often assume
    characteristics of urban street gangs, using common signs, symbols,
    names, slang, and attire. These gangs have been significantly
    influenced by members who were previously incarcerated and involved in
    prison gang cultures. As incarcerated individuals have been released
    from prison to their reservation communities, they have enhanced their
    influence by promoting their prison gang affiliations, fostering the
    growth of criminal gang cultures in IC. In addition to prison gang
    influences, IC law enforcement officials have noted the emergence of
    female Native American gangs, members of which have escalated their
    violent behavior in order to prove they are as violent and anti-social
    as their male counterparts.
        The FBI sponsors training for all levels of IC law enforcement,
    including approximately 25 classes per year for 1,200 Federal, state,
    local, and tribal law enforcement officials. This training addresses
    Native American gangs, crime scene processing, child abuse
    investigations, forensic interviewing of children, homicide
    investigations, interviewing and interrogation, officer safety and
    survival, crisis negotiation, and Indian Gaming.
                                 internet crime
        Question. The Albuquerque Journal reported this week that over the
    past two years, internet crime in my home state of New Mexico has
    increased by over 235 percent, while internet crime nationwide has
    remained at the same levels. This news story went on to state that the
    technology boom in rural America may be the cause of increased internet
    criminal activity in New Mexico. Electronic criminal activity is a
    serious issue that appears to be difficult to investigate and
    prosecute.
        Has the FBI made any inroads into cracking down on this type of
    criminal activity?
        Answer. The series of international searches, arrests, and
    confessions accomplished in the past several years through Operation
    Fast Link and Operation Site Down have enabled the FBI to make
    significant progress in addressing IP Internet criminal activity. The
    FBI is also focusing on the counterfeiting of business software and
    hardware products, which has significant international impact. The FBI
    will continue to work with industry, state and local law enforcement
    authorities, and our foreign law enforcement partners to ensure that
    our IP enforcement measures are as effective as possible and address
    the problem at all levels.
        Question. What is the FBI doing to assist local law enforcement
    with investigations related to internet crime?
        Answer. The FBI's approach to Internet crime includes more than 75
    cyber task forces, which include state and local law enforcement and
    leverage the FBI's ability to provide support and guidance in support
    of their local investigations. These task forces supplement the FBI's
    investigative efforts by supporting not only IP rights and Internet
    crime investigations, but also computer intrusion and ``Innocent
    Images'' investigations.
        In addition, the Internet Crime Complaint Center (IC3), which is a
    project jointly run by the FBI and the National White Collar Crime
    Center, receives over 22,000 Internet crime complaints per month from
    consumers and businesses. All complaints received by IC3 are accessible
    to Federal, state, and local law enforcement to support active
    investigations, trend analysis, and public outreach and awareness
    efforts. During 2006, IC3 referred 86,279 complaints of crime to
    Federal, state, and local law enforcement agencies around the country
    for further consideration. The vast majority of these cases involved
    fraud and a financial loss on the part of the complainant.

                              SUBCOMMITTEE RECESS

        Senator Mikulski. So, this subcommittee stands in recess
    until 10 a.m., Thursday, May 3, when we will take testimony
    from the Equal Employment Opportunity Commission.
        Mr. Mueller. Thank you, Madam Chairman, and thank you for
    letting me out of here so I can attend to the next function I
    have to make.
        Thank you.
        [Whereupon, at 11:43 a.m., Thursday, April 26, the
    subcommittee was recessed, to reconvene at 10 a.m., Thursday,
    May 3.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

                             THURSDAY, MAY 3, 2007

                                           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. Barbara A. Mikulski (chairman)
    presiding.
        Present: Senators Mikulski, Shelby, and Alexander.

                    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

    STATEMENT OF NAOMI CHURCHILL EARP, CHAIR

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Good morning. The Subcommittee on
    Commerce, Justice, Science of the Appropriations Committee will
    come to order. As we said in the beginning of the year, our
    themes are innovation, security, and accountability.
        This morning, this subcommittee will focus on an agency who
    has one of probably the most important missions within the
    Government in addition to security, which is the enforcement of
    our laws against employment discrimination. This hearing will
    be an oversight hearing as related to what is needed to be sure
    the agency is able to fulfill its mission.
        I would have never dreamed many years ago that I would be
    able to be here as the appropriator for the Equal Employment
    Opportunity Commission (EEOC). It would have been a dream well
    beyond my wildest imagination. Over 40 years ago, I was a young
    social worker who had heard the call of a gifted President
    named Jack Kennedy asking not what you can do for your country
    but what your country can do for you, and responded to that
    call by fighting the war on poverty and being very active in my
    own community in the area of civil rights.
        Baltimore was a tough town. It had a northern economy but a
    southern social structure. It was a segregated town and as part
    of great leadership, the home of where the NAACP is
    headquartered, the home that gave us Thurgood Marshall, the
    Mitchell family, like Juanita and of course, Mr. Mitchell, the
    101st Senator himself. We did marches and we sang, but we knew
    that marches and singing didn't always open the doors. They
    were to get the attention to open the doors.
        So when this Government created the Equal Employment
    Opportunity Commission, we thought it would be a one-stop shop
    that people within this country could turn to redress any
    grievance they had if doors were being slammed against them.
    That's what the job of the EEOC Commission is, to make sure
    that doors of employment are never ever slammed shut, that by
    vigorously enforcing the discrimination laws on race, religion,
    gender, and national origin, we would show that America
    believed that we are truly all created equal.
        But we are very concerned about what's happened over at the
    Equal Employment Opportunity Commission over the years. It
    seems not to have been able to fulfill its mission and we are
    concerned about three issues: management, morale, and money. Is
    it the lack of resources that are creating the problem? But by
    any index of objective analysis, it seems that the EEOC really
    has problems and is in disarray.
        We are very concerned about the fact that over years,
    management has been inconsistent and imperial. Madam Chair, we
    understand you've been on the job for 6 months, so we're
    looking for recommendations and results and how that might be
    tied to resources. If it's not resource-driven but leadership
    driven, then I want to hear what your vision is because we're
    very concerned about how we can fix it so that people can have
    confidence in the process. We believe that we are a Nation of
    law, that our law guarantees equal opportunity in employment
    and that we have an agency that you can turn to if you feel
    that you have discriminated against.
        But we're concerned. Last year, EEOC received 76,000
    complaints that needed to be investigated on top of a backlog--
    the 34,000 backlog cases from the year before. Backlogs are an
    obsession with us because where there is a backlog, there is
    really a question of being able to enforce the laws. We're
    concerned that backlogs are on the rise and that the issues are
    not being addressed.
        Despite rising complaints and increased backlogs, EEOC has
    downsized its agency, contracted out to a customer service call
    center, which had very few people and seemed to have very
    little training. So we're going to want to ask about this call
    center. When you call, do you get an answer? Or are you put on
    hold and with the backlog, there's another hold you're put on?
        What we want to be able to do today is focus on two things:
    oversight and accountability and how that leads to advocacy. My
    duty as an appropriator is to make sure that American taxpayer
    dollars are used responsibly but at the same time, that
    accomplishes mission and purpose. So we've been concerned and
    I'll be blunt, Ms. Earp, we know you've had this job 6 months
    so when you hear our frustration, it's not targeted at you
    personally, so we want you to know that. We know that front
    line staff has been cut. We know that work has been privatized
    without really ensuring quality and oversight.
        The district offices were reduced from 23 to 15 but what is
    the rationale? We know that there has been a reduction in
    attorneys. Was this about money? Was this about poor
    management? And it's had a terrible effect on morale. The
    agency has been reduced by 575. Has this been downsizing and
    downgrading? Or it is right sizing? We need to know and we know
    that there hasn't been a look at the agency in a number of
    years and that's why we want to start this ball rolling.
        As I said, we're advocates here, of civil rights. These men
    represent the New South. They were generationally parallel. We
    came out of a lot of turmoil and a lot of tumult but committed
    in our lives and our public service to do that. Senator Shelby,
    a champion on these issues. Senator Alexander, a Governor, a
    Secretary of Education, now fighting also to make sure that
    education is one of the key tools of an empowerment agenda and
    the greatest equal opportunity is the right to an equal
    education and to a good education.
        So we're champions here of civil rights and this is why we
    want this agency, under our stewardship, to be one of the best
    in our portfolio. So we want to hear from you today on how to
    do it. You know, we've been through restructuring plans. We
    don't know what that meant. We saw that positions were reduced,
    as I said, from 23 to 15. Was that a good idea? It seemed that
    from what we heard from the civil rights community was that it
    was not a good idea.
        With the call center, we understand that it was contracted
    out. They only get 7 days of training on civil rights law, that
    you're not getting the calls that you expected and there seems
    to be a tremendous lack of communication between the EEOC and
    the call center.
        Then, in my own State, there was the closing of a district
    office, which was the hallmark of fairness in hearing
    complaints for Federal employees. There are 117,000 Federal
    employees in the State, and not because we're a big
    bureaucracy. We're the home to the National Institutes of
    Health--13,000 people. We're the home to the Census Bureau--
    4,000 people. We are the home to so many other Federal
    agencies--yes, as well as our defense, which has its own track.
        So you see, what we want to do is we--we can talk about
    downsizing and right sizing but what we want to talk about is
    the right track. We are committed to the mission and goals that
    were established for the EEOC. So we want to take a look at the
    management issues, the morale issues and the money issues and
    we look forward to hearing your recommendations because we are
    results driven but know, just as there has been a backlog,
    there is also a backlog of frustration.
        But I'm going to be clear. It is not at you personally.
    Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Senator, Chairman Mikulski,
    Madam Chairman. We thank you for joining us here today to
    discuss this. The chairman has already said the Equal
    Employment Opportunity Commission 2008 budget request.
        The EEOC has an important mission as it provides assistance
    to those who have faced discrimination in the workplace. This
    is accomplished through investigations, mediation, legal action
    and by providing education to businesses. The EEOC request for
    2008 is $327.7 million, which is approximately a $1 million
    decrease below the 2007 joint resolution funding level.
        I know that Chairman Mikulski has serious concerns
    regarding the EEOC's performance, particularly with the
    Commission's direction and disregard for congressional
    oversight. I agree with her and know that you are new to your
    chairmanship and inherited many of the problems from your
    predecessor. I believe this has had an immeasurable impact on
    the EEOC's ability to carry out its mission.
        It's come to my attention that the EEOC has decided to cut
    a large amount of its allocation from the State and local
    sector. I'm curious as to why this route has been taken because
    the local offices, I believe, are vital to the mission of EEOC.
    I have heard of the great accomplishments of the new Mobile
    office in my State, especially given its large jurisdiction
    covering the gulf coast regions of Mississippi, Alabama, and
    the Florida Panhandle. I want to work with you to ensure that
    the State and local offices get the support that they need to
    do their job.
        Based on my review of your request, combined with the
    likely fiscal constraints of this subcommittee, we will need
    your assistance, Madam Chairman, as we face tough funding
    decisions regarding the allocation of resources in your budget.
    This subcommittee and the Commission share the difficult task
    of targeting these limited resources in a manner that
    safeguards taxpayers' dollars while enabling the mission of
    EEOC to be carried forward.
        Madam Chairman, we look forward to your testimony and we
    look forward to working with you during the 2008 budget process
    to ensure that you have, as the chairman, have the necessary
    resources to carry out the wide and varied missions of the
    EEOC. I look forward to working with you and Chairman Mikulski
    and Senator Alexander and others to make sure that you have the
    requisite funding and we hope and I believe you will go in the
    right direction. Thank you.
        Senator Mikulski. Thank you very much. Senator Alexander,
    did you wish to make a comment?
        Senator Alexander. No thank you, Madam Chairman. I have
    some questions but I'll save them for later.
        Senator Mikulski. Thank you. Ms. Earp, please proceed.

                        SUMMARY STATEMENT OF NAOMI EARP

        Ms. Earp. Thank you. Good morning, Madam Chair, members of
    the subcommittee. Thank you for inviting me to testify today on
    behalf of the Equal Employment Opportunity Commission in
    support of the President's 2008 budget request for $327.7
    million.
        As you've already indicated, I became the 13th Chair of the
    Equal Employment Opportunity Commission just this last fall. It
    is a distinct pleasure to appear before you to discuss the
    needs of EEOC for fiscal year 2008 as represented in the
    President's budget. I want to thank you, Madam Chair, for your
    past support and thank the members of the subcommittee for its
    support and your anticipated future support.
        EEOC's vision is for a strong and prosperous Nation secure
    through fair and inclusive workplaces. We strive to ensure
    equality of opportunity in the workplace by enforcing the
    Federal laws prohibiting employment discrimination. We seek to
    maintain the Commission's reach by continuing proactive
    measures to prevent discrimination while resolving claims and
    strategically focusing our enforcement and litigation programs.
        I've submitted for the record, a statement that highlights
    aspects of our budget but I want to spend just a few minutes
    touching on some of the points that are in the written
    statement.
        First of all, our budget request includes $160.3 million
    for administrative charge processing. In fiscal year 2006, the
    EEOC received almost 76,000 private sector charges. This was a
    slight increase over 2005. We resolved just over 74,000 private
    sector resolutions and recovered $229.8 million in monetary
    benefits for victims of discrimination. We ended the fiscal
    year with a charge inventory of almost 40,000 charges. We
    acknowledge that our charge----
        Senator Mikulski. Excuse me. Does charge inventory mean
    backlog?
        Ms. Earp. Essentially.
        Senator Mikulski. Okay.
        Ms. Earp. We acknowledge that the inventory is growing.
    EEOC also has responsibility for hearings and appeals of
    complaints filed by Federal employees. We received over 14,000
    requests for hearings or appeals from Federal sector employees.
    Our budget request includes $47.5 million for Federal sector
    programs.
        The litigation program is an important part of overall
    enforcement. During 2006, our litigation program filed 371 new
    lawsuits on the merits and resolved 418, resulting in monetary
    benefits of $44.3 million. The 2008 budget request includes
    almost $3 million in direct support of the litigation program.
        That would bring our total litigation budget to just a
    little under $57 million.
        A strong litigation program provides an incentive for the
    early resolution of charges during the administrative
    enforcement process.
        Regarding mediation, our budget request includes $22.3
    million. In fiscal year 2006, 8,200 charges were resolved
    through mediation. The mediation program is highly successful
    and has been since its inception.
        Madam Chair, you've noted a number of issues that you are
    concerned about but I would like to point out that the
    mediation program is one of the best, most successful efforts
    EEOC currently has underway. An independent survey found that
    96 percent of employers and 91 percent of charging parties
    would use our mediation program again if they were offered it.
        It's clear the best way to combat employment discrimination
    is to prevent it from happening in the first place. We continue
    to meet with advocacy and community groups, employer groups,
    the legal community, students, educational organizations,
    unions and members of the general public. We share with them
    employment trends. We assess needs and we offer advice and
    assistance. In fiscal year 2006, we conducted 5,634 outreach
    events, reaching nearly 300,000 people. Approximately 4 percent
    of the budget is devoted to outreach activities. We're asking
    $12.6 million.
        Regarding the FEPA, Senator Shelby, that you mentioned, I
    would note that we are joined in our enforcement efforts, with
    96 State and local partners generally called the Fair
    Employment Practice Agencies (FEPA). The budget request for
    FEPAs for 2008 is $28 million and I would just note at this
    time that EEOC has no involvement and has had no involvement in
    cutting any amount from the President's budget or otherwise for
    our State and local partners.
        The EEOC, like all agencies today, faces many challenges.
    We are first and foremost an enforcement agency and we must
    provide the quality and integrity of enforcement efforts that
    the public expects and deserves. Approximately 80 percent of
    our budget has been consistently devoted to relatively fixed
    expenses, primarily payroll and rent. An additional 9 to 10
    percent is dedicated to our partners in the State and local
    fair employment practice agencies. The fixed costs of EEOC
    leave us with little discretion in terms of shifting resources
    to be able to respond to emerging or pressing needs. We
    constantly look for ways to maximize the return on resources
    and we look for better ways to align those resources with the
    mission.
        In August 2002, the National Academy of Public
    Administration (NAPA) conducted a study of our structure and
    our program delivery. In February 2003, the Academy released
    its findings. Most significantly, they recommended that we
    establish a National Contact Center and that we align or
    realign our field offices and that we restructure our
    headquarters. We have acted on the first two of these
    recommendations and we are just beginning work on the third. I
    look forward to working with the subcommittee, getting the
    subcommittee's ideas about reorganizing, restructuring our
    headquarters office.
        I want to make just a couple of points about the National
    Contact Center (NCC). It began operation in March 2005 on a 2-
    year pilot basis. It's based in Lawrence, Kansas. The pilot has
    been extended for 1 additional year. While admitting that the
    National Contact Center got off to a rough start, we had some
    things to smooth out. The NCC allows 24-hour access to the
    Equal Employment Opportunity Commission. It saves our
    investigators and our attorneys from having to answer routine
    calls. Since it began taking calls, the National Contact Center
    has received over 1 million contacts from the public. This
    includes telephone calls, e-mails, faxes.
        Our initial focus was on training, monitoring for quality,
    accuracy and the interpersonal skills of the people who would
    answer the phone for us. As these have developed, we are now
    prioritizing actions to increase call volume and to better
    integrate the National Contact Center with EEOC procedures and
    practices. Results are reflected in the most recently available
    report, which shows that in March of this year, the National
    Contact Center received over 65,000 contacts. At this rate, we
    project that the contact center will handle 700,000 contacts
    for us this year alone.
        A recent report by NAPA found that EEOC is aggressively
    addressing issues and the implementation and follow-up is
    noteworthy regarding the contact center. The NAPA Panel also
    found that the cost of moving the contact center into EEOC
    would substantially exceed the current arrangement and that an
    in-house run EEOC call center would cost about $8 million the
    first year and almost $5 million every year after that.
        Regarding repositioning, I would just simply say, again
    this was a NAPA recommendation that we believe is a good idea
    as we seek to realign our resources with our organizational
    structure. While we are concerned about the rising inventory
    and our ability to timely investigate charges and provide
    efficient customer service, we are confident that strides are
    being made, that improvements are underway and that we can
    manage within the budget the President requests for 2008.

                               PREPARED STATEMENT

        In conclusion, Madam Chair, the EEOC cannot fight
    discrimination in the 21st century with the same methods that
    we've used in the past and we thank you for your support.
        [The statement follows:]
                   Prepared Statement of Naomi Churchill Earp
        Good morning Madam Chair and Members of the Subcommittee. Thank you
    for inviting me to testify today on behalf of the Equal Employment
    Opportunity Commission (EEOC) in support of the President's fiscal year
    2008 budget request of $327.7 million. As you may know I became the
    thirteenth Chair of the Equal Employment Opportunity Commission in
    September 2006. It is a distinct pleasure to appear before you to
    discuss the needs of the EEOC for fiscal year 2008 as represented in
    the President's request. I want to thank you for your past and
    anticipated future support of the EEOC.
        Our vision is for a strong and prosperous nation secured through
    fair and inclusive workplaces. We strive to ensure equality of
    opportunity in the workplace by enforcing the federal laws prohibiting
    employment discrimination. Our newly implemented strategic plan builds
    upon what the agency has accomplished to improve its operations. It
    seeks to maintain the Commission's reach by continuing proactive
    measures to prevent discrimination; resolving claims of discrimination
    more proficiently; continuing alternative dispute resolution;
    developing a more strategic focus in our enforcement, litigation and
    federal programs; and renewing a strategy to eradicate race and color
    discrimination while maintaining our internal operations.
                     eeoc's fiscal year 2008 budget request
        EEOC's fiscal year 2008 budget request is for $327,748,000. Let me
    highlight some components of our budget, approval of which will be
    essential to meet the demands inherent to the fulfillment of our
    mission in the 21st century. I am also submitting for the record a copy
    of EEOC's Fiscal Year 2006 Performance and Accountability Report. The
    report provides in greater detail the successes of our performance and
    activities for the past year.
        Staffing and Enforcement Workload.--Our budget request includes
    $160.3 million for administrative charge processing. Our employees are
    passionate about, and dedicated to, their work and produce a
    substantial body of work. In fiscal year 2006 the EEOC received 75,768
    private sector charges, a slight increase over 2005. We had 74,308
    private sector resolutions and recovered $229.8 million in monetary
    benefits that went directly to the victims of discrimination.
        In fiscal year 2006 our average processing time per private sector
    charge was 193 days, a 12 percent increase over our 171 day average in
    fiscal year 2005. Our end of year inventory of private sector charges
    was 39,946, a 19 percent increase over our fiscal year 2005 inventory.
    We project an inventory of in excess of 54,000 by the end of fiscal
    year 2007 and in excess of 67,000 by the end fiscal year 2008. We will
    address this issue of rising average processing times within existing
    resources, using an FTE level of 2,381, the same as fiscal year 2007
    and an increase over our staff level at the end of fiscal year 2006. As
    we staff up to our budgeted levels, we expect an increase in charge
    processing (and, by extension, progress in our inventory).
        EEOC also has responsibility for hearings and appeals of complaints
    filed by federal employees. Our hearings data shows that we received
    7,802 hearing requests, had 8,685 resolutions, ended the year with an
    inventory of 4,912 and had an average processing time of 248 days. In
    the area of federal sector appeals, we received 6,743 appeals, resolved
    6,405, and ended the year with an inventory of 3,887. The average
    processing time was 220 days for fiscal year 2006--a 13 percent
    increase from the previous year. Our federal sector appeals data
    reflects increases in inventory and average processing time and a drop
    in resolutions.
        Litigation.--Our litigation program is an important part of our
    overall enforcement of the law. During fiscal year 2006, our litigation
    program filed 371 new lawsuits on the merits and resolved 418,
    resulting in monetary benefits of $44.3 million. We seek to maximize
    the impact of our lawsuits through various means, including obtaining
    relief for multiple aggrieved individuals and securing broad-based,
    prospective relief to prevent the recurrence of discrimination. A
    strong litigation program also provides an incentive for the early
    resolution of a charge during the agency's administrative enforcement
    process in the pre-cause determination and mediation process and in the
    conciliation process. We also believe that publicity of high impact
    litigation and other cases serves to increase voluntary compliance with
    the laws we enforce.
        The EEOC's fiscal year 2008 budget request includes $2.9 million in
    direct support to our litigation program, with a total litigation
    budget of just under $57 million. We project a slight decrease in our
    suit filings for fiscal year 2008, but the demands on our staff and our
    resources are expected to increase. This is because we expect to devote
    some of the requested funding to litigating larger and more complex
    cases involving systemic discrimination developed through the
    Commission's new Systemic Program. While these cases are resource-
    intensive to litigate, they have great potential to pay enormous
    dividends in the long run.
        Systemic Program.--Last April, the Commission considered the
    recommendations of our Systemic Taskforce which was led by Vice Chair
    Leslie Silverman. The Commission unanimously passed a series of motions
    calling for the Commission to reinvigorate its Systemic efforts.
    Systemic cases are defined as ``pattern or practice, policy and/or
    class cases where the alleged discrimination has a broad impact on an
    industry, profession, company, or geographic location.'' Since the
    passage of Title VII of the Civil Rights Act of 1964, as well as with
    later amendments and authority granted, Congress recognized that
    employment discrimination cannot be eradicated without a focus on its
    systemic nature. A strong systemic program is crucial to the
    elimination of instances of pattern or practice, policy and class
    discrimination which has a broad impact on an industry, profession,
    company or geographic location.
        Therefore, to complement private sector enforcement of Title VII,
    the ADEA, the EPA and the ADA, the Commission has embarked upon an
    enhanced systemic enforcement program. Systemic plans from all District
    Offices were approved in December 2006. Commissioner charges based on
    those plans have been submitted and signed by Commissioners. While
    Systemic cases often take two or three years in order to investigate
    and develop evidence to decide whether to proceed, I expect some of our
    cases to be developed and resolved through settlement, conciliation or
    a litigation filing within a year.
        ADR/Mediation.--Our budget request includes $22.3 million for
    mediation. In fiscal year 2006 we increased the number of our mediation
    resolutions to 8,202. Since its inception, EEOC's mediation program has
    been highly successful in resolving charges of employment
    discrimination. In addition to the record number of resolutions
    obtained through the mediation process in fiscal year 2006, a survey
    conducted by independent researchers to evaluate the program's
    effectiveness found that 96 percent of employers and 91 percent of
    charging parties that participated in the mediation process would use
    the mediation program again if offered. The Commission continues to
    conduct extensive outreach and publicity efforts to highlight the
    benefits of EEOC's mediation program and to expand charging party and
    respondent participation. Additionally, as a result of significant
    efforts focused on increasing the participation of employers in the
    mediation program, the agency continues to utilize Universal Agreements
    to Mediate (UAMs) to secure employer support for the program. These
    agreements now number over 1,100.
        Outreach.--We also employ other strategies by which we address
    discrimination in the workplace. The best way to combat employment
    discrimination is to prevent it from happening in the first place. The
    Commission continues to work closely with its stakeholders to implement
    new strategies to stop discrimination before it starts. We are striking
    a vital balance between outreach and education on one hand, and
    enforcement and litigation on the other. We meet with advocacy and
    community groups, employer groups, the legal community, students and
    educational organizations, labor unions and the general public to
    assess current needs, and employment trends and issues. In recent
    years, EEOC staff also has increased our number of media presentations,
    including appearances on radio and television programs in languages
    other than English, providing information to uncounted thousands of
    people. The Commission recognizes the importance of outreach,
    education, and technical assistance to reach out to under-served
    constituents and to aid in voluntary compliance. In fiscal year 2006,
    EEOC conducted 5,634 outreach events, reaching nearly 302,000 people.
    Events included speeches, seminars, workshops, training programs,
    expanded presence visits, cultural expositions, conferences, and
    community group meetings. Approximately 4 percent of our budget
    request, or $12.6 million is allocated to outreach.
        Federal Sector.--The Commission fulfills its mandate to federal
    employees and applicants for employment through our hearings and
    appellate enforcement efforts, as well by exercising our oversight
    authority and providing guidance, outreach and technical assistance.
    Our budget request includes $47.5 million for our federal sector
    programs.
        The Federal Sector complaint process is one area by which
    stakeholders agree that improvements need to be made. We believe that
    the complaint process takes too long. By statute, federal agencies
    initially are responsible for investigating charges filed against them.
    Both Commissioners Stuart Ishimaru and Christine Griffin have been
    working on recommendations for improvement to the complaint process,
    and particularly on the agency investigative process. We have made
    advances in the processes under EEOC's direct control. For example, the
    inventory of requests for a hearing sharply declined from 5,994 in
    fiscal year 2005 to 4,912 in fiscal year 2006. Additionally, the
    average processing time from request to the conclusion of the hearing
    declined slightly last year. These are welcome developments. Both
    appeals inventory and average processing time have shown significant
    decline since 2001-2002, but both showed increases in fiscal year 2006.
        In addition, we continue to provide training, outreach, and
    technical assistance to federal agencies in the implementation of our
    Management Directive 715 to aid agencies in their efforts to build
    model EEO programs.
        Fair Employment Practices Agencies.--We are joined by our 96 State
    and Local partners, Fair Employment Practices Agencies (FEPAs), in our
    vital enforcement role. Our budget request calls for an amount for
    state and local contracts up to $28 million. Additionally, we continue
    to support the 64 Tribal Employment Rights Organizations (TEROs),
    providing outreach and training to address the specific equal
    employment issues facing the Native American community. During fiscal
    year 2006, we successfully transitioned our State and local government
    FEPA partners to the new Integrated Mission System (IMS), allowing EEOC
    to retire the old legacy Charge Data System. This migration will
    provide consistent data management and reporting across EEOC and FEPA
    offices nationwide. In response to recommendations from the State and
    Local Re-engineering Workgroup, during fiscal year 2006 we began a
    comprehensive national training initiative for FEPA staff. This effort
    will continue into fiscal year 2007.
        Information Technology.--Over the past several years, EEOC has
    completed several major information technology (IT) projects that have
    streamlined internal processes, reduced paperwork burden, integrated
    data, advanced our technological infrastructure, and allowed the agency
    to conduct business more efficiently. The EEOC is taking a fresh look
    at our Information Technology (IT) architecture and services in an
    effort to improve operational efficiency, lower recurring costs,
    increase customer satisfaction, and ensure that IT services are
    properly aligned with agency priorities and strategic plans. Our
    overall goal is more efficient usage of the resources that EEOC expends
    to maintain our IT infrastructure, while realigning our architecture to
    better support an environment that promotes collaboration, information
    sharing and analysis, enhanced communications, and streamlined work
    processes.
        During fiscal year 2007, we are integrating our EEO-1 and IMS
    systems, to provide improved analysis capabilities and data integrity.
    We have also expanded usage of video conferencing and video-streaming,
    using this technology to conduct depositions and external hearings,
    provide remote interpretive services, conduct remote training sessions,
    and improve collaboration/communication across our multiple office
    locations. In addition, I have already discussed our systemic program,
    and several initiatives are underway to ensure that EEOC's technology
    infrastructure supports a seamless, nationwide, systemic practice.
        During fiscal year 2008, we will maintain our critical technology
    infrastructure but will not undertake new projects or expand current
    services. Our ability to move forward on other major technology
    initiatives, such as document management and data warehousing will be
    largely dependent on future funding. EEOC is currently conducting
    studies and developing business cases to support requests in these
    areas.
        Initiatives.--It is critical not only that we manage our inventory,
    but that we spread the word that preventing discrimination benefits
    everyone. Some of our outreach is conducted through several targeted
    ongoing initiatives. These initiatives have no separate funding
    component and are performed by all of our professional staff and
    included in our overall outreach, education and technical assistance
    budget.
        In support of the President's New Freedom Initiative, we will
    continue to work with state governments on strategies for removing
    employment barriers and to promote the employment of people with
    disabilities. Our Youth@Work Initiative empowers youth to understand
    their workplace rights and responsibilities and encourages employers to
    promote fair and inclusive workplaces. Our Small and Mid-size Business
    Initiative expands outreach and technical assistance to the small
    business community to encourage voluntary compliance. Our newest
    initiative--ERACE, Eradicating Racism and Colorism in Employment--
    addresses the persistence of race and color discrimination in the
    workplace through outreach, dialogue, and the pursuit of priority and
    emerging legal issues. In addition, in fiscal year 2005, we inaugurated
    the agency's first-ever Freedom to Compete Award program to recognize
    best practices in the private sector, public sector, associations and
    other organizations. In the federal sector we have begun our LEAD
    initiative (Leadership in the Employment of Americans with
    Disabilities) to address the lack of improvement in the federal
    government's employment of people with targeted disabilities.
                   national contact center and repositioning
        The EEOC, like all federal agencies today, faces many challenges.
    We are first and foremost an enforcement agency and we must provide the
    quality and integrity in our enforcement efforts that the public
    expects and deserves. As such, we strive to manage our resources to
    most effectively and efficiently fulfill our enforcement mandate.
        Approximately 80 percent of the EEOC's budget has been consistently
    devoted to relatively fixed expenses, primarily payroll and rent. An
    additional 9-10 percent has been dedicated to our partners in state and
    local Fair Employment Practices Agencies. Therefore, our fixed costs of
    approximately 90 percent of the agency budget leave us with little
    discretion in terms of shifting additional resources to respond to
    pressing needs. We continue to look for ways to maximize the return on
    our resources.
        In August 2002 we commissioned the National Academy of Public
    Administration (NAPA) to conduct a study of our structure and program
    delivery systems. In February 2003, the Academy released its findings
    and recommendations. The Academy Panel made a series of
    recommendations, most significantly recommending that: (1) we establish
    a National Contact Center (NCC) as a way to improve the quality,
    timeliness, access, and consistency of services to EEOC's customers and
    (2) that we realign our field offices flattening the field's management
    staffing levels, and (3) that we reorganize our headquarters. We have
    acted on the first two recommendations and have begun work on the
    third.
        National Contact Center.--After the Commission approved the
    contract to establish the National Contact Center (NCC) in September
    2004, it became operational in March 2005 on a two-year pilot basis and
    was extended by the Commission for one additional year in July 2006.
    The NCC operates under a contract to Vangent, Inc., from a facility in
    Lawrence, Kansas. For fiscal year 2008, $2.5 million is included in our
    budget for the operation of the NCC. The NCC allows 24 hour access to
    the EEOC and the ability to speak with a live person 12 hours a day,
    five days a week. Since it began taking calls on March 21, 2005, the
    NCC has received more than 960,000 phone calls, nearly 48,000 emails,
    and more than 2,500 faxes and letters from the public. The NCC's
    Customer Service Representatives (CSRs) have handled more than 600,000
    calls in English, Spanish and through the TTY. In fiscal year 2006, the
    first full year of operation, the NCC handled over 500,000 contacts,
    including 284,000 calls answered by CSRs. We expect the contacts
    handled by the NCC to increase by 100 percent in 2007. The remainder
    were handled via Interactive Voice Response (IVR), e-mail, fax, or
    written correspondence. Initial focus was on training, monitoring for
    quality, accuracy, and interpersonal skills. As these have been
    developed, we are now prioritizing actions to increase call volume and
    integrate NCC and EEOC procedures and practices.
        In 2006 the NCC was reviewed by EEOC's Inspector General. The IG's
    report made a number of recommendations that needed to be implemented
    if the NCC was to be a more effective and integrated component of the
    EEOC. Many steps have been taken to implement those recommendations.
    Among the recommendations was the need to increase the call volume to
    meet prior projections. Actions have been taken to increase call volume
    since the beginning of fiscal year 2007. The result is reflected in the
    most recently available monthly report which shows that in March 2007
    the NCC received approximately 65,174 contacts, including calls and
    emails, which projects to almost 800,000 contacts per years. A recent
    (January 2007) report by the National Academy for Public Administration
    found that EEOC has begun to aggressively address shortcomings in the
    NCC's implementation and follow-up and that progress has been
    noteworthy. The NAPA panel also found that the cost of moving the call
    center into EEOC would substantially exceed the current arrangement,
    and that an in-house EEOC-run NCC--staffed with EEOC employees--would
    cost $8 million for the first year and $5.7 million annually
    thereafter. Given the cost to bring the NCC in-house and the fact that
    many improvement-plan initiatives still are being implemented, the
    Panel recommended that EEOC maintain the current arrangement until and
    unless a more detailed, comprehensive cost analysis is conducted.
        Through the Center we have compiled data on the race, national
    origin, gender, and age range of callers and can separate the reasons
    people call into various topics. Among our findings, we now know that
    less than 40 percent of the callers are calling about potential
    charges. As of this month, we will be able to run reports on the bases
    and issues that people call about and show trends by region, race,
    national origin, gender, and age. This information will help us to know
    how to more strategically focus our resources. The NCC is a good
    investment--it allows the public greater access to our agency, permits
    us to analyze trends and other data, and frees up EEOC employees to
    focus on investigation, mediation and litigation. Overall, I believe
    both the IG and NAPA assessments have resulted in an improved system
    that will better serve the Commission. The extension of the NCC will be
    the subject of a Commission vote later this year.
        Repositioning.--The Commission also realigned its field
    organization effective January 2006. This reduced the number of our
    districts, reclassified the status of some offices, and allowed us to
    balance the workload within our districts. This was done without
    closing any offices or reducing staff.
        With the implementation of the field repositioning plan and the
    consolidation of 24 district offices into 15 districts, the agency has
    realized the benefits from being able to redirect more staff to the
    front line duties of enforcement and mediation. In preparing the
    repositioning plan, we looked at the resources EEOC was spending on its
    management and administrative positions. The previous EEOC structure
    was put in place in 1979 when the Commission had approximately 3,800
    employees; whereas in 2005 we had approximately 2,400 employees. We did
    not believe it was prudent to retain a management and administrative
    structure that was designed for a much larger workforce and was
    designed when we did not have the advantages of modern technology for
    our business uses. In fact, in 2006 we opened two new offices in Las
    Vegas and Mobile to provide access to the EEOC in growing and
    underserved areas. Beginning in 2003 we initiated a five-year program
    to more appropriately size our field office space as leases expire,
    with a goal of reducing rent costs by 35 percent. The lease on our
    headquarters building expires in 2008 and we are working with our
    landlord, the General Services Administration, to find a location that
    will meet our current space requirements.
        We are now working on the third of NAPA's major recommendations,
    the evaluation and reorganization of our headquarters structure.
                                   conclusion
        We will continue to review our operations and infrastructure to
    obtain savings wherever we can so that we are best able to place our
    resources where they are most needed. We have been diligent in our
    efforts to do so and to build a sound financial model. We believe that
    the efficiencies that we have in place will in the long term reap
    benefits; however, we cannot and will not lose sight of our current
    posture and the need to continuously align our resources with our
    mission.
        It is essential that we be fully funded at the President's request,
    so that we can maintain staff and deal with the inventory issue to the
    best of our capability. While we are concerned about our rising
    inventory and its impact on our ability to timely investigate charges
    and provide efficient customer service, we are confident that we can
    reduce the inventory and our charge processing time by more efficiently
    utilizing our existing resources.
        Madam Chair, the EEOC cannot fight discrimination in the 21st
    century with the same methods that have been used in the past. Great
    strides have been made in the past four decades, but there is no rest
    for the EEOC. Approval of our 2008 budget is essential to permit the
    EEOC to continue with its vital mission of ensuring that equality
    exists in the American workplace. The citizens of our Nation deserve no
    less. We must continuously work to effectively allocate our resources
    so as to meet our statutory mandates. Madam Chair, we appreciate your
    support and that of the Subcommittee. Thank you for inviting me to
    appear before you today and I will be happy to answer any questions you
    might have.

        Senator Mikulski. Thank you very much for this testimony.
    We are going to vote. The vote will start in about 15 minutes,
    although it's never as calibrated as we all think. And I
    understand my colleague, Senator Shelby, might not return, to
    be able to return. Senator, what I'm going to suggest as a way
    of proceeding that we turn to you and then----
        Senator Shelby. I'll be quick.
        Senator Mikulski. We want you to do what you need to do
    here and then we'll return and when the vote occurs, we'll
    recess, dash over and come right back.

                                OFFICE CLOSURES

        Senator Shelby. Okay. Thank you, Madam Chairman. I'll just
    get right to some of the issues that I raised. In my opening
    statement, I mentioned that I was concerned about the cut in
    State and local funding. You alluded to that. Your budget
    request reduces funding to the State and local offices--it's my
    understanding--by $2 million from the 2007 budget. Will this
    cut cause any offices to be shut down? I mentioned the Mobile
    office, which covers south Alabama, part of Mississippi and the
    Florida Panhandle. We think that's an important office, not
    because it's located in my State. It could be located in
    Maryland or somewhere else but local offices do augment what
    you're doing.
        Ms. Earp. No, sir. We do not anticipate closing any local
    offices.
        Senator Shelby. Okay. Well, that's good.
        Senator Mikulski. Mr. Chairman, what do you mean by local
    office? Are you talking about a Federal office? What do you
    mean?
        Ms. Earp. Well, definitely we don't plan to close any State
    or local offices under the fair employment practices agencies
    but we have no plans, have never considered closing any of the
    Federal offices either.
        Senator Shelby. That's good to know because I don't--if you
    start closing offices anywhere, I don't believe you can carry
    out the mandate that I know you want to do and have the EEOC to
    do as part of your charter and your responsibilities. That was
    my--that's one of my concerns, funding reductions.
        At the time of the release of your 2008 budget request,
    there were only 2,246. That's a decrease of 978 people, which
    seems like a number over a short period of time, especially
    since the backlog of charges has increased, that you mentioned.
    How are these staffing reductions spread across the agency,
    including field offices? Have you worked that out yet and if
    you haven't, will you let us know what you're doing?
        Ms. Earp. Well, we constantly balance the workload against
    the number of people available to do the work but I would be
    happy to submit to you a more detailed----
        Senator Shelby. To the subcommittee, to all of us.
        Ms. Earp. To the subcommittee.
        Senator Shelby. Sure. If you would do this, that would be
    very helpful from my standpoint. It's my understanding that
    there are 2,381 is the actual number of current employees or is
    this a ceiling for the maximum number you plan to employ? Do
    you want to answer that for the record?
        Ms. Earp. Yes, we plan to hire to our ceiling.
        Senator Shelby. You plan to continue to, under your
    leadership, for the EEOC to meet its responsibilities, do its
    job?
        Ms. Earp. Yes, sir, absolutely.
        Senator Shelby. Okay. Well, we have a lot of confidence in
    you. We know you are new on the job but you bring a lot of
    experience to this job and that's what we're interested in, is
    fairness in the workplace, fairness everywhere.
        Ms. Earp. Thank you.
        Senator Shelby. Thank you, Madam Chairman.
        Senator Mikulski. You were quick. Senator Alexander, will
    you be able to come back or would you like to proceed now as a
    senatorial courtesy?
        Okay. Then let me start the questioning and then we'll come
    back with Senator Alexander and if there is a follow up round.
    We want to acknowledge first of all, that the EEOC has been
    flat funded for 5 years. Five years, with an expanding
    population, expanding stress in terms of a variety of forms of
    discrimination and this flat funding has had to take its toll,
    which is one of the reasons we want to have this oversight
    hearing.
        Remember: management, morale, money. Let me get in--in the
    Congress when we passed the continuing resolution, we were able
    to come up with modest increases, particularly in the area as
    Senator Shelby has said, we increased it in State and local and
    also the private sector enforcement.

                               REPOSITIONING PLAN

        But let me get then to the punch line. Over the last 6
    years, there has been a reduction in full-time employees of 543
    staff. Was that--I'm going to talk about what caused the
    reduction and what are the consequences of the reduction,
    meaning the impact. Was the reduction due to the so-called
    right sizing, you know, all that nice private sector vocabulary
    or was it really budget driven when one looks then at the
    backlog and some of the other issues?
        Ms. Earp. I believe that the reduction is multifaceted. We
    stand in the current position today because like many Federal
    agencies, we have had a number of employees for some time who
    were retirement eligible. That's a factor. We also had early
    outs and voluntary retirements in the last couple of years and
    we've had some natural attrition.
        I think if you take all of those together, compared to the
    rising workload, it just makes sense. Over time, we have become
    a smaller agency like many.
        Senator Mikulski. But here's what I find difficult to
    understand. You have a rising workload, a changing population,
    even geographically, which I know you'll want to discuss with
    the field offices, which would seem to me with the backlog
    coming now of 40,000, don't you need more people?
        Ms. Earp. Well, we believe that we can manage for 2008
    within the President's budget. But I would submit, Madam
    Chairman, that the current situation, which some view as a
    crisis, started a number of years ago in the mid-nineties. In
    2002, EEOC----
        Senator Mikulski. We're not--we understand that. But we're
    right here now, to get it right. So we know that the backlog
    has been growing over a number of years. This is not finger
    pointing at an administration. This is trying to pinpoint where
    we are. We now have a backlog that we expect of 54,000 cases, a
    60-percent increase in 3 years. So let me then get to this.
    What does it take? What are your ideas for dealing with the
    backlog? How will we systematically be able to deal with the
    backlog and what do you need to be able to deal with this
    backlog?
        Ms. Earp. Well, we are doing a number of things to gain
    efficiencies and attempt to manage the workload. We continue to
    reassign staff. One important decision that was made recently
    is to manage the agency as if it were a national model. In the
    past, we've been stovepipes--each district responsible for its
    resources and the management of its cases.
        For example, with legal, we will function like a national
    law firm so that work in one area, we move the people to the
    work. That particular district no longer has to be held hostage
    to the limited resources that it has there.
        Senator Mikulski. Yes, but what are the top three things
    that you need? So one is this national model and I'm not sure
    what that means. But what are the top three things to deal with
    the backlog? What do you anticipate the backlog reduction will
    be for this coming year? We know backlogs can't just evaporate
    but we know--so can you tell us the top three things--what are
    your benchmarks and goals? How will you measure improvements in
    the reduction of backlogs? What would be the matrix that you
    would use?
        So what is your plan? What are your top three? What are
    your benchmarks for evaluation and what will be the matrix that
    you will use to evaluate that these suggestions or management
    models are effective?
        Ms. Earp. Madam Chair, because we are finalizing our
    strategic plan, I would really like to provide you with our top
    three benchmarks, and especially our measures at a later time,
    if you would allow me to do that.
        Senator Mikulski. Certainly. We would like the benchmarks
    and we'd like the matrix so then we're all--we all are clear
    then on what are the criteria by which we can evaluate progress
    and we can evaluate--and we can do our stewardship. But what
    are the top three things that you are going to do to eliminate
    the backlog?
        So one is the national model idea.
        Ms. Earp. One is to function on a national model. Number
    two is to have enough savings to be flexible and we are getting
    our savings from managing our rent, managing our attrition
    rates, preparing to relocate the headquarters office, as well
    as right size field offices and to use money saved there. To
    better train our staff is the third.
        Senator Mikulski. So what you're really doing with your
    three ways of reducing backlog is trying to find money
    elsewhere and to come up with savings. Is that right?
        Ms. Earp. We're trying----
        Senator Mikulski. Do you need more people? Or are you--the
    Office of Management and Budget (OMB)--listen, we're not trying
    to embarrass you, please. Are you OMB embargoed and can't tell
    me that?
        Ms. Earp. Yes, ma'am.
        Senator Mikulski. Okay. Well, I think that answers the
    question. If I could come back to the 543, were they in
    particular areas, like law? Were they back office support? Were
    they paralegals? Are there ways that technology can help you do
    things apart from this call center? We'll come back to that.
    Where did you lose most of your people?
        Ms. Earp. Most staff were lost with investigators and
    administrative support staff. Paralegals, clericals, the people
    who are a part of a very people-driven process on the customer
    service end. We've had less loss, I think, with attorneys but a
    lot on the enforcement staff with investigators.
        Senator Mikulski. So really, the front line staff, which is
    where the calls come in and then the people who actually
    initiate, particularly that initial claim and that's where,
    because you've lost investigators, the backlog in the initial
    claims is the one that's growing. Am I correct in that?
        Ms. Earp. Yes.
        Senator Mikulski. And then, of course, investigators need
    what we'll call the back office support, is that correct?
        Ms. Earp. Yes.
        Senator Mikulski. Can you tell me about how many
    investigators you lost and what would that be in terms of a
    budget item?
        Ms. Earp. I can't provide budget information but over a
    period of time, we've lost about 500 employees, the majority of
    those being on the enforcement side of the house versus the
    legal side.
        Senator Mikulski. Right. And enforcement is a word to mean
    the investigation of the complaints, which then determine the
    nature--when the validity of the complaint and the nature of
    the complaint, which meant some could go into mediation and
    some would have to follow our legal procedures, is that right?
        Ms. Earp. That's correct.
        Senator Mikulski. But this is the gateway and then would
    you say that this is also now the choke point in terms of
    creating the backlog?
        Ms. Earp. Yes. The inventory and receipts come in on the
    enforcement side of the house so the inventory grows on the
    enforcement side of the house.
        Senator Mikulski. Okay. My time has expired. I want to turn
    to Senator Alexander and Senator, why don't you proceed?

                           SALVATION ARMY LITIGATION

        Senator Alexander. Thank you, Madam Chairman. I have a
    question on a little different subject. Thank you for coming
    and I say, as I reflect on the discussion you've just had with
    the chairman about the need to allocate to resources and the
    56,000 case backlog. Are you aware of the lawsuit that the EEOC
    has filed against the Salvation Army, alleging that they fired
    two employees for not being able to speak English, according to
    the Salvation Army's policy that its employees should speak
    English in the workplace?
        Ms. Earp. Yes, sir.
        Senator Alexander. I want to ask you about that a little
    bit. As I understand the facts, the Salvation Army has a policy
    that says employees are expected to speak English and that it
    gave two employees who did not, 1 year to learn English and
    then when they didn't, it fired them. Am I to understand that
    any business in the United States cannot have a policy that
    requires its employees to speak our national language?
        Ms. Earp. No, sir. The--and I don't want to say too much
    about the Salvation Army case because it is ongoing. But the
    question, when an employer has an English only standard, as is
    alleged in this particular case, the issue for us is whether or
    not there is a business necessity for that requirement. If the
    charging party, the victim, the plaintiff, is engaged in work
    that doesn't require customer contact that is not a matter of
    health or safety, that there appears to be no legitimate reason
    to require English only, then it becomes unlawful or at least--
    --
        Senator Alexander. Well, whose job is it to prove that? It
    would be the employer's responsibility, right?
        Ms. Earp. Well, the employer has a responsibility to
    articulate for us a business necessity.
        Senator Alexander. Right. So every employer in the country
    has got to come before the EEOC and prove that there is a
    reason for speaking English only. Do you conduct your staff
    meetings in more than one language?
        Ms. Earp. No, sir.
        Senator Alexander. What's the reason for that?
        Ms. Earp. I only speak one.
        Senator Alexander. Well, what about your employees? Do you
    hire employees who only speak English in your staff, for
    example?
        Ms. Earp. No, we have staff that are bilingual.
        Senator Alexander. Well, no--only English. I mean, if
    Senator Shelby were to say, I only hire employees who can speak
    English because we have maybe 100 languages spoken in Alabama
    and I want to make sure that the common language is spoken
    here. Would he have to justify that to the EEOC that he has a
    business reason to do that?
        Ms. Earp. No. I think the circumstances under which we
    would be interested or get involved are very specific and on a
    case-by-case basis. An employer who establishes an English only
    rule has a responsibility to show a business necessity for that
    rule.
        Senator Alexander. Madam Chairman, I only have 2 minutes
    left. I find that an astonishing waste of your time and
    contrary to every effort we're making in the United States
    today to try to have one country. I mean, I've spent the last
    40 years voting for civil rights acts, but the reason was so
    that we could have a single country and there are only a few
    things that unite us.
        One is our common language, English. One is a few
    principles that we learned in the Declaration of Independence--
    I mean, I hardly know where to start with this. The Senate,
    last year, in debating the immigration legislation, declared
    English our national language, which you're now suing the
    Salvation Army to say they can't require employees to speak,
    even though they clearly posted it and employees don't have to
    work for the Salvation Army--the Senate said, we're going to
    give 500 grants to help prospective citizens learn English.
        The Senate said that people have to learn English before
    gaining legal status here. Since 1906, people have had to learn
    English to become citizens of the United States. It's not a
    punitive requirement. It's a requirement to help us make a
    common language.
        We have 28 languages spoken at the school my daughter went
    to. And it seems to me, completely contrary to everything I
    know about the importance of achieving unity in our country for
    us to, in effect, by your lawsuit, require every single
    employer in America to prove business necessity to the EEOC in
    order to require English in the workplace. Some may have to
    worry that if they post that in order to work here, you have to
    speak our common language, English, that they may be sued by
    you if they don't.
        Carlos Ghosn is the head of Nissan. He went to Japan to
    take charge of that company. He requires them all to speak
    English in their meetings because they need a common language.
    I don't know how you can conduct a staff meeting at the
    Salvation Army Thrift Store if people speak 15 different
    languages. A 9-1-1 telephone call wouldn't be useful to a
    Chinese person if the person who answered the phone spoke
    Spanish.
        So I would like to respectfully ask that if you have a
    backlog of 56,000 cases, that you put your resources on
    something other than harassing the Salvation Army Thrift Store,
    which is a nonprofit, charitable organization that relies on
    contributions for having to hire lawyers to defend for
    requiring their employees to speak our common language. I can't
    imagine why the EEOC would do that. And if necessary, I'll
    introduce legislation to permit employers in the United States
    to require their employees to speak our common language in the
    workplace. I never had imagined that might be necessary but if
    you persist in this, then I intend to do that.
        Senator Shelby. I just want to ask the chairperson, what is
    the origin of this lawsuit, assuming that what he is asking is
    factual and I believe, to me, that's--you know, we're promoting
    English as the language that unifies us. It binds us together.
    I think if you're doing this, you're going down a path that
    Congress is going to hit you hard on and I believe if you're
    doing this, I don't know what the legal basis of that is. I've
    never heard of such.
        Ms. Earp. EEOC has had a longstanding policy that
    essentially says when an employer takes an action that could be
    construed as an action based on that person's ethnicity, their
    race or their gender, that the employer has a responsibility to
    articulate a reasonable, legitimate business necessity. In
    other words, an employer can't say to someone, you can't speak
    your foreign language, your native language on the job unless
    there is a business reason. If it were for health, a nurse, if
    it were for public safety, a police officer, then it is
    required. But if the person is cleaning your floor or if the
    person is pressing your clothes or in this case, merely folding
    clothes but not having--allegedly not having any contact with
    the public. There appears to be no business reason to deny that
    person the right to speak their native language.
        Senator Shelby. Are we talking about working or speaking?
    You know, why--I personally wouldn't hire anybody in my office
    here or anything else, any other business if they couldn't
    speak English because English is the business language of this
    country. They couldn't help me. They couldn't help. I think
    you're missing the point.
        Senator Mikulski. Before the Chair responds, I'm going to,
    upon the completion of this line of questioning, the
    subcommittee will stand in recess and the first of the three to
    get back that wants to continue questioning can pick up on it.
    I'm going to excuse myself now. Did you want to?
        Senator Alexander [presiding]. Madam Chairman, that will be
    all my questions. I would just ask the Chairman in light of her
    56,000 case backlog and the commitment of this country to
    English as our national language, to think very carefully about
    whether this not only is a wise use of resources, but to
    consider that we've required every new citizen in this country
    to learn English since 1906. That's not discrimination. That's
    a form of national unity and we seek ways to encourage people
    not to learn English, not to learn it at the beginning of the
    previous century.
        Organizations all over America required the learning of
    English so that we could be one country, so we could talk with
    one another and that was one way we became Americans. Our oath
    of citizenship actually renounces where we've come from and
    says we've become an American and 650,000 people take it this
    year and they don't get to be Americans unless they speak
    English.
        I introduced legislation last year the Senate passed to say
    you can become a citizen a year earlier if you become
    proficient in English to try to send a signal of the importance
    of our common language. So it seems to me that if a company
    posts this and believes it is important to speak the common
    language, to have an integrated team, that it shouldn't be
    required to hire lawyers and justify to the EEOC why that
    company requires its employees to speak our common language in
    the workplace. So I hope you'll think carefully about this and
    about the relative value of it in terms of all the other things
    that you have to do.
        Ms. Earp. Senator, may I seek a private meeting with you at
    some point and perhaps your staff, to share the policies and to
    further discuss what your concerns are?
        Senator Alexander. I'd be happy to do that, Madam Chair and
    now if you'll excuse me, I'm going to join my colleagues and go
    vote.
        Ms. Earp. Thank you.
        Senator Mikulski [presiding]. The Subcommittee on Commerce,
    Justice, Science is officially reconvened and continues its
    oversight hearing on the Equal Employment Opportunity
    Commission.

                               REPOSITIONING PLAN

        Madam Chair, I want to go into questions about the field
    offices and the results of the National Academy for Public
    Administration (NAPA) study. Ordinarily, I'm a big fan of NAPA
    studies. When I was both the Chair and the ranking member of
    VA/HUD, we used--Senator Bond and I used NAPA a lot. In fact,
    it helped start one of the initial reforms of the Federal
    Emergency Management Agency (FEMA) under President Bush One.
    But I'm not so sure about this NAPA set of recommendations and
    the field studies and the track it put us on and now where we
    are with that.
        As I understand it, this resulted in--the number of
    district offices was reduced from 23 to 15. Is that correct?
        Ms. Earp. Yes.
        Senator Mikulski. And are there plans for further
    reductions now?
        Ms. Earp. No.
        Senator Mikulski. So you feel this is it?
        Ms. Earp. The field repositioning has been effective since
    January 2006. For now, things seem to be working well. There
    are no plans to further realign the field although we are
    looking at restructuring headquarters.
        Senator Mikulski. Well, we'll come back to headquarters
    because there is a lot in the--provided in the news about the
    headquarters.
        Let me go to where I'm concerned about the field offices
    and then I'm going to talk about the Maryland field office,
    which put us in a very prickly relationship. Now, when the
    Equal Employment Opportunity Commission embarked upon the
    implementation of the reduction of the number of district
    offices, the authorizing committee that Senator Kennedy chaired
    and I was a member, voiced very strong opposition to that with
    your predecessor. So again, this is something again that you've
    inherited and we had very serious concerns about which offices
    were going to be downsized, not only numerically but in terms
    of stature and in terms of the focus of what their work would
    be and you're familiar with the district office, the local
    office has very different functions.
        We were ignored and our problem is this--here's our
    national problem. Our national problem is number one,
    population centers are changing. So as you know, the growing
    populations, particularly in our border States. If our western
    Senators were here, Texas, New Mexico, of course California--
    with that is bringing other kinds of challenges on
    discrimination.
        Also we have places in our country where there are centers
    of large Muslim populations. They feel that because of dynamics
    in the larger society, they are facing discrimination from the
    kind of clothes they could wear in the workplace to overtly
    being shut out of possible jobs.
        So my question to you is the framework that we now have for
    district offices demographically outdated? And if you don't
    know the answer to that, that's okay because I'm going to get
    to another part of that. But do you see? This study was done in
    2002. We're in a very different world order now, in many
    different ways.
        I'm concerned that your location of your field offices--
    we're not talking about closing any but really helping you
    meet--we have a saying. I'm a professionally trained social
    worker. I know you come from a background of Federal agencies--
    to meet people where they are, not where you want them to be.
    You have to meet people where they are, not where you've got
    your field office.
        So my question is, that in the analysis of where your cases
    are coming from, where your analysis is with the new demography
    of our country, is in fact the need for more field offices,
    more strategically located on the basis of the complaints that
    are coming. In other words, where the dynamics seem to be and
    also where the population centers are that seem to be
    experiencing significant barriers in terms of employment and
    employment discrimination. Do you see where I'm heading?
        Ms. Earp. I do and I have two responses. One response is,
    we think for the short term that the decision to open the
    southern office in Mobile and the western office in Las Vegas,
    we're right on--that they were consistent with the demographic
    trends.
        My longer answer is, one of the positive things about the
    National Contact Center is it allows us to capture the data
    from where the calls come in, not just the issue raised but
    what part of the country right down to the zip code, that call
    came in from. So in the long term, I think that we will be
    better able to refine where offices are located.
        The only other point that I would make, Madam Chair, is we
    have historically tried to put the offices in a transportation
    center because often charging parties don't own cars. Sometimes
    they are not the highest socioeconomic rungs so it has been
    important to at least have those offices where public
    transportation is accessible.
        Senator Mikulski. Well, first of all, I think that's a very
    important goal and we'll come back to again, to the Maryland
    situation. But to be sure I understand the answer to your
    question, you want to use the data from the call center as a
    way of analyzing trends, both in the nature and the type of
    complaint that you're getting, because it's supposed to be
    gateway and number two, you want to look at it in terms of
    where is the volume coming from, to then assess whether you
    need more field offices. Is that correct?
        Ms. Earp. Well, we have the capability of looking at that
    data over time to see exactly what the issues are and where the
    issues are coming from. I don't think that we have given, at
    this particular point, any study or thought to opening
    additional field offices. Obviously that requires a lot of
    thought, a lot of deliberation, a lot of consultation with----
        Senator Mikulski. But I'm thinking about it. And I believe
    that members of the subcommittee are thinking about it because
    one of the hallmarks of our country is the fact that if you
    feel you are discriminated against, you have legitimate
    channels for redressing grievances. There are countries that
    are facing challenges, European Union (EU) countries with
    immigrant populations where they feel that they are frozen in
    place and they become targets of recruitment for radical
    organizations.
        We, on a bipartisan basis, believe in the opportunity
    ladder, which I believe you do believe in and you yourself, as
    I, have lived and benefited from this ladder. At the same time
    there must be a place to redress your grievances. In this
    country a person should not feel that you are frozen in place
    because of what your last name looks like or the clothes you
    wear or the accent that you might bring into the marketplace
    and if you feel that, if you feel you have a legitimate place--
    you have a place to take a legitimate grievance and that
    grievance will be met in a fair, open, consistent way, it's our
    way. It's the American way. And because it is an American way,
    that's why we've been able to, every generation, right or
    wrong, in every generation, welcome these new people.
        So you see why we feel--it's not about field offices and
    it's not about my district or that district. It's about America
    and it's about having the opportunity to redress grievances.

                                    FUNDING

        I was looking at--first of all, I'm very disturbed that the
    EEOC has been flat funded for 5 years. We also know it's been
    underfunded for a number of years so we're not pointing to an
    administration though this one has kept it flat funded while
    other benefits went in other areas.
        So we're looking at that. I was going to suggest a study
    but before we get into that, what we will then ask for you and
    your team to think about it. Because if the call center is
    going to be your tool, then the call center has got to work
    right and I don't have a lot of confidence right this minute in
    the call center. So let's put this on hold because I'm going to
    come back to the field offices.
        But you see where we are heading. It is to mission and to
    purpose. It's not about bureaucracy and these questions are
    meant so that we can have--we want America to be America.
    That's what we want. We want the Constitution and its laws to
    be able to be enforced and we want the people who are asked to
    do that to be in the right place with the right number of
    people, with the right tools to do this. That's where we're
    heading with this.

                          DOWNSIZING BALTIMORE OFFICE

        Now, let me go to the field offices. My favorite topic of
    course, is Baltimore. We got into a very prickly relationship
    with your predecessor and we got into a prickly one for several
    reasons. One, we felt we were not listened to and I'll give the
    reasons why we raised our challenges to the downsizing or down
    grading of the Baltimore office.
        Second, we felt that one, there was a promise made to take
    a look at it, which was never fulfilled. And number three, we
    felt that it was overall symbolic of what was felt by many
    employees, an imperial management style. So you need to know,
    that's where all the prickly comes from. Okay?
        Now, let's start with not being heard. One of the reasons
    we were concerned about the Baltimore District Office is not
    because it's Baltimore and Senator Mikulski's going to fight
    for one more thing and don't close this and don't downgrade
    that. Part of that would be true. You know me. You're my
    constituent. So you know where we would be.
        But I will go to the Baltimore office and what its job is.
    As you know, Maryland is the home to Federal employees. You
    yourself worked at, I believe, at NIH.
        Ms. Earp. Yes.
        Senator Mikulski. As well as other Federal agencies and I
    believe you developed certain diversity initiatives, which were
    much needed at the agency. As you know, it's had its own
    challenges with equal opportunity and you see, that's my whole
    point that within the National Capital region, not only
    Baltimore but also Northern Virginia.
        We are home to probably the largest number of Federal
    employees than anywhere in the United States of America.
    Because of that and in the Baltimore area, we're the home to
    significant ones, like the Social Security Administration
    (SSA). There are over 15,000 people who work there because it
    functions 24/7. You just don't do Social Security--it's not
    only the people who take the claims--all of that processing,
    which means the right check to the right person right on time,
    goes 24/7.
        That Social Security office in and of itself has an
    incredible history. When Lyndon Johnson was President and he
    said that the Federal Government would be the model employer,
    many African-Americans for the first time, felt that if you
    were talented, you could go to work for the Federal Government.
    So people like Kurt Schmoke's dad, with a background in
    chemical engineering, could go to work at Aberdeen. Men and
    women who had experience in law or business could come to
    Social Security.
        If you came to me with the Woodlawn community and saw the
    people who work there and people who retired. They worked hard.
    They did the right check at the right amount to the right
    person at the right time but they also, because they had
    opportunity at Social Security, could move on up, raise a
    family, send their kids to school and make a life. I only use
    that as an example.
        What we know in the Baltimore area is that because of the
    number of Federal employees that they needed a place to go. So
    just even in that larger metropolitan area, then also we are in
    tremendous economic change with populations. Twenty-five
    percent of our population in the State is African-American,
    still facing redlining and sidelining.
        As you know, sometimes it is sidelining, not the overt
    discrimination and you are an expert in the field. So we were
    concerned that because they eliminated the regional attorneys,
    they eliminated 20 jobs and then they downsized, telling
    essentially the Baltimore metropolitan area, go to Washington.
        But going to Washington along with the Washington
    metropolitan demands on EEOC, which again, looking back from
    your National Institutes of Health (NIH) hat, you know the
    stresses and strains and now you see it from a management
    capacity. If Webb and Warner were here, they would be talking
    about the Northern Virginia area. So you see why we didn't want
    Baltimore downsized? But we weren't heard. We were not heard.
    Then we were told, oh, I will take a look at it and then we
    were told that it would be kept a district office. That word
    was broken with me. Okay? And it was actually broken with
    Senator Kennedy, who also was aware of this.
        So it seemed like the team was clueless about being
    involved with Congress. Now, we can get involved in a lot of
    tying you up into knots and into all that. I don't want to do
    that. I believe it is new leadership and it's time for a new
    start. And I think that's what you want. Am I right?
        Ms. Earp. Absolutely.
        Senator Mikulski. Do you want to respond to what I've said
    so far?
        Ms. Earp. Yes. Let me start----
        Senator Mikulski. I went through this narrative because I
    felt--one, because again, we have national responsibility but I
    want to use my situation as a cameo because other colleagues
    have some of the same questions.
        Ms. Earp. Well, first of all, Madam Chair, let me say, I
    hear you. I hear you loud and clear and I thank you for giving
    me an opportunity to demonstrate my leadership and my
    commitment. I start by saying, I respect the role of the
    legislative branch, and obviously my Appropriations Committee,
    the subcommittee, I respect tremendously.
        I intend to operate in a spirit of transparency and one of
    comity and respect for your role and to seek the subcommittee's
    advice and guidance on changes, proposals, activities at the
    Equal Employment Opportunity Commission and I would also say, I
    am a political appointee today but I have 20 years prior to
    today, of being a career civil servant. I don't think anyone
    who has ever worked with me would describe me as being
    imperial. My style is open----
        No, no, no--I absolutely agree. I say that only as an
    example of what the changed environment is at the Commission
    today.
        Senator Mikulski. I want to talk about a way forward. First
    of all, I'd like to talk about the National Capital region and
    the tremendous changes that are coming to the region and then
    the fact that I would like an evaluation of the field offices
    and so on, in the National Capital region.
        The National Capital region, to me, is Northern Virginia,
    really up to around Aberdeen Proving Grounds. Okay? And what is
    happening is that base realignment and closure (BRAC) is
    coming. The base realignment and with that means more jobs.
    There are more jobs that are coming to Fort Belvoir than have
    ever come before.
        If we look at Aberdeen, Fort Meade, Naval Bethesda, these
    are all--Walter Reed is consolidating but also more coming to
    Aberdeen and to Fort Meade. We estimate that anywhere from
    10,000 to 30,000 new jobs are going to be created by base
    realignment that either will be direct civil servants jobs or
    private sector jobs and particularly in the area of security.
    Along with that will come support services in law, real estate,
    et cetera. So the good news is, our economy will continue to
    boom.
        At the same time, there will be new populations coming and
    some directly related to Federal employment. What I would like
    is to evaluate what it is that the EEOC needs to do to be ready
    because this was a 2002 NAPA study, which is no longer relevant
    to what the population is or won't be or whatever, particularly
    for those who have responsibility to Federal employees or
    private contractors funded by the Federal Government.
        Because if we're not the--you know this--if we're not the
    model employer, how do we go to the private sector? If we are
    not the best, then how can we ask them to do this? So, this is
    why I would like to both--we don't want to micromanage the
    nature of the study. We want to work with you in a very
    collegial way to take a look now at the National Capital region
    and what is here, both in public and private areas and how we
    need to reassess in a post-2002 world. Do you follow me?
        Ms. Earp. Yes.
        Senator Mikulski. So we can get at what do we need and
    where do we need it and is it really dysfunctional to get
    people who are working in certain areas to have to come to a
    Washington office that is already overburdened and overstressed
    because it's the Washington office. It's the mother ship
    office.
        Ms. Earp. Madam Chair, would you anticipate that we would
    fund this study out of the 2008 budget?
        Senator Mikulski. You mean fund the study? For whatever I'm
    going to ask you to do, I will make sure you have the money to
    do it.
        Ms. Earp. Thank you.
        Senator Mikulski. Okay? No, because we are--I will come
    back to the fact that I think I and others are concerned about
    the flat funding of the EEOC. We acknowledge that you've had to
    forage for funds so we're not--anything we're going to ask you
    to do, we will be a pay as you go subcommittee. Okay? That will
    be my contract with you. What I need back from you then is us
    to find out what it is that we need so we are focusing on the--
    I'm a data driven lady. So on the basis of sound data that has
    had rigorous intellectual analysis about what is it that we
    need, even if it takes us a while to get to it but we'll know
    then what we need. And we can discuss whether that should be
    done internally or done externally. Okay?
        Because I come back to the fact that Maryland--we get
    casework calls but Maryland constituents are complaining about
    their complaints not being fully investigated. They feel that
    they are turned away early--that for a variety of reasons, they
    don't feel that their complaints are being rigorously
    investigated.
        So what we want to be able to do is look not only at
    Baltimore but the Capital region, looking at BRAC. As I said,
    just in Maryland alone, over 40,000 jobs but they really won't
    be coming until 2009 and 2010. We can just take a look at what
    will come. We also know that--so that's where, that's kind of
    where we are. Does that sound like a good way to go?
        Ms. Earp. Yes, ma'am.

                              NATIONAL CALL CENTER

        Senator Mikulski. Now, this takes me to the call center.
    You know, I understand why NAPA recommended the call center but
    we were really concerned because the Federal Government has not
    had good experiences with national call centers, whether it has
    been the Equal Employment Opportunity Commission, whether it
    has been the Immigration Service call center and so on.
        And what we were concerned about that with this 2-year
    contract, that with all the work that needs to be done, that
    they only agreed to 36 jobs. They got 7 days of training. They
    had training and experience in civil rights law. Calls never
    reached to the volume that EEOC predicted. I do acknowledge the
    facts that you have presented to the subcommittee seem to be
    different than what we heard even say, 3 months ago, about this
    call center.
        But to us, the call center has never lived up to its
    promise. We're concerned about the fact that though we say it's
    24 hours, it's really an answering machine, I believe, so could
    you tell me what you want to do with this call center? Because
    we're not happy with it. And yet, you're going to rely on it to
    be--play a very important role and then also to tell you
    trends.
        Ms. Earp. I would absolutely stipulate that the call
    center, the National Contact Center got off to a rocky start.
    But it is so dramatically improved from its beginnings in March
    2005. The call center currently will answer the phone in an
    average of 1 minute. There are times that the wait is somewhat
    longer but on average, in 1 minute. It allows us to track data,
    to do monitoring and the question about training for the
    customer service representatives--they receive the same
    training that we give brand new investigators.
        Senator Mikulski. When did you do that? When was all that?
    That's not what we were told. We were told 7 days of training.
    I think you give your investigators more than that.
        Ms. Earp. Not initially.
        Senator Mikulski. You mean your investigators only get 7
    days of training in civil rights law?
        Ms. Earp. They get 1 week of basic training. Now the thing
    with investigators is, we have an opportunity over time, to
    refine that training and they're on the ground so they get to
    practice their skills. But the customer service representatives
    are not responding to in-depth inquiries. We think that they
    have sufficient training to do that first response to the
    caller coming in. It is--despite the problems in the beginning,
    it is admittedly substantially improved today.
        The issue is, if we don't have a national way to answer
    phones of some sort, either the one that we're currently
    working with or one that is inside, we are going to be in a
    crisis because they answer more than 600,000 calls for us,
    which frees up--which frees up investigators and attorneys to
    do the real jobs that they are hired for.
        Senator Mikulski. You know, you and I could go back and
    forth on the call center and I don't know where it would take
    us. Whenever I ask a question, I always wonder, what's the
    destination? In other words, where am I going? What I--I want
    to acknowledge the validity of the need for a call center.
    Okay? So we understand that.
        The question is, is this call center really operating the
    way it should and what all does it need to be run effectively?
    I'm not disputing what you are saying. We could spend a lot of
    time going back and forth but I feel that I need an independent
    analysis of the call center. This is not being provocative with
    you. But where we then would have some type of document, again,
    for a way forward.
        So you see where I'm heading with the EEOC? We've given the
    EEOC a forum that they have not had in a number of years. I--we
    checked our records. We can't find when was the last time this
    subcommittee asked the EEOC to come and tell us their story and
    that we could share this.
        So this is one of the reasons we wanted to because our
    accountability and oversight is to see what is our job and then
    what is your job and again, for the way forward. So where I am,
    because we could talk about headquarters, et cetera, is to be
    sure that we have, for the need for the management reforms
    necessary, we're going to be looking at a way of getting an
    independent analysis.

                         HEADQUARTERS RELOCATION PLANS

        I'm going to come back to this in 1 minute but please tell
    me, tell me about this headquarters situation. I read that you
    are moving. I read that people don't like the fact that you're
    moving. I read they don't like where you're moving. We wonder
    about--do you have to move? What is it going to cost to move?
    Is this something that will take a lot of time, energy and be a
    distraction from the mission? Do you want to talk to us about
    the move?
        Ms. Earp. Well, change is always difficult and a move like
    this one--I was actually working for the Commission when the
    lease was signed on the building that we're currently in and I
    remember some employees back then not wanting to move from
    Columbia Plaza, which is where we were at the time. So the move
    is difficult.
        But in terms of managing our resources, we believe that a
    move is necessary. The Commission has factored into its budget
    process for the last 5 years, savings from rent. We moved the
    Washington field office into the headquarters building 1 year
    ago and immediately saved $500,000.
        So the plan for some time has been as leases expire, to
    right size the office. We've lost employees so we don't need as
    much space. So the short answer is, yes, we think that we need
    to move, not only because we don't need as much space as we
    currently occupy but because the current landlord doesn't
    really want us to stay. He really wants to go back commercial
    with that building.
        The General Services Administration (GSA) has served as our
    agent in this process. They effectively recommended a spot to
    us, which our very enterprising employees are speculating about
    where it is but really, because of the Procurement Integrity
    Act, we're not even at liberty to say exactly what the location
    is.
        Senator Mikulski. You mean I have to go into a classified
    hearing like I would with the Federal Bureau of Investigation
    (FBI) to find this out?
        Ms. Earp. Well, I----
        Senator Mikulski. No, I understand. But what you're saying
    is you have to move?
        Ms. Earp. Yes.
        Senator Mikulski. And that the landlord has told you to
    move?
        Ms. Earp. Essentially, the lease expires next year and he
    is----
        Senator Mikulski. The lease expires when?
        Ms. Earp. July 2008.
        Senator Mikulski. So it's July 2008, not July 2007. Okay.
        Ms. Earp. No but the process to plan for a move when you
    have technology, you have case files, you have to notify the
    public. We thought that we needed to get started. In fact, I
    feel we're starting a little bit late because we're only giving
    ourselves just a little more than 1 year when we probably
    should have had as many as 18 months to prepare.
        Senator Mikulski. Well--but you are working with GSA?
        Ms. Earp. Yes.
        Senator Mikulski. Because all the street buzz is that you
    were acting on your own.
        Ms. Earp. Not at all.
        Senator Mikulski. Kind of like drive-by buying.
        Ms. Earp. No.
        Senator Mikulski. So you're not a drive-by buyer for a new
    Federal----
        Ms. Earp. No, ma'am.
        Senator Mikulski. Well, I think again, we're always
    concerned about the process and the integrity of the process.
    As long as EEOC feels that it has to move and it is working
    with GSA that really is along the path that the subcommittee
    would want to go.
        It's now 11:30. We have many other questions, which we will
    submit for the record because we are--I'm due on the Senate
    floor for speaking on drug safety.
        But I think this has been a very informative and
    constructive hearing but where I want to go forward is to
    really get a picture now of where is the EEOC? And I'm going to
    ask for--and I want you to know, I'm not now being--I don't
    want to be viewed as pugnacious, but I am going to ask for a
    Government Accountability Office (GAO) audit of EEOC because I
    want to get a sense of what was done.
        And what they would recommend needs to be done, what was
    the financial impact of restructuring and ultimately, what does
    this mean in terms of enforcing our civil rights? And we'll
    look to your leadership team too, to discuss what additional
    studies do we need to do in addition to this, to see where EEOC
    needs to go.
        This is the 21st century and we are righting the wrongs of
    so many centuries, in terms of the mission of this agency, yet
    we have new populations and new challenges and new other ways
    of discrimination. You said you were a career employee for how
    long?
        Ms. Earp. Twenty years.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Mikulski. Twenty years. So you came in 1987. For
    those in 1977, it was another form of discrimination. For those
    first employees at the Social Security Administration, they had
    faced another kind, et cetera, et cetera. And we're just to
    make sure that the mission stays the same but we have new
    contemporary challenges. So we want to make sure that you're in
    the right place, meaning you are located in the right place
    with the right number of people, with the right resources so
    that we do the right thing by the people. So that's where we
    are.
        [The following questions were not asked at the hearing, but
    were submitted to the Commission for response subsequent to the
    hearing:]
               Questions Submitted by Senator Barbara A. Mikulski
                                    backlogs
        Question. How can EEOC meet its mission when backlogs continue to
    grow and the organization cuts staff?
        Answer. The Commission is keenly aware of the problems associated
    with a growing inventory of charges. Notwithstanding this challenge,
    the agency has and will continue to fulfill its mission of eliminating
    unlawful employment discrimination based on age, disability, race,
    color, sex, national origin and religion. We wish to put our rising
    inventory and other challenges in perspective. In 2006, during the last
    fiscal year, EEOC successfully mediated 8,200 charges--the most in EEOC
    history; resolved (closed) 74,000 charges filed by members of the
    public; processed to closure 5 Commissioner or systemic charges;
    recovered more than $274 million for victims of discrimination through
    administrative and legal enforcement; and filed 371 new lawsuits on the
    merits. Additionally, the agency secured, in thousands of cases, non-
    monetary relief such as changes in personnel policies, reasonable
    accommodations and modifications to employment testing. All of this was
    accomplished with existing staff.
        It is true that over the last year, EEOC has eliminated several
    managerial positions. As senior individuals have left the agency, their
    specific jobs were not filled but associated savings were allocated to
    filling front line investigator, trial attorney and mediator vacancies.
    At present, EEOC hires managers only for those positions that are
    critical to the success of the agency mission, but we continue to
    conduct hiring of groups of investigators and trial attorneys. The
    National Contact Center is also producing efficiencies. Our front-line
    enforcement staff now can work on cases uninterrupted rather than
    having to respond to general inquiry calls, which number nearly 700,000
    calls annually. Thus, staff are focusing on the jobs they were hired to
    perform.
        The Committee can be assured that EEOC will continue to manage our
    resources effectively, increasing supervisory spans of control,
    eliminating managerial layers and training our staff in new
    technological developments. We are most fortunate to have a talented,
    highly-motivated workforce so that we can continue our mission of
    eliminating unlawful employment discrimination ``root and branch''.
        Question. How is employee morale at EEOC?
        Answer. The Partnership for Public Service reported in their ``Best
    Places to Work in the Federal Government 2007 Rankings'' that when
    compared to 30 large agencies, EEOC ranked 24th. The EEOC ranked 2nd in
    Employee Skills/Mission match in this report.
        Based on the ``2006 Federal Human Capital Survey'' conducted by the
    Office of Personnel Management, EEOC rated 21st on Job Satisfaction out
    of 36 agencies.
        Question. How many cases, on average, does a single EEOC
    investigator handle at the same time?
        Answer. Over the last 5\1/2\ years, the average workload per
    investigator based on end of year data has been approximately 40
    assigned charges. However, as the chart below indicates, during the
    period in question, the average workload has increased steadily from a
    low of 28 charges per investigator assigned in 2002 to a high of 63 at
    mid-year 2007.

    ----------------------------------------------------------------------------------------------------------------
                                                                      Pending End Inventory          Investigators
                                                                ---------------------------------      Assigned
                                                                                                 -------------------
                                                                   Total      ADR    Enforcement             Charges
                                                                                                    Total      Per
    ----------------------------------------------------------------------------------------------------------------
    2007 \1\...................................................    45,943     6,997      38,946        619        63
    2006.......................................................    39,946     6,485      33,461        653        51
    2005.......................................................    33,562     5,700      27,862        711        39
    2004.......................................................    29,966     5,289      24,677        730        34
    2003.......................................................    29,368     5,229      24,139        785        31
    2002.......................................................    29,041     5,540      23,501        829        28
                                                                ----------------------------------------------------
    Average....................................................    34,638     5,873      28,764        721        40
    ----------------------------------------------------------------------------------------------------------------
    \1\ Mid-year data.

        Question. How many support personnel help a single investigator
    handle his or her cases?
        Answer. The number of support personnel varies from office to
    office depending on the on-board resources. Most field offices have an
    Investigator Support Assistant (ISA) on-board. See Attachment I for
    breakout of ISAs and other support personnel by office. The ISA
    performs a range of investigator-related duties that includes providing
    pre-charge counseling to potential charging parties. In some field
    offices, ISAs perfect charges received in the mail. Field support
    personnel also handle a large percentage of information calls from the
    public.

                                      ATTACHMENT I.--FIELD STAFFING--AS OF 5/16/07
    ----------------------------------------------------------------------------------------------------------------
                                                                                             Investigator
                District                         Office              Office   Investigators     Support     Support
                                                                     Total                       Assts       Staff
    ----------------------------------------------------------------------------------------------------------------
    Atlanta.........................  Atlanta....................         75           35              4          10
                                      Savannah...................          9            5              1           2
                                                                  --------------------------------------------------
          Atlanta Total.............  ...........................         84           40              5          12
                                                                  ==================================================
    Birmingham......................  Birmingham.................         67           25              4           9
                                      Jackson....................         26           14              2           6
                                      Mobile.....................          2            1              0   .........
                                                                  --------------------------------------------------
          Birmingham Total..........  ...........................         95           40              6          15
                                                                  ==================================================
    Charlotte.......................  Charlotte..................         47           13              1           6
                                      Greensboro.................          8            5              0           1
                                      Greenville.................         11            6              0           2
                                      Norfolk....................         15            5              1           3
                                      Raleigh....................         18            7              0           4
                                      Richmond...................         17            6              0           2
                                                                  --------------------------------------------------
          Charlotte Total...........  ...........................        116           42              2          18
                                                                  ==================================================
    Chicago.........................  Chicago....................         85           36              4          11
                                      Milwaukee..................         35           11              1           5
                                      Minneapolis................         17            6              1           4
                                                                  --------------------------------------------------
          Chicago Total.............  ...........................        137           53              6          20
                                                                  ==================================================
    Dallas..........................  Dallas.....................         64           21              2          10
                                      El Paso....................         16           10              0           2
                                      San Antonio................         50           20              1           5
                                                                  --------------------------------------------------
          Dallas Total..............  ...........................        130           51              3          17
                                                                  ==================================================
    Houston.........................  Houston....................         67           27              0           9
                                      New Orleans................         36           11              2           6
                                                                  --------------------------------------------------
          Houston Total.............  ...........................        103           38              2          15
                                                                  ==================================================
    Indianapolis....................  Cincinnati.................         14            7    ............          2
                                      Detroit....................         40           16              1           5
                                      Indianapolis...............         73           30              2          11
                                      Louisville.................         19            8              1           4
                                                                  --------------------------------------------------
          Indianapolis Total........  ...........................        146           61              4          22
                                                                  ==================================================
    Los Angeles.....................  Fresno.....................          3            1              0   .........
                                      Honolulu...................          7            3              0           1
                                      Las Vegas..................          6            2              0           1
                                      Los Angeles................         56           15              1           8
                                      San Diego..................         12            5              0           2
                                                                  --------------------------------------------------
          Los Angeles Total.........  ...........................         84           26              1          12
                                                                  ==================================================
    Memphis.........................  Little Rock................         24           12              0           3
                                      Memphis....................         46           13              0           8
                                      Nashville..................         21           11              1           3
                                                                  --------------------------------------------------
          Memphis Total.............  ...........................         91           36              1          14
                                                                  ==================================================
    Miami...........................  Miami......................         72           32              2           7
                                      San Juan...................          9            4              1           2
                                      Tampa......................         28           16              1           5
                                                                  --------------------------------------------------
          Miami Total...............  ...........................        109           52              4          14
                                                                  ==================================================
    New York........................  Boston.....................         20            7              1           4
                                      Buffalo....................         10            7              0           2
                                      New York...................         72           20              1          10
                                      Newark.....................         14            6              1           4
                                                                  --------------------------------------------------
          New York Total............  ...........................        116           40              3          20
                                                                  ==================================================
    Philadelphia....................  Baltimore..................         44           13              2           7
                                      Cleveland..................         48           14              3           9
                                      Philadelphia...............         64           21              0           8
                                      Pittsburgh.................         23           12              2           4
                                                                  --------------------------------------------------
          Philadelphia Total........  ...........................        179           60              7          28
                                                                  ==================================================
    Phoenix.........................  Albuquerque................         20            8              2           4
                                      Denver.....................         45           14              1           7
                                      Phoenix....................         58           21              1           9
                                                                  --------------------------------------------------
          Phoenix Total.............  ...........................        123           43              4          20
                                                                  ==================================================
    San Francisco...................  Oakland....................          3            2              1           1
                                      San Francisco..............         53           10              1           6
                                      San Jose...................         10            4              1           2
                                      Seattle....................         40           12              2           6
                                                                  --------------------------------------------------
          San Francisco Total.......  ...........................        106           28              5          15
                                                                  ==================================================
    St. Louis.......................  Kansas City................         19           10              1           2
                                      Oklahoma City..............         20           11              1           3
                                      St. Louis..................         40           15              1           6
                                                                  --------------------------------------------------
          St. Louis Total...........  ...........................         79           36              3          11
                                                                  ==================================================
    Washington......................  Washington.................         32            4              4           8
                                                                  ==================================================
          Field Total...............  ...........................      1,730          650             60         201
    ----------------------------------------------------------------------------------------------------------------

        Question. How many front-line staff do you have in each area office
    to take initial complaints?
        Answer. The chart in Attachment I provides an office-by-office
    breakout of the numbers of investigators, ISAs and support staff, all
    of whom may perform charge intake duties. The chart also reflects the
    overall total staff (both enforcement and legal) for each office.
        Question. Can you provide the Committee with a strategic plan that
    includes benchmarks for reducing EEOC's backlog and improving morale?
    (OCH)
        Answer. A copy of our current strategic plan (2007-2012) is
    attached. Many of the measures contained in that plan are to be
    determined. A revised strategic plan with specific performance measures
    is currently under development and will be voted on by the Commission
    when completed. We will of course share our plan with you when it is
    completed and approved.
        With regard to employee morale, as part of our current strategic
    plan we are improving our strategic management of human capital. The
    EEOC has completed key steps toward developing and implementing a human
    capital initiative. Planning for human capital needs is more important
    than ever. Our human capital strategic plan guides our agency's
    actions, including:
      --Revising our performance management system for executives and
            managers to link their performance with the agency's mission
            and goals.
      --Developing and sustaining leadership and supporting succession
            planning through the agency's Management Development Institute,
            an umbrella program addressing managerial needs of supervisors
            and executives.
      --Participating in the Office of Personnel Management's human capital
            surveys and implementing regular internal surveys to identify
            employee satisfaction with human capital management and
            developing action plans based on an analysis of feedback.
      --Identifying and quantifying mission critical competencies for key
            positions, including investigators, attorneys and mediators,
            developing multi-year training plans to address any
            organizational gaps.
      --Closing gaps through individual development plans, mentoring,
            training, rotational assignments and other staff development
            initiatives.
      --Aggressively recruiting, developing and retaining high-quality
            talent.
        The EEOC's program to reinvigorate our systemic discrimination
    program highlights the need to fine tune our human capital approaches.
    To succeed, the agency must enhance incentives for identifying,
    investigating, and litigating systemic cases, provide additional
    opportunities for training and the development of expertise related to
    systemic discrimination, and improve technology skills. Our systemic
    initiative will facilitate development of more refined approaches to
    enforcing the law. Our goal is to ensure that employees have the right
    skills, talents, and abilities to succeed in implementing this program.
                         eeoc oversight of eeo offices
        Question. How does EEOC evaluate each equal employment office?
        Answer. The standards by which EEOC evaluates the sufficiency of
    federal agency Title VII and Rehabilitation Act programs are set forth
    in EEO Management Directive 715, which became effective in 2003. MD-715
    divides the essential elements of model agency EEO programs into six
    broad categories: (1) demonstrated commitment from agency leadership;
    (2) integration of EEO into the agency's strategic mission; (3)
    management and program accountability; (4) proactive prevention of
    unlawful discrimination; (5) efficiency; and (6) responsiveness and
    legal compliance.
        Pursuant to MD-715, agencies are required to conduct periodic self-
    assessments of their Title VII and Rehabilitation Act programs against
    the six model elements enumerated above. Agencies are required to
    report on a yearly basis to EEOC their progress toward establishing and
    maintaining a model workplace. That report includes the identification
    of any program deficiencies and the identification of any barriers to
    equal employment an agency has discovered along with plans to eliminate
    any such barriers. Agencies also are required to submit to EEOC a
    series of data tables showing snapshots of their agency workforce by
    race, national origin, sex and targeted disability. EEOC evaluates each
    agency's submission and provides written feedback and analysis on each
    agency's progress toward establishing and maintaining a model EEO
    workplace and identifies areas in which each agency's program needs
    improvement.
        In addition to the written evaluations based upon agencies' MD-715
    reports, EEOC conducts a limited number of in-depth, program
    evaluations each year.
        Question. How often are evaluations conducted?
        Answer. Evaluations based upon agencies' MD-715 reports are
    conducted each year. EEOC also conducts more in-depth evaluations of
    agency EEO programs. EEOC conducted 3 such evaluations in fiscal year
    2004; 5 in fiscal year 2005; and 4 in fiscal year 2006. We plan to
    conduct 3 to 4 evaluations in fiscal year 2007.
        Question. What can a federal employee do if he or she feels that
    the agency EEO office is not investigating the case properly?
        Answer. There are several options available to a federal employee
    who feels that his or her complaint is not being properly processed.
    These options include raising these concerns with: (1) the agency
    officials responsible for conducting the investigation; (2) an EEOC
    Administrative Judge; and (3) the EEOC on appeal.
        Complaints concerning the processing of complaints, including how
    complaints are investigated, are addressed in the U.S. Equal Employment
    Opportunity Commission (EEOC) Management Directive (MD) 110.
    Specifically, MD-110 Chapter 5 Section IV.D entitled ``Allegations of
    Dissatisfaction Regarding the Processing of Pending Complaints,''
    provides that if a complainant is dissatisfied with the processing of
    his/her pending complaint, whether or not it alleges prohibited
    discrimination as a basis for dissatisfaction, s/he should be referred
    to the agency official responsible for the quality of complaints
    processing.
        Agency officials should earnestly attempt to resolve
    dissatisfaction with the complaints process as early and expeditiously
    as possible. Further, the agency official responsible for the quality
    of complaints processing must add a record of the complainant's
    concerns and any actions the agency took to resolve the concerns to the
    complaint file maintained on the underlying complaint. If no action was
    taken, the file must contain an explanation of the agency's reason(s)
    for not taking any action.
        In cases where the complainant's concerns have not been resolved
    informally with the agency, the complainant may present those concerns
    to the EEOC at either of the following stages of processing: (a) Where
    the complainant has requested a hearing, to the EEOC Administrative
    Judge when the complaint is under the jurisdiction of the
    Administrative Judge; or (b) Where the complainant has not requested a
    hearing, to the EEOC Office of Federal Operations (OFO) on appeal.
        Where the Administrative Judge or OFO finds that an agency has
    improperly processed the original complaint and that such improper
    processing has had a material effect on the processing of the original
    complaint, the Administrative Judge has the authority to supplement the
    record at the hearing stage, and/or impose sanctions on the agency as
    s/he deems appropriate.
        In some instances, if there appears to a particularly egregious or
    systemic issue with a particular agency, which may have been identified
    by multiple complaints received through complainant correspondence,
    and/or through our independent review of their policies, practices, and
    procedures as revealed by their annual 462 and MD-715 reports, the EEOC
    may select the agency for a Program Evaluation. This evaluation
    involves an intensive review of the agency's EEO practices after which
    we prepare a report documenting our findings on the factors that we
    determine are having a significant impact on the agency's program
    efficiency as well as EEOC's recommendations on how the agency should
    address these findings. Similarly, on occasion, if a complaint presents
    a conflict of interest, or if high-level agency officials are involved,
    the EEOC's Special Services Staff in its Office of Federal Operations
    may undertake an investigation of a complaint if requested by the
    agency where the discrimination allegedly occurred.
        Finally, federal employees or applicants who are not satisfied with
    the outcome of the administrative process may elect to file a civil
    action in an appropriate United States District Court.
                                brac in maryland
        Question. Maryland over the next five years will be undergoing
    tremendous growth due to BRAC. Did EEOC consider this when they decided
    to downgrade the Baltimore office?
        Answer. EEOC was aware of the BRAC recommendations at the time that
    the repositioning plan was developed. EEOC regularly monitors its
    workload and staffing data, both at the national and at the local
    office levels, to identify any shifts or trends in charge receipts and
    resolutions from projected expectations. This monitoring allows us to
    develop needed adjustments to workload through the inter-district
    transfer of charges in the short term and, subject to budgetary
    constraints, by adjusting office staffing levels for the long-term.
    With respect to the Baltimore office, we have been keeping their front-
    line staff at close to an optimal level, which should allow them to
    take on additional work resulting from base build-ups in Maryland. In
    January 2006, when we implemented field repositioning, there were 11
    investigators in the Baltimore District Office. Today, we have 12
    investigators in the Baltimore Field Office. The redesignation of the
    Baltimore office as a result of repositioning did not result in fewer
    frontline positions.
        Question. How will EEOC handle this influx of 55,000 new employees
    to Maryland?
        Answer. See response to question 1 above.
        Question. What is EEOC doing right now to plan for this increased
    caseload?
        Answer. See response to question 1 above.
                                     ______

                   Questions Submitted by Senator Tom Harkin
        Question. What percentage of the EEOC cases that have been resolved
    or closed in the last three years originated with the state and local
    agencies?
        Answer. Over the last three years, the state and local agencies
    (FEPAs) have resolved approximately 40 percent of the total combined
    resolutions of dual-filed charges with EEOC and the FEPAs.
    Specifically, the FEPA percentage of overall dual-filed charge
    resolutions during this period was: 40 percent in fiscal year 2004,
    41.3 percent in fiscal year 2005 and 40.5 percent in fiscal year 2006.
        Question. What percentage of callers to the national call center's
    800 number are referred to state and local offices?
        Answer. Slightly less than 2 percent of NCC calls are referred to
    FEPAs. For example, of the 222,350 calls handled by customer service
    representatives during the 7-month period between October 2006 to April
    2007, 4,162 (1.9 percent) were referred to FEPAs.
        Question. Please provide a justification for the agency proposal to
    place over 60 percent of the cuts proposed by the Administration on the
    state and local agencies that have the largest share of the caseload.
        Answer. For fiscal year 2008, the Administration has proposed a
    $997,000 reduction from the fiscal year 2007 enacted level. From the
    enacted 2007 level, the State and local agencies were apportioned $30
    million in 2007 and will receive $28 million (a budget reduction of
    less than 7 percent) under the Administration budget before Congress.
    The budget projections show the EEOC inventory to rise to 67,000
    charges, while the FEPA charge inventory has been dropping and will
    flatten out at around 50,000 charges. The budget proposal seeks to
    provide more funds to EEOC to avoid a worsening EEOC inventory rise.
    The cut in FEPA funds should not change the projected FEPA inventory.
                                     ______

                 Questions Submitted by Senator Lamar Alexander
        Question. How many lawsuits and complaints against employers over
    English language workplace policies has the U.S. Equal Employment
    Opportunity Commission (EEOC) filed so far this year? How many lawsuits
    and complaints did the Commission file in 2006, 2005, 2004, 2003, 2002,
    and 2001?
        Answer.
    Charges
        In the period of fiscal year 2001 to fiscal year 2006, EEOC has
    received charges alleging discrimination on the issue of English-only
    policies as follows:

                                         CHARGE RECEIPTS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Receipts........................................................     154     237     173     184     141     125
    ----------------------------------------------------------------------------------------------------------------

        On average, this represents an average of 169 charge receipts per
    year, which equals less than 0.2 percent of receipts (using an average
    of 75,000), a small fraction of our total receipts. Additionally, we
    resolved the following number of charges during this same timeframe:

                                       CHARGE RESOLUTIONS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Resolutions.....................................................     182     218     190     165     189     111
    ----------------------------------------------------------------------------------------------------------------

        Of these resolutions, EEOC found reasonable cause to believe
    discrimination occurred in approximately 53 charges, on average, per
    fiscal year. The specific numbers, by fiscal year, are as follows:

                                        CAUSE RESOLUTIONS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Cause Resolutions...............................................      59      62      39      47      83      25
    ----------------------------------------------------------------------------------------------------------------

    Lawsuits
        EEOC has filed one case this fiscal year involving English-only
    policies. In prior fiscal years, EEOC has filed the following cases
    involving this issue:

                                       LITIGATION FILINGS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Filings.........................................................       3       2       2       2       4       2
    ----------------------------------------------------------------------------------------------------------------

        Question. How much money has the EEOC spent to prosecute lawsuits
    and file complaints against employers over English language workplace
    policies so far this year (including staff costs, court fees, etc.)?
    How much did the Commission spend on lawsuits and complaints in such
    cases in 2006, 2005, 2004, 2003, 2002, and 2001?
        Answer.
    Charges
        Of the 169 charge receipts that EEOC receives on average each year,
    the cost of processing these charges is difficult to quantify. However,
    basing our calculations on this six-year average for receipts, these
    charges represent the annual workload of approximately 1\1/2\
    investigators. Computing out the annual salary, benefits and overhead
    for an investigator, and calculating their time spent on English-only
    charges, the cost would be approximately $250,000.
    Lawsuits
        The table below provides cost to EEOC for litigating English-only
    cases.

                                                             LITIGATION COST FOR ENGLISH-ONLY ISSUE
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Fiscal Year--
                                                                  ------------------------------------------------------------------------------------------
                                                                       2001         2002         2003         2004         2005         2006         2007
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Staffing Cost................................................    $6,515.00   $35,394.00   $38,038.00    $7,103.00  $130,804.00  $105,786.00   $54,793.00
    Litigation Cost..............................................  $123,026.78   $71,432.00   $24,435.00   $87,062.00   $14,098.63      $399.00  ...........
                                                                  ------------------------------------------------------------------------------------------
          Total..................................................  $129,542.78  $106,826.00   $62,473.39   $94,165.69  $144,902.63  $106,185.00   $54,793.00
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. How many small-to-medium sized businesses (under 100
    employees) has the EEOC filed complaints or lawsuits against over
    English language workplace policies this year? How many in 2006, 2005,
    2004, 2003, 2002, and 2001? How many big businesses (100 or more)? How
    many of each category in Tennessee?
        Answer.
    Charges
        Of the cause findings issued each year during the past six years,
    the number of those that were issued by the size of the employer is as
    follows:

                               CAUSE RESOLUTIONS WITH ENGLISH-ONLY ISSUE BY EMPLOYER SIZE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Total Cause Resolutions.........................................      59      62      39      47      83      25
    15-100 Employees................................................      16      14      14      21      19      11
    101-500 Employees...............................................      20      27      13       8      20       5
    501+ Employees..................................................      23      19      11      14      39       6
    No. of Employees Unknown........................................  ......       2       1       4       5       3
    ----------------------------------------------------------------------------------------------------------------

        During this six-year period, there were only three cause findings
    issued to employers in the State of Tennessee. All of these findings
    were issued in a single fiscal year, fiscal year 2001, and were evenly
    split between the three size categories above.
    Lawsuits
        EEOC has not filed any cases this fiscal year against small
    employers involving this issue. For prior fiscal years, we have filed
    the following:

                LITIGATION FILINGS WITH ENGLISH-ONLY ISSUE AGAINST EMPLOYERS WITH 100 OR FEWER EMPLOYEES
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Filings.........................................................  ......       2       1  ......       2       1
    ----------------------------------------------------------------------------------------------------------------

        EEOC has filed one case this year against a large employer. In the
    past, we have filed the following:

                LITIGATION FILINGS WITH ENGLISH-ONLY ISSUE AGAINST EMPLOYERS WITH MORE THAN 100 EMPLOYEES
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Filings.........................................................       3  ......       1       2       2       1
    ----------------------------------------------------------------------------------------------------------------

        EEOC has filed no cases against employers in Tennessee involving
    this issue for the period October 1, 2000 to the present.
        Question. How many lawsuits and complaints arising over English
    language workplace policies has the EEOC settled, won, and lost this
    year? How many in 2006, 2005, 2004, 2003, 2002, and 2001?
        Answer.
    Charges
        The number of English-only policy resolutions involving settlements
    include successful conciliations--a component of the cause finding--as
    well as settlements. The annual tallies follow:

                                           SETTLEMENTS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Successful Conciliations........................................      23      22       7      16      25       6
    Settlements.....................................................      13      28      26      20      14      18
                                                                     -----------------------------------------------
          Total.....................................................      36      50      33      36      39      24
    ----------------------------------------------------------------------------------------------------------------

    Lawsuits
        EEOC has resolved three cases this fiscal year; all were settled by
    consent decree. In prior years, we resolved the following:

                                     LITIGATION RESOLUTIONS WITH ENGLISH-ONLY ISSUE
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal Year--
                                                                     -----------------------------------------------
                                                                       2001    2002    2003    2004    2005    2006
    ----------------------------------------------------------------------------------------------------------------
    Consent Decree..................................................       4       1  ......       1       1       3
    Settlement Agreement............................................  ......       1       1  ......  ......  ......
    Favorable Court Order...........................................  ......  ......  ......  ......       1  ......
                                                                     -----------------------------------------------
          Total.....................................................       4       2       1       1       2       3
    ----------------------------------------------------------------------------------------------------------------

                                     ______

                   Questions Submitted by Senator Ted Kennedy
        Question. I understand that EEOC has undertaken a commitment to
    revitalize systemic litigation. I applaud this effort. However, in
    light of your significant and growing case backlog and the significant
    staff reductions the agency has undergone in recent years, do you
    believe that the Commission has the resources to implement this renewed
    commitment? What other areas will the Commission have to compromise in
    this effort?
        Answer. We believe that in order to combat systemic discrimination
    effectively, the Commission must promote a culture that encourages
    staff to look for, recognize, and investigate systemic discrimination.
    We already have a core group of investigators, attorneys and other
    enforcement staff who have a proven record in this area including many
    significant settlements and conciliations over the years, and in some
    instances, major systemic litigation. We are enhancing this core group
    by adding positions for lead systemic investigators, systemic paralegal
    specialists, and labor economists to support this effort. In addition,
    we are devoting resources to systemic training programs to develop and
    enhance the expertise of existing investigators, attorneys and support
    staff.
        We are able to leverage our existing resources by encouraging
    districts to partner with one another and form a national systemic
    practice along the lines of a national law firm model. This strategy
    allows the Commission to address systemic discrimination effectively
    nationwide while at the same time sharing and building expertise in all
    of our offices.
        We budgeted $213,000 in fiscal year 2006 non-staff funds for
    information technology support for this activity. In fiscal year 2007,
    we have budgeted $150,000 for non-staff costs in the field for this
    activity. The funds were realized when planned new hires did not enter
    on duty within the new hire timeline. These funds will be used to hire
    expert and support services for manipulating systemic data, train staff
    in systemic analysis, and pay for travel expenses for staff to meet on
    systemic cases that involve multiple offices.
        Specifically, in our budget request, we project a slight decrease
    in lawsuit filings compared to previous years, due to a readjustment of
    our docket to include more large class cases. In fiscal year 2006, we
    filed 371 suits, and in fiscal year 2008 we estimate filing 340 suits.
    We anticipate a shift in the size and complexity of cases in our docket
    as the Commission's new Systemic Program produces some larger cases for
    enforcement litigation by fiscal year 2008. Our campaign to
    reinvigorate the systemic program may redirect some resources from
    smaller, individual cases. The Commission understands this potential
    trade-off and believes that it is worthwhile. When done correctly,
    systemic cases can transform whole industries or geographic areas--not
    just the named defendants. They are a way of leveraging the agency's
    limited resources to have the widest possible reach. Thus, we believe
    the Commission has the resources to implement its renewed commitment to
    systemic litigation, without compromising its overall enforcement
    program.
        Question. The National Employment Lawyers Association recently
    released a report containing disturbing findings from a survey that the
    Association conducted about EEOC operations. I was particularly
    troubled by the report's discussion of the problems that members of the
    public have experienced with intake investigations. Potential claimants
    are receiving erroneous advice--e.g., that they cannot file a claim if
    they still have their job, or that they cannot name more than one
    grounds of discrimination in their charge--and this bad advice has
    compromised their rights. In addition, the agency's recent
    reorganization significantly reduced the number of frontline staff,
    particularly intake investigators. You testified at the hearing that
    EEOC's frontline investigators receive only one week of specialized
    training. I know that the agency's employees are dedicated and
    hardworking, but it appears that they do not have the capacity or the
    training to perform their jobs effectively. What steps can the agency
    take to increase the quality of frontline services it provides? Does
    the agency need to implement additional training programs? Do you need
    to hire more frontline investigative staff? How can the quality of
    services be improved without additional resources above and beyond the
    President's budget request?
        Answer. First, I would like to note that when I became Chair in
    September 2006, I met with NELA representatives almost immediately,
    with the goal of beginning a close partnership with them in my new
    role. Since last September, I have maintained an on-going dialogue with
    NELA on many matters and spent two days with NELA representatives at
    the ABA off-the-record meeting in January of this year. As NELA itself
    states in the introduction to its report:

        ``The Chair and the Commissioners have taken affirmative steps in
    seeking NELA's input and feedback regarding EEOC operations. Indeed,
    open dialogue with and encouragement from Chair Earp, Vice Chair
    Silverman, and Commissioners Griffin and Ishimaru were a catalyst for
    NELA conducting the survey which is the subject of this report.''

        Second, I would like to reassure the Committee that the instances
    recounted in NELA's report are not the usual conduct of business at
    EEOC. The survey was sent to 2,500 NELA members with the request that
    they report problems with EEOC rejecting charges. Of those 2,500, 343,
    or 13.7 percent responded. A total of 77, or 3 percent of the members
    surveyed reported drafting a ``discrimination charge . . . that was not
    accepted for filing . . . .'' NELA's survey covered approximately two
    and a quarter calendar years; although our numbers follow fiscal years,
    instead of calendar years, they provide context to consider the numbers
    of complaints that NELA received. During fiscal year 2004-fiscal year
    2006, EEOC received more than a half million inquiries (558,177) and
    took in over a quarter of a million charges (230,628). In light of this
    enormous workload, the instances reported are indeed a small number.
        I want to emphasize that I take NELA's concerns very seriously. As
    a result of discussions with them on intake issues, long before we
    received the survey results, we began setting up an e-mail address to
    enable NELA members to inform us in real time of concerns they have
    with any particular intake session. We notified NELA informally of this
    e-mail address in February and in April formally notified them in a
    letter which they can distribute to their members. We intend to use the
    information provided by NELA members to remedy any situation where an
    individual who wishes to file a charge has encountered obstacles, as
    well as to train and counsel staff on correct intake procedures, when
    necessary. As we receive messages in this mailbox, we will be working
    with the appropriate office to resolve the situation promptly, ensure
    that charging party rights are preserved and that our staff deals
    properly with anyone who initiates intake activity.
        We have also found that face-to-face meetings with stakeholders
    such as NELA are extremely helpful to both sides. For example, when
    NELA representatives in Atlanta informed us in 2005 of problems they
    encountered with filing charges in the Atlanta District Office, our
    Atlanta District Director met with them personally to resolve those
    issues. She then set up quarterly meetings with regional NELA
    representatives, which are on-going to this day. We understand that
    these meetings are well received on both sides and we have encouraged
    our other district directors across the country to meet regularly with
    their regional NELA representatives.
        Of course, there are reasonable differences that our staff have had
    from time to time with charges drafted by private attorneys and some
    charges are reworked. For example, we routinely request that charges
    not include the specific disability on the face of the charge. The
    Americans with Disabilities Act limits the extent to which employers
    can disclose the medical information of employees. Charges are served
    on employers and may go through many hands and be seen by many people
    at the company. We would not want our charge process to produce results
    inconsistent with the statute. Another example is the honest mistake
    that some private attorneys make by naming witnesses to the alleged
    discrimination on the face of the charge. If such charges were taken
    ``as-is'' and served on the employer, those witnesses could easily
    become targets for retaliation. Consequently, our staff request that
    the names of witnesses be removed from the charge and provided
    separately to investigators.
        Finally, you should know that EEOC has been working on maintaining
    the overall high quality of our intake process for several years, in
    part through Technical Assistance reviews that our headquarters staff
    conduct of our field offices. In 2005, we set up an Intake Workgroup,
    composed of deputy district directors and district enforcement
    managers, which drafted a proposed uniform intake questionnaire to
    assist the district offices with their intake procedures. We have also
    been working on redirecting staff resources to the intake function to
    allow better development of the allegations included in charges as well
    as the evidence necessary to support those allegations. We anticipate
    additional training for our intake staff sometime in the near future.
    This would augment the initial one-week classroom training provided to
    new investigators that is supplemented with local training conducted in
    each office, on-the- job training, and later advanced classroom
    training.
        We have already given NELA's report to our Technical Assistance
    teams for their review and analysis of the specific problems noted in
    the survey. We will use their recommendations to improve our processes
    as necessary and reduce any such occurrences in the future.
        Question. I am familiar with the findings of the Inspector
    General's report on the ineffectiveness of the Commission's call center
    pilot project. The center has been plagued with operational problems
    and is not serving the public effectively. Even if improvements have
    been made, it is clearly time to reexamine this problematic experiment.
    You have mentioned that there would be increased expense if this
    function were brought in-house, but your estimate of the cost seems
    extremely high. Can you provide for me the basis of your calculations
    about the cost of bringing the call center in-house? Wouldn't the
    Commission's client populations be better served by working with
    experienced EEOC employees when they contact the agency?
        Answer. In September 2006, EEOC asked the National Academy of
    Public Administration (NAPA) to conduct an assessment of the
    requirements to establish an in-house contact center and to provide an
    independent estimate of the costs. NAPA issued a report in January 2007
    that estimated that it would cost an initial $2.3 million to move the
    National Contact Center (NCC) in-house and annual ongoing costs of $5.5
    million; therefore, the first year of operating an in-house contact
    center would be $7.8 million. By comparison, annual on-going costs for
    the contractor-run center costs about $2.5 million. In developing their
    cost estimates, NAPA used comparable staffing, processes, technology,
    and equipment as that used by the NCC. The NAPA estimates took into
    account that the software application, knowledge base, and training
    materials used by the NCC are the property of EEOC under the terms of
    the contract and would not have to be purchased. According to the NAPA
    report, which is available at, ``the staffing estimates are based upon
    a representative month and the metrics currently in place to meet
    service requirements including speed of answer and qualitative
    measures.'' The NAPA estimates also presumed the rental of a stand-
    alone facility located in a labor market designated as ``rest of USA.''
        It is important to note that the customer service representatives
    (CSRs) who answer the phones for EEOC are dedicated to the EEOC
    contract, are well-trained to represent EEOC and allow us to present a
    consistent face to the public for 12 hours each work day. This is an
    important service to our client population--to be accessible, at
    convenient hours, and providing accurate information or referrals. A
    report issued by the Claes Fornell International (CFI) Group in May
    2006 indicated the overall Customer Satisfaction Score for the EEOC
    contact center was 77, which is six points higher than the average for
    Federal Government contact centers. This report is accessible on the
    EEOC external website at the following URL: http://www.eeoc.gov/
    abouteeoc/oig/reports/ncc/cs_survey.html. In addition, we receive very
    few complaints from our field offices regarding the services provided
    by the contact center. The volume of calls handled by the CSRs, more
    than 38,000 a month (with an average wait time of 30 seconds), could
    not be handled using existing experienced EEOC employees and
    technology.
        A March 2003 survey indicated that 61 percent of the calls to our
    public numbers in the field were for reasons other than potential
    charge filing and could easily be answered by clerical level employees.
    These figures still hold true today in that more than 60 percent of the
    calls coming to the NCC are for reasons other than filing a charge.
    Callers who have questions about filing a charge are pre-screened for
    coverage and mailed an intake questionnaire. Contact center employees
    have been trained to handle the variety of calls coming in to EEOC and
    our EEOC monitors believe they are doing a very good job of collecting
    data, answering questions, and as several field supervisors noted
    recently, ``providing a portal to EEOC.'' The training for customer
    service representatives does not end after the initial two weeks
    (including six days devoted to EEOC content) and also includes on-going
    monitoring and refresher training at least four times each month. The
    CSR's job is to be quickly accessible, to quickly determine the reason
    for the call, and to provide the appropriate level of assistance. Do
    they use scripts to do this? Yes, they do, but they are trained to ask
    appropriate questions to determine which scripts to use and when. These
    same scripts have been shared with all field offices at the request of
    field supervisors. CSRs hold a dialogue with the caller and because
    they are constantly monitored, we are able to follow up on any
    incomplete or incorrect information.
        In order to set up an EEOC-operated contact center, we will have to
    make a significant investment in technology and additional resources to
    provide the same level of service the public is receiving from the
    contract call center. When we used only EEOC employees answering the
    phone, we found we could not adequately do the job without using some
    21st century technology and strategies. Our volume of calls, currently
    over 60,000 per month to the NCC alone, is clear evidence that we need
    to take advantage of industry best practices to meet our customer
    service needs. It is better for our customers that we are making the
    best use of our limited budgetary resources to operate a contract call
    center, because in this way:
      --the caller can be certain of reaching a CSR 12 hours-a-day and only
            having to wait less than a minute on average to do so;
      --the caller can be assured of getting consistent information,
            consistent treatment, and consistent service, regardless of
            whether he or she resides in the country, or what language he
            or she speaks; and
      --our investigators are able to devote their time to deal with
            potential charges and investigations rather than handling phone
            duty of general inquiries, which currently number 60,000 per
            month.

                             CONCLUSION OF HEARINGS

        Senator Mikulski. We'll look forward to further
    conversations with you as we move ahead. This subcommittee will
    stand in recess, subject to the call of the Chair.
        [Whereupon, at 11:36 a.m., Thursday, May 3, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2008

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [The following testimonies were received by the
    Subcommittee on Commerce, Justice, Science, and Related
    Agencies for inclusion in the record. The submitted materials
    relate to the fiscal year 2008 budget request for programs
    within the subcommittee's jurisdiction.]
       Prepared Statement of the National Employment Lawyers Association
                               executive summary
        In March of this year, the National Employment Lawyers Association
    \1\ (NELA) prepared and distributed to its membership a brief on-line
    survey to gain a better and more current understanding of (1) the
    frequency with which charging parties and/or their attorneys encounter
    refusals by the U.S. Equal Employment Opportunity Commission (EEOC) to
    accept charges; and (2) the extent to which charging parties and/or
    their attorneys experience other problems with charge filing at the
    EEOC (see Appendix A attached to the full report). NELA spearheaded the
    survey in response to comments it regularly receives from NELA members
    and local NELA affiliate members about the EEOC's charge filing process
    as well as by our discussions with the leadership of the EEOC. Both the
    EEOC and the Congress also have recently expressed concerns about the
    need for charging parties to have effective access to the Commission's
    compliance procedures.
    ---------------------------------------------------------------------------
        \1\ The National Employment Lawyers Association (NELA) advocates
    for employee rights and workplace fairness while promoting the highest
    standards of professionalism, ethics and judicial integrity. NELA was
    founded in 1985 to provide assistance and support to lawyers in
    protecting the rights of employees against the greater resources of
    their employers and the defense bar. NELA is the country's largest
    professional organization that is comprised exclusively of lawyers who
    represent individual employees in cases involving employment
    discrimination, wrongful termination, employee benefits, and other
    employment-related matters. NELA and its 67 state and local affiliates
    have more than 3,000 members nationwide.
        As a group, NELA members have represented thousands of individuals
    seeking equal employment opportunities. NELA is one of a limited number
    of organizations dedicated to protecting the rights of all employees
    who rely on the U.S. Equal Employment Opportunity Commission (EEOC) and
    the courts for protection against illegal workplace discrimination.
    NELA's members serve the same constituency as the Commission, namely,
    employees who have been and are being subjected to invidious race,
    color, national origin, gender, religious, age, and disability
    discrimination prohibited by Title VII of the Civil Rights Act of 1964,
    the Age Discrimination in Employment Act, and the Americans with
    Disabilities Act. NELA's members interface with the EEOC on a daily
    basis. They are involved with the Commission's compliance procedures,
    its investigation practices, and its disposition of cases. That
    involvement is nationwide and reaches to all of EEOC's regional and
    district offices.
    ---------------------------------------------------------------------------
        The survey sought to elicit information about what happens when a
    charge is presented to the Commission--whether charging parties
    encounter problems, the types of problems they experience, and the
    frequency and timing of such problems. The survey covers the period
    from January 1, 2005 to April 2, 2007; questions were categorized by
    calendar year. The survey was conducted from March 16, 2007 through
    April 2, 2007. NELA received 343 unique responses to the survey, for a
    total response rate of 14 percent. The responses represent the
    experiences of plaintiff employment lawyers (and their clients) from 30
    states, the District of Columbia and Puerto Rico who practice before
    EEOC offices in every region, including 15 district, 9 field, 12 area
    and 11 local offices. (A list of the EEOC offices referenced by survey
    respondents is contained in Appendix B of the full report.)
        The cumulative responses reveal an agency that is resistant to the
    filing of employment discrimination charges. Of the survey respondents,
    nearly one-quarter (23 percent) indicated that they had drafted charges
    for clients that had not been accepted for filing by the EEOC during
    the twenty-seven month period covered by the survey.\2\ In response to
    the broader question, ``[H]ave you had other problems with the EEOC in
    the processing of charges or intake questionnaires (e.g., resistance by
    EEOC office identified above to accepting filing as prepared by you,
    substantial modification by EEOC of what you prepared, etc.)?''--the
    ``yes'' response rate was even higher.\3\ Thirty-six percent (36
    percent) of respondents reported that they had encountered such
    problems at some time since January 1, 2005. Moreover, more than a
    quarter of the respondents who had experienced such problems did so
    more than once in calendar years 2005 (26 percent) and 2006 (28
    percent).\4\ In 2005, 12 percent, and in 2006, 13 percent, of them had
    encountered such problems three or more times in the year.\5\
    ---------------------------------------------------------------------------
        \2\ See Question 3, Appendix A.
        \3\ See Question 11, Appendix A.
        \4\ See Questions 12 and 13, Appendix A.
        \5\ Supra.
    ---------------------------------------------------------------------------
        The comments of survey respondents illuminate the pervasiveness of
    the problems that charging parties and plaintiff's attorneys have with
    the EEOC's intake, charge filing and investigation processes. The
    respondents cite several recurrent problems with EEOC charge intake as
    well as with EEOC investigations after charges are filed (see pages 6-
    13 of the full report).
        These findings, as alarming as they are, do not come as a surprise
    to anyone who is familiar with the EEOC. They are, in substantial part,
    symptomatic and the consequence of an inadequate budget which has
    resulted in an understaffed agency burdened with a massive flow of
    charges and an ever growing backlog. Indeed, the Commission has
    struggled to meet the mounting pressures of this burden and has tried
    to adjust to the realities of its budget through a major reorganization
    and reallocation of staff.
        When the chaff is separated from the wheat, however, the key fact
    that emerges is that the EEOC has for many years only been able to
    budget a small amount of its funding to enforcement and virtually
    nothing to training personnel. This renders the Commission ill-equipped
    to achieve its mission, produces never-ending delays, prevents even
    minimal training of staff, and breeds inordinate pressures not to add
    to a burgeoning backlog by junking potential and actual cases at every
    step of the administrative process. More specifically, it produces an
    inherent resistance to the filing of charges by compliance staff,
    shortchanges investigations (if and when they take place), and
    increases an administrative ``washing of hands'' of cases through the
    convenience of boilerplate Notices of Right to Sue that include nothing
    but a mere check-off box for ``insubstantial evidence to determine''
    discrimination.
        In enacting various anti-discrimination laws, Congress has signaled
    that addressing and eliminating invidious discriminatory employment
    practices is one of the nation's highest priorities. Thus, it is
    incumbent upon Congress to ensure that the Commission--the federal
    agency that it has mandated to enforce these laws--receives the
    necessary funding to rectify the untenable morass described in the
    report. If the EEOC is to overcome the dire consequences of past budget
    reductions, then funding well beyond the current levels must be made
    available.
        At the same time, the EEOC also must be held accountable to
    Congress and the public it serves. Thus, oversight and assessment
    mechanisms must be put into place to assure that additional resources
    are directed toward viable and meaningful enforcement of the EEOC's
    mandates (see page 15 of the full report). The findings cited in NELA's
    survey lend credence to the problems faced by the EEOC and those
    Americans the agency is mandated to protect from unlawful employment
    discrimination. For the EEOC to fulfill its mission as the federal
    agency most responsible for the enforcement of the nation's equal
    employment opportunity laws, these problems must, at a minimum, be
    addressed with more resources targeted at improving basic enforcement
    functions.
        For more information, contact Donna R. Lenhoff, Legislative &
    Public Policy Director, National Employment Lawyers Association, 1090
    Vermont Avenue, NW, Suite 500, Washington, DC 20005 (Tel: 202-898-2880;
    E-mail: dlenhoff@nelahq.org).
      workers' rights in jeopardy: eeoc's enforcement of equal employment
                 opportunity laws impeded by inadequate funding
    a report by the national employment lawyers association--april 27, 2007
    Introduction
        The National Employment Lawyers Association (NELA) advocates for
    employee rights and workplace fairness while promoting the highest
    standards of professionalism, ethics and judicial integrity. NELA was
    founded in 1985 to provide assistance and support to lawyers in
    protecting the rights of employees against the greater resources of
    their employers and the defense bar. NELA is the country's largest
    professional organization that is comprised exclusively of lawyers who
    represent individual employees in cases involving employment
    discrimination, wrongful termination, employee benefits, and other
    employment-related matters. NELA and its 67 state and local affiliates
    have more than 3,000 members nationwide.
        As a group, NELA members have represented thousands of individuals
    seeking equal employment opportunities. NELA is one of a limited number
    of organizations dedicated to protecting the rights of all employees
    who rely on the U.S. Equal Employment Opportunity Commission (EEOC) and
    the courts for protection against illegal workplace discrimination.
    NELA's members serve the same constituency as the Commission, namely,
    employees who have been and are being subjected to invidious race,
    color, national origin, gender, religious, age, and disability
    discrimination prohibited by Title VII of the Civil Rights Act of 1964,
    the Age Discrimination in Employment Act, and the Americans with
    Disabilities Act. NELA's members interface with the EEOC on a daily
    basis. They are involved with the Commission's compliance procedures,
    its investigation practices, and its disposition of cases. That
    involvement is nationwide and reaches to all of EEOC's regional and
    district offices.
        NELA members and the staff of the EEOC share the common goal of
    ensuring that the nation's equal employment opportunity laws are
    enforced as mandated by Congress. Indeed, several current and past EEOC
    staff are or have been members of NELA, including former Commissioners
    as well as senior attorneys in the Office of General Counsel and
    Regional Offices. These EEOC alumnae are passionate about their years
    at EEOC. They remain committed to helping the EEOC to advance its
    mission, to establish and develop a vibrant body of employment law, to
    address discrimination where it has operated and is continuing to be
    practiced, and to secure remedies for unlawful employment practices. In
    short, NELA and its members are uniquely positioned to comment upon
    EEOC's compliance efforts and the extent to which the Commission meets
    its mission, exercises its responsibilities, and provides relief to
    individuals who are discriminated against in the workplace.
        Effective, attentive and responsive enforcement procedures hold out
    the hope for resolution and relief for victims of workplace
    discrimination. By the same token, ineffective, inattentive and
    irresponsible administrative processing by EEOC precludes and/or
    directly impacts the nature and scope of the relief charging parties--
    even those represented by attorneys--can obtain during the
    administrative process. Furthermore, because utilization of the
    Commission's administrative procedures is a mandatory gateway to
    private enforcement of Title VII and defines the scope of any ensuing
    litigation, NELA's members and their clients have a vital stake in
    ensuring charging party accessibility to the EEOC and effective
    compliance efforts.
        It is essential to underscore that EEOC leaders, especially its
    current Chair, have recognized this commonality between EEOC's
    responsibilities and the interests and experiences of NELA's members.
    They are acutely aware that working in partnership with NELA, as well
    as other stakeholders, is key to fulfilling the EEOC's mission of
    enforcing the nation's equal employment opportunity laws. The Chair and
    the Commissioners have taken affirmative steps in seeking NELA's input
    and feedback regarding EEOC operations. Indeed, open dialogue with and
    encouragement from Chair Earp, Vice Chair Silverman, and Commissioners
    Griffin and Ishimaru were a catalyst for NELA conducting the survey
    which is the subject of this report. The same is true with respect to a
    planned project that NELA hopes to implement in the near future
    regarding EEOC's National Contact Center.
    The Survey and Methodology
        In March of this year, NELA prepared and distributed to its
    membership a brief on-line survey, a copy of which is attached as
    Appendix A. The purpose of the survey was to gain a better and more
    current understanding of: (1) the frequency with which charging parties
    and/or their attorneys encounter refusals by the EEOC to accept
    charges; and (2) the extent to which charging parties and/or their
    attorneys experience other problems with charge filing at the EEOC.
    NELA spearheaded the survey in response to comments it regularly
    receives from NELA members and local affiliate members about the EEOC's
    charge filing process as well as by our discussions with EEOC
    leadership. In addition, both the EEOC and the Congress have recently
    expressed concerns about the need for charging parties to have
    effective access to the Commission's compliance procedures.
        The survey sought to elicit information about what happens when a
    charge is presented to the Commission--whether charging parties
    encounter problems, the types of problems they experience, and the
    frequency and timing of such problems. The survey covers the period
    from January 1, 2005 to April 2, 2007; questions were categorized by
    calendar year.
        Instructions and a link to the on-line survey were sent by
    electronic mail to NELA members. In addition, NELA's sixty-seven state
    and local affiliate leaders were encouraged to forward the survey link
    to their membership (which include members who are not members of the
    national organization). The survey was conducted from March 16, 2007
    (the date it was first distributed) through April 2, 2007 (the date the
    survey was closed). NELA received 343 unique responses to the survey,
    for a total response rate of 14 percent.
        The responses represent the experiences of plaintiff employment
    lawyers (and their clients) from 30 states, the District of Columbia
    and Puerto Rico. The respondents practice before EEOC offices in every
    region, including 15 district, 9 field, 12 area and 11 local offices.
    (A list of the EEOC offices referenced by respondents is contained in
    Appendix B.)
    The Findings
        The responses reveal an agency that is resistant to the filing of
    employment discrimination charges. Of the survey respondents, nearly
    one-quarter (23 percent) indicated that they had drafted charges for
    clients that had not been accepted for filing by the EEOC during the
    twenty-seven month period covered by the survey.\6\ In response to the
    broader question, ``[H]ave you had other problems with the EEOC in the
    processing of charges or intake questionnaires (e.g., resistance by
    EEOC office identified above to accepting filing as prepared by you,
    substantial modification by EEOC of what you prepared, etc.)?''--the
    ``yes'' response rate was even higher.\7\ Thirty-six percent (36
    percent) of respondents reported that they had encountered some such
    problems at some time since January 1, 2005. Moreover, more than a
    quarter of the respondents who had experienced such problems did so
    more than once in calendar years 2005 (26 percent) and 2006 (28
    percent).\8\ In 2005, 12 percent, and in 2006, 13 percent, of them had
    encountered such problems three or more times in the year.\9\
    ---------------------------------------------------------------------------
        \6\ See Question 3, Appendix A.
        \7\ See Question 11, Appendix A.
        \8\ See Questions 12 and 13, Appendix A.
        \9\ Supra.
    ---------------------------------------------------------------------------
        These experiences were not specific to just one or two of EEOC's
    local offices, but involved, as mentioned above, 47 offices nationwide.
    These 47 EEOC offices are not, however, necessarily any worse than EEOC
    offices not reflected in the survey. On the other hand, the offices not
    on the list (Appendix B) are not necessarily any better than those that
    are on the list. Indeed, NELA has no reason to believe that these 47
    EEOC offices are either better or worse than the EEOC offices that were
    not mentioned by survey respondents.
        The comments of those responding to the survey, which are compiled
    in Appendix C, illuminate the pervasiveness of the problems that
    charging parties and plaintiff's attorneys have with the EEOC's intake,
    charge filing and investigation processes. As reflected below, the
    comments indicate several recurrent problems with EEOC charge intake as
    well as with EEOC investigations after charges are filed. This is not
    to suggest, however, that all is bad at the EEOC; in fact, some
    respondents recognized and complimented particular offices or
    personnel.
                Problems with Charge Intake
        While NELA attorneys, more often than not, succeed in filing
    charges for their clients, they report that these same clients in many
    instances were previously turned away by EEOC's intake personnel based
    on the same alleged incidents of discrimination. For example:
      --Our clients who come to [us] after going to the EEOC have numerous
            horror stories about being told they couldn't file because they
            still had their job, didn't have a case, etc.----Comment 16
            (Atlanta)
      --While I have not had problems with the EEOC accepting my charges or
            questionnaires, I have had many potential clients report that
            the EEOC would not accept their charges--at least 4 in the past
            two months. I cannot say how many have reported this since
            January 2005, but the numbers seem to be increasing of late. In
            addition, the EEOC does not want any information before the 180
            day filing period, whether or not this information is relevant
            to the discrimination claims in the charge.----Comment 118
            (Atlanta)
      --Because of previous problems with the EEOC I always draft the
            charges and have them hand delivered and stamped. I stopped
            sending my clients in to file on their own behalf because the
            EEOC . . . tell[s] clients they don't have a case even though I
            have already determined that they do.----Comment 45 (Chicago)
      --[T]he problem seems to be mainly with people who attempt to file
            charges without an attorney. I get many, many calls from people
            who say that the EEOC told them that they do not have a case
            when in fact they do have one, or would have if they had filed
            the charge when they contacted EEOC. EEOC gave them bad legal
            advice which caused them not to file when they should have, and
            their rights were compromised.----Comment 86 (Dallas)
      --I don't have problems . . . It is the unrepresented people who have
            problems. For instance, I have had people come to see me who
            have been told by the intake folks that they don't have a case
            and don't know they can insist on filing a charge. I draft and
            file the charge and there is no problem. I really worry about
            the folks who don't have a lawyer, not the ones who do!!----
            Comment 175 (St. Louis)
      --[A]ggrieved individuals go [to the EEOC and] are often told that
            they have no case and no charges are accepted. How many people
            with legitimate claims then exit the process, demoralized? If
            they come to us, we have to fight to get the charges filed,
            including writing them ourselves (which I have not had rejected
            but never results in much of an investigation).----Comment 99
            (Detroit)
        Often, before accepting a charge (even one prepared by an
    attorney), EEOC intake personnel have required that the charge be
    narrowed (for example, to one incident or to one form of
    discrimination, such as gender or race discrimination but not both).
    For example:
      --Refusal to allow charging party to check more than one box; refusal
            to allow charging party to name employment agency or joint
            employer; not allowing charging party to mention events outside
            180 days on the face of the charge; telling charging party she
            doesn't have a charge and not letting her file.----Comment 173
            (Atlanta); see also Comment 84 (Dallas)
      --[T]he EEOC often will not include all claims (even when client has
            been instructed by me as to what claims).----Comment 45
            (Chicago)
        The EEOC resists accepting charges, primarily due to untrained
    intake personnel. For example:
      --Some investigators are more notorious than others. The intake
            investigators are not attorneys but are making legal decisions.
            Of course, this could be critical if the individual does not
            first see an attorney or delays seeing an attorney until after
            the charging party's deadline has passed.----Comment 23
            (Raleigh)
      --Unqualified people tell me what does and does not fall under Title
            VII.----Comment 170 (San Antonio)
      --The EEOC told one client that they had too many cases to really
            read his case or deal with it since his did not involve a
            termination.----Comment 30 (Boston)
      --Intake investigators do not seem to understand the elementary
            principles of discrimination cases, do not seem to understand
            the significance of certain facts when those facts are
            presented to them during the intake interview, and can hardly
            write an intelligent sentence in either the charge or the
            affidavit.----Comment 132 (San Antonio)
      --I have been told by investigators that the charge cannot be
            accepted without more detailed information, particularly
            comparative information. The detail required appears to exceed
            the notice pleading standard in federal court.----Comment 24
            (El Paso)
      --I have seen cases of non-represented complainants in which the
            intake person at the EEOC drafts a charge and immediately
            issues a notice of right to sue, telling the complainant he/she
            ``doesn't have a case'' based on the intake person's inaccurate
            understanding of the law (e.g., ``If you were the only person
            it happened to it can't be discrimination. . . .''). I wonder
            how many persons with legitimate complaints rely on that
            ``advice'' and decide not to pursue their claim.''----Comment
            148 (St. Louis)
        Timely claims are jeopardized due to delays in the EEOC's
    procedures. For example:
      --[R]ecently I was contacted by a charging party who had submitted
            his questionnaire in October, but as of mid-February had heard
            nothing from EEOC. His 180 days to file was within a month of
            running. I contacted EEOC on his behalf and was told that they
            were ``just getting to'' the October questionnaires and that
            the fact that his time was close to running did not give it any
            priority over other charges. I ended up filing a charge on his
            behalf instead of waiting for the EEOC.----Comment 92 (Atlanta)
      --I have a case now where the EEOC told my client that he did not
            have a case, and that they wouldn't accept his charge. He
            insisted, so they accepted the charge (that they drafted).
            Months later (after 300 days post-incident) he got a call from
            the EEOC telling him that he needed to sign another (identical)
            charge. He did, sent it back, and it was stamped ``filed'' for
            that new date. Then, the EEOC dismissed him for filing too
            late. Luckily, he had a copy of the original stamped charge,
            and we survived a motion to dismiss on this.----Comment 2
            (Chicago); see also, Comment 37 (Dallas)
      --The EEOC routinely attempts to re-write the charge, invariably
            leaves [information] out, and then sends the revised charge to
            the client for signature. It then tries to substitute the date
            of the ``new'' charge for the original filing date. I then have
            to write to the EEOC and demand that they use the original
            charge and original filing date. The EEOC has backed down after
            receiving my correspondence, but my intervention should not be
            necessary. In [another] case in 2006 the EEOC told [my client]
            that it could not accept his charge unless he came into the
            EEOC personally and complete[d] an intake with an EEOC
            employee. The EEOC then sent a letter to the client informing
            him that his charge was not valid and would not be accepted
            until he followed through on the personal interview. I wrote to
            the EEOC, explained the statutory requirements for filing, and
            it ultimately accepted the charge with the original date.
            Again, this should not have been necessary, particularly since
            I had entered my appearance.----Comment 104 (Philadelphia)
        Arbitrary and capricious actions by EEOC personnel jeopardize
    employees' rights. For example:
      --They required a whole new charge to be filed for one typo.----
            Comment 70 (Indianapolis)
      --In the past 30 days . . . a charge [was] returned to me telling me
            that normally they have staff to make corrections on charges,
            but because they do not have enough staff currently, they were
            sending back my charge and giving me 33 days to correct the
            charge. They said that the charge was deficient because I
            stated the type of disability on the charge form, I described
            damages and my charge narrative was too lengthy (it fit on the
            front of the charge form).----Comment 168 (Philadelphia)
      --[O]n several occasions from 2005 to the present, [the Miami office]
            tried to reject charges [I'd filed] (the most recent occasion
            being this month). When I challenged them and asked them to
            cite the provision of the EEOC regulations that authorized them
            to reject the charge, they backed off. The most egregious of
            these instances was a disability discrimination charge in which
            ``disability'' and ``retaliation'' were checked off and the
            charge alleged that my client was an individual with a
            disability who was being denied urgently needed accommodations
            and whose medical information was not being kept confidential.
            (My client was literally dying because of the employer's change
            in his work schedule, which interrupted his regime for taking
            HIV medication.) Someone from the Miami EEOC office called and
            said the charge was being rejected because it didn't expressly
            mention the Americans with Disabilities Act. I hit the roof and
            told them that the description of the discrimination and
            checking off of ``disability'' made it patently obvious that
            this was an ADA charge.----Comment 101 (Miami)
        Inability to contact EEOC personnel. For example:
      --Complete inability to talk to any EEOC personnel about status of
            charge, investigation, etc.; complete failure of EEOC to
            conduct any investigation of charges that clearly are
            meritorious.----Comment 185 (Baltimore)
      --I have had . . . numerous occasions where I have attempted to get
            in touch with investigators to convey information or inquire
            into case status and my calls have not been returned.----
            Comment 128 (Cincinnati)
        Other Intake Problems Confronted by Survey Respondents and Their
    Clients:
      --Lack of Spanish-speaking personnel.----Comment 80 (Birmingham)
      --The EEOC charge form is not readily available.----Comment 82
            (Dallas); see also Comment 32 (Cincinnati)
      --Lack of coordination among EEOC personnel (e.g., different
            investigators assigned to charges against the same employer
            involving the same discriminatory practice).----Comment 86
            (Dallas)
      --Lost charges and files.----Comments 114 (Philadelphia); Comment 65
            (St. Louis); Comment 128 (Cincinnati); Comment 62 (Baltimore)
      --Failure to provide right-to-sue letter.----Comment 116 (Charlotte)
                Problems with Investigations and Post-charge Processing
        The narrative comments that accompanied the survey responses also
    enumerate repeated concerns about what takes place after charges are
    accepted by the EEOC. These concerns include the following:
      --Cursory investigations by untrained investigators. For example:
        --The problems I have encountered have occurred after the charge is
                filed. We have had several cases where the EEOC simply
                decided not to investigate or even [to] require a response
                from the Respondent because the EEOC decided the charging
                party could not be discriminated against on the basis of
                race if the decision maker was the same race. That is not
                the law, but it is making it hard to prosecute these
                cases.----Comment 13 (Chicago) [emphasis supplied]
        --My problems have been with the EEOC's lack of investigation and
                routine acceptance of the respondent's position.----Comment
                116 (Charlotte)
        --Zero knowledge of pretext. EEOC requires direct evidence or they
                dismiss the claim. Also, zero knowledge of the single
                enterprise theory. If the employer says they don't employ
                15 people or 50 people, etc., EEOC makes no further
                inquiry.----Comment 52 (New Orleans)
        --The EEOC routinely contacts clients who are represented by
                counsel and gives them advice which is often incorrect, and
                causes the clients unnecessary confusion.----Comment 104
                (Philadelphia)
        --Pregnancy discrimination charge dismissed because client was
                replaced by a female. Investigator didn't understand that
                the female that replaced my client was not pregnant.
                Recently, same investigator would not allow my client to
                amend charge to include retaliation which occurred after
                the filing of the first charge. New charge had to be filed
                after discussion with investigator's supervisor.----Comment
                113 (Denver)
        --[T]he investigators are overwhelmingly unqualified (can't even
                identify the prima facie elements to claims, and have no
                clue how to investigate). There is very little access and
                transparency, since the District Director . . . is more
                interested in closing files and denying access to position
                statements than he is in having his investigators do their
                job.----Comment 73 (El Paso)
        --Another EEOC problem: they are not investigating a lot of
                charges. I've had a few potential clients come in with
                charges that received no substantial evidence findings
                within 7 days of filing.----Comment 2 (Chicago)
      --Perfunctory acceptance of the employer's written response to the
            charge, and little or no assessment of the merits or follow-up
            to test the representations contained in the employer's
            response (such as contacting witnesses or obtaining relevant
            comparative data). For example:
        --[The] most frequent and significant problem I have encountered is
                resistance by some investigators to conduct a meaningful
                investigation if they have determined that the case has no
                merit. Investigators will often receive the employer's
                position statement and reach a premature conclusion that
                the charge has no merit. The investigators are then
                resistant to conduct[ing] an investigation (e.g., contact
                witnesses or obtain documents) that might indicate that the
                employer's position statement is inaccurate or is not
                meritorious. In my opinion, this resistance occurs from a
                need to move and close files at a certain rate.----Comment
                77 (St. Louis)
        --We get almost no feedback on the [investigation] process.
                Conciliation ends up undervaluing the claims dramatically.
                There are a few good investigators, but for the most part
                there seems to be no will to question, let alone rebut, the
                proffered explanation of the employers. When we FOIA the
                records afterward there is almost no discovery conducted.
                There is almost never a ``for cause'' finding. I think I
                have seen at most three or four throughout a fifteen year
                career. Needless to say I have settled many a case in which
                the EEOC found no cause. The administration at our [EEOC]
                office seems completely oblivious to the problems. When the
                issues are raised, the reaction is, ``Well, that is not our
                policy, so, it must not be happening the way you describe
                it.'' I was on the verge of FOIAing the Detroit district
                office annual reports to use to request some sort of
                Congressional oversight from our senators.----Comment 99
                (Detroit)
        --The problems I have with the EEOC occur during the supposed
                ``investigation'' of the charge. The investigators
                typically receive the employer's position statement, treat
                it like the gospel, do nothing more, and then issue a
                terrible letter telling my clients that they were horrible
                employees and that there was no discrimination. I have
                repeatedly complained about this to the [EEOC] Cleveland
                counsel, to no avail.----Comment 98 (Cleveland)
        --They simply notify us of their intent to dismiss based on the
                employer's position statement without giving the charging
                party an opportunity to refute what the employer has
                said.----Comment 29 (Detroit)
      --Perfunctory issuance of boilerplate right-to-sue letters at intake
            or after a pro forma investigation. For example:
        --I have seen several instances of clients who file charges and
                receive their notice of right to sue at the same time, with
                no investigation.----Comment 83 (Dallas)
        --My problems arise after filing and the EEOC does nothing. I draft
                questions and investigators do not investigate or are just
                too busy to do anything. I file at least a half dozen
                charges each year. Inevitably we get back the punt, unable
                to determine if discrimination took place.''----Comment 57
                (Philadelphia)
    Inadequate Funding: The Source of the Problems
        These findings, as alarming as they are, do not come as a surprise.
    They clearly are, in substantial part, symptomatic and the consequence
    of an inadequate budget which has resulted in an understaffed agency
    burdened with a massive flow of charges and an ever growing backlog.
    The Commission has struggled to meet the mounting pressures of this
    burden and has tried to adjust to the realities of its budget through a
    major reorganization and reallocation of staff. Members of Congress,
    NELA, and other stakeholder organizations were critical of and voiced
    their skepticism about the reorganization, fearing it would, if
    anything, further deplete enforcement and would not result in staffing
    that would achieve the results forecast by EEOC. Whether those
    criticisms were well founded or whether the Commission's blueprints for
    reorganization make sense are appropriate subjects of debate and
    scrutiny. That controversy, however, ignores an overwhelming reality.
        When the chaff is separated from the wheat, the key fact that
    emerges is that the EEOC has for many years only been able to budget a
    small amount of its funding to enforcement and virtually nothing to
    training personnel. This renders the Commission ill-equipped to achieve
    its mission, produces never-ending delays, prevents even minimal
    training of staff, and breeds inordinate pressures not to add to a
    burgeoning backlog by junking potential and actual cases at every step
    of the administrative process. More specifically, it produces an
    inherent resistance to the filing of charges by compliance staff,
    shortchanges investigations (if and when they take place), and
    increases an administrative ``washing of hands'' of cases through the
    convenience of boilerplate Notices of Right to Sue that include nothing
    but a mere check-off box for ``insubstantial evidence to determine''
    discrimination.
        The inescapable conclusion is that the reductions in the EEOC's
    budget over the past several years have wreaked havoc upon the
    Commission's enforcement efforts. For all intents and purposes, these
    budget levels have imposed upon the EEOC a paralysis that frustrates
    Congressional intent in enacting equal employment opportunity laws, the
    Commission's efforts in achieving its mission and, moreover, the rights
    of American workers to be free from unlawful employment discrimination.
    For those who do succeed in obtaining relief from illegal employer
    conduct, that relief is likely to be only after years of delay.
        In enacting various anti-discrimination laws, Congress has signaled
    that addressing and eliminating invidious discriminatory employment
    practices is one of the nation's highest priorities. Thus, it is
    incumbent upon Congress to ensure that the Commission--the federal
    agency that it has mandated to enforce these laws--receives the
    necessary funding to rectify the untenable morass described in this
    report. If the EEOC is to overcome the dire consequences of past budget
    reductions, then funding well beyond the current levels must be made
    available.
        At the same time, the EEOC also must be held accountable to
    Congress and the public it serves. Thus, oversight and assessment
    mechanisms must be put into place to assure that additional resources
    are directed toward viable and meaningful enforcement of the EEOC's
    mandates. In particular:
      --Immediate attention should be given to how many investigators and
            attorneys are assigned to each of EEOC's offices as well as to
            the past and anticipated case flow at each of these offices.
      --A critical examination is needed to determine what, if any,
            training is provided to EEOC's compliance staff.
      --If EEOC intends to make good on its commitment to revitalize
            systemic cases, then the agency needs to assess whether it has
            sufficient staff attorneys and support personnel to fulfill
            this promise.
      --Mechanisms are required to ensure that individual cases are not
            short-changed while the Commission pursues systemic cases.
      --Factors relating to employee performance incentives and awards
            should be based on enforcement of the laws, vindication of
            civil rights and changing business practices as opposed to
            speeches and community outreach.
    Conclusion
        The findings of NELA's survey lend credence to the problems faced
    by the EEOC and those Americans the agency is mandated to protect from
    unlawful employment discrimination. For the EEOC to fulfill its mission
    as the federal agency most responsible for the enforcement of the
    nation's equal employment opportunity laws, these problems must, at a
    minimum, be addressed with more resources targeted at improving basic
    enforcement functions.
        appendix a.--nela eeoc charge processing survey--numerical data
        Total Responses: 343
        1. Name:
        2. EEOC Office you primarily practice before:
        3. Since January 1, 2005, have you drafted a discrimination charge
    (or charges) for a client (or clients) that was (were) not accepted for
    filing by the EEOC office identified above?

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    Yes...................................................       77    22.60
    No....................................................      264    77.40
                                                           -----------------
          Total Respondents...............................      341  .......
    ------------------------------------------------------------------------

        4. If yes, how many times did it occur in calendar year 2005:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      155    74.20
    1.....................................................       18     8.60
    2.....................................................       19     9.10
    3-5...................................................       13     6.20
    6-10..................................................        1     0.50
    11 or more............................................        3     1.40
                                                           -----------------
          Total Respondents...............................      209  .......
    ------------------------------------------------------------------------

        5. How many times did it occur in calendar year 2006:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      153    70.50
    1.....................................................       37    17.10
    2.....................................................       15     6.90
    3-5...................................................       10     4.60
    6-10..................................................  .......  .......
    11 or more............................................        2     0.90
                                                           -----------------
          Total Respondents...............................      217  .......
    ------------------------------------------------------------------------

        6. How many times did it occur from January 1, 2007 to present:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      198    92.50
    1.....................................................       13     6.10
    2.....................................................        1     0.50
    3-5...................................................        2     0.90
    6-10..................................................  .......  .......
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      214  .......
    ------------------------------------------------------------------------

        7. Since January 1, 2005, have you prepared an EEOC intake
    questionnaire (or questionnaires) that was (were) not accepted by the
    EEOC office identified above:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    Yes...................................................       19     5.70
    No....................................................      316    94.30
                                                           -----------------
          Total Respondents...............................      335  .......
    ------------------------------------------------------------------------

        8. If yes, how many times did it occur in calendar year 2005:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      156    94.00
    1.....................................................        2     1.20
    2.....................................................        5     3.00
    3-5...................................................        1     0.60
    6-10..................................................        2     1.20
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      166  .......
    ------------------------------------------------------------------------

        9. How many times did it occur in calendar year 2006:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      155    90.60
    1.....................................................       10     5.80
    2.....................................................        3     1.80
    3-5...................................................        2     1.20
    6-10..................................................        1     0.60
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      171  .......
    ------------------------------------------------------------------------

        10. How many times did it occur from January 1, 2007 to present:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      166    96.50
    1.....................................................        5     2.90
    2.....................................................  .......  .......
    3-5...................................................        1     0.60
    6-10..................................................  .......  .......
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      172  .......
    ------------------------------------------------------------------------

        11. Since January 1, 2005, have you had other problems with the
    EEOC in the processing of charges or intake questionnaires (e.g.,
    resistance by EEOC office identified above to accepting filing as
    prepared by you, substantial modification by EEOC of what you prepared,
    etc.):

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    Yes...................................................      117    35.70
    No....................................................      211    64.30
                                                           -----------------
          Total Respondents...............................      328  .......
    ------------------------------------------------------------------------

        12. If yes, how many times did it occur in calendar year 2005:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      130    62.20
    1.....................................................       24    11.50
    2.....................................................       30    14.40
    3-5...................................................       21    10.00
    6-10..................................................        4     1.90
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      209  .......
    ------------------------------------------------------------------------

        13. How many times did it occur in calendar year 2006:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      117    55.70
    1.....................................................       34    16.20
    2.....................................................       32    15.20
    3-5...................................................       23    11.00
    6-10..................................................        3     1.40
    11 or more............................................        1     0.50
                                                           -----------------
          Total Respondents...............................      210  .......
    ------------------------------------------------------------------------

        14. How many times did it occur from January 1, 2007 to present:

    ------------------------------------------------------------------------
                                                             Number  Percent
    ------------------------------------------------------------------------
    0.....................................................      164    79.20
    1.....................................................       28    13.50
    2.....................................................        8     3.90
    3-5...................................................        5     2.40
    6-10..................................................        2     1.00
    11 or more............................................  .......  .......
                                                           -----------------
          Total Respondents...............................      207  .......
    ------------------------------------------------------------------------

     appendix b.--nela eeoc charge processing survey list of eeoc offices
                           referenced by respondents
    Atlanta District Office
    Birmingham District Office
    Charlotte District Office
    Chicago District Office
    Dallas District Office
    Houston District Office
    Indianapolis District Office
    Los Angeles District Office
    Memphis District Office
    Miami District Office
    New York District Office
    Philadelphia District Office
    Phoenix District Office
    San Francisco District Office
    St. Louis District Office
    Baltimore Field Office
    Cleveland Field Office
    Denver Field Office
    Detroit Field Office
    New Orleans Field Office
    San Antonio Field Office
    Tampa Field Office
    Seattle Field Office
    Washington Field Office
    Albuquerque Area Office
    Boston Area Office
    Cincinnati Area Office
    El Paso Area Office
    Kansas City Area Office
    Louisville Area Office
    Milwaukee Area Office
    Minneapolis Area Office
    Nashville Area Office
    Newark Area Office
    Pittsburgh Area Office
    Raleigh Area Office
    Buffalo Local Office
    Greenville Local Office
    Honolulu Local Office
    Las Vegas Local Office
    Norfolk Local Office
    Oakland Local Office
    Richmond Local Office
    San Diego Local Office
    San Jose Local Office
    San Juan Local Office
    Savannah Local Office
     appendix c.--nela eeoc charge processing survey comments organized by
                                     office
    Atlanta District Office
        16. [No problems] in the charges we file except that when we have
    more than one employer the EEOC now insists upon having separate
    charges and they have ended up going to different investigators. Our
    clients who come to us after going to the EEOC, on the other hand, have
    numerous horror stories about being told they couldn't file because
    they still had their job, didn't have a case, etc.
        34. I receive many calls from potential clients that describe being
    turned away from EEOC and not allowed to file a charge of
    discrimination.
        41. The problems with the EEOC usually arise when the charging
    party is NOT represented by an attorney. That's usually when I hear
    about instances of the EEOC refusing charges, or advising charging
    parties that they don't have any claims, etc. When the charge comes
    from a lawyer, it's been my experience that they usually accept the
    charge.
        49. Requests to interview my clients directly without informing me
    of the nature or specific purpose of the interview, other than saying
    that the charge as drafted was insufficient.
        59. One of my clients just had his case, a strong religious
    discrimination case, dismissed due primarily to the EEOC's
    incompetence. The client went to the EEOC, pro se, complaining about
    religious discrimination in the workplace. The investigator said that
    much of the supporting evidence my client had was more than 6 months
    old, and discouraged my client from filing a religious [discrimination]
    claim. The investigator asked my client the race of client's boss, who
    is white. The client is black. The investigator said he'll check off
    the race box. My client said no, it's not a race claim, it's a
    religious discrimination claim. The investigator said that he can only
    check off one box, and since a lot of client's evidence is more than 6
    months old on the religious [discrimination] claim (but his termination
    was within 6 months), he will go with race only. My client was pro se,
    at the EEOC for the first time, and wrongly trusted the investigator to
    get it right. My client subsequently put on the questionnaire that it
    is a religious discrimination as well as race matter. The Court denied
    Defendant's motion to dismiss for failure of notice in the early stages
    of the litigation. We then went through full discovery, costing the
    client over $7,000. Then, a new judge took over the case. He tossed the
    case on summary judgment due primarily to the EEOC mishandling of the
    charge. He also briefly went over the facts of the case and determined
    the underlying facts were not strong enough. That was argued very
    poorly and we would have had a good shot on appeal on that argument.
    Unfortunately though, his primary argument--the EEOC matter--has enough
    case law on both sides. We decided not to appeal.
        92. The primary problems of which I am aware are related to
    unrepresented charging parties who try to file charges. For example,
    recently I was contacted by a charging party who had submitted his
    questionnaire in October, but as of mid-February had heard nothing from
    EEOC. His 180 days to file was within a month of running. I contacted
    EEOC on his behalf and was told that they were ``just getting to'' the
    October questionnaires and that the fact that his time was close to
    running did not give it any priority over other charges. I ended up
    filing a charge on his behalf instead of waiting for the EEOC.
        93. NELA-GA is in communication with the Atlanta EEOC office about
    joint employers. The EEOC wants separate charges filled out for each
    employer (meaning the charges are assigned to different mediators,
    different investigators . . .); NELA-GA wants all employers to be
    listed on the same charge.
        110. EEOC often pigeon holes a complaint into ``race'' or
    ``gender'' rather than check multiple boxes to cover discrimination
    based on more than one factor. EEOC also often gives clients
    incompetent and wrong legal advice.
        118. While I have not had problems with the EEOC accepting my
    charges or questionnaires, I have had many potential clients report
    that the EEOC would not accept their charges--at least 4 in the past
    two months. I cannot say how many have reported this since January
    2005, but the numbers seem to be increasing of late. In addition, the
    EEOC does not want any information before the 180 day filing period,
    whether or not this information is relevant to the discrimination
    claims in the charge.
        119. Individuals going to the EEOC alone and having the intake
    office refuse to take their charge or telling them they have no case.
        142. Telling people who come in, even if they have a witness with
    them that they have no case. In one instance it involved touching
    sexual harassment and an eye witness and they were turned away. They
    tell the potential charging party they have no case and never inform
    them that there are other laws that the EEOC does not enforce that may
    apply to their situation. Also have had preemptory dismissals without
    any defect on the face of the charge.
        173. Refusal to allow charging party to check more than one box;
    refusal to allow charging party to name employment agency or joint
    employer; not allowing charging party to mention events outside 180
    days on the face of the charge; telling charging party she doesn't have
    a charge and not letting her file.
        175. One investigator threatened not to accept an amended charge. I
    filed it anyway.
    Birmingham District Office
        80. Lack of Spanish-speaking EEOC personnel in the South.
        95. Years ago, in the 1990s, the Birmingham office would not take a
    charge by fax. I haven't tried since then. I think charges should be
    accepted by fax, email, etc.
        151. Most investigators are lazy and rude; one black male hated all
    complaints from females, asking ``Who do you think you are?'' to a
    sexual harassment victim. He was equally threatening to me. Had to go
    to the national director to get him removed. Turned out he was having a
    gay affair with an executive of the employer. With no state employment
    discrimination laws, we must go through EEOC.
    Charlotte District Office
        7. I have not really had any problems in connection with the filing
    of a charge. My problems have been with the EEOC's lack of
    investigation and routine acceptance of the respondent's position.
    Also, I have had some incidents where the EEOC has not provided the
    right to sue letter to the complainant.
        116. My clients who go in person to file charges have been turned
    away and told they do not have a charge. They have also encountered
    some rude intake people. I have had to tell clients to go back and
    insist they have a right to file a charge. I have also had EEOC people
    discourage people from retaining an attorney.
        141. I have two problems with the EEOC. One, they will not issue a
    right to sue letter 180 days after the charge is filed. Two, they will
    not keep me informed of the status of the charge.
    Chicago District Office
        1. Particular EEOC investigator [deleted] is pre-disposed to
    employer stances/defenses. [Deleted] has completely unreasonable
    demands of clients for specific dates and times of discussions from
    over a year prior. [Deleted.] demands both shorter CODs and more
    details and facts. [Deleted] even accused attorney of coaching witness
    to change testimony and of witness of changing testimony.
        2. The EEOC-Chicago now has a rule that they any charges that come
    in notarized automatically get sent to the Illinois Department of Human
    Rights. The EEOC will take only un-notarized charges. I learned of this
    rule from an investigator. Another EEOC problem: they are not
    investigating a lot of charges. I've had a few potential clients come
    in with charges that received no substantial evidence findings within 7
    days of filing. I have a case now where the EEOC told my client that he
    did not have a case, and that they wouldn't accept his charge. He
    insisted, so they accepted the charge (that they drafted). Months later
    (after 300 days post-incident) he got a call from the EEOC telling him
    that he needed to sign another (identical) charge. He did, sent it
    back, and it was stamped ``filed'' for that new date. Then, the EEOC
    dismissed him for filing too late. Luckily, he had a copy of the
    original stamped charge, and we survived a motion to dismiss on this.
    But the EEOC file had notes saying that he chose not to file the first
    charge--total cover-your-#$@ language. I'm guessing they lost the first
    charge. Another client of mine had his Chicago charge ignored for 8
    months, when he called on it, the Chicago office hadn't heard of him.
    He got a call a few days later from the Cleveland office; they were
    investigating it. He talked to the investigator and she said she'd get
    back to him in 30-45 days. Four hours later she called back, said never
    mind the previous call, she was issuing a right to sue now because she
    determined from reading the charge that he was not a qualified person
    with a disability. (!!!!!) In other words, she was not investigating
    it, period. I have another case at the EEOC that has been there for a
    couple of years. It has class action potential against a major
    retailer, so the legal department is thinking about it. I check in
    periodically, get told they are still thinking about it. I don't want
    to rock the boat because it would be GREAT for the clients if the EEOC
    took this on, but it's been way too long.
        3. EEOC refused to accept charge of my client last September 2006.
    Two weeks before the 300th day, senior investigator sent a letter in
    mid-December saying she would not accept the charge. After I finally
    made a scene on the 300th day, EEOC accepted the charge and pulled the
    investigator off the file. Then when new investigator called to
    interview my client, she refused to give me the name of the attorney
    representing the company so I could discuss settlement with the
    attorney. I was told the EEOC never gives out names of lawyers and if
    we wanted to discuss settlement, we could only do so through EEOC
    (translate: so they can get credit for any settlement amounts). On
    other fronts, we have seen a great deal of foot dragging on issuing
    right to sue letters.
        10. Twice my office was told by an EEOC representative that they
    changed a policy and now any charge that was notarized would not be
    accepted for filing. We had to have the client re-sign the cover sheet
    and filed it unnotarized. However, since mid-2006 when this occurred,
    we have filed several other charges where the charge was accepted
    notarized without incident.
        13. The problems I have encountered have occurred after the charge
    is filed. We have had several cases where the EEOC simply decided not
    to investigate or even require a response from the Respondent because
    the EEOC decided charging party could not be discriminated against on
    the basis of race if the decision maker was the same race. That is not
    the law, but it is making it hard to prosecute these cases.
        14. Re: filing charges--they don't investigate, they won't litigate
    good cases and choose to litigate horrid cases--they've got it all
    backwards here.
        31. Apart from my personal experience, potential clients report
    EEOC turning them away when they attempt to file a charge. EEOC will
    opine they don't have a case. On at least two occasions they misplaced
    written appearance notice and contacted client directly.
        40. I have never had the EEOC reject for filing a charge I have
    drafted, although there was a lot of confusion last year when the EEOC
    suddenly began to refuse to accept charges that had been notarized. In
    my experience, however, problems with charge filing at the EEOC's
    Chicago office are more likely to occur when an individual is not
    represented by an attorney. I have had clients first come to me after
    they filed a charge that they had EEOC drafted for them, and the charge
    often omits important allegations that the client told the EEOC about.
    In addition, charge intake personnel sometimes give individuals
    misinformation about the strengths or weaknesses of their claims.
        45. Because of previous problems with the EEOC I always draft the
    charges and have them hand delivered and stamped. I stopped sending my
    clients in to file on their own behalf because the EEOC often will not
    include all claims (even when client has been instructed by me as to
    what claims, or they tell clients they don't have a case even though I
    have already determined that they do.
        60. EEOC refused to file various charges, but I eventually talked
    them into it. EEOC eventually accepted all charges.
        72. Chicago office refuses to release the respondent's position
    statement ``to the claimant's counsel or to the claimant.''
        75. The triage system for handling charges is not well implemented.
    Some investigations done are haphazard. The office does not timely
    respond to FOIA requests for documents in investigative files, even
    after the right-to-sue is issued.
        143. Although I primarily work with the EEOC in Chicago, the office
    our firm had ``problems'' with was either Tampa or Miami (I'm fairly
    certain Miami). We were forced to significantly reduce the length of a
    charge, which required leaving out certain factual allegations we
    wanted to include. I'm fairly certain this was 2006, but it could have
    been late 2005. It could have been very problematic, given varying
    judicial interpretations of the ``scope of the charge'' doctrine, but
    the matter resolved.
        155. I have not encountered significant problems filing charges;
    however, I have been encountering increasing resistance during the
    investigative phase and even in mediation. Specifically, I have found
    an increasing desire by investigators and mediators to close their
    files at the expense of the charging party. Many times in recent years,
    the investigators have conducted themselves more like an opposing
    counsel would when taking my client's deposition (e.g., very
    adversarial and confrontational). I certainly don't believe that is the
    proper role of the EEOC.
        156. Investigator who rolled her eyes during the intake (my client
    was not represented then) was assigned to the investigation during
    which she ``no caused'' the case in record breaking time based on her
    impressions during intake.
        181. Problem I had was with Miami, Florida office. The EEOC would
    not accept the charge we drafted and instead re-wrote a shorter and
    less complete charge.
        186. The time for a charge to be processed from start until we get
    right to sue is wildly inconsistent. We get right to sues within a few
    months finding no evidence or get a right to sue over 1 year later.
    There is no consistency that I have recognized either in terms of the
    type of charge, merit of the charge, or any other possible pattern.
    Dallas District Office
        9. I file many charges with the EEOC. I prepare my clients'
    charges. I have never had a problem with the EEOC in accepting the
    charges.
        26. Failure to investigate, failure to interview witnesses, failure
    to request documents, difficulty in getting in touch with EEOC
    investigators.
        37. I had one disturbing situation with a client who met with me
    after first going to the Dallas EEOC. What he told me about his
    treatment there concerned me, as it may signal a more widespread
    problem in terms of acceptance of charges. In his situation, he was
    told that he did not have a case and that if he insisted on filing a
    charge they would give him a right to sue notice that day and he would
    have only 90 days to file suit. Since he didn't have an attorney at the
    time, he did not file the charge that day. Luckily, he met with me in
    sufficient time to still file a charge, which we did without trouble,
    and the case later resolved during litigation. The fact that he was
    turned away initially, however, bothers me a great deal. How many
    others are told they don't have a case and are turned away?
        58. Telling me what the law is even if they are wrong and therefore
    wanting to dictate dates of discrimination and whether I can mark
    continuing action. Not wanting to accept more explanation, such as a
    letter detailing the charge, as opposed to just limiting the
    information to the small space on the form. I got my way in the end
    each time, but was a hassle. For clients--not processing the intake
    questionnaire in a timely manner, such that questionnaire pre-dates by
    weeks actual charge while deadlines tick.
        82. The EEOC Charge form is not readily available.
        83. I have seen several instances of clients who file charges and
    receive their notice of right to sue at the same time, with no
    investigation. I have also had clients tell me that they were told that
    they did not have a case and were not allowed to file a charge.
        84. A client who filed her charge with the San Antonio, TX office
    in 2005 (prior to my representation of her) was forced to substantially
    modify her claims and description of events supporting her charge. The
    EEOC staff member said that the EEOC would not accept her charge unless
    she made the changes. These changes substantially and negatively
    impacted the client's case.
        85. Client filed initial race discrimination charge. After
    reporting some possible retaliation to me, I instructed her to write a
    letter to EEOC to amend charge to add retaliation. EEOC did not amend
    charge, and her charge received no attention for several months.
        86. Multiple clients filing charges against a single employer for
    the same reason. Charges are assigned out to different investigators.
    If one investigator were to take the charge, then they would have a
    more complete picture of what is going on at the employer. Also, the
    problem seems to be mainly with people who attempt to file charges
    without an attorney. I get many, many calls from people who say that
    the EEOC told them that they do not have a case when in fact they do
    have one, or would have if they had filed the charge when they
    contacted EEOC. EEOC gave them bad legal advice which caused them not
    to file when they should have, and their rights were compromised.
        96. I have had potential clients who tell me the EEOC told them
    there is ``no discrimination'' and refuse to take a charge.
        134. Other than the fact that for at least the last 25 years, the
    EEOC intake staff has demonstrated hostility to working people in
    general and a great capacity for leisure, nothing out of the ordinary--
    but then I have come to expect nothing from the EEOC of a positive
    nature, either.
        136. Local offices have been resistant to providing a qualified
    sign language interpreter for interviews so that a person who is deaf
    can fully understand the questions they are being asked. At times, I
    have had to bring my own sign language interpreters to the EEOC office
    in order to ensure that my clients can understand what is going on in
    the interview.
        187. Sometimes I have to submit a legal brief to support the
    charge, but the EEOC office has always accepted the briefing.
        192. I have had clients go to the EEOC to try to file a charge
    before they have retained counsel. They were told by the EEOC that they
    did not have a case and were not allowed to file a charge. Once I was
    hired, I would send the client back to the EEOC, but there were times
    when the claim would be time barred if the EEOC did not use the initial
    date of the client visit. I have run into problems where the EEOC would
    not go back and use that initial first visit date as the date for
    filing the charge even though the EEOC told the client he/she could not
    file a charge because he/she did not have a case.
    Houston District Office
        47. EEOC officials routinely tell individuals they cannot file
    charges or their grounds do not constitute violations. They are NOT in
    a position to know and have done no investigation. Usually they are
    wrong anyway for a plethora of reasons, including philosophic reasons.
    All charges should be allowed to be filed. Also, charges filed are
    incomplete and strictly boiler plate and missing essential facts and
    claims, usually discrimination and national origin claims as it relates
    to race and color claims. Also, the EEOC officials fail to identify 42
    USC 1981 claims which have no punitive damages limits as well and
    advise.
        87. I am now having trouble with multiple employers in two areas:
    (1) where we are not sure if the underlying employer is a separate
    company of the parent so we name both and both need to be noticed . . .
    am not sure they are; and, (2) where there are co-employers, I heard by
    the grapevine that they should be two separate charges on the same
    facts, but have not had anything rejected yet.
        103. They do not always confirm they have received a charge and
    return it with a charge number. Also, they often do not send a copy of
    the right to sue or other correspondence to the attorney.
        149. Not precisely relevant, but a couple years ago I represented a
    woman who went to the EEOC and met with an intake person. She was
    scared to death to file a charge and wasn't committed to doing so. She
    went just to get information and discuss her options. The intake person
    prepared a charge and mailed it to her. She wasn't prepared to file a
    charge. The next thing she knew, she received a notice of right to sue,
    copied to the employer, dismissing the charge she never filed on the
    grounds that she'd failed to cooperate. No investigation was done of
    course, and nor had she ever actually filed a charge. This was during
    the time that Houston was headed by [deleted], an incompetent
    management tool who remains in charge of the Dallas and San Antonio
    offices. I contacted him to seek some redress of the situation. He
    agreed to withdraw the notice of right to sue only if my client agreed
    to immediately file a charge with the understanding that it would be
    promptly dismissed without an investigation, thereby giving her an
    untainted right to sue. It was truly an appalling abuse of the
    Commission's authority, all around.
        158. People who file (or try to file) before obtaining our
    assistance have problems--they are refused, or the wrong claims are
    asserted, or joint employers are not named.
        183. Numerous clients over the years, including 2005-2007 have
    reported to me that the Houston District Office of the EEOC refused
    their attempt to file a charge. I also have had some reports of intake
    personnel at the office strongly discouraging individuals from
    contacting an attorney regarding their claims.
    Indianapolis District Office
        70. They required a whole new charge to be filed for one typo.
        109. The Indianapolis EEOC office asked plaintiff's attorneys to
    cooperate with them by NOT preparing written filings to them for our
    clients. They want the intake questionnaires and charges to be drafted
    by their trained personnel. Given this request, we have provided our
    clients with contact information and sent them to file directly with
    the EEOC. Many, many of them have called me to complain that the EEOC
    intake officer told them they do not have a case and refuse to file a
    charge for them. Only after my client has become belligerent--because I
    warn them this may happen and they need to insist--then a charge is
    finally prepared and it is usually pretty sloppy. I then rewrite the
    charge for the client to sign and file. At the investigation stage,
    there is no such thing as an investigation anymore. I have not had the
    EEOC actually do an on-site investigation and take witness interviews
    in a case since they started the A,B,C classification system. Instead,
    I get a letter summarizing the respondent's legitimate non-
    discriminatory action and a demand that I submit proof to rebut it--
    which is ignored if I submit it--followed by issuance of a dismissal
    and notice of rights. I treat the EEOC process as just a time waster
    that allows my client to save up the filing fee so we can file a
    complaint as soon as the right to sue notice is issued. It is a real
    waste of taxpayer dollars.
    Los Angeles District Office
        6. Inability of intake officers to distinguish important from
    unimportant information provided by claimant.
        8. The EEOC process is a complete mystery to me. I rarely file with
    the EEOC, so the numbers above represent 100 percent of my filings with
    the EEOC. In one case, there was such a substantial delay in
    communicating with me, I sent a letter asking for a right to sue
    letter. Despite follow-up calls and letters, to date, my client has
    never received a right to sue letter. Over six months has elapsed. I
    really do not understand the procedures.
        23. Most of our charges are initiated by the Nevada Equal Rights
    Commission (NERC) as the deferral agency to the EEOC. The NERC
    frequently to my understanding refuses to take charges from individuals
    acting in proper person.
        78. I personally have not had any situations where the EEOC has
    refused to accept a charge drafted by me. However, it should be noted
    that many years ago I worked at the EEOC as an attorney (and prior
    thereto as a Paralegal and Investigator) and still know some of the
    individuals at the agency. I do know that the Los Angeles office is
    VERY short staffed. The number of investigators is dismal in comparison
    to the number of investigators that were at the agency when I was there
    in the 1980s.
    Memphis District Office
        42. Intake person did not want to accept charge which I prepared
    and filed on behalf of a client. After that resistance, I began to file
    the charges by mail and did not meet with any further resistance.
        137. They have tried to rewrite the charge to be very vague and
    non-specific, which leads to all kinds of trouble later. When I
    protested, the EEOC intake worker said that they had been instructed to
    take out specifics and leave vague, bare-bones allegations.
    Miami District Office
        4. The EEOC office in Florida is overwhelmed and conducts little or
    no investigation. They do not forward any documents to us and actually
    read the position over the phone as opposed to sending it to the firm.
    Often the investigator is uninformed on the law and has an out-dated
    definition of the law. Honestly, I see little benefit to the process
    and wonder if the budget could not be used in other ways.
        15. We are concerned that the EEOC rarely, if ever, contacts the
    witnesses that we provide before it makes a final determination/
    decision. Needless to say, clients are upset if the EEOC does not
    contact the witnesses provided when making decisions. In fact, may
    clients feel that it is the firm's fault that the EEOC doesn't contact
    witnesses.
        17. My charges are frequently rewritten.
        21. Most recent problem was charging party worked at home and
    employer had no Florida address. I file charges with EEOC and FCHR,
    requesting EEOC mediate and investigate. Eliminates problems.
        44. None, but I am utilizing a local OEO office, which acts as an
    intake office for the Miami EEOC.
        53. The biggest issue is getting the investigator to actually do an
    investigation beyond reading the charge, position statement and reply.
    I have rarely seen that they contact witnesses, for example, or demand
    documents relevant to the charge.
        69. I have never experienced a problem with the Tampa office in
    nearly nine years of dealing with them. [Deleted] and [deleted] are
    especially helpful.
        101. The Miami office has accepted all the charges that I've
    drafted but on several occasions from 2005 to the present, they tried
    to reject charges (the most recent occasion being this month). When I
    challenged them and asked them to cite the provision of the EEOC
    regulations that authorized them to reject the charge, they backed off.
    The most egregious of these instances was a disability discrimination
    charge in which ``disability'' and ``retaliation'' were checked off and
    the charge alleged that my client was an individual with a disability
    who was being denied urgently needed accommodations and whose medical
    information was not being kept confidential. (My client was literally
    dying because of the employer's change in his work schedule, which
    interrupted his regime for taking HIV medication.) Someone from the
    Miami EEOC office called and said the charge was being rejected because
    it didn't expressly mention the Americans with Disabilities Act. I hit
    the roof and told them that the description of the discrimination and
    checking off of ``disability'' made it patently obvious that this was
    an ADA charge. The most recent instance concerned a sexual harassment
    and retaliation charge that generally alleged that my client had been
    subjected to sexual and retaliatory harassment by managers. I received
    a phone call from an investigator at the Miami office in which he
    indicated that the charge would not be accepted for filing unless we
    provided specific facts on the face of the charge. In a not-very-
    friendly tone, he asked how could I expect the employer to respond to
    the charge without putting it on notice of the instances of harassment.
        111. Would not let me file a single charge against two respondents
    that I was alleging constituted a joint employer.
        145. What I find is that unrepresented individuals are still being
    told ``you don't have a case'' and are turned away. Sometimes their
    time has passed before they decide to hire counsel. Otherwise, I have
    to say that I've had better luck the past couple of years with the EEOC
    process. More ``cause'' findings, although they are still unusual (I
    tell people they are more likely to be struck by lightning). And I had
    the first conciliation that actually resulted in a settlement in 20
    years of practice. Most still result in nothing but additional delay. I
    would definitely like to see more pressure put on parties to resolve in
    conciliation, such as mandatory participation in mediation.
    New York District Office
        5. Often inadequate investigation, extremely slow but sometimes the
    investigator is very good.
        18. Investigations seem half hearted, with the outcome pre-
    determined. I especially object to the New York office transferring
    matters to Boston, where the investigators seem to almost object to
    having to handle the file.
        36. Filing is usually no problem. It's the lack of meaningful
    action after that's the problem.
        39. I have never had a problem filing a charge with the NYDO. I
    have never had an intake officer refuse a charge or otherwise practice
    law without a license. I don't know if this happens to pro se charging
    parties but I have never had a client make such a complaint to me. I do
    make sure to file the charge in quintuplicate by certified mail return
    receipt requested.
        105. Investigation stage is very slow.
        122. The Boston Area Office waits 180 days and then dismisses the
    charge. The investigators are often deceived by a lengthy and organized
    position statement, regardless of substance.
        131. I sent a charge to the NYDO for filing in November 2006 and it
    was not processed until January 2007. Fortunately the statute of
    limitations had not run, but it caused significant anxiety for my
    client.
        178. Several years ago, maybe before 2005, I had to write letters
    to senior attorneys in Washington, D.C., to get someone to pay
    attention to the fact that I had to make an urgent filing. In general,
    I have found that the phone numbers listed on the EEOC website prior to
    the phone center were simply not answered at all in some cities. Most
    of my practice is outside of NY.
    Philadelphia District Office
        11. The Philadelphia office sent one of my cases to the Baltimore
    office. The Baltimore office excluded my involvement even though I, the
    attorney for the charging party, filed the charges and had my name on
    record. The Baltimore office then made a determination solely on the
    employer's position statement that was filled with misrepresentations.
    The charging party was denied opportunity for a rebuttal because I
    never was notified after the case went to Baltimore for investigation.
    I learned of the Baltimore office's involvement only after a right to
    sue was issued. I was not sent a copy of the right to sue. Now the case
    is pending in USDC, Eastern District PA.
        22. Mailed charge. Intake called me and said the EEOC does not
    handle ``Black on Black'' discrimination. Claim was that an African
    American supervisor subjected employees to disparate treatment. A call
    to the office intake supervisor ([deleted]) took care of it.
        28. The only problem I have had is filing a charge and then
    receiving a stack of questionnaires in the mail which I have to fill
    out with my client before EEOC will docket the charge. All of the
    information in the questionnaires had been included in the charge and
    affidavit. Since then, I attended their intake training and even though
    I think the intake questionnaires are burdensome, I followed their
    instructions to the letter and have had no further problems with
    intake. My charges have tended to settle early so I have no further
    info re: handling subsequent to intake.
        46. Charges never get processed at all. I filed a charge two months
    ago and have not received any correspondence from any investigator on
    it.
        56. The only problem I have is that it takes weeks for the intake
    personnel to time stamp the charges making them appear to be filed
    later than they actually are. I have never had a problem with filing.
        57. I have never had a problem with filing charges. My problems
    arise after filing that the EEOC does nothing. I draft questions and
    investigators do not investigate or are just too busy to do anything. I
    file at least a half dozen charges each year. Inevitably we get back
    the punt, unable to determine if or if not discrimination took place.
        74. This was before 2005, but I had a client who was told by an
    investigator that he didn't have a claim because he lied on his
    employment application. The lie was that he said that he resigned from
    his prior job when he actually was fired and had a prior lawsuit
    claiming discrimination there. I had to go to Philadelphia with a
    letter that was a mini-brief before they overturned Newark and reopened
    the case. The Newark investigator never heard of the after-acquired
    evidence rule.
        88. More recently our problems with the EEOC have included
    misplacement of files and failure to notify our office of dismissals of
    charges and the issuances of notices of right sue letters. This has
    occurred twice thus far in 2007 from Philadelphia and once from Newark
    in 2006.
        104. I ordinarily file my own EEOC charges for my clients with an
    entry of appearance. The EEOC routinely attempts to re-write the
    charge, invariably leaves out, and then sends the revised charge to the
    client for signature. It then tries to substitute the date of the
    ``new'' charge for the original filing date. I then have to write to
    the EEOC and demand that they use the original charge and original
    filing date. The EEOC has backed down after receiving my
    correspondence, but my intervention should not be necessary. For
    unrepresented clients or people represented by attorneys unfamiliar
    with the statute this could present some really difficult problems. In
    one case in 2006 the EEOC called my client, on whose behalf I had
    entered an appearance, and told him that it could not accept his charge
    unless he came into the EEOC personally and complete an intake with an
    EEOC employee. The EEOC then sent a letter to the client informing him
    that his charge was not valid and would not be accepted until he
    followed through on the personal interview. I wrote to the EEOC,
    explained the statutory requirements for filing, and it ultimately
    accepted the charge with the original date. Again, this should not have
    been necessary, particularly since I had entered my appearance. The
    EEOC routinely contacts clients who are represented by counsel and
    gives them advice which is often incorrect, and causes the clients
    unnecessary confusion.
        114. Charges have been lost. I believe charges from counsel should
    be accepted before questionnaires or other confirming information is
    provided.
        121. Intake workers and investigators who do not understand the law
    and, more importantly, decline to let you educate them about it.
        138. EEOC normally will not accept a charge unless it is
    accompanied by numerous other forms (which could be provided during the
    course of the investigation). These include: Allegations of
    discrimination; Witness Questionnaire; Remedy form; Discharge (or
    other) form; etc.
        139. I have filed a charge of discrimination on behalf of a client
    over 2 months ago and have yet to receive any correspondence even
    saying it has been received.
        140. The EEOC is consistently resistant to accepting charges
    drafted by my office as drafted and does not accept charges that
    require investigation on a systemic basis. After the charge is filed,
    it is often difficult to secure the cooperation of the investigators in
    seeking appropriate information and documents.
        146. Unfortunately most of the charges I file are with the Delaware
    Department of Labor that has a reciprocal working relationship with the
    EEOC. The EEOC can then do a substantial weight review, which means in
    most cases they adopt the DDOL findings.
        152. I handle many federal employee cases, so the procedure is
    different. When I have private sector cases I refer and file them at
    the PHRC because I do not like the EEOC procedures. Since I also take
    many small cases that have potential settlement value, I find that the
    ``triage'' procedure at the EEOC is not conducive to getting such a
    case settled.
        157. Delays in docketing, not returning time-stamped copies.
        168. In the past 30 days I received a charge returned to me telling
    me that normally they have staff to make corrections on charges, but
    because they do not have enough staff currently, they were sending back
    my charge and giving me 33 days to correct the charge. They said that
    the charge was deficient because I stated the type of disability on the
    charge form, I described damages and my charge narrative was too
    lengthy (it fit on the front of the charge form).
        174. They are quite hostile to any charge that's actually carefully
    drafted by counsel. In Philadelphia anyway, they like to have one big,
    fat, run-on paragraph that throws in (supposedly) everything. It's the
    kind of drafting that any advocate would be ashamed of, has no
    persuasive value, and has no utility later in the case. They really
    resent a lawyer's effort to represent the client.
        177. My partner had a problem in the past year with an investigator
    trying to rewrite a Charge of Discrimination in an ADA case claiming
    that they were not allowed to accept charges that describe the
    disability in detail.
        188. Supposedly required information was missing from our charge.
    The charge was initially rejected but through discussions with the
    Buffalo office, those problems were resolved and the charge was
    accepted.
    Phoenix District Office
        162. The time to get a Notice of Right to Sue once a request for
    dismissal of the case has been submitted.
        163. The EEOC doesn't seem to follow-up or even investigate some of
    the worst charges.
    San Francisco District Office
        19. I generally discourage clients from filing with the EEOC
    because California's FEHA gives greater protection. But, I intervened
    in an EEOC case in 2005. I was appalled at how the EEOC investigator
    allowed the employer to limit the scope of his investigation to an
    interview with the general manager only. The EEOC investigator
    interviewed some of the witnesses and reviewed a few of the documents
    that my client had identified only after I complained. However, I found
    working with EEOC Deputy Attorney [deleted] both a privilege and a
    pleasure.
        33. Offices in our area follow different procedures and constantly
    demand more information or different formats to accept charges. We have
    not experienced refusals because we do not accept refusals and are
    persistent about filing charges. I would not send a client to file a
    charge himself/herself.
        43. None with the EEOC but lots with the California Department of
    Fair Employment and Housing.
        94. Sent a non-African-American client to EEOC to complain that he
    had been fired because employer thought he was African-American. EEOC
    told him he could not file a complaint.
        129. Several years ago I participated in a mediation conducted by a
    very biased mediator. It was obvious the mediator had a strong bias in
    favor of the University of Nevada (the defendant). I walked out of the
    mediation (I settled the case the next day (no thanks to the
    mediator)). I wrote to the EEOC and described the inappropriate and
    biased conduct of the mediator. This mediation occurred approximately
    in 2001. I have also experienced a couple of incidents whereby the EEOC
    basically attempted to hijack cases. I resisted these efforts
    successfully. The EEOC targeted my best cases, i.e., cases involving
    multiple sexual harassment victims, egregious conduct, blatant failure
    by management to redress the conduct, and strong corroborating
    evidence. I resisted the attempt to wrest control of the cases because
    I have had experience with the EEOC at mediation, i.e., I've witnessed
    an attempt by the EEOC to effect a nominal damage settlement in an
    extremely strong case involving seven plaintiffs. I effected a
    settlement for approximately 700 percent of what the EEOC mediator
    proposed the case be resolved for. It was obvious the EEOC mediator was
    intent on improving the EEOC's statistics--as opposed to achieving an
    acceptable resolution for the plaintiffs. Therefore, when the EEOC
    attempted to cherry pick my best cases, I resisted this effort. In my
    opinion, the EEOC tends to devalue good cases, i.e., they explain to
    plaintiffs (with extremely strong cases) the average settlement is
    something like $17,000 (I can't recall the exact figure used, but it is
    in this range). This is an appropriate settlement for a relatively weak
    case. The EEOC attempted to foist off this figure in one of my cases
    which involved seven women, who had been subjected to protracted,
    crystalline abuse (fucking c---, etc.). The response of management
    consisted of, ``if you don't like it, there's the door.'' I easily
    obtained six, devastating corroborating affidavits. The defendant
    employed approximately 20,000 persons.
        167. None. My problems in the last six years have been with the
    Oakland DFEH.
        191. Many, many problems pre-2005 with various offices, including
    San Jose and Miami. Much better experience recently.
    St. Louis District Office
        77. Most frequent and significant problem I have encountered is
    resistance by some investigators to conduct a meaningful investigation
    if they have determined that the case has no merit. Investigators will
    often receive the employer's position statement and reach a premature
    conclusion that the charge has no merit. The investigators are then
    resistant to conduct an investigation (i.e. contact witnesses or obtain
    documents) that might indicate that the employer's position statement
    is inaccurate or is not meritorious. In my opinion, this resistance
    occurs from a need to move and close files at a certain rate.
        108. I haven't experienced any charge filing problems with the St.
    Louis District Office since 1/31/2006 when I started private practice.
    It is difficult to get a blank charge, so once you get one, the best
    thing to do is keep it on your computer for future use.
        135. I've had them ``lose'' an entire charge in 2005 that I had
    hand-delivered to the office. The internal ``mediators,'' [deleted] and
    [deleted], are wholly worthless and investigator [deleted] REFUSED to
    find a Title VII violation where active KKK recruitment was ongoing at
    the jobsite! He classed that as a Title VIII (and, yes HUD is involved
    and a Title VIII retaliation charge has been filed and is being
    litigated in KS USDC) case--but was overruled by the Regional Director
    and a Cause Finding issued leading to Conciliation (which failed).
        148. I have seen cases of non-represented complainants in which the
    intake person at the EEOC drafts a charge and immediately issues a
    notice of right to sue, telling the complainant he/she ``doesn't have a
    case'' based on the intake person's inaccurate understanding of the
    law; e.g. ``if you were the only person it happened to it can't be
    discrimination . . .'' I wonder how many persons with legitimate
    complaints rely on that ``advice'' and decide not to pursue their
    claim.
        176. I don't have problems--we have schooled over the years so that
    now they just take the charges we draft, give them a number and docket
    them. However, we hand deliver them and get them stamped received just
    to be safe. It is the unrepresented people who have problems. For
    instance, I have had people come to see me who have been told by the
    intake folks that they don't have a case and don't know they can insist
    on filing a charge. I draft and file the charge and there is no
    problem. I really worry about the folks who don't have a lawyer, not
    the ones who do!!
    Baltimore Field Office
        55. The personnel don't seem to be very well trained and don't
    provide the follow-up or keep their commitments. The Baltimore office
    seems to be a low performer.
        62. Lost charges; when clients go to the EEOC on their own, EEOC
    representatives inadequately write up the complaint on the charging
    form or fail to allege all types of discrimination, thereby limiting
    the client's recovery.
        64. I have not filed any charges in the specified time frames, so
    have not had any problems.
        65. Charge not assigned to investigator for months, charge then
    transferred without reason to Baltimore.
        79. The Baltimore, MD EEOC initially would not accept a charge
    alleging discrimination against an employment agency. At first they
    didn't realize they had jurisdiction over employment agencies. Then
    they erroneously stated that in the 4th Circuit, the employment agency
    had to meet the definition of employer (i.e. at least 15 employees).
    The representative I spoke with finally agreed they should investigate,
    and then referred it to an investigator who didn't understand the notes
    that were supposedly in the file and dismissed it for lack of
    jurisdiction.
        127. Long periods of time without communication; erratic
    investigations--some investigators send the Respondents' position paper
    for us to rebut and others just dismiss the charge; mediation
    coordinator supervisor in Baltimore is terrible. (Keep this anonymous
    please.)
        165. I have not experienced any problems regarding the filing of
    charges. The main problem that I have experienced is being able to
    speak with an actual person when I call an office.
        185. Complete inability to talk to any EEOC personnel about status
    of charge, investigation, etc.; complete failure of EEOC to conduct any
    investigation of charges that clearly are meritorious.
    Cleveland Field Office
        91. They make the clients wait to talk.
        98. The problems I have with the EEOC occur during the supposed
    ``investigation'' of the charge. The investigators typically receive
    the employer's position statement, treat it like the gospel, do nothing
    more, and then issue a terrible letter telling my clients that they
    were horrible employees and that there was no discrimination. I have
    repeatedly complained about this to the Cleveland counsel, to no avail.
        133. EEOC is resistant to lawyers being involved in the process.
    And they require too much bureaucratic involvement at the front end,
    causing cases to be untimely. For this reason, I almost always refer
    clients to the state agency, where you can file a charge on-line,
    without the micromanaging that EEOC uses. They are useless, as far as
    investigation and providing any information regarding the employer's
    position, and I only recommend them when the charge is an age
    discrimination charge, based on our state's idiosyncratic way of
    dealing with them.
        144. No problems with filing (although I know that charging parties
    have contacted me after they've filed because of problems they've had).
    Always a problem getting EEOC to investigate!
        150. Investigators contacting the charging party directly despite
    my request to be involved with the intake and circumventing my attempts
    to set up a conference call.
    Denver Field Office
        90. 1. Refusing to provide a copy of Position Statement or even a
    Summary of a Position Statement makes preparing a meaningful rebuttal
    nearly impossible. 2. Asking that rebuttals--even in complicated
    cases--be prepared within 5 days although the EEOC has had the Position
    Statement for more than a year. 3. Being asked by investigators to
    draft charges in a rigid manner when the facts are more wide-ranging
    and some context is necessary. As lawyers, we have to anticipate ways
    our charges may be attacked--which might require something other than
    what the investigator wants. 4. Disputes as to what is an amended
    charge or a new charge.
        113. Pregnancy discrimination charge dismissed because client was
    replaced by a female. Investigator didn't understand that the female
    that replaced my client was not pregnant. Recently same investigator
    would not allow my client to amend charge to include retaliation which
    occurred after the filing of the first charge. New charge had to be
    filed after discussion with investigator's supervisor.
        169. The EEOC makes it very difficult to file class charges or to
    file multi-charges for a number of class members who need a joint
    investigation. Our problems are not so much with the EEOC process in
    accepting charges, but in their failure to investigate cases and their
    biases against charging parties and their attorneys.
        180. The Denver office has turned individuals away who were NOT
    represented. In one case during 2006, they advised the client to get an
    attorney, but they still turned the client away. Thanks!
    Detroit Field Office
        29. They simply notify us of intent to dismiss based on the
    employer's position statement without giving the charging party an
    opportunity to refute what the employer has said.
        76. My client went to file an EEOC charge against Cintas, a company
    that the EEOC has had multiple claims against. I wrote out the charge
    for the client and she went down. She called me in tears because the
    EEOC refused to take the claim. Told her she did not have a claim. Our
    office wrote a letter to the EEOC and I then accompanied her back to
    the EEOC. After the charge was taken, nothing was done in terms of
    investigation. After several inquiries I was told the case was being
    sent to Washington to be handled along with other claims against
    Cintas. A few months later the case was dismissed, citing the
    defendant's claims verbatim. I do not believe any real investigation
    was done into my client's case.
        99. We have many problems. In the Detroit area the EEOC office acts
    as a palliative: aggrieved individuals go there, uncounseled as a first
    step in the process. They are often told that they have no case and no
    charges are accepted. How many people with legitimate claims then exit
    the process, demoralized? If they come to us, we have to fight to get
    the charges filed, including writing them ourselves (which I have not
    had rejected but never results in much of an investigation). We get
    almost no feedback on the process. Conciliation ends up undervaluing
    the claims dramatically. There are a few good investigators, but for
    the most part there seems to be no will to question, let alone rebut,
    the proffered explanation of the employers. When we FOIA the records
    afterward there is almost no discovery conducted. There is almost never
    a ``for cause'' finding. I think I have seen at most three or four
    throughout a fifteen year career. Needless to say I have settled many a
    case in which the EEOC found no cause. The administration at our office
    seems completely oblivious to the problems. When the issues are raised,
    the reaction is, ``Well, that is not our policy, so, it must not be
    happening the way you describe it.'' I was on the verge of FOIAing the
    Detroit district office annual reports to use to request some sort of
    Congressional oversight from our senators. My understanding is their
    entire litigation office only brought three cases to litigation in
    2006. This is outrageous.
        120. People who we speak to and send to EEOC on their own have
    reported that they are turned away from the EEOC and their charge is
    rejected.
    New Orleans Field Office
        20. Very negative in general. Usually don't understand retaliation
    claims.
        52. Zero knowledge of pretext. EEOC requires direct evidence or
    they dismiss the claim. Also, zero knowledge of the single enterprise
    theory. If the employer says they don't employ 15 people or 50 people,
    etc., EEOC makes no further enquiry. Finally, EEOC requires the
    complainant to sign the questionnaire and charge under penalty of
    perjury, but the employer can respond via unsworn letter or even from
    the company attorney, without being bound by the response.
        124. The whole process is just very slow. It usually takes anywhere
    from 30-60 days to get a response back from the EEOC.
    San Antonio Field Office
        50. I've had numerous situations where the client has been told
    it's your word against theirs and it would be a waste of time.
    Employees of the EEOC would try to dissuade the client from filing.
        51. The times that the EEOC has rejected a charge or redrafted it
    were for purely stylistic reasons that in my opinion were unwarranted,
    such as rejecting a 1\1/2\ page charge that supposedly included ``too
    much information.'' This has not happened frequently but it is annoying
    and seems non-sensical when it does happen.
        67. I have a problem with the new process at the San Antonio
    branch. They will not give me a copy of the employer's response but
    will only read it to me over the telephone. Also, I am not notified if
    and when the employer files a response, so I usually just get a letter
    from the investigator regurgitating the employer's position and
    ignoring the witness affidavits that I submitted.
        71. Primary problem is EEOC turning away those who wish to file
    charges when NOT accompanied by a lawyer. They often do not make it to
    a private lawyer until many months later and sometimes miss the state
    180-day deadline or even the federal 300-day deadline because they were
    discouraged from filing what was, in my opinion, a perfectly viable
    claim.
        106. Back in perhaps 2002, the local office refused to accept a
    charge I had prepared. But, it was during the lunch hour, when a back-
    up person was working the front desk. When I went later that week
    myself, they accepted my charge with no problems.
        112. I frequently counsel my clients that they WILL meet resistance
    to filing their complaints at the EEOC and they must INSIST that they
    be filed.
        132. Intake investigators do not seem to understand the elementary
    principles of discrimination cases, do not seem to understand the
    significance of certain facts when those facts are presented to them
    during the intake interview, and can hardly write an intelligent
    sentence in either the charge or the affidavit.
        147. Timeliness--even though charge was faxed in timely, but
    received by mail after deadline. Summary conclusion--the charge does
    not apply to any laws we enforce.
        164. Rejecting the charge we prepared, rewriting it and leaving
    things out, refusing to accept a Form 5 from a private attorney.
        170. Unqualified people telling me what does and does not fall
    under Title VII.
    Tampa Field Office
        25. Transferring a charge from Tampa to Miami and then not keeping
    me informed of the progress, including after dismissing the charge for
    alleged lack of jurisdiction. Tampa had me on their referral list, but
    I recently found out they had my wrong area code.
        172. I filed a charge where the 300th day was a Sunday. The charge
    was sent by Fed Ex on Friday and delivered on Monday. It was returned
    as untimely. I call the Director and left messages about this but he
    never returned my call. Additionally, within the last year or so I have
    had extreme difficulty getting through to a live person when I call the
    EEOC--I get put into the ``circular voice mail'' thing and end up
    hanging up in frustration.
    Seattle Field Office
        35. No meaningful investigation--witnesses not contacted, no
    employer records requested, etc.
        48. I had them ``lose track'' of my client's charge for 9 months.
        171. I think the Seattle EEOC office does a great job and they have
    always been responsive to my clients' need. I live in Anchorage,
    Alaska, and practice statewide in Alaska. We do not have our own EEOC
    office, but the Seattle office makes a big effort to outreach to
    Alaska.
        182. EEOC is now so overworked that I am hesitant to use them for
    anything but getting a NRTS.
    Washington Field Office
        63. We have a strong local law and need not exhaust administrative
    remedies first before going to court. Therefore the EEOC is not usually
    involved in most of our cases as we spend most of our time in the
    private sector.
        66. Charges are not promptly prepared after questionnaire is
    completed and submitted. There are long delays in getting the final,
    typed up charge. Often, the language in the final charge is not
    accurate and needs to be corrected; this results in more delay.
    Telephone calls to make appointments, ask questions, inquire about
    status, etc. are not returned. Waiting periods in the lobby are long,
    even if no one else is sitting there.
        97. I practice federal-sector law before the EEOC, and that process
    is slightly different than the private-sector cases. The biggest
    problem in the federal-sector is the inordinate delays in the
    assignment of an EEOC Administrative Judge.
        154. We tend to file charges we prepare ourselves with supporting
    declarations of 5 to 15 pages. In several cases, EEOC has substantially
    delayed processing the charges while they rewrite our charges. As far
    as I can tell, the rewrites are pointless because they don't change the
    substance of the charge.
    Boston Area Office
        30. The EEOC told one client that they had too many cases to really
    read his case or deal with it with his since his did not involve a
    termination.
        68. Connecticut is a deferral state, so we have little contact with
    EEOC, other than filing the initial charge. I have had only one case
    that was processed solely by EEOC, since it was filed more than 180
    days after the discriminatory act. EEOC sent the case to mediation
    which was successful. They used a great mediator and I was very happy
    with the outcome.
        89. Basically, I have a problem in their lack of investigation. I
    almost never file directly with the EEOC, but with our State agency. I
    do that even if it is going to get bumped to the EEOC.
        115. In Maine, we file with the Maine Human Rights Commission and
    they forward our charges to the EEOC. I have not known of any charges
    returned to the MHRC during that process but am not sure that I would
    be told about it. I dislike dealing with the EEOC so much that I
    virtually never file directly with them.
    Cincinnati Area Office
        32. Two problems: (1) no charge form available online (which is
    ridiculous); and (2) inconsistency between local practice and general
    charge form (which our office had to create from a hard copy ``EEOC
    form.''
        128. I have had several times where the office has been overly
    technical with the content of the charges. I have had charges get lost
    there and have had numerous occasions where I have attempted to get in
    touch with investigators to convey information or inquire into case
    status and my calls have not been returned.
    El Paso Area Office
        24. I have been told by investigators that the charge cannot be
    accepted without more detailed information, particularly comparative
    information. The detail required appears to exceed the notice pleading
    standard in federal court.
        73. This survey is not very useful. The multitude of problems which
    charging parties face occur almost exclusively when they are proceeding
    pro se, not when they are represented by counsel. In El Paso, the
    investigators are overwhelmingly unqualified (can't even identify the
    prima facie elements to claims, and have no clue how to investigate).
    There is very little access and transparency, since the District
    Director (out of Dallas), is more interested in closing files and
    denying access to position statements, than he is in having his
    investigators do their job.
        190. Southern New Mexico is now assigned to El Paso, which has
    caused many problems. We used to file in Albuquerque and they did a
    great job. El Paso is slow and also frequently applies 5th Circuit law
    it its analysis--but we're in the 10th. Also they have no discernable
    relationship with New Mexico's state administrative agency. I hear many
    complaints and wish they would change it back!
    Kansas City Area Office
        179. I file 90 percent of my client complaints with my state
    agency. The Kansas Human Rights Commission investigative staff makes a
    more thorough and timely investigation of complaints. I receive a
    letter determination for each case with a case investigation report.
    Then we seek review and/or a notice of suit rights from EEOC. I only
    file with EEOC when my client is outside the 180 day period for filing
    a state complaint.
    Milwaukee Area Office
        100. EEOC here very much resists letting attorneys draft their own
    charges. They insist on intake interviews and will draft their own
    charges or redraft a charge to suit themselves. We have seen some
    turning away of attempts to file charges but whenever our state
    affiliate hears of it, we get active. It comes in spurts.
        159. Very, very slow investigation of a charge filed in October
    2005. Lack of communication from investigator.
        161. Iowa is a deferral state--so all processing is through the
    Iowa State Civil Rights Commission. My problems with the EEOC all stem
    at the end of the process--getting rights to sue.
    Minneapolis Area Office
        27. The only real problem we have with the EEOC is time. We have
    had charges sit for over two years. Most of the time we will pull it
    out and sue, but on class cases where the EEOC hinted we would get PC
    we did not want to do that. Otherwise it has been mostly okay. We have
    more problems with the state human rights department.
        38. I have never had a charge not accepted. A few times in the past
    two years I have had charges merely dismissed because the employer
    denied the charges--a reason I find pretty outlandish to support a
    dismissal of charge.
        107. I have not had any problems with filing--I had a problem with
    a no probable cause finding based on my client's refusal to accept an
    unconditional offer of reinstatement--which goes to damages, not
    liability.
        160. I have received numerous reports from clients who came to me
    after first visiting the EEOC where those clients were told they did
    not have a claim or the intake person at the EEOC refused to prepare
    and file a charge. Consequently, we have begun preparing the entire
    charge, including the text, and filing that--which the EEOC has always
    accepted without change. It's just when a charging party is
    unrepresented and visits the EEOC first that resistance by the EEOC
    occurs. Some investigators are more notorious than others. The intake
    investigators are not attorneys but are making legal decisions. Of
    course, this could be critical if the individual does not first see an
    attorney or delays seeing an attorney until after the charging party's
    deadline has passed.
    Nashville Area Office
        153. It takes about 9 months to a year for the EEOC to complete its
    investigation. I don't know how that compares to other offices.
        166. I have never had a problem but individuals have expressed to
    me about 6 to 10 times over last 2 or 3 years that the EEOC intake
    person said that they did not have claim and did not take a charge. I
    do not know if it is true but I believe they must be discouraging
    employees from filing charges.
    Newark Area Office
        54. Very slow follow-up on the part of the investigators. Lack of
    good training or knowledge of the law by investigators, who routinely
    reject cases that are then won in court or settled.
    Pittsburgh Area Office
        102. In my experience, the Pittsburgh office does an excellent job
    processing charges no matter what is alleged. It will take the charge,
    evaluate it as required and then make a decision. While I don't agree
    with the decisions made, my experience is that they do not dismiss a
    charge out of hand.
        117. When charges are transferred from Pittsburgh to Cleveland, I
    am not notified and at times when there is more than one Respondent,
    not all the charges are transferred together.
    Raleigh Area Office
        12. I have not personally had any problems with the EEOC. However,
    I am aware of several clients who have experienced problems with having
    the EEOC accept their charges of discrimination and/or omit claims from
    the charge that the EEOC prepared (which were clearly covered in the
    intake questionnaire).
    Buffalo Local Office
        61. EEOC investigator objected to describing specific health
    condition in ADA charge.
        123. My comment is neither profound nor new. The EEOC has very
    limited resources. The quality of a decent percentage of the
    investigators is not terribly high. They do not require a college
    degree and are being asked to evaluate issues that many lawyers outside
    the employment field would not immediately get. If private counsel is
    involved, my view is that they should either partner with them if the
    agency is interested in the case or willing to help, or otherwise
    simply stay out of the case so as not to mess stuff up. They should
    concentrate their resources on good cases brought by those without an
    attorney.
        189. Office failed to respond to status inquiries for an extended
    period of time and then refused to perform investigation.
    Norfolk Local Office
        126. The Norfolk EEOC office is WOEFULLY understaffed. Just over a
    year ago the office had 12 investigators--it now has 5. EEOC personnel
    are working valiantly, but there are simply not enough of them. My
    clients are best protected from ``frivolous'' lawsuit claims by a cause
    finding. Obtaining one, however, can take over a year.
    Richmond Local Office
        81. EEOC has done almost no meaningful investigation: no follow-up
    after receipt of employer's position paper; no interest in contacting
    witnesses, etc.
        125. Once charges are filed, it is often months or even years
    before anything is done or the charge is even assigned to an
    investigator.
    San Juan Local Office
        184. Very high rate of ``no cause'' rulings without any
    investigation.
    Savannah Local Office
        130. During reorganization last year, we were reassigned from the
    Greenville, South Carolina office to the Savannah, Georgia office, and
    have encountered some problems with filing, and some problems with one
    particular investigator who did not conduct much of an investigation,
    and sent the right to sue letter after several months directly to our
    client's mother, despite the fact that I left a number of messages over
    the course of 3 months, to which he never responded. It was clear on
    our paperwork that we were her attorneys from the start. The Savannah
    office does not seem to have been able to hire additional personnel,
    despite having a significant portion of South Carolina added to their
    region.
                                     ______

             Prepared Statement of the Investment Company Institute
        The Investment Company Institute appreciates this opportunity to
    submit testimony to the Subcommittee in support of the Administration's
    fiscal year 2008 Appropriations request for the Securities and Exchange
    Commission (SEC). We commend the Subcommittee for its consistent past
    efforts to assure adequate resources for the SEC.
        Mutual funds are an integral part of the U.S. economy and continue
    to be one of America's primary savings and investment vehicles for
    middle-income Americans. Since 1990, the percentage of U.S. retirement
    assets held in mutual funds has more than quadrupled. Today, more than
    96 million investors in nearly 55 million U.S. households own mutual
    fund shares; the median household income of fund shareholders is
    $68,700. These millions of ordinary Americans continue to recognize
    that mutual funds are the best means of achieving their long-term
    financial goals. They deserve and benefit from continued vigilant
    regulatory oversight of mutual funds.
        In addition to their role as the investment vehicle of choice for
    millions of Americans, mutual funds are major investors in securities
    and participants in the marketplace. As such, they have a strong
    interest in assuring the SEC's continued ability to soundly and
    effectively regulate securities offerings, other market participants,
    and the markets themselves.
        For all of these reasons, sufficient funding of the SEC is
    critically important to the Institute and its members.
        The Administration's fiscal year 2008 budget proposes SEC funding
    at a level of $905.3 million, which is a very slight increase from the
    $904 million appropriated in fiscal year 2007. The SEC has determined
    that this level provides it with adequate funding to fulfill its
    regulatory mandate and to continue protecting the nation's investors.
    Accordingly, the Institute urges Congress to provide appropriations at
    this funding level.
        We believe it is significant that the SEC has specifically
    requested funding to allow it to continue to invest resources in
    technology. We are particularly pleased that the top strategic
    priorities for the SEC's Division of Investment Management include
    revamping the mutual fund disclosure regime by making disclosures more
    useful to investors through better use of new technologies, such as
    interactive data tagging (XBRL) and the Internet. Division Director
    Andrew Donohue recently outlined plans to develop a short-form
    disclosure document for fund investors, which would be coupled with
    giving investors the ability to obtain additional information via the
    Internet or in paper form.\1\ As Director Donohue said, mutual fund
    shareholders ``deserve a streamlined disclosure system that better
    meets their needs and is consistent with the manner in which most
    Americans retrieve and process information in the 21st century.'' We
    agree, and we strongly support funding for these important initiatives.
    ---------------------------------------------------------------------------
        \1\ Speech by SEC Director of the Division of Investment Management
    Andrew J. Donohue, Keynote Address at the 2007 ICI Mutual Funds and
    Investment Management Conference, March 26, 2007.
    ---------------------------------------------------------------------------
        While providing adequate funding is vitally important, it is
    equally important that the SEC deploy available resources in ways
    designed to assure the effectiveness of its regulatory and law
    enforcement efforts. We therefore strongly support the continued focus
    on internal reforms that will improve the performance of the SEC. This
    includes, for example, providing regulatory guidance that better
    anticipates issues, developing closer integration of the activities of
    different SEC divisions and branch offices, implementing new inspection
    strategies, and conducting empirical research that informs major
    rulemakings. Indeed, the importance of these kinds of reforms has been
    underscored in a series of recent reports.\2\ We support appropriate
    funding of the SEC to facilitate these and other initiatives to enhance
    the effectiveness of the SEC.
    ---------------------------------------------------------------------------
        \2\ See Interim Report of the Committee on Capital Markets
    Regulation (November 30, 2006, as revised on December 5, 2006); Report
    of the U.S. Chamber of Commerce, Commission on the Regulation of U.S.
    Capital Markets in the 21st Century (March 2007); and Sustaining New
    York's and the U.S.' Global Financial Services Leadership (January
    2007).
    ---------------------------------------------------------------------------
        In conclusion, the SEC and the fund industry share a common
    objective of assuring that mutual funds remain a vibrant, competitive
    and cost effective way for average Americans to access the securities
    markets and realize their long-term financial goals. Future regulatory
    and oversight actions by the SEC will play a key part in this process.
    It is therefore critically important that the SEC have sufficient
    resources to enable it to be an effective and efficient regulator and
    fulfill its mission of protecting the nation's investors, including the
    more than 91 million Americans who own mutual funds. Accordingly, we
    support providing the SEC with the requested level of funding.
        We appreciate your consideration of our views.
        The Investment Company Institute is the national association of
    American investment companies. ICI members include 8,821 open-end
    investment companies (mutual funds), 664 closed-end investment
    companies, 385 exchange-traded funds, and 4 sponsors of unit investment
    trusts. Mutual fund members of the ICI have total assets of
    approximately $10.481 trillion (representing 98 percent of all assets
    of U.S. funds); these funds serve approximately 93.9 million
    shareholders in more than 53.8 million households.
                                     ______

          Prepared Statement of the National Treasury Employees Union

        Chairman Durbin, ranking member Brownback, and distinguished
    members of the subcommittee, I would like to thank you for allowing me
    to provide comments on the administration's fiscal year 2008 budget
    request for the Internal Revenue Service (IRS). As President of the
    National Treasury Employees Union (NTEU), I have the honor of
    representing over 150,000 Federal workers in 30 agencies including the
    men and women at the IRS.
                      irs fiscal year 2008 budget request
        Mr. Chairman, as you know, the IRS budget forms the foundation for
    what the IRS can provide to taxpayers in terms of customer service and
    how the agency can best fulfill its tax enforcement mission. Without an
    adequate budget, the IRS cannot expect continued improvement in
    customer service performance ratings and will be hampered in its effort
    to enhance taxpayer compliance. I would like to applaud the
    administration for acknowledging in its fiscal year 2008 Budget in
    Brief (page 65) that ``assisting the public to understand their tax
    reporting and payment obligations is the cornerstone of taxpayer
    compliance and is vital for maintaining public confidence in the tax
    system.'' However, I was disappointed in the administration for failing
    to request a budget for fiscal year 2008 that meets the needs of the
    Agency to meet its customer service and enforcement challenges. In
    fact, the President's budget anticipates a ``savings'' equal to nearly
    1,200 full-time equivalent positions, including 1,147 in enforcement
    and taxpayer service programs.
        Although it's widely recognized that additional funding for
    enforcement provides a great return on the investment, the
    administration seems reluctant to request an adequate budget for the
    IRS. In addition, despite citing a lack of resources as the primary
    rationale for contracting out a number of inherently governmental
    activities, such as the collection of taxes, the Commissioner of the
    IRS has told Congress that the IRS does not need any additional funding
    above the President's budget request.
        NTEU believes that Congress must provide the IRS with a budget that
    will allow the Service to replenish the depleted workforce,
    particularly with respect to enforcement personnel.
        History has shown that the IRS has the expertise to improve
    taxpayer compliance but lacks the necessary personnel and resources.
    The President's own fiscal 2008 budget proposal trumpets the increased
    tax collections produced by IRS's own employees and cites the increased
    collections of delinquent tax debt from $34 billion in 2002 to $49
    billion in 2006, an increase of 44 percent. Unfortunately, instead of
    providing additional resources to hire more enforcement staff, IRS
    personnel resources have been slashed in recent years resulting in a 36
    percent decline in combined collection and examination function
    enforcement staff between 1996 and 2003. In addition, these staffing
    cuts have come at a time when the IRS workload has dramatically
    increased.
        According to IRS's own annual reports and data, taxpayers filed
    114.6 million returns in 1995. After a steady annual climb, 11 years
    later, the Service saw more than 132 million returns filed. Yet,
    between 1995 and 2005, total numbers of IRS employees shrunk from
    114,000 to 94,000. Even more alarming is that during that period,
    revenue officers and revenue agents--two groups critical to IRS
    enforcement and compliance efforts--shrunk by 32 and 23 percent
    respectively. Revenue officers who collect large delinquent accounts
    went from 8,139 to 5,462 and revenue agents who do audits fell from
    16,078 to 12,355. Unfortunately, instead of reversing this trend, the
    IRS has continued efforts to reduce its workforce and has moved forward
    with downsizing in several different areas which have targeted some of
    the Service's most productive employees.
        These include last year's re-organization of the Estate and Gift
    Tax Program which sought the elimination of 157 of the agency's 345
    estate and gift tax attorneys--almost half of the agency's estate tax
    lawyers--who audit some of the wealthiest Americans. The Service
    pursued this drastic course of action despite internal data showing
    that estate and gift attorneys are among the most productive
    enforcement personnel at the IRS, collecting $2,200 in taxes for each
    hour of work.
        The IRS decision to drastically reduce the number of attorneys in
    the estate and gift tax area flies in the face of several reports made
    to Congress by Treasury and IRS officials over the past few years,
    indicating that tax evasion and cheating among the highest-income
    Americans is a serious and growing problem. In fact, an IRS study found
    that in 1999, more than 80 percent of the 1,651 tax returns reporting
    gifts of $1 million or more that were audited that year understated the
    value of the gift. The study found that the average understatement was
    about $303,000, on which about $167,000 in additional gift taxes was
    due. This alone cost the government about $275 million. Consequently,
    it is difficult to understand why the IRS sought the elimination of key
    workforce positions in an area that could produce significant revenue
    to the general treasury.
        In addition, the Service continues to move forward with its plan to
    close five of its ten paper tax return submission facilities by 2011.
    The IRS originally sought the closings of the five paper return
    submission centers due to the rise in the use of electronic filing (e-
    filing) and in order to comply with the IRS Restructuring and Reform
    Act of 1998 (RRA 98) which established a goal for the IRS to have 80
    percent of Federal tax and information returns filed electronically by
    2007. But in their recent report to Congress on e-filing, the IRS
    Oversight Board noted that the IRS will fall well short of the 80
    percent goal and urged Congress to extend the deadline to 2012. The
    report noted that in 2006 just 54 percent of individuals e-filed their
    returns, well short of the 80 percent goal. Furthermore, the report
    cited a decline in 2006 in the number of e-file returns received from
    individual taxpayers who self-prepared their taxes. And finally a
    recent GAO report on the 2006 filing season noted the year over year
    percentage growth in individual e-filing slowed to a level lower than
    any of the previous 3 years.
        While overall use of e-filing may be on the rise, the number of
    taxpayers opting to use this type of return is not increasing as
    rapidly as the IRS had originally projected. Combined with the fact
    that almost a third of American taxpayers do not even have internet
    access and changes to the IRS Free File Program that are expected to
    increase the number of paper filing returns, it is clear that paper
    submission processing facilities are still necessary and that serious
    thought and consideration must be given before any additional closings
    are undertaken.
        Mr. Chairman, it is clear that drastic reductions in some of the
    agency's most productive tax law enforcement employees directly
    contradict the Service's stated enforcement priority to discourage and
    deter non-compliance, particularly among high-income individuals. In
    addition, we believe these staffing cuts have greatly undermined agency
    efforts to close the tax gap which the IRS recently estimated at $345
    billion. As Nina Olson, the National Taxpayer Advocate noted, this
    amounts to a per-taxpayer ``surtax'' of some $2,600 per year to
    subsidize noncompliance. And while the agency has made small inroads
    and the overall compliance rate through the voluntary compliance system
    remains high, much more can and should be done. NTEU believes that in
    order to close the tax gap, the IRS needs additional employees on the
    frontlines of tax compliance and customer service. In addition, we
    believe Congress should establish a dedicated funding stream to provide
    adequate resources for those employees.
                             nteu staffing proposal
        In order to address the staffing shortage at the IRS, NTEU supports
    a 2 percent annual net increase in staffing (roughly 1,885 positions
    per year) over a 5-year period to gradually rebuild the depleted IRS
    workforce to pre-1998 levels. A similar idea was proposed by former IRS
    Commissioner Charles Rossotti in a 2002 report to the IRS Oversight
    Board. In the report, Rossotti quantified the workload gap in non-
    compliance, that is, the number of cases that should have been, but
    could not be acted upon because of resource limitations. Rossotti
    pointed out that in the area of known tax debts, assigning additional
    employees to collection work could bring in roughly $30 for every $1
    spent. The Rossotti report recognized the importance of increased IRS
    staffing noting that due to the continued growth in IRS' workload
    (averaging about 1.5 to 2.0 percent per year) and the large accumulated
    increase in work that should be done but could not be, even aggressive
    productivity growth could not possibly close the compliance gap.
    Rossotti also recognized that for this approach to work, the budget
    must provide for a net increase in staffing on a sustained yearly basis
    and not take a ``one time approach.''
        Although this would require a substantial financial commitment, the
    potential for increasing revenues, enhancing compliance and shrinking
    the tax gap makes it very sound budget policy. One option for funding a
    new staffing initiative would be to allow the IRS to hire personnel
    off-budget, or outside of the ordinary budget process. This is not
    unprecedented. In fact, Congress took exactly the same approach to
    funding in 1994 when Congress provided funding for the administration's
    IRS Tax Compliance Initiative which sought the addition of 5,000
    compliance positions for the IRS. The initiative was expected to
    generate in excess of $9 billion in new revenue over 5 years while
    spending only about $2 billion during the same period. Because of the
    initiative's potential to dramatically increase Federal revenue,
    spending for the positions was not considered in calculating
    appropriations that must come within annual caps.
        A second option for providing funding to hire additional IRS
    personnel outside the ordinary budget process could be to allow IRS to
    retain a small portion of the revenue it collects. The statute that
    gives the IRS the authority to use private collection companies to
    collect taxes allows 25 percent of collected revenue to be returned to
    the companies as payment, thereby circumventing the appropriations
    process altogether. Clearly, there is nothing magical about revenues
    collected by private collection companies. If those revenues can be
    dedicated directly to contract payments, there is no reason some small
    portion of other revenues collected by the IRS could not be dedicated
    to funding additional staff positions to strengthen enforcement.
        While NTEU agrees with IRS' stated goal of enhancing tax compliance
    and enforcement, we don't agree with the approach of sacrificing
    taxpayer service in order to pay for additional compliance efforts.
    That is why we were disappointed to see that the President's proposed
    budget calls for the elimination of 527 taxpayer services positions.
    NTEU believes providing quality services to taxpayers is an important
    part of any overall strategy to improve compliance and that reducing
    the number of employees dedicated to assisting taxpayers meet their
    obligations will only those efforts. The administration's own budget
    proposal for 2008 notes that in fiscal year 2006, IRS' customer
    assistance centers answered almost 33 million assistor telephone calls
    and met the 82 percent level of service goal, with an accuracy rate of
    91 percent for tax law questions. In addition, a recent study
    commissioned by the Oversight Board found that more than 80 percent of
    taxpayers contacted said that IRS service was better than or equal to
    service from other government agencies. And while these numbers show
    that IRS taxpayer services are being effective, more can and should be
    done.
        Mr. Chairman, in order to continue to make improvements in taxpayer
    services while simultaneously processing a growing number of tax
    returns and stabilizing collections and examinations of cases, it is
    imperative to reverse the severe cuts in IRS staffing levels and begin
    providing adequate resources to meet these challenges. With the future
    workload expected to continue to rise, the IRS will be under a great
    deal of pressure to improve customer service standards while
    simultaneously enforcing the Nation's tax laws. NTEU strongly believes
    that providing additional staffing resources would permit IRS to meet
    the rising workload level, stabilize and strengthen tax compliance and
    customer service programs and allow the Service to address the tax gap
    in a serious and meaningful way.
                                span of control
        And while it is imperative that Congress provide the IRS with
    sufficient staffing resources, we also believe that the IRS should look
    at the management to bargaining unit employee ratio to find additional
    resources for increased frontline tax compliance efforts. As noted
    previously, while the number of employees at the IRS has decreased by
    almost 20,000 since 1995, the number of managers who supervise these
    employees has increased over this same period. If we just look at the
    period between 2000 and 2005, we see that the number of bargaining unit
    employees, the frontline employees who do the work, decreased by 4,756,
    a decrease of 5.1 percent. During that same time, the number of
    managers and management officials increased by 170, an increase of 1
    percent. If the IRS decreased the number of managers and management
    officials at the same rate as it decreased its rank and file employees
    during that period, there would be 5.1 percent fewer managers and
    management officials or a savings of 808 full time equivalents (FTE's)
    that could be saved and redirected to the frontlines. While the IRS has
    previously cited concerns about the number of employees that would have
    to be taken offline to train additional frontline employees, we believe
    this training could be done with minimal disruption to current
    operations. One possibility would be to use the increasing number of
    managers and management officials to do the training. This would ensure
    that these employees are afforded the best possible training while
    allowing current operations to continue to run efficiently.
                             private tax collection
        Mr. Chairman, as stated previously, if provided the necessary
    resources, IRS employees have the expertise and knowledge to ensure
    taxpayers are complying with their tax obligations. That is why NTEU
    continues to strongly oppose the administration's private tax
    collection program, which began in September of last year. Under the
    program, the IRS is permitted to hire private sector tax collectors to
    collect delinquent tax debt from taxpayers and pay them a bounty of up
    to 25 percent of the money they collect. NTEU believes this misguided
    proposal is a waste of taxpayer's dollars, invites overly aggressive
    collection techniques, jeopardizes the financial privacy of American
    taxpayers and may ultimately serve to undermine efforts to close the
    tax gap.
        NTEU strongly believes the collection of taxes is an inherently
    governmental function that should be restricted to properly trained and
    proficient IRS personnel. When supported with the tools and resources
    they need to do their jobs, there is no one who is more reliable and
    who can do the work of the IRS better than IRS employees.
        As you may know, under current contracts, private collection firms
    are eligible to retain 21 percent to 24 percent of what they collect,
    depending on the size of the case. In testimony before Congress, former
    IRS Commissioner Mark Everson repeatedly acknowledged that using
    private collection companies to collect Federal taxes will be more
    expensive than having the IRS do the work itself. The Commissioner's
    admission directly contradicts one the administration's central
    justifications for using private collection agencies--that the use of
    private collectors is cost efficient and effective.
        In addition to being fiscally unsound, the idea of allowing private
    collection agencies to collect tax debt on a commission basis also
    flies in the face of the tenets of the IRS Restructuring and Reform Act
    of 1998. Section 1204 of the law specifically prevents employees or
    supervisors at the IRS from being evaluated on the amount of
    collections they bring in. But now, the IRS has agreed to pay private
    collection agencies out of their tax collection proceeds, which will
    clearly encourage overly aggressive tax collection techniques, the
    exact dynamic the 1998 law sought to avoid. Furthermore, the IRS is
    turning over tax collection responsibilities to an industry that has a
    long record of abuse. For example, in 2006, consumer complaints about
    third-party debt collectors increased both in absolute terms and as a
    percentage of all complaints that consumers filed with the Federal
    Trade Commission (FTC). Last year the FTC received 69,204 consumer
    complaints about debt collection agencies--giving debt collectors the
    impressive title of the FTC's most complained-about industry.
        NTEU believes that a better option would be to provide the IRS with
    the resources and staffing it needs. There is no doubt that IRS
    employees are--by far--the most reliable, cost-effective means for
    collecting Federal income taxes. As noted previously, the former IRS
    Commissioner himself has admitted that using IRS employees to collect
    unpaid tax debts is more efficient than using private collectors. In
    addition, the 2002 budget report submitted to the IRS Oversight Board,
    former Commissioner Charles Rossotti made clear that with more
    resources to increase IRS staffing, the IRS would be able to close the
    compliance gap.
        This is not the first time the IRS has tried this flawed program.
    Two pilot projects were authorized by Congress to test private
    collection of tax debt for 1996 and 1997. The 1996 pilot was so
    unsuccessful it was cancelled after 12 months, despite the fact it was
    authorized and scheduled to operate for 2 years. A subsequent review by
    the IRS Office of Inspector General found that contractors
    participating in the pilot programs regularly violated the Fair Debt
    Collection Practices Act, did not adequately protect the security of
    personal taxpayer information, and even failed to bring in a net
    increase in revenue. In fact, a 1997 GAO report found that private
    companies did not bring in anywhere near the dollars projected, and the
    pilot caused a $17 million net loss.
        Despite IRS assurances that it has learned from its past mistakes,
    two recent reports indicate otherwise. A March 2004 report by the
    Treasury Inspector General for Tax Administration raised a number of
    questions about IRS' contract administration and oversight of
    contractors. The report found that ``a contractor's employees committed
    numerous security violations that placed IRS equipment and taxpayer
    data at risk'' and in some cases, ``contractors blatantly circumvented
    IRS policies and procedures even when security personnel identified
    inappropriate practices.'' (TIGTA Audit #200320010). The proliferation
    of security breaches at a number of government agencies that put
    personal information at risk further argue against this proposal. These
    security breaches illustrate not only the risks associated with
    collecting and disseminating large amounts of electronic personal
    information, but the risk of harm or injury to consumers from identity
    theft crimes.
        In addition, a September 2006 examination of the IRS private
    collection program by the Government Accountability Office (GAO)
    reveals that like the 1996 pilot, the program may actually lose money
    by the scheduled conclusion of the program's initial phase in December
    2007. The report cited preliminary IRS data showing that the agency
    expects to collect as little as $56 million through the end of 2007,
    while initial program costs are expected to surpass $61 million. What's
    more, the projected costs do not even include the 21-24 percent
    commission fees paid to the collection agencies directly from the taxes
    they collect.
        In addition to the direct costs of the program, I am greatly
    concerned about the potential negative effect that the private tax
    collection program will have on our tax administration system. In her
    recent report to Congress, the National Taxpayer Advocate voiced
    similar concern about the unintended consequences of privatizing tax
    collection. Olson cited a number of ``hidden costs'' that private tax
    collection has on the tax system including reduced transparency of IRS
    tax collection operations, inconsistent treatment for similarly
    situated taxpayers, and reduced tax compliance. Clearly the negative
    effects of contracting out tax collection to private collectors hampers
    the agency's ability to improve taxpayer compliance and will only serve
    to undermine future efforts to close the tax gap.
        NTEU is not alone in its opposition to the IRS' plan. Similar
    proposals allowing private collection agencies to collect taxes on a
    commission basis have been around for a long time and have consistently
    been opposed by both parties. In fact, the Reagan Administration
    strongly opposed the concept of privatizing tax collections warning of
    a considerable adverse public reaction to such a plan, and emphasizing
    the importance of not compromising the integrity of the tax system.
    (Treasury Dept. Statement to House Judiciary Comm. 8/8/86). More
    recently, opposition to the private tax collection program has been
    voiced by a growing number of members of Congress, major public
    interest groups, tax experts, as well as the Taxpayer Advocacy Panel, a
    volunteer Federal advisory group--whose members are appointed by the
    IRS and the Treasury Department. In addition, the National Taxpayer
    Advocate, an independent official within the IRS recently identified
    the IRS private tax collection initiative as one of the most serious
    problems facing taxpayers and called on Congress to immediately repeal
    the IRS' authority to outsource tax collection work to private debt
    collectors (National Taxpayer Advocate 2006 Report to Congress).
        Instead of rushing to privatize tax collection functions which
    jeopardizes taxpayer information, reduces potential revenue for the
    Federal Government and undermine efforts to close the tax gap, the IRS
    should increase compliance staffing levels at the IRS to ensure that
    the collection of taxes is restricted to properly trained and
    proficient IRS personnel.
        irs audits of high-income individuals and large businesses and
                                  corporations
        Mr. Chairman, the final issue that I would like to discuss is IRS
    enforcement efforts with regard to high-income individuals and large
    businesses and corporations. I previously noted the drastic staff
    reductions in the estate and gift tax division that occurred last year
    and will obviously hamper the Service's ability to achieve greater
    compliance from the wealthiest Americans. In addition, recent IRS data
    shows that IRS audits of high-income individuals have dropped
    dramatically over the past decade. The audit rate for face-to-face
    audits fell from 2.9 percent of high-income tax filers in fiscal year
    1992 to 0.38 percent in fiscal year 2001 and then drifted down to 0.35
    percent in fiscal year 2004. While the audit rate has rebounded
    somewhat in the last 2 years, it is still far below the level of the
    mid-1990's. These facts seem to directly contradict claims by the IRS
    that the Service's first enforcement priority is to discourage and
    deter non-compliance, with an emphasis on high-income individuals.
        We are seeing similar troubling trends with respect to large
    corporations. While this issue has just started receiving public
    attention in recent weeks, it has long been of concern to IRS employees
    that believe recent IRS currency and cycle time initiatives are
    resulting in the premature closing of audits of large companies,
    possibly leaving hundreds of millions of dollars of taxes owed on the
    table. IRS data shows the thoroughness of IRS enforcement efforts for
    the Nation's largest corporations--measured by the number of hours
    devoted to each audit--has substantially declined since fiscal year
    2002. IRS data also show that the annual audit rates for these
    corporations, all with assets of $250 million or more, while increasing
    in fiscal year 2004 and 2005, receded in 2006 to about the level it was
    in 2002 and is much lower than levels that prevailed a decade or more
    ago.
        Although the number of the largest corporations is small, they are
    a very significant presence in the American economy. In fiscal year
    2002, the largest corporations were responsible for almost 75 percent
    of all additional taxes the IRS auditors said were owed the government.
    By comparison, low and middle income taxpayers in the same year were
    responsible for less than 10 percent of the total.
        Agency data shows that audit attention given those corporations
    with $250 million or more in assets has substantially declined in the
    last 5 years. In 2002, an average of 1,210 hours were devoted to each
    of the audits of the corporations in this category. The time devoted to
    each audit dropped sharply in 2004 and by 2006 the number of hours per
    audit remained 20 percent below what it was in 2002.
        But what may be most disturbing is that according to IRS' own data,
    while the coverage rate of large corporation returns (identified as
    those with assets of $10 million and higher) increased in fiscal year
    2004 and 2005, the number of audits for these corporations actually
    decreased in 2006. Clearly, the rationale the IRS is using to justify a
    reduction in time and scope of large corporation audits, that is, to
    allow for expanding the total number of companies audited is not
    working.
        IRS officials have continued to point to a rise in additional tax
    recommended for each hour of audit as a sign that the policy is
    working, but most auditors know that this rise can be primarily
    attributed to the proliferation of illegal tax shelters which makes it
    easier to find additional taxes due.
        Warnings about the potential negative consequences of such policy
    decisions were made by a number of IRS employees in a recent New York
    Times article and are not new. In fact, when the IRS first began
    limiting the time and scope of business audits through implementation
    of the Limited Issue Focused Examination (LIFE) process in 2002, the
    former chief counsel of the IRS said that the IRS' proposed reductions
    in cycle time of corporate audits would ``virtually guarantee that IRS
    auditors would miss tax dodges, fail to explore suspicious
    transactions, or even walk away from audits that are on the verge of
    finding wrongdoing.''
        In addition, IRS employees have raised concerns about this shift in
    approach to the auditing of business tax returns since its
    implementation several years ago. Their concerns are multi-fold.
    Primarily, employees' feel that their experience and professional
    judgment is being ignored when the scope of audits is limited and cycle
    times are reduced. Revenue agents need flexibility to determine the
    scope of an audit and need the ability to expand the examination time
    when necessary. The men and women of the IRS that perform these audits
    are highly experienced employees who know which issues to examine and
    when more time is necessary on a case. But under current IRS policies,
    this is just not the case.
        Mr. Chairman, we have heard directly from a number of our members
    about the detrimental effect this policy has had not just on efforts to
    ensure corporations are in full compliance, but also how this misguided
    policy is damaging employee morale. In one instance, an IRS agent with
    29 years of experience, including 19 as an international specialist
    examining tax returns of large, multinational corporations was given an
    unreasonably short period of time to examine 3 tax years of a very
    large company. The agent reported being constantly harassed for
    refusing to further limit the scope of the examination beyond that
    which was set at the beginning of the audit, even though he had
    successfully completed two prior examinations of the same taxpayer in a
    timely manner. The employee knew the issues and how to examine them but
    also knew they would need more than the allotted time to complete his
    part of the examination. But, despite past successes, management
    refused to provide the employee with additional time to complete his
    portion of the audit and labeled the employee as uncooperative and not
    a ``team player.'' Although the employee refused to compromise, he
    believed that other members of the examination team had been pressured
    into dropping issues which likely would have resulted in additional
    tax.
        Mr. Chairman, in the face of a rising tax gap and exploding Federal
    deficits, it is imperative that the agency is provided with the
    necessary resources to allow IRS professionals to pursue each and every
    dollar of the taxes owed by large businesses and corporations. Allowing
    these corporations to pay just a fraction of what they owe in taxes
    greatly hinders efforts to close the tax gap and is fundamentally
    unfair to the millions of ordinary taxpayers that dutifully pay their
    taxes. Only by increasing the overall number of IRS employees that do
    this work can the Service ensure that businesses and large corporations
    are complying with their tax obligations and that the tax gap is being
    closed.
                                   conclusion
        It is an indisputable fact that the IRS workforce is getting mixed
    signals regarding its value to the mission of the Service and the level
    of workforce investment the Service is willing to make. NTEU believes
    that the drastic reductions of some of the IRS's most productive
    employees, reliance on outside contractors to handle inherently
    governmental activities such as the collection of taxes, and a shift in
    philosophy which focuses enforcement efforts too much on wage earners
    and not enough on high-income individuals and large businesses and
    corporations, only serve to undermine the agency's ability to fulfill
    its tax enforcement mission and hamper efforts to close the tax gap.
                                     ______

              Prepared Statement of the Pacific Salmon Commission
        Mr. Chairman, my name is Roland Rousseau and I serve as an
    alternate commissioner on the Pacific Salmon Commission (PSC) and the
    chair of the Budget Committee for the U.S. section of the Commission.
    The Pacific Salmon Treaty (Treaty) between the United States and Canada
    was established in 1985. An subsequent agreement was concluded in June
    of 1999 (1999 agreement) that established new abundance-based fishing
    regimes under the treaty and made other improvements in the treaty's
    structure. During fiscal year 2008, the PSC will conduct very important
    negotiations to renew provisions of treaty fishing regimes that are
    scheduled to expire at the end of 2008. The U.S. section recommends
    that Congress:
        For Department of Commerce:
      --Fund the Pacific Salmon Treaty line item of the National Marine
            Fisheries Service at $8,000,000 for fiscal year 2008, restoring
            $1,000,000 previously provided by Congress. This funding
            provides the technical support for the States of Alaska,
            Washington, Oregon and Idaho and the National Marine Fisheries
            Service to conduct the salmon stock assessment and fishery
            management programs required to implement the treaty fishing
            regimes. Included within the total amount of $8,000,000 is
            $400,000 to continue a joint Transboundary River Enhancement
            Program required by the treaty.
      --Fund the Pacific Salmon Treaty Chinook Salmon Agreement line item
            of the National Marine Fisheries Service for fiscal year 2008
            at $1,844,000, level funding from what was provided by Congress
            for fiscal year 2006. This funding continues to be necessary to
            acquire the technical information to implement abundance-based
            Chinook salmon management provided for under the 1999
            agreement.
        For Department of State fund the PSC at $3,049,000, under
    International Fisheries Commission, Department of State. This is
    approximate level funding from that provided in fiscal year 2006 to
    fund the bilateral PSC office and staff, and to support U.S. section
    activities required to implement provisions of the treaty. Funding for
    the total International Fisheries Commission line item should be
    $24,000,000, the funding level for fiscal year 2006, to provide full
    funding for the operations of all the fishery commissions, including
    the PSC.
        The base treaty implementation projects include a wide range of
    stock assessment, fishery monitoring, and technical support activities
    for all five species of Pacific salmon in the fisheries and rivers from
    Southeast Alaska to those of Washington, Oregon, and Idaho. The States
    of Alaska, Washington, Oregon, and Idaho, and the National Marine
    Fisheries Service (NMFS), are charged with carrying out major portions
    of the salmon fishery stock assessment and harvest management actions
    required under the treaty. Federal funding for these activities is
    provided through NMFS on an annual basis. The agency projects carried
    out under PSC funding are directed toward acquiring, analyzing, and
    sharing the information required to implement the salmon conservation
    and sharing principles of the treaty. A wide range of programs for
    salmon stock size assessments, escapement enumeration, stock
    distribution, and catch and effort information from fisheries, are
    represented. The information from many of these programs is used
    directly to establish fishing seasons and harvest levels. Congress
    increased this funding by $2,000,000 in fiscal year 2005 to a total of
    $8,000,000 to provide for programs needed to implement the new
    abundance-based fishing regimes established under the 1999 agreement,
    but the level was reduced to $7,000,000 in fiscal year 2006. The U.S.
    section recommends that $8,000,000 be restored in fiscal year 2008 to
    allow full implementation of treaty provisions. The 1999 agreement
    updated provisions of the Pacific Salmon Treaty including fishing
    arrangements and abundance-based management approaches for Chinook,
    southern coho, Northern Boundary and Transboundary River fisheries. The
    $400,000 that has been provided since 1988 for a joint Transboundary
    River enhancement program with Canada is included in this amount.
        In 1996, the United States adopted an abundance-based approach to
    managing Chinook salmon fisheries in Southeast Alaska. Under this
    approach, Chinook harvest levels are based on annual estimates of
    Chinook abundance. This system replaced fixed harvest ceilings agreed
    to in 1985, which did not respond to annual fluctuations in Chinook
    salmon populations. The revised 1999 agreement adopted this abundance-
    based management approach for all Chinook fisheries subject to the
    treaty. In recognition of this new management approach, since 1998,
    Congress has provided $1,844,000 annually to allow for the collection
    of stock assessment and fishery management information necessary for
    implementation. Through a rigorous competitive technical review
    process, the States of Alaska, Washington, Oregon, and Idaho, and the
    24 treaty tribes are using the funding to implement abundance-based
    Chinook salmon management coast-wide under the new agreement. The U.S.
    section recommends level funding of $1,844,000 for fiscal year 2008 to
    support the implementation of abundance-based Chinook salmon
    management.
        The United States and Canada agreed in 1988 to a joint salmon
    enhancement program on the Transboundary Rivers, which rise in Canada
    and flow to the sea through Southeast Alaska. Since 1989, Congress has
    provided $400,000 annually for this effort through the National Marine
    Fisheries Service International Fisheries Commission line item under
    the Conservation and Management Operations activity. Canada provides an
    equal amount of funding and support for this bilateral program. This
    funding is included in the $8,000,000 the U.S. section is recommending
    for the fiscal year 2008 Pacific Salmon Treaty line item.
        The U.S. section of the PSC recommends that $3,049,000 for
    implementation of the treaty be provided in the Department of State's
    International Fisheries Commissions line item in fiscal year 2008. This
    is $20,000 more than the amount provided by Congress for fiscal year
    2006 and is vitally needed to support U.S. commitments made in the 1999
    agreement and support costs for U.S. section participation. This
    funding provides for the United States contribution to the bilateral
    PSC staff and offices based in Vancouver, British Columbia. It also
    provides for travel for U.S. commissioners, panel members, and
    technical committee members and stipends for authorized commissioners
    and panel members. Increasing travel costs, less favorable currency
    exchange rates with Canada and increased costs associated with the
    renegotiation of fishing regimes that will be in progress during fiscal
    year 2008, make it very important that this funding is available to
    support PSC operations.
        This concludes the statement of the U.S. section of the PSC
    submitted for consideration by your committee. We wish to thank the
    committee for the support that it has given us in the past.

                      SUMMARY OF PROGRAM FUNDING FOR THE UNITED STATES-CANADA PACIFIC SALMON TREATY
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year     Fiscal Year
                                                                           2006            2008           Section
                                                                       Appropriation  Recommendation     Shortfall
    ----------------------------------------------------------------------------------------------------------------
    Department of Commerce:
        Pacific Salmon Treaty Line Item.............................      $7,000,000  \1\ $8,000,000      $1,000,000
        Pacific Salmon Treaty--Chinook Salmon Agreement Line Item...       1,844,000       1,844,000  ..............
    Department of State: International Fisheries Commissions:              3,029,000       3,049,000          20,000
     Pacific Salmon Commission......................................
    ----------------------------------------------------------------------------------------------------------------
    \1\ The recommended fiscal year 2008 amount includes $400,000 provided for the Joint Transboundary River
      Enhancement Program previously funded under the NMFS International Fisheries Commission account.

                                     ______

            Prepared Statement of the American Astronomical Society
        I appreciate the opportunity to comment on NASA's 2008 science
    budget from my perspective as president of the American Astronomical
    Society (AAS).
        The AAS believes that NASA's Science Mission Directorate (SMD)
    should be part of the American innovation agenda, which seeks to
    bolster funding for the National Science Foundation (NSF), the
    Department of Energy's (DOE) Office of Science, and the National
    Institute for Standards and Technology (NIST). These agencies have been
    identified as vital to America's leadership in innovation, by training
    a highly-skilled workforce and fostering the discovery and development
    of new ideas. NASA science is a partner in these endeavors.
    Specifically, we advocate for increasing NASA SMD's fiscal year 2008
    budget to $5.566 billion, which is 6 percent over the final fiscal year
    2007 amount and a modest increase over the President's fiscal year 2008
    request.
        The AAS is the major organization of professional astronomers in
    the United States. The basic objective of the AAS is to promote the
    advancement of astronomy and closely related branches of science. The
    membership, numbering approximately 7,000, includes physicists,
    mathematicians, geologists, and engineers whose interests lie within
    the broad spectrum of modern astronomy. AAS members advise NASA on
    scientific priorities, participate in NASA missions, and use the data
    from NASA's outstanding scientific discoveries to build a coherent
    picture for the origin and evolution of the Earth, the solar system,
    our galaxy, and the universe as a whole.
        In the recent past, the astronomical community, working together
    with NASA, has produced a remarkable string of successes that have
    changed our basic picture of the universe. Observations with the Hubble
    Space Telescope (HST) of exploding stars whose light has been traveling
    for half the age of the universe, combined with the exquisite map of
    the glow from the big bang itself from the Wilkinson Microwave
    Anisotropy Probe and information from other observatories, shows that
    the universe we live in is not the universe we see. Mysterious dark
    matter makes the ordinary particles clump together to form stars and
    galaxies. Even more mysterious dark energy makes the expansion of the
    universe speed up. Both of these concepts challenge our understanding
    of the nature of matter and energy in the universe and open up broad
    new vistas for future work. An ambitious set of great observatories,
    now including Spitzer in the infrared and Chandra at X-ray wavelengths,
    is hard at work, enriching our understanding of how the universe works.
        Similarly, exploration of the solar system has been a resounding
    success for NASA, with exciting missions to Mars and to Saturn
    revealing a beautiful and intricate history that is interwoven with the
    history of our planet Earth. The discovery of planets around other
    stars has been a great triumph of the past decade, raising hopes for
    seeing planets like our own Earth, and placing our own solar system,
    and life itself, in a new context.
        NASA's key role in these discoveries makes its science program of
    deep interest to AAS members. In the past, NASA has worked with the
    astronomical community to find the most promising paths forward. The
    James Webb Space Telescope (JWST) is a large program that was endorsed
    by the National Academy of Sciences (NAS) Decadal Survey in astronomy.
    When completed in the next decade, it will help expand the frontier of
    knowledge to the deepest reaches of space and time and into the hidden
    places where stars and planets are formed. The astronomical community
    also recommended, and NASA plans to execute, a wide range of other
    programs--some of moderate scope and others that nourish the
    infrastructure for a healthy and vibrant community. This balanced
    approach has proved best--with a range of opportunities carefully
    crafted to get the best science from NASA's science budget.
        Recognizing the current challenging budget climate, in which
    federal non-security, discretionary spending is declining by about 1
    percent, the current NASA budget for science is nonetheless cause for
    concern. The continuing resolution (CR), now Public Law 110-005,
    provided funding for many federal agencies including NASA for fiscal
    year 2007. NASA science has suffered a $78.8 million shortfall from the
    President's fiscal year 2007 request. The President's fiscal year 2008
    budget request represents a 0.9 percent increase in NASA science
    spending over the fiscal year 2007 request; however, with inflation
    currently around 2 percent, the fiscal year 2008 request still
    represents a decline in real dollars available for research in science
    compared to the President's fiscal year 2007 request. A key question is
    what will become the new baseline for NASA science funding, the fiscal
    year 2007 request or the CR. If the CR is adopted as the new baseline,
    this could represent a loss to NASA science in the out-years of $1
    billion or more.
        The AAS therefore recommends that Congress increase the fiscal year
    2008 budget for NASA science by 6 percent over the CR level. This
    modest increase over the President's fiscal year 2008 request will help
    maintain balance within the science portfolio, which is critical to our
    community. It is important to support small missions and research
    grants to individual investigators. Otherwise, many exciting programs
    to explore the solar system, to detect planets around other stars, to
    measure gravitational waves from astronomical events, to explore black
    holes in all their manifestations, and to seek the nature of the dark
    energy may be threatened. In particular, we advocate for restoring
    funding to the Explorer program and protecting the Beyond Einstein
    mission.
        We further advocate that NASA science should be part of the
    American innovation agenda. Maintaining and strengthening American
    innovation in science and technology has broad bipartisan support, both
    in Congress and the administration. Our recommended increase of 6
    percent in NASA science is smaller than the increases proposed for the
    science component of other agencies identified as strategically
    important for innovation. These include an 8.7 percent increase for
    NSF, a 16 percent increase for Department of Energy's Office of
    science, and nearly 21 percent for NIST (all increases over the CR
    levels). For AAS members, the cuts in NASA's support for science
    threaten to offset or overwhelm the increases that have been aimed at
    improving America's innovation through the NSF, DOE, and NIST. A real
    effort to improve science and engineering in the United States should
    treat NASA's science program as part of the solution. NASA's science
    missions inspire new generations of young people to pursue careers in
    science, engineering, and mathematics and train these students and
    young scientists to become the innovators of the future.
        Finally, the AAS applauds the administration and Congress for
    upholding the priorities of the NAS Decadal Survey in astronomy. We are
    pleased that the development of JWST and HST servicing mission are
    priorities in the new budget, but we stress that balance is critical in
    the science portfolio.
        NASA science has been and continues to be a beacon of innovation
    and discovery by inspiring generations of young people, capturing the
    imagination of the public, developing new technologies, and discovering
    profound insights into the nature of our universe.
        The AAS and its members are prepared to work with Congress and with
    NASA to help find the best way forward. We will give you our best
    advice and we will work diligently to make the most of NASA's
    investment in science.
                                     ______

        Prepared Statement of the National Fish and Wildlife Foundation
        Madam Chairman and members of the subcommittee: I appreciate the
    opportunity to submit testimony regarding the fiscal year 2008 funding
    request for the National Fish and Wildlife Foundation (Foundation). The
    Foundation respectfully requests that the committee fund these efforts
    at the following levels: $4 million through the National Oceanic and
    Atmospheric Administration appropriation.
        This request lies well within the authorized levels and will allow
    the Foundation to better meet the demand for new or expanded strategic
    conservation programs. The appropriations provided by the committee are
    also used by the Foundation to attract additional funding for
    conservation projects through mitigation, settlements, and direct
    gifts.
        These dollars will be focused on mutually agreed upon projects
    across the country. Furthermore, the appropriated $4 million will be
    turned into a minimum of $8 million, according to the Foundation's
    Congressional Charter which requires a minimum of a 1-to-1 match. We
    have been operating on a 3-to-1 match historically, which means that
    the $4 million has the potential to become $16 million or more for on-
    the-ground and in-the-water conservation. One other note of special
    interest is that according to the Foundation's charter, all directly
    appropriated funds have to be obligated to grants as they are not
    available to the Foundation for any direct or indirect expenses.
        Since our inception in 1984 through fiscal year 2006, the
    Foundation has supported over 8,865 grants and leveraged over $374
    million in Federal funds for more than $1.2 billion in on-the-ground
    conservation. This has resulted in more than 18.35 million acres of
    restored and managed wildlife habitat; new hope for countless species
    under stress; new models of private land stewardship; and stronger
    education programs in schools and local communities. We recognize that
    without the seed money this committee provides, many of these
    conservation benefits would not be realized.
        The federal dollars appropriated by this committee allow the
    Foundation to assist NOAA in accomplishing its mission. Whether it
    involves coastal-habitat conservation, species management, or
    conservation education, the Foundation strategically invests the
    federal funds entrusted to us in sound projects. This request would
    allow the Foundation to expand its highly successful grant programs to
    better assist NOAA in maximizing protection and restoration of marine
    and coastal resources. Over the 14 years of the NOAA-Foundation
    partnership, more than $47 million in NOAA funds have been leveraged to
    produce over $142 million for on-the-ground and in-the-water
    conservation. From 2002-2006, 788 projects have been awarded, focusing
    on the conservation needs of at-risk species, habitat enhancement,
    coastal restoration, marine debris clean-up, environmental education,
    and community-based stewardship. With our fiscal year 2006 NOAA
    appropriations, we were able to fund 39 projects, representing over
    $1.4 million in Foundation federal funds, leveraging it with $8.4
    million in other federal and non-federal funds to commit $9.8 million
    for coastal and marine conservation.
        The National Fish and Wildlife Foundation continues to be one of,
    if not the most, cost-effective conservation program funded in part by
    the Federal Government. Congress established the Foundation 23 years
    ago, and since that time the Foundation's vision for more healthy and
    abundant populations of fish, wildlife, and plants has flourished
    through the creation of numerous valuable partnerships. The breadth of
    our partnerships is highlighted through our active agreements with 14
    federal agencies, as well as numerous corporations, foundations, and
    individual grantees. Through these unique arrangements, we are able to
    leverage federal funds, bring agencies and industry together, as well
    as produce tangible, measurable results. Our history of collaboration
    has given way to programs and initiatives such as the Chesapeake Bay
    Small Watershed Grants Program, Chesapeake Bay Targeted Watershed
    Grants, North American Waterfowl Management Plan, the Neotropical
    Migratory Bird Conservation Program, and the National Fish Habitat
    Initiative. With the support of the committee in fiscal year 2008, we
    can continue to uphold our mission of enriching fish, wildlife, and the
    habitat on which they depend.
        Working Marine and Coastal Habitats.--The Foundation and NOAA work
    together to identify the highest priority coastal and marine
    conservation projects to sustain, restore, and enhance marine and
    coastal habitats, as well as increase populations of imperiled marine
    species. Funds available through the NOAA/Foundation partnership seek
    to achieve three specific objectives, through our Marine and Coastal
    Life and Habitats Keystone Initiative. These three objectives include:
    increase and sustain productivity of key spawning grounds and unique
    marine habitats by reducing unintended human impacts; increase
    populations of imperiled marine species; and improve and sustain the
    health of the Nation's major estuaries and the Great Lakes by restoring
    and protecting critical coastal habitat, improving water quality in
    tributaries, and enhancing populations of keystone species.
        Conserving Fish, Wildlife, and Plants.--The Foundation also
    administers several programs which are directed to specific species or
    habitats and which are administered to rally private donations and
    contributions from other agencies around these strategic focus areas.
    Examples of such programs include: the Marine Debris Prevention and
    Removal Program, the Coral Reef Conservation Fund, the National Whale
    Conservation Fund, the Chesapeake Bay Small Watershed Grants Program,
    the Pacific Grassroots Salmon Initiative, the Delaware Estuary Grants
    Program, and the Pinellas County Environmental Fund.
      --Coral Reef Conservation Fund.--Responding to an alarming decline in
            both the quantity and productive quality of the world's coral
            reef ecosystems, the Foundation partnered with NOAA to
            establish the Coral Reef Conservation Fund. Through this fund,
            the Foundation supports local to ecosystem level projects that
            restore damaged reef systems and prevent further negative
            impacts through both on-the-water and up-the-watershed
            projects. By focusing on specific areas of human impact such as
            anchor damage and sedimentation, we maximize the outcome of our
            programs. The Foundation has provided funding for over 166
            projects with $5.7 million in federal and non-federal funds,
            leveraged with $9.5 million in non-federal matching funds, for
            a total of $15.2 million for coral conservation in 35
            countries, including 4 U.S. States and 8 U.S. territories and
            freely associated States, giving the program a truly global
            reach
      --Marine Debris Prevention and Removal Program.--In 2006, the
            Foundation formed a partnership with the NOAA Marine Debris
            Program to establish a competitive grants program aimed to
            foster public and private relationships and support research,
            prevention, and reduction activities related to the issue of
            marine debris. Through this program, our goals are to build a
            well informed public that acts as a steward of coastal and
            marine ecosystems, thereby sustaining the health and
            productivity of this ecosystem for the benefit of society as a
            whole. In 2006, the Foundation awarded 18 projects with over
            $782,000 in federal funds, which was leveraged with over $1
            million in non-federal matching funds for projects in 9 States
            and 2 U.S. territories.
        With our NOAA appropriations, the Foundation also leveraged
    resources to fund projects that directly benefit endangered and
    threatened fish and marine species, including such species as North
    Atlantic right whales, Loggerhead turtles, Hawskbill turtles, Pacific
    coho salmon, and Atlantic salmon. We also measure our success in part
    by preventing the listing of species under the Endangered Species Act,
    as well as by stabilizing and hopefully moving others off the list. We
    invested in common sense and innovative cooperative approaches to
    endangered species, building bridges between the government and the
    private sector.
        New Strategic Plan.--During 2006, the Foundation underwent a
    detailed self-evaluation, which resulted in the development of a new
    strategic plan for the organization. The strategic planning process
    revealed that the Foundation maximizes conservation benefits when it
    targets a series of grants towards a specific geographic region,
    habitat type, or conservation challenge. To ensure that future grants
    achieve a sustainable and measurable conservation impact, the
    Foundation is establishing targeted Keystone Initiatives around the
    core conservation investment areas in which the Foundation has
    historically specialized. The Keystone Initiatives represent the new
    core portfolio of the Foundation's grant making with clearly defined
    long-term goals, well-articulated strategies, and defined budgets to
    reach desired outcomes.
        The four initial Keystone Initiatives, launched by the Foundation
    in 2007, include birds; wildlife and landscape scale habitats;
    freshwater fish and habitats; and marine and coastal life and habitats.
    Additional Keystone Initiatives being developed include wildlife and
    agriculture, wildlife and energy development, invasive species, and
    future conservation Leaders. Each grant approved under a Keystone
    Initiative will be designed to provide a measurable outcome that brings
    us one step closer to the final long-term conservation goal of the
    initiative. Where appropriate, the strategies and outcomes of the
    Foundation's Special Grant programs, such as the Great Lakes
    Restoration Fund, Bring Back the Natives, and the Coral Reef
    Conservation Fund, will be designed to directly contribute to the long-
    term Keystone Initiative goal. Through our targeted grants, the
    Foundation seeks to achieve measurable success in ``moving the needle''
    on these critical conservation objectives over the next 5 to 10 year
    period.
        Accountability and Grantsmanship.--During the strategic planning
    process, Foundation staff spent time listening to feedback from our
    agency partners and grantees. Choke points in our grant making process
    were identified, and the Foundation is in the process of revising
    portions of our grant review and contracting process to ensure we
    maximize efficiency while maintaining strict financial and evaluation-
    based requirements. The Foundation has also launched a new website that
    is more user-friendly and content rich than the previous version. This
    new interactive tool will allow the Foundation to improve communication
    with our stakeholders and will help streamline our grant making
    process.
        To ensure that only those grants with the greatest likelihood of
    obtaining conservation outcomes directly related to a Keystone
    Initiative are funded, the Foundation has implemented a thorough review
    process. Applicants are required to submit a pre-proposal which allows
    staff to proactively work with applicants to refine and improve their
    application before submitting a full proposal. All full proposals are
    then submitted to a peer review process which involves five external
    reviews representing State agencies, federal agencies, affected
    industry, environmental non-profits, and academics. Grants are also
    reviewed by the Foundation's Keystone Initiative staff, as well as
    evaluation staff, before being recommended to the board of directors
    for approval. In addition, the Foundation provides a 30-day
    notification to the members of Congress for the congressional district
    and State in which a grant will be funded, prior to making a funding
    decision, according to our congressional charter.
        Basic Facts About the Foundation.--The Foundation is governed by a
    25-member board of directors, appointed by the Secretary of Interior
    and in consultation with the Secretary of Commerce. At the direction of
    Congress, the board operates on a nonpartisan basis. Directors do not
    receive any financial compensation for service on the board; in fact,
    most all of our directors make financial contributions to the
    Foundation. It is a diverse board, and includes the director of the
    U.S. Fish and Wildlife Service, the administrator of the National
    Oceanic and Atmospheric Administration, as well as corporate and
    philanthropic leaders with a tenacious commitment to fish and wildlife
    conservation.
        None of our federally appropriated funds are used for lobbying,
    litigation, or the Foundation's administrative expenses. By
    implementing strategic real-world solutions with the private sector,
    while avoiding regulatory or advocacy activities, we serve as a model
    for developing cooperative solutions to environmental issues. We are
    confident that the money you appropriate to the Foundation is making a
    positive difference.

       NATIONAL FISH AND WILDLIFE FOUNDATION'S FEDERAL APPROPRIATIONS FOR
                              FISCAL YEAR 2006 \1\
                            [In millions of dollars]
    ------------------------------------------------------------------------
                      Agency Funding Source                   Funding Amount
    ------------------------------------------------------------------------
    Natural Resources Conservation Service..................           2.970
    Fish and Wildlife Service...............................           7.656
        Washington Salmon...................................           1.971
        Atlantic Salmon.....................................           0.985
    Bureau of Land Management...............................           2.955
    Forest Service..........................................           2.637
    National Oceanic and Atmospheric Administration.........           1.400
        Pinellas County Environmental Fund..................           0.937
    ------------------------------------------------------------------------
    \1\ We are providing the Foundation's appropriations for the last full
      fiscal year, as we are continuing to work with our agencies to
      finalize our fiscal year 2007 funding allocations.

                                     ______

    Prepared Statement of the National Federation of Community Broadcasters
        Thank you for the opportunity to submit testimony to this
    Subcommittee requesting a $30 million appropriation for the Commerce
    Department's Public Telecommunications Facilities Program (PTFP) in
    fiscal year 2007. As the President and CEO of the National Federation
    of Community Broadcasters, I speak on behalf of 250 community radio
    stations and related organizations across the country including many of
    the new Low Power FM stations. NFCB is the sole national organization
    representing this group of stations, which provide independent local
    service in both the smallest communities and largest metropolitan areas
    of this country. Nearly half of NFCB's members are rural stations, and
    half are controlled by people of color.
        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.
      --Supports funding to help public and community radio stations
            prepare to provide emergency information during natural or
            manmade disasters.
      --Supports restoration of administrative funding for the program
            which was cut in fiscal year 2005.
        Community Radio supports $30 million in funding for the Public
    Telecommunications Facilities Program in fiscal year 2008. 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 low income communities. PTFP funds new stations, expanding the
    reach of public broadcasting to rural areas and to audiences that are
    not served by existing stations. In addition, it replaces obsolete and
    worn out equipment so that the existing public stations can continue to
    broadcast high quality programming. PTFP funding is critical to
    ensuring public radios' readiness to provide life-saving information in
    case of local disasters, as we have seen during the weather emergencies
    the last few years. Finally, with the advent of digital broadcasting,
    PTFP funding is helping with the conversion to this new technology.
        We support $30 million in funding to ensure that both the on-going
    program--currently funded in fiscal year 2007 at $21.8 million--will be
    continued, and that the increase to $30 million will be available to
    help cover the cost of improving the emergency infrastructure of public
    broadcasting stations. This increase in funding is an urgent need in
    order for stations to withstand and broadcast through extreme weather
    or other emergency situations. In addition, increased funding is needed
    to assist the conversion of public radio and television to digital.
    This is particularly important because the FCC has endorsed a standard
    for digital radio broadcasting, the television conversion deadline is
    imminent, and commercial radio stations are converting to digital
    transmission and public radio should not be left behind.
        PTFP funding is unique. It is the only source of funding available
    to help get new stations on the air and to ensure that public
    broadcasting is available everywhere in the United States. At a time
    when local service is being abandoned by commercial radio, PTFP aids
    communities to develop their own local stations which provide local
    information and emergency notifications.
        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. Often they fund translators to expand the coverage of
    an existing station and 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
    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 stations need to be prepared to provide continuing
    service during emergency situations. As we saw during the hurricanes
    and severe weather the last couple of years, radio is the most
    effective medium of communication about evacuations, weather forecasts,
    traffic, services available, etc. Since everyone has radios and they
    are portable and battery operated, a radio is the first source of this
    critical information. But stations must have emergency power at both
    the studios and the transmitter in order to provide this service.
        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 and over 300 public radio transmitters have
    been converted. Most exciting to public radio is that stations can
    broadcast two or more high quality signals, even while they continue to
    provide the analog signal. The development of additional digital audio
    channels will potentially more than double the public service that
    public radio can provide, particularly to unserved and underserved
    communities.
        Community Radio supports additional administrative funding for the
    PTFP. While we thank the Senate for continuing funding of PTFP,
    financial support for the skilled dedicated staff who administer these
    funds was cut nearly in half in fiscal year 2005. Restoration of
    administrative funds to the earlier level will assure that the program
    will be carefully and thoroughly administered.
        Over the last few years, the number of administrative staff for the
    Public Telecommunications Facilities Program has been decreased. With
    fewer Program Officers there is less support for applicants or outreach
    about the program and reduced administrative funding hurts the review
    process. NFCB supports the restoration of these funds.
        Thank you for your consideration of our testimony.
                                     ______

          Prepared Statement of the American Public Power Association
        The American Public Power Association (APPA) is the national
    service organization representing the interests of over 2,000 municipal
    and other state and locally owned utilities in 49 of the 50 States (all
    but Hawaii). Collectively, public power utilities deliver electricity
    to one of every seven electric consumers (approximately 44 million
    people), serving some of the nation's largest cities. However, the vast
    majority of APPA's members serve communities with populations of 10,000
    people or less.
        The Department of Justice's (DOJ) Antitrust Division and the
    Federal Trade Commission (FTC) play critical roles in monitoring and
    enforcing antitrust laws affecting the electric utility industry. With
    the repeal of the Public Utility Holding Company Act (PUHCA) included
    in the Energy Policy Act of 2005, the electric utility industry is
    likely to experience an increase in mergers that could result in
    increased market power in certain regions. This development coupled
    with the volatility and uncertainty continuing to occur in wholesale
    electricity markets makes the oversight provided by DOJ and the FTC
    more critical than ever.
        APPA supports adequate funding for staffing antitrust enforcement
    and oversight at the FTC and DOJ. Specifically, we support the
    Administration's request of $241 million for fiscal year 2008 for the
    FTC. We are heartened that the downward trend in funding for the DOJ's
    Antitrust Division over several years has been reversed, and are
    pleased with the Administration's request of $155 million for fiscal
    year 2008.
        We appreciate the opportunity to submit this statement outlining
    our fiscal year 2008 funding priorities within the Commerce, Justice
    and Science Subcommittee's jurisdiction.
                                     ______

              Prepared Statement of the Gaviota Coast Conservancy
        Madame Chairwoman and Honorable members of the Subcommittee, I
    appreciate the opportunity to present this testimony in support of an
    appropriation of $1.5 million from NOAA's Coastal and Estuarine Land
    Conservation Program to acquire a 42-acre property at Gaviota Cove in
    California.
        The Gaviota Coast Conservancy is the primary land conservation,
    advocacy group for the Gaviota Coast. Since our incorporation in 1996
    as a non-profit, public benefit organization, we have been working to
    secure permanent protection of the Gaviota Coast's significant
    resources.
        Located in western Santa Barbara County between Coal Oil Point and
    Point Sal, the Gaviota Coast is approximately 100 miles north of Los
    Angeles and lies between the Channel Islands National Marine Sanctuary
    and the Los Padres National Forest. Offering a wide variety of natural,
    recreational and agricultural resources, it is a high priority area for
    conservation and is Southern California's largest remaining stretch of
    pristine coastline. This remarkable 76-mile landscape includes 15
    percent of the Southern California coast, representing about 50 percent
    of its remaining undeveloped coastline. More than 40 sensitive species
    inhabit this area, including the California red-legged frog, western
    snowy plover, southern steelhead trout, southern sea otter, peregrine
    falcon and tidewater goby. More than 525 plant species, representing
    approximately one-half of the plant families found in California, live
    in the Gaviota Coast area. This relatively undisturbed area spans more
    than 30 coastal watersheds, allowing it to serve as a migration
    corridor between inland, mountainous and coastal habitat areas, and
    makes the Gaviota Coast the best opportunity to provide a safe-harbor
    for the threatened biodiversity of Southern California's coastal
    Mediterranean biome. This biome is unique in America.
        The Gaviota Coast also contains some of the most significant
    archaeological sites in California, preserving at least 9,000 years of
    prehistory. The Chumash tribe resided in the area, and sites of several
    Chumash towns, as well as numerous tribal rock art sites, are located
    along the coast. Large cattle ranches and adobes still exist and are
    testimony to the early settlements and agricultural history of the
    region. The Gaviota Coast is a much-loved area for outdoor recreation
    due to its proximity to major metropolitan areas, its scenic vistas,
    rugged beaches, excellent wildlife viewing, and panoramic coastal
    hillsides and mesas. It is home to several state and county parks that
    are popular venues for activities such as hiking, camping, swimming,
    picnicking, hang-gliding, and surfing. A study by the National Park
    Service in 2004 determined that the natural and cultural resources of
    the Gaviota Coast are nationally significant and encouraged efforts to
    conserve them.
        Situated within the Santa Barbara Coast State Seashore, and
    abutting Gaviota State Park on two sides, the 42-acre Gaviota Cove
    property has outstanding natural resource, recreation and scenic
    values. As an in-holding within state park lands, and historically used
    for coastal-dependent industry, this project is an excellent
    opportunity to achieve coastal resource enhancements and public
    recreational access. The property also has several known Chumash
    cultural sites. Gaviota Cove is comprised of a variety of habitat
    types, including grasslands, riparian habitat, willow scrub and coastal
    sage scrub, freshwater aquatic, coastal strand, and marine habitats.
    These habitat types are home to many plant and wildlife species,
    including California thrashers, coyotes, white-crowned sparrows,
    rainbow trout, western fence lizards, snowy egrets, and California
    ground squirrels. Some of the sensitive species that may be found on
    the project site are Gaviota tarplant, southern steelhead, globose dune
    beetle, California red-legged frog, yellow-billed cuckoo, two-striped
    garter snake, San Diego horned lizards, and cactus wren. The western
    portion of the northern parcel and the entirety of the southern parcel
    are designated as environmentally sensitive habitat (ESH) areas under
    state law.
        There are two creeks which run through the property: Alcatraz
    Creek, and Cementerio Creek. Both creeks reach the Pacific Ocean at a
    confluence on the southern part of the property. Documented occurrence
    of southwestern pond turtle, a California species of special concern,
    has occurred on both Alcatraz and Cementerio Creeks. Habitat sustained
    by these blue-line creeks includes riparian woodlands, such as arroyo
    willow and black cottonwoods, eucalyptus stands, oak woodlands,
    chaparral, coastal bluff/sage scrub and native perennial and introduced
    annual grassland communities. The property's southern boundary abuts
    the shoreline's sandy beach. The drainages provide critical corridors
    for wildlife movement and the other habitats provide living space for
    both terrestrial and aquatic species.
        As an addition to Gaviota State Park, this project will expand
    recreational opportunities along this beautiful stretch of Southern
    California coast, and protect the magnificent coastal viewshed of
    Gaviota State Park for visitors on and offshore. The Gaviota Cove
    property offers the unique opportunity to link isolated beach portions
    of the Gaviota State Park, adding more than a quarter-mile of shoreline
    to the park and creating a contiguous corridor of publicly accessible
    beach for 6.5 miles. The Gaviota State Park is an extremely popular
    facility, welcoming 86,000 visitors annually for hiking, soaking in hot
    springs, swimming, diving, surfing, fishing and boating. It currently
    has 41 developed campsites, which are popular and often full to
    capacity. In expanding the state park, this project provides excellent
    opportunities to enhance this public recreation resource, allowing
    State Parks to increase its number of campsites and create and enhance
    new trail linkages.
        Increased demand for housing and other development, coupled with
    the rising value of agricultural land, contribute to the rising
    development pressures on the Gaviota Coast. In fact, the county is
    projected to grow by 50 percent by 2025. The California Wilderness
    Coalition has identified the Gaviota Coast as one of California's ten
    most threatened wild places. Development would threaten the area's
    biodiversity and the agricultural way of life. It would adversely
    compromise the area's scenic vistas, air and water quality, and
    invaluable cultural resources.
        An fiscal year 2008 appropriation of $1.5 million from NOAA's
    Coastal and Estuarine Land Conservation Program (CELCP) is needed to
    acquire and protect this 42-acre property. If added to Gaviota State
    Park, it will increase public beach access, expand recreational
    opportunities, provide much needed visitor facilities, protect scenic
    viewshed, and conserve important wildlife habitat.
        In addition to specifically funding Gaviota Cove, I urge your
    support for a substantial increase in overall funding for the Coastal
    and Estuarine Land Conservation Program in fiscal year 2008 to enable
    the protection of significantly more coastal resources than in previous
    years. While I am pleased that the program has finally been recommended
    in the President's budget for $15 million, this level--while a good
    first step--is inadequate when compared to the needs from across the
    country, and what Congress has historically provided for this program.
        It is well established that coastal land uses can have direct and
    significant adverse impacts on marine resources. In light of the fact
    that most Americans live in coastal counties, resulting in ever-
    increasing demands on coastal resources, it is imperative that a high
    priority be placed on coastal, estuarine land conservation if we are to
    properly manage our marine resources.
        Thank you, Madame Chairwoman, for the opportunity to present this
    testimony in support of the Gaviota Cove acquisition and of the CELCP
    program.
                                     ______

               Prepared Statement of Fight Crime: Invest in Kids
        Ms. Chairman and Members of the Senate Appropriations Subcommittee
    on Commerce, Justice, Science and Related Agencies: Thank your for the
    opportunity to submit this written testimony. My name is Mary Ann
    Viverette. I've been with the Gaithersburg Police Department since 1979
    and Chief since 1986. My public safety career has included service on
    the Executive Committee of the Maryland Chief of Police Association,
    service as a Commissioner with the Commission on Accreditation for Law
    Enforcement Agencies, and I am currently the Immediate Past President
    of the International Association of Chiefs of Police. I am also a
    member of Fight Crime: Invest in Kids, an anti-crime group of more than
    3,000 police chiefs, sheriffs, prosecutors, and victims of violence
    from across the country who have come together to take a hard-nosed
    look at the research about what really works to keep kids from becoming
    criminals.
        As a police chief, I know there is no substitute for tough law
    enforcement. Dangerous criminals must be prosecuted and put behind
    bars. Yet law enforcement leaders like myself know better than anyone
    that we cannot arrest and imprison our way out of the crime problem.
    Fortunately, research--and our experiences--show that targeted
    investments that help kids get a good start in life and that intervene
    effectively to redirect offending juveniles onto a different path can
    prevent crime, and can make our communities safer. The federal Juvenile
    Accountability Block Grant (JABG) and Title II and Title V of the
    Juvenile Justice and Delinquency Prevention Act (JJDPA) provide needed
    support for these evidence-based prevention and intervention
    approaches. The bipartisan Second Chance Act, once enacted, will
    authorize additional support for these approaches. On behalf of my
    fellow law enforcement leaders around the nation, I urge you to
    increase our nation's investments in these proven crime-prevention
    strategies that save lives and taxpayer dollars.
        Programs that connect children to caring adults and provide
    constructive activities, especially during the after-school hours of 3
    p.m. to 6 p.m.--the ``prime time for juvenile crime'' on school days--
    are among our most powerful tools for preventing crime. For example, a
    study compared five housing projects without Boys & Girls Clubs to five
    receiving new clubs. At the beginning, drug activity and vandalism were
    the same. But by the time the study ended, the projects without the
    programs had 50 percent more vandalism and scored 37 percent worse on
    drug activity. Similarly, a study of Big Brothers Big Sisters found
    that young people who were randomly assigned to a Big Brother or Big
    Sister mentor were about half as likely to begin illegal drug use and
    nearly one-third less likely to hit someone compared to those who were
    assigned to a waiting list. Despite these proven benefits, more than 14
    million children nationwide still lack adult supervision after school,
    and millions lack a caring, responsible adult mentor in their lives.
        One source of funding for after-school and mentoring programs is
    Title V of the federal Juvenile Justice and Delinquency Prevention Act
    (JJDPA). The Title V Local Delinquency Prevention Grants program is the
    only federal funding source dedicated solely to the prevention of youth
    crime and violence. Almost 1,500 communities have received Title V
    grants since 1994 through a competitive grant process that requires
    states and localities to match at least 50 percent of the grant with
    cash or in-kind contributions.
        For the most dangerous young offenders, especially those who are
    involved in violent gangs, a combination of intensive police
    supervision, expedited sanctions for repeated violence, and expedited
    access to jobs, drug treatment or other services--a carrot-and-stick
    approach--has shown in a number of cities that it can cut homicides
    among violent offenders in high-crime neighborhoods. In Chicago, for
    example, this comprehensive, community-wide approach was tried in a
    group of west side Chicago neighborhoods with a long history of high
    levels of homicide, with another set of dangerous neighborhoods on the
    south side of Chicago serving as the control group. In the carrot-and-
    stick approach area there was a 37 percent drop in quarterly homicide
    rates when the project was implemented, while the decline in homicides
    in the other neighborhood during the same period was 18 percent. In a
    number of locations, Juvenile Accountability Block Grant (JABG) or
    JJDPA state formula grant funds have been used to support these
    efforts.
        Effective interventions that incorporate community sanctions have
    also been shown to reliably cut crime. One such program is the
    Functional Family Therapy (FFT) program. FFT works to engage and
    motivate youth and their families to change behaviors that often result
    in criminal activity. In one evaluation from Salt Lake City, families
    with troubled youths were randomly assigned to either a group that
    received FFT or one that did not. The youths who families received FFT
    were half as likely to be re-arrested as the youth whose families did
    not receive the family therapy. By reducing recidivism among juvenile
    offenders, FFT saves the public an average of $32,000 per youth
    treated.
        Similarly, the Multi-Systemic Therapy (MST) program targets kids
    who are serious juvenile offenders by addressing the multiple factors--
    in peer, school, neighborhood and family environments--known to be
    related to delinquency. One MST study followed juvenile offenders until
    they were, on average, 29-years-old. Individuals who had not received
    MST were 62 percent more likely to have been arrested for an offense,
    and more than twice as likely to be arrested for a violent offense. It
    is also less expensive than other mental health and juvenile justice
    services like residential treatment and incarceration, saving the
    public $4.27 for every dollar invested.
        The transition of juvenile offenders from confinement to ``life on
    the outside'' presents great risks and opportunities for young people
    and society. Juveniles released from confinement still have their
    likely ``prime crime years'' ahead of them. Perpetrators over age 17
    commit 85 percent of all violent crimes and young adults aged 18 to 21
    account for a greater percentage of crime than any other four-year age
    group. Unsuccessful transitions into the community result in an
    alarmingly high recidivism rate for juvenile offenders of 55-75
    percent. Fortunately, the likelihood that young people will
    successfully transition back into society after confinement improves
    markedly with comprehensive, research-based reentry efforts.
    Comprehensive reentry programs are especially effective among young
    people. With their brain development still in progress, young ex-
    offenders are more amenable to effective behavior modification
    interventions, thus saving lives, anguish, and public tax dollars.
        Effective offender reentry efforts include programs like
    Multidimensional Treatment Foster Care (MTFC). Foster care may sound
    like a pass for juveniles who should be paying a more severe price for
    the crime they committed. But for teens who are often used to running
    the streets, and who see a month in custody as just another chance to
    socialize with delinquent friends or learn new criminal behaviors, this
    is a more controlled experience and a tough intervention. MTFC provides
    specially trained foster parents and ongoing supervision by a program
    case manager, as well as frequent contact and coordination of services
    with a youth's parole or probation officer, teachers, work supervisors
    and other involved adults during and after a youth's out of home
    placement. Compared to similar juveniles placed in non-secure group
    facilities, the MTFC approach cuts the average number of repeat arrests
    for seriously delinquent juveniles in half, and six times as many of
    the boys in MTFC as boys in a group home were not arrested again. MTFC
    is also cost-effective: it saves the public an average of over $77,000
    for every juvenile treated.
        The bi-partisan Second Chance Act of 2007 (H.R. 1593/S. 1060) is a
    step toward reducing the high recidivism rate among juvenile and adult
    offenders. The legislation authorizes assistance to states and
    localities to develop and implement strategic plans for comprehensive
    efforts to enable ex-offenders to successfully reenter their
    communities such as: family reunification, job training, education,
    housing, substance abuse and mental health services. The bill would
    also provide for research on reentry, as well as create a national
    resource center to collect and disseminate information on best
    practices in offender reentry. This legislation is moving towards
    enactment in 2007, with funding first authorized for fiscal year 2008.
        JABG and JJDPA Title II state formula grants already support
    research-proven programs like FFT, MST and MTFC. But funding falls far
    short of meeting the need. In 2002, approximately 150,000 juvenile
    offenders were placed out-of-home, and nearly 400,000 others were
    placed on probation. Some juvenile offenders must be placed in secure
    custody to protect public safety, and many others are first-time
    offenders who will not become repeat offenders and therefore are not
    high-risk enough to justify the expense and intrusion of the
    aforementioned programs. But even if only half of those on probation
    and half of those placed out of home are eligible for these effective
    intervention programs, the number of young offenders who could benefit
    from evidenced-based approaches would still amount to 7 times the
    35,000 total currently being served by MST, FFT, and MTFC. In other
    words, these programs will have to expand 7 times their current
    capacity nationwide before they start running out of youth who could
    and should be receiving their services.
        Unfortunately, the Administration's fiscal year 2008 budget
    proposes to eliminate all of the JJDPA funding sources and create a
    single, new ``Child Safety and Juvenile Justice'' block grant. This
    block grant would be funded at a level that is 25 percent lower than
    the total fiscal year 2007 funding for the programs eliminated. We
    encourage Congress to demonstrate its commitment to crime prevention by
    rejecting proposed cuts and block-granting, and by increasing funding
    for federal juvenile justice and delinquency prevention programs. We
    urge you to restore funding for Title II State Formula Grants to $89
    million, Title V funding to $95 million, and JABG funding to $250
    million--levels appropriated by Congress in fiscal year 2002--and
    ensure that the new Second Chance Act of 2007 is fully funded.
        If we do not invest in research-proven crime-prevention programs
    for America's most vulnerable kids, many of them will grow up to become
    America's most wanted adults. By failing to adequately invest in proven
    crime-prevention strategies, Congress is not only failing to facilitate
    a better future for millions of kids but is also permitting the
    cultivation of criminals--jeopardizing the safety of all Americans for
    years to come.
        Thank you for this opportunity to present our views on how your
    Subcommittee can help to reduce crime and make us all safer.
                                     ______

          Prepared Statement of the West Creek Preservation Committee
        Madam Chairwoman and Honorable members of the Subcommittee, I
    appreciate and am honored by the opportunity to provide this testimony
    in support of an appropriation of $1,100,000 from NOAA's Coastal and
    Estuarine Land Conservation Program to protect the 10-acre West Creek
    Confluence property in the city of Independence, Ohio.
        In addition, I would like to urge your support for a substantial
    increase in overall funding for the Coastal and Estuarine Land
    Conservation Program in fiscal year 2008. The coastal resources of this
    nation, including Ohio's, are under intense and increasing development
    pressure. It is of the utmost importance that we balance future
    development with greater protection of our coastal resources and
    natural heritage. For instance, in Ohio alone approximately $10 billion
    is generated annually from Lake Erie tourism and recreation-related
    activities, which are dependent upon a healthy and aesthetically
    pleasing coastal area.
        Ohio is not alone in regard to its need for greater coastal
    resource protection. Across this great nation coastal areas are among
    the most densely populated and heavily utilized. We are pleased that
    the program has been recommended in the President's budget for $15
    million. However, when compared to the needs from across the country
    and to what Congress has historically provided for this program, we
    believe that the protection and future wellbeing of our coastlines and
    coastal watersheds requires a substantially greater investment.
        To be specific, the protection and future wellbeing of Ohio's
    coastal resources and coastal watersheds are why I have traveled to be
    before you today. I am the Watershed Coordinator for the West Creek
    Preservation Committee, a citizen-led nonprofit organization that works
    within the Greater Cleveland area of the Cuyahoga River and Lake Erie
    watersheds. Our mission is to conserve, protect and restore the
    environmental, recreational and cultural resources of this area. Our
    thousands of supporters and members are comprised of a diverse mixture
    ranging from your average citizens, to business leaders, to elected
    officials, all with the common goal of protecting environmental
    quality, furthering outdoor urban recreational opportunities and
    quality of life, and increasing economic prosperity.
        In the ten years that the West Creek Preservation Committee has
    been in existence we have protected approximately 500 acres of urban
    and suburban greenspace including the creation of Cleveland's newest
    Metropark, we have created and restored acres of urban wetlands, we are
    developing a recreational trail system and greenway that will span
    multiple communities and be a part of and connect with the Ohio & Erie
    Canalway National Scenic Byway, and we are undertaking one of the most
    ambitious and important stream restoration projects in the Greater
    Cleveland area.
        We are proud to be working with the City of Independence, Ohio, and
    numerous other project partners, including The Trust for Public Land,
    the Northeast Ohio Regional Sewer District and Cleveland Metroparks, on
    what we consider to be one of our most critical projects to date, the
    West Creek Confluence Project. Located within Cuyahoga County in the
    City of Independence, and within the Cuyahoga River Area of Concern,
    the West Creek Confluence Project involves the acquisition, and future
    complete restoration, of ten acres of land at the confluence of two
    extremely important waterbodies, West Creek and the Cuyahoga River.
        The property contains approximately 850 feet of West Creek main
    stem and includes its confluence with the Cuyahoga River. The property
    is positioned at the northern end of the Cuyahoga Valley National Park,
    is adjacent to the Ohio & Erie Canalway National Scenic Byway, and will
    provide an access point to the Cuyahoga Valley Scenic Railroad and to
    the Ohio & Erie Canal Towpath Trail.
        Several decades ago the property was developed with what is now an
    empty warehouse, which severely impacted West Creek and has contributed
    to extensive flooding, degraded aquatic and riparian habitat, and
    enormous influxes of nonpoint source pollution to the Cuyahoga River
    and Lake Erie Basin.
        Once permanently protected the Confluence Property will be fully
    restored and the empty warehouse and parking lot removed. Proper
    hydrology will be restored to the waterway by re-meandering it through
    the property and re-connecting it with its floodplain. Aquatic and
    riparian habitat will be restored to the stream and an expansive array
    of floodplain wetlands and vernal pools will be created to increase
    ecological habitat and diversity for everything from waterfowl to
    amphibians, to store and retain stormwater during flooding events, and
    to filter and reduce sediment influxes and other nonpoint source
    pollution, one of the greatest contributors to water quality problems
    within Lake Erie.
        Perhaps most importantly, the West Creek Confluence Project will
    herald in a new era of sustainable land use for the Cuyahoga River
    floodplain and its development away from previously poor and
    incompatible land uses. This project will not only improve the
    environment and Lake Erie Basin water quality, it will also create a
    dynamic recreational and educational focal point along the Ohio & Erie
    Canalway Scenic Byway that will attract large numbers of citizens,
    tourists and new business opportunities.
        When completed, as visitors veer west from the Ohio & Erie Canal
    Towpath Trail onto the West Creek Greenway Trail System, they will see
    a meandering, willow-lined West Creek, they will see a broad and
    vibrant floodplain, and they will see numerous floodplain wetlands and
    vernal pools and the animals that inhabit them. The West Creek
    Confluence Project will become a gateway to the endless possibilities
    that exist within the realm of urban coastal conservation and
    stewardship.
        Realizing the importance and value of this project, the State of
    Ohio (through the Clean Ohio Conservation Fund), the Northeast Ohio
    Regional Sewer District (through the Water Resources Restoration
    Sponsorship Program) and the City of Independence are all making
    substantial monetary investments in the West Creek Confluence Project.
    The appropriation of $1,100,000 from NOAA's Coastal and Estuarine Land
    Conservation Program will leverage and be matched with the committed
    funding from the State of Ohio, Northeast Ohio Regional Sewer District
    and City of Independence to bring the protection of this important
    property through to fruition.
        Millions of Ohioans depend upon Lake Erie for clean drinking water,
    recreational enjoyment and economic prosperity. It is the eleventh
    largest freshwater lake in the world and, of the five Great Lakes
    basins, it is the most densely populated and most affected by both
    urbanization and agriculture. Lake Erie supports one of the world's
    most significant commercial freshwater fisheries and the largest sport
    fishery among the five Great Lakes. Lake Erie alone produces more fish
    for human consumption than the other four Great Lakes combined!
        Ohio's North Coast has seen a significant increase in recreation
    and tourism related revenue over the past decade, which is directly
    attributable to the environmental and aesthetic health and wellbeing of
    Lake Erie. Over 7 million people recreate at Ohio's portion of the Lake
    Erie Basin annually resulting in the sustenance of a quarter of a
    million jobs and netting $5.8 billion in yearly wages. An additional
    approximately $10 billion per year is generated from Lake Erie tourism
    and recreation-related activities.
        Lake Erie is key to Northern Ohio's future economic prosperity! The
    West Creek Confluence Project represents a key step in sustaining and
    improving Lake Erie watershed water quality and environmental health!
        In fiscal year 2008, $1.1 million is needed from NOAA's Coastal and
    Estuarine Land Conservation Program to complete the protection of the
    West Creek Confluence Property. Substantial State of Ohio and local
    investment has been secured to match this Coastal and Estuarine Land
    Conservation Program funding request. However, due to time limitations
    associated with some of the State and local matching funds it is
    critical that this Coastal and Estuarine Land Conservation Project be
    funded in fiscal year 2008.
        On behalf of the West Creek Preservation Committee, our members,
    supporters and citizens of Greater Cleveland and Northeast Ohio, I
    thank you, Madam Chairwoman and Honorable members of the Subcommittee,
    for the opportunity to provide this testimony.
                                     ______

      Prepared Statement of the American Institute of Biological Sciences
        The American Institute of Biological Sciences (AIBS) encourages
    Congress to appropriate at least the President's fiscal year 2008
    request of $6.43 billion for the National Science Foundation (NSF).
    Providing at least $20 million more than the request would enable NSF
    to increase funding for the Biological Sciences Directorate (BIO) by
    roughly 7 percent, an increase over the requested 4.1 percent and just
    below the agency-wide average increase for the various research
    directorates.
        AIBS is a nonprofit scientific association dedicated to advancing
    biological research and education for the welfare of society. Founded
    in 1947 as a part of the National Academy of Sciences, AIBS became an
    independent, member-governed organization in the 1950s. AIBS is
    sustained by a robust membership of some 5,000 biologists and nearly
    200 professional societies and scientific organizations; the combined
    individual membership of the latter exceeds 250,000. AIBS advances its
    mission through coalition activities in research, education, and public
    policy; publishing the peer-reviewed journal BioScience and the
    education website ActionBioscience.org; providing scientific peer
    review and advisory services to government agencies and other clients;
    convening meetings; and managing scientific programs.
        Invigorating our nation's innovation enterprise, improving science
    education, and addressing energy, security, and environmental problems
    are bipartisan national priorities. NSF is the primary federal research
    agency with the capacity to support the breadth of scientific research
    programs that have the potential to drive discovery to meet these
    priorities. Moreover, NSF-sponsored biological and environmental
    sciences research will contribute to the development of sustainable and
    cost-effective solutions for these challenges.
        NSF's BIO is vital to our nation's continued leadership in the
    biological sciences, the fields of science dedicated to understanding
    how organisms and ecological systems function. Research disciplines
    heavily dependent upon the directorate include botany, ecology,
    microbiology, zoology, basic molecular and cellular biology,
    systematics and taxonomy. Equally important, NSF provides essential
    support for our nation's biological research infrastructure, such as
    field stations and natural science collections (e.g. university-based
    natural history museums), and education and training programs for
    undergraduate, graduate and post-doctoral students.
        According to NSF data, BIO provides 68 percent of federal grant
    support for fundamental biological research conducted at our nation's
    universities and other nonprofit research centers.
        The Administration's fiscal year 2008 budget request would provide
    $5.131 billion to support disciplinary research programs within the
    Research and Related Activities (R&RA) account. This funding level
    would provide an average 7.7 percent increase for the various programs
    within the R&RA account, and a 4.1 percent increase for the biological
    sciences.
        Members of the biological sciences community appreciate the
    proposed increase. However, there is growing concern that BIO funding
    is not keeping pace with the need and demand for biological sciences
    research. When adjusted for inflation, the requested fiscal year 2008
    budget for BIO places the program only slightly above the 2001 funding
    level and near the 2003 funding level. Scientists dependent upon BIO
    grants for research support are feeling the pressure. Over the past
    four years, the research grant funding rate for BIO has been lower than
    the NSF-wide funding rate. Yet the number and scope of problems
    requiring biological information continues to increase. In 2006, the
    research grant funding rate was only 14 percent compared with an
    agency-wide rate of 21 percent.
        Under the requested budget, BIO would receive $633 million in
    fiscal year 2008 to support its six core programs. These programs and
    their proposed funding levels are: Molecular and Cellular Biosciences
    $116.37 million; Integrative Organismal Systems $105.49 million;
    Environmental Biology $114.66 million; Biological Infrastructure $96.1
    million; Emerging Frontiers (a cross-discipline, ``virtual''
    directorate) $99.16 million; and Plant Genome Research $101.2 million.
        The fiscal year 2008 budget request includes important funding for
    the National Ecological Observatory Network (NEON), the first national
    ecological measurement and observation system designed to answer
    regional- to continental-scale scientific questions. NEON is an
    innovative facility that is designed to transform the way science and
    education are conducted by enabling integration of data from natural-
    to human-dominated systems and from genomes to the biosphere. A total
    of $24 million has been requested for NEON in fiscal year 2008. Roughly
    $16 million would be funded from BIO and $8 million would be funded
    from the Major Research Equipment and Facilities Construction (MREFC)
    account.
        Research support is only one of NSF's important missions. NSF is a
    vital component of our nation's formal and informal science education
    system. Whether through programs such as Research Experiences for
    Undergraduates, Integrated Graduate Education and Research
    Traineeships, or other fellowships for graduate and post-doctoral
    researchers, NSF provides the resources required to recruit, educate
    and train our next generation of scientists.
        The informal science education programs supported by the Education
    and Human Resources Directorate could benefit from increased funding.
    Economic growth demands a scientifically aware and technically skilled
    workforce--one in which employees have the scientific awareness
    adequate to generate the next great idea. Moreover, we live at a time
    when the citizenry is increasingly called upon to make informed
    decisions. Informal science education programs, whether through a
    natural history museum, science center or other venue, reach large
    audiences and provide a valuable mechanism for reaching the general
    public.
        Thank you for your thoughtful consideration of this request and for
    your prior support of the National Science Foundation. If you have any
    questions or require additional information, please contact me at 202-
    628-1500.
                                     ______

          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 joint
    mission of science and public education. It is renowned for its
    exhibitions and collections of more than 32 million natural specimens
    and cultural artifacts. With approximately 4 million annual on-site
    visitors--approximately half of them children--it is one of the
    largest, fastest growing, and most diverse museums in the country.
    Museum scientists conduct groundbreaking research in fields ranging
    from all branches of zoology, comparative genomics, and informatics to
    Earth science, biodiversity conservation, and astrophysics. 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.
                     the american museum--nasa partnership
        NASA and the AMNH have been engaged in a multi-year partnership
    founded on a joint commitment to cutting-edge research and the
    integration of that research into unique educational tools and
    resources. The AMNH has worked with the Agency to develop innovative
    technologies and resources that provide an unparalleled platform for
    interpreting, displaying, and distributing NASA content to audiences
    nationwide.
      --The Museum has built a set of singular national resources that
            bring cutting-edge science and integrated NASA content to total
            audiences of more than 15 million in New York City, across the
            country, and around the world. In the New York area alone, the
            Museum reaches nearly four million annual visitors, including
            more than 450,000 children in school groups and more than 5,000
            teachers, with millions visiting online.
      --We have launched a successful program to disseminate project
            resources to informal learning venues nationally and
            internationally, with Science Bulletins already on view in 39
            locations and Space Shows at 32, with more being added.
      --We have created Science Bulletins--technologically innovative,
            immersive multimedia science encounters, presenting space,
            Earth, and life science news and discoveries in visually
            stunning feature documentaries, data visualizations, and weekly
            updates.
      --The Museum has made numerous technological breakthroughs--it has
            established leadership in science visualization and high
            resolution renderings of massive data sets; it has converted
            its Space Shows to digital format, making the AMNH the only
            full planetarium dome content provider that crosses all major
            platforms; it has pioneered a unique online distribution
            network that each week streams new science content in HD MPEG2
            encodes to partners across North America and most recently, has
            simplified the technical requirements of the network, including
            new server and/or lower bandwidth for downloading, so that
            content is more accessible to more venues.
      --AMNH routinely hosts major events celebrating NASA's mission
            highlights and milestones. Recent events have included live,
            large-scale events of broadcasts of the New Horizons launch,
            Stardust sample return, and Mars Reconnaissance Orbiter arrival
            at Mars.
      --The Museum's educational mission is fueled by and reflects cutting-
            edge science, including the work of our scientists in
            collaboration with NASA centers and researchers.
        Building on this foundation, the Museum seeks in fiscal year 2008
    to advance the AMNH-NASA collaboration--with a particular focus on
    scaling up to reach even larger audiences--with a program for
    communicating current science content, and content about NASA science
    and missions in particular, to diverse national audiences. The Museum's
    activities will include the development of current NASA science
    education resources, such as Science Bulletins, and continuing to scale
    up their national distribution for presentation in public spaces and
    for classroom use.
        Science Bulletins (SB) is a nationally distributed, multimedia
    science exhibition program targeted to informal learning settings. It
    presents cutting-edge research and discoveries in visually compelling
    feature documentaries and updates in flexible, large-screen, high-
    definition video and interactive kiosk versions, as well as in a free
    online version adapted for classroom use. Our SB program for the
    following year includes expanding dissemination significantly,
    developing new visualization methods for use in the development and
    distribution of SB, and reaching out in diverse ways to the formal
    education sector to maximize access to the Science Bulletins at the K-
    12 level.
        Museum activities for the next year also include R&D on new
    techniques for visualizing massive space and Earth science data sets,
    creating visualization tools for presenting NASA missions and other
    dynamic science stories, and for advancing innovative solutions to
    technical challenges in presenting digital planetarium shows. AMNH will
    conduct extensive internal and external evaluation of this program's
    activities.
        Recognizing its potential to support NASA in its goals to pioneer
    the future in space exploration, scientific discovery, and aeronautics
    research; to develop a balanced overall program of science,
    exploration, and aeronautics; and to establish new and innovative
    programs to enhance understanding of our Earth, other planets,
    asteroids, and comets in our solar system, as well as the search for
    life around other stars, the Museum looks forward to advancing its
    successful multi-year collaboration with NASA and to contributing its
    unique science, education, and technological capacity to helping the
    Agency to meet these goals.
                                     ______

          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.
        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 to integrating this information
    into the conservation process and disseminating 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. The 2006 symposium, Conserving Birds in Human-
    Dominated Landscapes, focused on unique challenges to and key
    opportunities for invigorating bird diversity in the areas most heavily
    impacted by human activities, and the 2007 symposium, Small Matters:
    Microbes and Their Role in Conservation, will bring together a diverse
    group of microbiologists and conservation biologists to explore broad
    questions of the planet's microbial diversity and how conservation
    practices take microbial life into account.
        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 with 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.
                         common goals of noaa and amnh
        The National Oceanic and Atmospheric Administration (NOAA) is
    committed to understanding and predicting changes in the Earth's
    environment and to conserving and managing coastal and marine resources
    to meet the nation's needs. NOAA's Education Plan outlines a broad
    vision for reaching various audiences to build awareness and knowledge
    of issues related to the world's atmosphere, climate, oceans, and
    coastal ecosystems. Addressing the needs of teachers, students, and
    policy makers as well as the general public, the agency's goals include
    enhancing environmental literacy and knowledge, application of NOAA
    science, and development of a capable and diverse workforce for
    environmental science.
        The American Museum of Natural History shares NOAA's commitment to
    these environmental goals and to the scientific research and public
    education that support them. Since its founding in 1869, the American
    Museum has pursued its mission of scientific investigation and public
    education. Its exhibitions and collections serve as a field guide to
    the entire planet and present a panorama of the world's cultures.
    Museum collections of some 32 million specimens and cultural artifacts
    provide an irreplaceable record of life. More than 200 Museum
    scientists conduct groundbreaking research in fields as diverse as
    systematic and conservation biology, astrophysics, and Earth and
    biodiversity sciences. The work of scientific staff fuels exhibitions
    and educational programming that reach annually an on-site audience of
    nearly four million visitors--nearly half of them children.
                           marine sciences initiative
        In fiscal year 2004, as a result of Congressional leadership, the
    Museum entered into a partnership with NOAA that launched a multi-year
    marine science and education initiative. Support for this initiative,
    which encompasses a broad range of education and research activities
    closely aligned with NOAA goals and purposes, was continued in fiscal
    year 2005 (and recommended in the fiscal year 2007 report), and further
    leveraged by Museum scientists who successfully secured competitive
    NOAA funding. Building upon this strong foundation, and in concert with
    the strategic priorities of NOAA and the Museum, we seek $1 million in
    fiscal year 2008 to join with NOAA in aquatic research and education
    activities that promote environmental literacy. Over a one year period,
    activities will include: ecosystem-based research, training, and
    research tool development concerning oceans and aquatic environments;
    professional development for teachers; special programs on New York
    waterways for New York City schoolchildren; and public education
    programs--including some built around a special water exhibition--that
    will increase understanding of the importance of healthy oceans and
    atmosphere.
        Recognizing its potential to support NOAA in its goals to
    understand and predict changes in the Earth's environment; to conserve
    and manage coastal and marine resources; and to protect, restore, and
    manage the use of coastal and ocean resources to meet our Nation's
    economic, social, and environmental needs, the Museum looks forward to
    advancing a partnership with the agency in an education, outreach, and
    research initiative to promote public understanding and stewardship of
    marine environments.
                                     ______

       Prepared Statement of the University Corporation for Atmospheric
                                    Research
        On behalf of the University Corporation for Atmospheric Research
    (UCAR) and the university community involved in weather and climate
    research and related education, training and support activities, I
    submit this written testimony for the record of the Senate Committee on
    Appropriations, Subcommittee on Commerce, Justice and Science. UCAR is
    a 70-university member consortium that manages and operates the
    National Center for Atmospheric Research (NCAR) and additional programs
    that support and extend the country's scientific research and education
    capabilities. UCAR is supported by the National Science Foundation
    (NSF) and other federal agencies including the National Aeronautics and
    Space Administration (NASA), and the National Oceanic and Atmospheric
    Administration (NOAA).

        Innovation research is about chemistry and physics, but it's also
    about earth science. Understanding the earth is a basic necessity,
    because we need to understand our planet and its environments in order
    to make sound policy decisions. And if we don't understand the earth,
    we can't save it.----Barbara Mikulski, Chair, Appropriations Commerce,
    Justice, Science Subcommittee

        The American Competitiveness Initiative (ACI) is proposed to double
    the physical sciences research budget by 2016, thereby strengthening
    this nation's economic competitiveness. In this most critical moment
    for the health of our planet and therefore the future of life as we
    know it, the geosciences contribute knowledge that is absolutely
    necessary to understanding climate, weather, the dynamics of water
    resources, solar effects on Earth, space weather, the interactions of
    Earth's systems, energy resources, geologic hazards, and all aspects of
    the global oceans. The economic effects are very substantial, with
    estimates of the component of the U.S. economy exposed to risks
    associated with weather and climate variability reaching $3 trillion
    annually.
        The strength of the country's R&D investment is a result of
    multiple agencies playing numerous, complementary and interlocking
    roles. Through NSF, NASA and NOAA funding of the geosciences, critical
    information is provided for economic planning and to produce a better
    equipped work force to deal with environmental challenges. The
    atmospheric sciences community strongly supports the nation's
    innovation agenda--an investment that will pay great dividends for this
    country if it is funded over the next ten years. We urge the Committee
    to do everything possible to include the geosciences within NSF, as
    well as NASA and NOAA science programs, in this initiative.
    National Science Foundation (NSF)
        NSF plays a unique role among all federal agencies in strengthening
    the ability of the country to: create new ideas; develop new
    technologies; create a diverse, knowledgeable workforce; and set new
    standards that challenge any boundaries of invention and intellect.
    These are all key components of our capacity to compete globally in the
    21st Century and are fundamental drivers of wealth producing growth and
    job creation. I urge the Committee to support the President's overall
    fiscal year 2008 request of $6.4 billion for the National Science
    Foundation and, within NSF, the request of $5.1 billion for Research
    and Related Activities (R&RA), the heart of NSF's scientific
    enterprise. In addition, I urge the Committee to support the
    Administration's goal of doubling the research budget of NSF over the
    course of a decade, realizing the promise of the National Science
    Foundation Authorization Act of 2002.
        Geosciences Directorate (GEO).--GEO is the principal source of
    federal funding for university based, basic research in the
    geosciences, providing 61 percent of the total federal support in these
    areas. As stated directly in the fiscal year 2008 budget request, ``GEO
    directly contributes to innovation and competitiveness through its
    broad portfolio of investments in fundamental research, facilities, and
    instrumentation that enable discovery, innovation, and integrated
    education and research activities that increase the effectiveness of
    the science and engineering workforce.'' I urge the Committee to
    support the President's fiscal year 2008 request of $792.0 million for
    the Geosciences Directorate and, within GEO, to provide the President's
    request of $240.8 million for the Atmospheric Sciences Division which
    provides resources for the atmospheric sciences community that are
    critical to the physical safety of our citizens, our economic health,
    and global issues of national security such as severe weather hazards,
    climate change, the security of our communications infrastructure, and
    the environmental health of the planet.
        Education and Human Resources (EHR) Directorate.--Key to the
    success of the innovation agenda and to the future of this country, is
    the improvement of math and science education. However, EHR funding has
    declined steadily for the last several years, particularly in the K-12
    and undergraduate areas. We believe those reductions should be reversed
    so that a strong NSF presence in the K-12 and undergraduate areas can
    be maintained. The strengthening of science education, so critical to
    the nation's future, must be intimately connected with the best
    scientific practices and results being produced via the NSF scientific
    directorates. We appreciate the recognition in the request of the value
    of digital libraries to major communities of learners. Within the
    Division of Undergraduate Education (DUE), the National STEM Education
    Digital Library (NSDL) receives a modest increase of $500,000. The
    value of this program continues to rise as its capacity to bring first-
    rate education tools into the classroom is broadened and enhanced. I
    urge the Committee to provide as healthy an increase as possible, above
    the request of $750.6 million, for the Education and Human Resources
    Directorate so that it may play its rightful, critical role in
    achieving the country's ACI goals.
    National Aeronautics and Space Administration (NASA)
        NASA's Science Mission Directorate (SMD) plays a unique and central
    role in our nation's ability to attract students into science and
    engineering fields, and to understand the universe, our own planet's
    environmental complexities and its relationship to the Sun, and major
    factors contributing to climate change. Despite this essential role,
    NASA's fiscal year 2008 federal budget request would significantly
    decrease the science portfolio, defer or eliminate many of the nation's
    most successful and promising missions, and fund only a relatively
    small number of scientific missions (albeit promising ones) in the next
    five to ten years. While the manned program is important, it cannot
    come at the expense of this critical investment. Within SMD, NASA also
    plays a unique and central role in the study of the complexities of the
    Earth system and the equally complex relationship of the Sun to Earth.
    NASA's continued funding for Landsat Data Continuity Mission (LDCM),
    Glory, NPOESS Preparatory Project (NPP), and the Global Precipitation
    Measurement (GPM) mission to maintain current schedules is strongly
    endorsed. However, given the recent release of the National Research
    Council's Decadal Survey on Earth Science, NASA should increase its
    funding levels for earth sciences consistent with the report's
    recommendations to ensure that future critical missions are supported.
        Moreover, NASA's investment in Earth Science Research and Analysis
    (R&A) and the missions and tools associated with this research makes
    possible the study of Earth from space providing data that simply are
    not available from any other sources. These observations, used in
    research and in the construction of computer models to predict weather,
    climate, and natural hazards, provide a critical basis from which our
    understanding of our planet evolves and on which informed policy
    decisions, both long term and emergency response, can be made. Given
    the tremendous importance of this underlying activity, I urge the
    Committee to restore Research and Analysis (R&A) programs to funding
    levels at least commensurate with fiscal year 2006 levels.
        In addition to investments in Earth-Sun System, NASA must preserve
    the essential PI-led programs that serve as a primary conduit through
    which the nation's best scientists can engage NASA in cutting-edge
    problems. NASA should support the Explorer, Discovery, and New Frontier
    programs and fully commit to missions unless there are technical or
    cost related issues. When NASA promotes premature termination of those
    missions for non-technical or cost reasons, it is in danger of sending
    the message to the community that it is an unreliable partner and that
    this is not a field that future scientists and engineers should pursue.
    Moreover, balanced, highly skilled teams of talent are lost, as are
    discoveries on the immediate horizon. NASA also sends a troubling
    message to graduate students and young investigators by delaying new
    opportunities in these programs. The long delay in Explorer
    opportunities from a once annual opportunity runs the risk of depleting
    the nation's pipeline of scientists and program managers capable of
    leading the next generation of earth and space missions.
        While the exploration initiative and International Space Station
    are of great human interest and of scientific value, we are far from
    unlocking all the mysteries of our own planet. NASA programs that are
    in progress and others that are yet to be implemented will enable us to
    protect space vehicles, astronauts, and satellites from the devastating
    radiation of solar storms; mitigate some of the property damage and
    prevent some of the deaths caused by severe weather; and help us to
    mitigate, understand, and cope with the inevitable effects of natural
    and human-induced climate change. These programs are critical to the
    health of our economy, to the health of the Earth, and to our national
    security. As the Administration's new vision for U.S. space exploration
    unfolds, I urge the Committee to protect the vibrant NASA science
    accounts and missions, current and planned, that make possible the
    study of our own planet and the environment that sustains life on
    Earth.
    National Oceanic and Atmospheric Administration (NOAA)
        NOAA's contributions to the nation's safety, economy and
    environment more than justify increased investment in its research and
    education programs, its personnel and related scientific support
    facilities. One of NOAA's most important contributions is its support
    for the weather enterprise--a partnership between government, academic
    and private sector organizations. For example, NOAA maintains a world-
    class satellite and surface-based observational system without which
    weather research and operational forecasts simply could not function.
    NOAA also makes its own key contributions to both research and to
    developing and maintaining operational systems. Without the R&D and
    operations behind the accurate forecasts and warnings that moved tens
    of thousands of people out of the path of Hurricane Katrina, the number
    of deaths caused directly by the storm would have been catastrophic.
    This is just one example of the manner in which NOAA provides a
    critical link that often means the difference between life and death,
    between research results, research applications, technology
    development, and operations.
        We strongly support an appropriation of $4.5 billion for NOAA in
    fiscal year 2008--a level recommended by the Senate for the past two
    fiscal years and endorsed by the House Oceans Caucus and the Friends of
    NOAA Coalition. The fiscal year 2008 request is $3.8 billion, a
    decrease of more than $96.0 million from the fiscal year 2006 enacted
    level. We believe that under-funding NOAA is a false economy that will
    degrade critical weather and climate services all too often taken for
    granted. For NOAA to address all areas of concern and priority that
    have been identified by Congress and that are listed below, and to
    restore core funding that has decreased in recent years, I urge the
    Committee to fund NOAA at $4.5 billion for fiscal year 2008 and to do
    so while maintaining vital support for other portion's of the
    Subcommittee's research and development portfolio.
        National Weather Service (NWS).--The fiscal year 2008 President's
    request for NWS contains modest growth above the fiscal year 2007
    request and joint resolution. This amount will modestly help to ease
    demoralizing pressures put on NWS operations staff in recent years.
    Unfortunately, several important programs continue to fare poorly. The
    Space Environment Center (SEC) provides space weather and solar
    radiation warnings for, among other things, modern telecommunications
    and electricity grid operations. Yet the fiscal year 2008 request is
    only $6.2 million, down from $7.3 million in fiscal year 2007. The NOAA
    Profiler Network (NPN) gathers vertical wind data of proven value for
    weather prediction and severe storm warnings. We appreciate the stated
    commitment to beginning the NPN conversions needed to avoid a near
    complete shutdown by 2010, but note that the fiscal year 2008 request
    would leave 90 percent of the conversions to be completed in only two
    years. Additional funds in the PAC account for NPN may provide a more
    realistic completion schedule. The U.S. Weather Research Program
    (USWRP) request reduces funding to multi-national cooperative research
    efforts by $1.5 million, in particular pulling out of the THORPEX
    Pacific-Asia Regional Campaign (T-PARC) designed to improve pacific
    coast winter storm forecasts. This would renege on U.S. commitments and
    slow forecast improvements. I urge the Committee to increase the
    President's fiscal year 2008 request of $903.5 million for the NWS by
    the amount necessary, approximately $3.5 million to fund SEC, NPN, and
    THORPEX at reasonable levels.
        Office of Oceanic and Atmospheric Research (OAR).--The OAR fiscal
    year 2008 budget request is $368.8 million, a decrease of over $10.0
    million from the fiscal year 2006 enacted level. The fiscal year 2008
    request will allow modest increases for implementation of the National
    Integrated Drought Information System (NDIS) and improving hurricane
    intensity research, extremely important and timely progress that we
    welcome. The climate research programs of OAR, including the
    competitive grants program within Climate and Global Change, have been
    combined into a new account titled, Competitive Research Program. Since
    the overwhelming percentage of the programs funded within this account
    are operated by NOAA and not open to competition, this new title is
    misleading. However, many of the programs within this account are
    certainly of importance to the atmospheric sciences community, in
    particular the extramural, merit-based grants program which could
    address shortfalls in critical areas such as badly needed improved
    observations provided through programs such as ARGO, if it were fully
    funded. I urge the Committee to provide at least the President's fiscal
    year 2006 enacted level of $379.6 million for OAR in fiscal year 2008
    in order to allow for a robust and truly competitive extramural climate
    research program.
        National Environmental Satellite, Data and Information Service
    (NESDIS).--NESDIS is responsible for managing all aspects of NOAA's
    remotely gathered environmental data that form the basis for
    environmental research meeting the needs of policy makers and users.
    Continued support for the Global Earth Observation System of Systems
    (GEOSS) is appreciated, but the overall NESDIS request is down as is
    the request for the National Data Centers which are of critical
    importance in making data available to researchers and policy makers.
    Our community is well aware of the significant budget problems that the
    National Polar-orbiting Operational Environmental Satellite (NPOESS)
    will surely cause as it becomes operational. The NPOESS program is
    essential to maintaining and upgrading a comprehensive satellite and
    surface observational system, 40 percent of which, according to a
    recent NRC report, is quickly coming to the end of its functional life.
    At a time when the nation should be fixing the NPOESS problem, we do
    not understand how NESDIS could be slated for a budget cut. I urge the
    Committee to protect other NOAA research and operational programs that
    serve this nation well, while addressing the NPOESS issue and giving
    NESDIS the resources it needs in fiscal year 2008 to keep this country
    ahead of all others in our ability to gather environmental data that
    are essential for policy decisions, the management of resources, and
    the health of our economy.
        National Ocean Service (NOS) and Ocean Research Priorities Plan.--
    NOAA is the nation's preeminent agency for ocean research and for the
    transfer of research results into products and services that affect the
    health of the oceans, coastlines, and coastal water sheds; the nation's
    economy; and the well being of many U.S. citizens. In 2004, the U.S.
    Commission on Ocean Policy recommended approximately $3 billion in
    projects to improve the state of our oceans, yet NOAA's budget has
    fared poorly since then and many ocean programs of NOAA have been cut.
    There is an urgent need to implement programs such as the Integrated
    Ocean Observing System at this particular time when our environment is
    changing rapidly and we need to monitor changes in the oceans as well
    as interactions between the atmosphere and oceans. I urge the Committee
    to fund NOS at the fiscal year 2006 enacted level of $590.4 million in
    fiscal year 2008.
        The Administration has recently completed and released an
    interagency Ocean Research Priorities Plan and implementation strategy
    in a report entitled Charting the Course for Ocean Science in the
    United States for the Next Decade. This plan is an important first step
    toward building the scientific foundation to improve society's
    stewardship and use of, and interaction with, the ocean and
    understanding its impact on our weather and climate systems. I urge the
    Congress to examine this interagency plan closely--particularly as it
    relates to NSF and NOAA--and provide as much support as possible for
    its implementation.
        On behalf of the UCAR community, I want to thank the Committee for
    your stewardship of the nation's scientific enterprise and your
    understanding that the future strength of the nation depends on the
    investments we make in science and technology today.
                                     ______

         Prepared Statement of the National Marine Sanctuary Foundation
        Dear Chairwoman Mikulski and Ranking Member Shelby: We, the Board
    of Directors of the National Marine Sanctuary Foundation, are writing
    as supporters of the oceans programs of the National Oceanic and
    Atmospheric Administration (NOAA). We strongly encourage you to
    consider appropriations for NOAA at the $4.5 billion level for fiscal
    year 2008.
        This investment in NOAA yields great returns for the nation,
    especially when you consider that over half of the nation's gross
    domestic product is generated in coastal counties and adjacent waters,
    yielding $2.5 trillion. Through its weather forecasting, nautical
    charting, fisheries management, hazard mitigation, and ocean protection
    and management responsibilities, no other federal agency affects this
    country's 300 million Americans every day the way NOAA does. An
    investment of $4.5 billion averages out to just $15 per person
    annually.
        Despite the many benefits NOAA provides, shifts in funding
    priorities in recent years have led to substantial cuts in key NOAA
    programs with long-standing reputations for excellence. The National
    Marine Sanctuary System (NMSS), for example, is a crucial thread in the
    larger fabric of ocean science, conservation and education. To enhance
    and sustain the effectiveness of the system, we strongly urge you to
    fund NMSS at no less than $78 million for fiscal year 2008, which would
    restore the fiscal year 2005 enacted level and provide a $10 million
    increase to support the system's growth since then.
        The National Marine Sanctuary System includes 14 sites nationwide
    that serve as living laboratories, classrooms, and playgrounds for all
    Americans by making areas of the ocean realm manageable and accessible
    for state and local partners, research centers, educators, and other
    partners. The most recent addition to the system is the newly
    designated (June 2006) Northwestern Hawaiian Islands Marine National
    Monument, which provides 140,000 square miles with the nation's highest
    form of marine environmental protection, while preserving access for
    native cultural activities and allowing for carefully regulated
    educational and scientific activities.
        During this fiscal year 2008 appropriations process, we urge you to
    be the ocean champion that this country so desperately needs by
    supporting a $4.5 billion appropriation for NOAA, which would
    collectively provide critical funding for many important ocean programs
    and activities around the nation, including the National Marine
    Sanctuary System, the Ocean Exploration Program, the National Sea Grant
    College Program, the Education Initiative, and many others. Such NOAA
    programs are not only vital to our nation's environment, economy, and
    competitiveness, but also to the health and well being of every
    resident of your state.

                                     ______

        Prepared Statement of the Northwest Indian Fisheries Commission
        Thank you for the opportunity to appear before this Committee and
    provide oral testimony on the Department of Commerce fiscal year 2008
    appropriations. We support full funding for the NOAA Fisheries and
    NOAA-National Ocean Service (NOS) budgets that include appropriations
    necessary for key Federal and State partnerships with the twenty Treaty
    Indian Tribes in Western Washington. We would like to highlight the
    following requests:
               summary of fiscal year 2008 appropriations request
        NWIFC Specific Requests:
      --$100 million for the Pacific Coastal Salmon Recovery Fund with a $9
            million allocation for the twenty affected Treaty Tribes in
            Western Washington for their management responsibilities and
            the Northwest Indian Fisheries Commission along with support
            language (NOAA/National Marine Fisheries)
      --$500,000 for Coastal Marine Resource Management
    $100 million for the Pacific Coastal Salmon Recovery Fund with a $9
            million allocation for the twenty affected Treaty Tribes in
            Western Washington and the Northwest Indian Fisheries
            Commission
        The Pacific Coastal Salmon Recovery Fund (PCSRF) is a multi-state,
    multi-tribe program established by Congress in fiscal year 2000 with a
    primary goal to help recover wild salmon throughout the Pacific
    Northwest and Alaska. The PCSRF seeks to aid the conservation,
    restoration and sustainability of Pacific salmon and their habitats by
    financially supporting and leveraging local and regional efforts.
    Recognizing the need for flexibility among Tribes and the States to
    respond to salmon recovery priorities in their watersheds, Congress
    earmarked the funds for salmon habitat restoration, salmon stock
    enhancement, salmon research, and implementation of the 1999 Pacific
    Salmon Treaty Agreement and related agreements. PCSRF is making a
    significant contribution to the recovery of wild salmon throughout the
    region. Since the program's inception, Pacific coastal Tribes,
    including the 20 Treaty Tribes in Western Washington, who are members
    of the NWIFC, have used PCSRF monies to remove 79 fish passage
    barriers-opening up 47 stream miles; restore 282 miles of instream
    habitat; restore 747 acres and 113 stream miles of riparian habitat;
    restore 129 acres of wetland habitat and protect 288 acres of habitat
    through land acquisition, easement or lease. The Tribes are using these
    funds to implement the recovery plan for ESA-listed Puget Sound Chinook
    recently approved by NOAA. However, even though Tribes were to receive
    at least a 10 percent set aside from PCSRF funding every year, the $90
    million base dropped to $67 million in fiscal year 2006 and Tribes were
    disproportionately cut to $4.4 million. Restoration of these funds to
    support this important recovery work by the Tribes is vital.
    $500,000 for Coastal Marine Resource Management
        The NOAA/Marine Sanctuary Program has provided nominal funding from
    its base to enable the four coastal Tribes to effectively participate
    in sanctuary management, based on the federal/state/tribal Memorandum
    of Understanding that established the Intergovernmental Policy Council
    earlier this year. National programs currently are in place and budgets
    exist and are funded for the NOAA/National Marine Sanctuary Program.
    Early planning and negotiation has occurred, setting the framework for
    Pacific Ocean planning. This funding will allow Tribes to build their
    staffing expertise and support their policy involvement in the later
    detailed work processes.
        The economic value associated with effective marine resource
    protection is huge. Not only are marine areas crucial for our natural
    resources and those that use them; they are bridges of commerce between
    nations and continents. Healthy oceans are essential if we value stable
    climates that will sustain our economies and our lives. Tribes must be
    partners in the efforts to research, clean up and restore the environs
    necessary to deal with such problems as:
      --Damage to Dungeness Crab Fisheries--The State commercial crab
            season annually nets more than 20 million pounds of Dungeness
            crab, valued at nearly $1 billion. Tribes presently harvest a
            fraction of that amount. Yet declining salmon runs caused by
            lost and degraded habitat have made fisheries such as those for
            Dungeness crab increasingly important to Tribal communities.
      --Groundfish, such as black cod, whiting and halibut have also grown
            in economic importance to Tribes. Unfortunately, just as
            coastal Treaty Tribes are beginning to fully access some of
            their treaty-reserved harvest of groundfish, several rockfish
            species have declined sharply. As a result, severe harvest
            restrictions have had to be implemented, threatening the
            cultural, spiritual and economic vitality of coastal Treaty
            Tribes.
        As co-managers of groundfish with the Federal and State
    governments, Tribes want to work collaboratively to address a
    significant lack of data on groundfish populations. Better data will
    enable Tribes to make more informed management decisions. Better data
    also facilitates the move to an ecosystem-based management approach
    that takes into consideration the differences among groundfish
    populations in different areas.
        Tribes have proven that we can bridge different interests for the
    good of the whole. Tribes have been actively involved in marine issues
    off the coast of Washington. As described earlier, Tribes, NOAA and the
    State of Washington have jointly signed a working MOU to guide Olympic
    Marine Sanctuary planning and implementation. The Tribes also
    participate in the State Ocean Policy Workgroup. Besides State and
    Federal government partners, the Tribes work closely with business,
    industry, sportsman and commercial fishing groups, environmental and
    community groups and individuals. Incidentally, Tribes are also key
    partners in the Puget Sound Shared Salmon Strategy and the Puget Sound
    Partnership. Tribal leaders have consistently been early advocates,
    leaders and technicians as these efforts were brought to fruition.
                                   background
        When our ancestors signed treaties, ceding millions of acres of
    land to the United States government, they reserved fishing, hunting
    and gathering rights in all traditional areas. These Constitutionally-
    protected treaties, the Federal Trust Responsibility and extensive case
    law, including the U.S. v. Washington Decision of 1974, all
    consistently support the role of Tribes as natural resource managers,
    on and off reservation. In Washington State, these provisions have
    developed into a generally successful co-management process between the
    Federal, State and Tribal governments. The co-management route is the
    one and only path that leads to true sustainability in our region, and
    is the tool that must be used to meet the many environmental challenges
    we face, such as polluted and over-appropriated waters, species decline
    and climate change. Treaties are nation-to-nation accords, and Tribes
    have always been outstanding natural resource managers and stewards of
    the land.
        However, the Federal government has chosen to cut funding to Tribal
    natural resource management programs over the past six years. There is
    no question that this jeopardizes the bond of trust between our
    governments. It also jeopardizes management programs and infrastructure
    critically important to co-management and to the health and vitality of
    natural resources, and the Tribal and non-tribal people they sustain.
    The timing of funding cuts could not have been worse. We are facing
    many environmental and natural resource management challenges in the
    Pacific Northwest, caused by human population expansion and urban
    sprawl, increased pollution problems ranging from storm water runoff to
    de-oxygenated or ``dead'' areas in the Hood Canal, parts of Puget Sound
    and in the ocean off the coast. The pathway to the future is clear to
    us. The Federal, State and Tribal governments must strengthen our bond
    and move forward, together, with the determination and vigor it will
    take to preserve our heritage. Together, we must focus on the needs of
    our children, with an eye on the lessons of the past.
                                  our message
        Our message to you now is that achieving such objectives requires
    adequate funding. The Tribes strive to implement their co-management
    authority and responsibility through cooperative and collaborative
    relationships with the state and local communities. We constantly seek
    ways to restore and manage these precious natural resources in a manner
    that can be supported by all who live in this area. The work the Tribes
    do benefits all the citizens of the State of Washington, the region and
    the nation. But the increasing challenges I have described and the
    growing demand for our participation in natural resource/environmental
    management requires increased investments of time, energy and funding.
    Restoring and protecting these natural resources is essential to the
    economy and the quality of life that is so valued by those who live in
    the Northwest.
        We are sensitive to the budget challenges that Congress faces. We
    recognize that this Administration has greatly reduced the allocation
    to discretionary domestic spending during the last several years, which
    makes it increasingly difficult to address the many requests you
    receive. Still, we urge you to maintain and increase the allocation and
    appropriations for priority ecosystem management initiatives. The need
    for an ecosystem-based management approach for Washington's marine
    waters have come into sharp focus in recent years. Major studies by the
    U.S. Commission on Ocean Policy and the Pew Charitable Trust, and the
    appearance of the low-oxygen dead zones are clear signals that the
    health of our rivers and marine waters is in rapid decline. In its
    report, ``An Ocean Blueprint for the 21st Century,'' the Ocean
    Commission essentially concluded that the oceans are sick, and
    estimated the costs for reversing declines and restoring coasts and
    oceans nationwide at about $4 billion annually. Follow through on that
    report has obviously not approached that level of investment--and it
    might not for some time. But, for the sake of sustainable health,
    economies and the natural heritage that sustains them, it is critically
    important for Congress to do more than it has, and to direct federal
    agencies to do even more to coordinate their efforts with State and
    Tribal governments.
        In Washington State, the Ocean Policy Workgroup, created by Gov.
    Chris Gregoire, was an outgrowth of the Ocean Commission. This group
    consists of 20 members, made up of state agency heads, legislators, the
    Governor's Office and Tribes. Among the group's recommendations was the
    creation of a governing board and council, with representatives from
    management agencies and Tribes, scientific communities, and stakeholder
    groups, to establish management needs, align research priorities and
    monitor the progress through specific work plans. We have been actively
    engaged in this process, and see great value in continuing our
    participation. We also look forward to increased participation in
    multi-state agreements and efforts on the Pacific Coast as well as the
    Puget Sound Estuary. Tribes hope to stay active with the Ocean Policy
    Workgroup, as well as with such programs as the Oil Spill Advisory
    Committee. Early this year, the coastal Treaty Indian Tribes, the State
    of Washington and the U.S. Government created a policy council to guide
    the Olympic Coast National Marine Sanctuary. An MOA between the parties
    has resulted in the creation of an Inter-governmental Policy Council
    with members from each coastal Tribe and the State to ensure
    coordinated and comprehensive management of the sanctuary and its
    resources. Related to all of these efforts, we look forward to
    participating in the development of a coast-wide cooperative ecosystem
    management approach in response to the Ocean Commission Report.
        As frequently attributed to Chief Seattle (Sealth), Tribes believe
    all things are connected. That is why we believe only through a
    holistic ecosystem management approach can we find success in achieving
    a healthy environment and robust natural resources. We believe failure
    to deal with the natural resource/environmental challenges forced upon
    us, with an ecosystem approach, can only result in ruinous impacts on
    treaty-protected resources.
        All of this requires adequate funding.
                                   conclusion
        Clearly, Western Washington Tribes are leaders in the Northwest
    salmon recovery effort. The Tribes possess the legal authority,
    technical and policy expertise, and effective programs to address
    impacts on wild salmon from harvest and hatcheries. The Tribes are
    strategically located in each of the major watersheds, and no other
    group of people knows salmon like the Tribes. No one else so deeply
    depends on salmon for their cultural, spiritual and economic survival
    either, although the habitat and salmon restoration work we do will
    definitely benefits everyone who lives here. Tribes seize every
    opportunity to coordinate with other governments, and non-governmental
    entities, to avoid duplication, maximize positive impacts and emphasize
    the application of holistic ecosystem management. We continue to
    participate in salmon recovery, habitat restoration, etc. on an equal
    level with the State, because we understand the great value of such
    cooperation. It is said that salmon are our miners' canary. They
    absolutely depend on clean water and healthy habitat--and so do we. We
    ask Congress to help us in the effort to restore salmon, other species
    and habitat by supporting our funding requests.
        I thank the Committee for allowing me this opportunity to make
    these budget requests of the fiscal year 2008 Appropriations for the
    Department of Commerce.
                                     ______

    Prepared Statement of the Population Association of America/Association
                             of Population Centers
                                  introduction
        Thank you, Senator Mikulski, Senator Shelby, and other
    distinguished members of the Subcommittee, for this opportunity to
    express support for the Census Bureau and the National Science
    Foundation (NSF), two agencies important to the Population Association
    of America and the Association of Population Centers (PAA/APC).
               background on the paa/apc and demographic research
        The PAA is an interdisciplinary, scientific organization comprised
    of over 3,000 research professionals, including demographers,
    economists, sociologists, and statisticians. The APC is a similar
    organization comprised of over 30 universities and research groups that
    foster collaborative demographic research and data sharing, translate
    basic population research for policy makers, and provide educational
    and training opportunities in population studies.
        Demography is the study of populations and how and why they change.
    Demographers, as well as other population researchers, collect and
    analyze data on trends in births, deaths, immigration and disabilities
    as well as racial, ethnic and socioeconomic changes in populations.
    Among the major policy issues, population researchers study the
    demographic causes and consequences of population aging, trends in
    fertility, marriage, divorce and their effects on the health and well
    being of children, and immigration and migration and how these patterns
    affect the ethnic and cultural diversity of our population and the
    nation's health and environment.
        PAA/APC members rely on a number of federal agencies charged with
    funding demographic research and generating reliable, accessible data.
    The ability of our members to produce meaningful research, often used
    to inform policy decisions, requires the use of substantial data sets
    and support for research projects and research training.
                               the census bureau
        The Census Bureau is the premier source of information about the
    American people and the U.S. economy. In addition to the decennial
    census and the American Community Survey, the Census supports a variety
    of surveys to measure changes in individual and household demographic
    and economic conditions. PAA and APC members rely on accessible data
    produced by the Census Bureau to conduct their research.
                          national science foundation
        The mission of NSF is to promote the progress of science; to
    advance the national health, prosperity, and welfare; and to secure the
    national defense. The demography of our population directly impacts the
    health, prosperity, welfare, and security of our nation. NSF support of
    demographic research, particularly its support of large-scale
    longitudinal surveys, such as the General Social Survey and Panel Study
    of Income Dynamics, is central to the agency's mission and essential
    for the field of population research. NSF provides about 20 percent of
    all federally supported basic research conducted by America's colleges
    and universities, including basic behavioral and social research.
    Demographic research also depends on support from NSF for support of
    individual research projects and research centers.
                                recommendations
        PAA and APC urge you to support the Administration's request for
    the Census Bureau, which is $1.23 billion in fiscal year 2008.
    Substantial preparation is required to ensure the success of an
    accurate 2010 Census and fully implemented American Community Survey.
    In 2008, the Census Bureau will be conducting the only dress rehearsal
    of the decennial census. The rehearsal, which will be conducted in San
    Joaquin County, California, and nine counties in the Fayetteville area
    of North Carolina, will evaluate the integrated census plan in a
    census-like environment. Also, in 2008, the Bureau will design and test
    a system for capturing and processing census data, open 12 regional
    census centers nationwide, and verify address information submitted by
    state, local, and Tribal governments. All of these key planning, or
    ramping up, activities are central to the success of the 2010 Census.
    Thus, it is imperative the Bureau receive the Administration's request
    in 2008. Receiving anything less than the President's request,
    jeopardizes the accuracy of the 2010 Census, increasing the chances of
    over counts, undercounts, and, ultimately, geographic misallocations of
    federal resources, and threatens the availability of key demographic
    and economic data researchers and policymakers require.
        PAA and APC, as members of the Coalition for National Science
    Funding, support the President's budget request for NSF in fiscal year
    2008, which is $6.43 billion. This budget will enable the NSF Social,
    Behavioral and Economic Science Directorate (SBE) to continue its
    support of social science surveys and a rich population research
    portfolio. Furthermore, the proposed budget will enable SBE to fully
    implement the Science of Science and Innovation Policy initiative. The
    goal of this initiative is to develop an evidence-based platform from
    which policymakers and researchers may assess the impacts of the
    Nation's science and engineering enterprise.
        The Census Bureau and the National Science Foundation support,
    indirectly and directly, the collection and availability of rich data
    sources to PAA/APC members. Our economists, statisticians, and social
    survey design experts rely on federally supported data to conduct their
    research and inform public policy. Investments in these data sets are
    investments in good policy.
        Thank you for considering our requests and for supporting federal
    programs that benefit the field of demographic research.
                                     ______

     Prepared Statement of the National Association of Marine Laboratories
        Madam Chair and Members of the Subcommittee, on behalf of the
    National Association of Marine Laboratories (NAML) I am pleased to
    submit this statement in strong support of the research and education
    programs under the subcommittee's jurisdiction that are vitally
    important for a vibrant oceans, coastal, and Great Lakes research and
    education enterprise. I will focus my remarks on four key areas:
    federal extramural research funding, innovation and competitiveness,
    implementation of ocean commission recommendations and other federal
    ocean research reports, and ocean education, literacy and workforce
    development.
        NAML (www.naml.org) is a nonprofit organization of over 120
    institutions employing more than 10,000 scientists, engineers, and
    professionals and representing ocean, coastal and Great Lakes
    laboratories stretching from Maine to the Gulf of Mexico, Guam to
    Bermuda, and from Alaska to Puerto Rico. NAML labs support the conduct
    of high quality ocean, coastal and Great Lakes research and education
    in the natural and social sciences and the effective use of that
    science for decision-making on the important issues that face our
    country.
    federal support for extramural ocean, coastal and great lakes research
                               and infrastructure
        NAML strongly urges federal commitment to enhance support for
    cutting-edge ocean, coastal, and Great Lakes research and
    infrastructure across federal funding agencies.
        The marine sciences have much to offer the Nation as it seeks to
    strengthen its ability to innovate and compete in today's global
    economy. They are inherently interdisciplinary, address science,
    technology, engineering, and mathematics (STEM) disciplines, push the
    envelope in terms of technology development, test the boundaries of our
    data collection and analysis systems, and offer an effective training
    ground for future scientists and engineers. NAML asks that the value of
    extramural research funding at all relevant federal agencies not be
    overlooked, but recognized as essential to the overall progress of
    coastal, ocean and Great Lakes science and education. Further, in order
    to support this research and ensure that this country is achieving the
    best possible results, all types of infrastructure-marine laboratories,
    observatories, ships, underwater vehicles, and satellites-must be
    supported across the board.
      --National Science Foundation.--NAML supports increased federal
            funding for the National Science Foundation (NSF) consistent
            with the President's budget request of $6.5 billion for fiscal
            year 2008. Basic research and the transfer and use of the
            knowledge developed through research are vital for the long-
            term economic competitiveness and national security of this
            Nation. NSF provides vital support for basic research and
            education which enhances public understanding of the Nation's
            oceans, coastal areas, and the Great Lakes. NSF also provides
            important support for basic laboratory facilities,
            instrumentation, support systems, computing and related
            cyberinfrastructure, and ship access. The final report of the
            U.S. Commission on Ocean Policy makes several recommendations
            on the need to develop and enhance ocean, coastal and Great
            Lakes research infrastructure. To that end, NAML strongly
            supports the development of the Ocean Observatories Initiative
            at NSF. Further, NAML urges the Subcommittee to significantly
            enhance the NSF Major Research Instrumentation (MRI) program
            and its Field Stations and Marine Laboratories (FSML) program.
            FSML is of particular interest to marine labs as it provides
            researchers with access to state of the art instrumentation for
            research and education and necessary cyberinfrastructure and
            data management systems that compliment the Ocean Observatories
            Initiative. We urge the Subcommittee to double the modest FSML
            budget from $2.5 million to $5 million for fiscal year 2008 and
            further request that the program ultimately be increased to $10
            million annually.
      --National Oceanic and Atmospheric Administration.--NAML requests a
            top-line appropriation of $4.5 billion for NOAA for fiscal year
            2008. This is consistent with the position take by the Friends
            of NOAA (www.friendsofnoaa.org) coalition which represents a
            diverse group of NOAA stakeholders.
          A Congressionally requested study of NOAA's research programs,
            entitled, Review of the Organization and Management of Research
            in NOAA completed August 2004, concluded that extramural
            research is critical to accomplishing NOAA's mission. The
            access to such enhanced research capacities provides NOAA with
            world-class expertise not found in NOAA laboratories;
            connectivity with planning and conduct of global science; means
            to leverage external funding sources; facilitation of multi-
            institution cooperation; access to vast and unique research
            facilities; and access to graduate and undergraduate students.
            Academic scientists also benefit from working with NOAA, in
            part, by learning to make their research more directly relevant
            to management and policy. It is an important two-way
            interaction and exchange of information.
          NAML strongly supports robust NOAA extramural research activities
            expressed though such programs as the National Sea Grant
            College Program, the National Undersea Research Program (NURP),
            Ocean Exploration, research related to aquaculture, invasive
            species, and the various joint and cooperative institutes
            supported by NOAA. The Bush Administration has proposed to
            maintain the Sea Grant program at $55 million for the third
            straight year. Sea Grant is already feeling the pinch of a
            flat-funding environment and the President's request will only
            further hinder the programs' ability to address local, regional
            and national ocean research and education needs. A budget of
            $72 million for Sea Grant will allow the program to mend past
            cuts and address emerging needs facing our coasts. In addition,
            the Bush Administration has proposed to the merge NURP with the
            Ocean Exploration program. NAML hopes that if or when this
            merger comes to fruition the new program will still provide an
            extramural research component that is so valued by the research
            community. While the merger of the two programs is still under
            development, we support funding NURP at $20 million and Ocean
            Exploration at $28 million for fiscal year 2008. These noted
            partnership programs are not only consistent with the findings
            of the August 2004 review of NOAA research, but are also
            consistent with NOAA's missions. As such they should be
            strongly supported and made accessible to the ocean, coastal,
            and Great Lakes research community on a competitive basis.
          NAML is encouraged that the Administration has included in its
            budget request for fiscal year 2008 a line for the development
            of an Integrated Ocean Observing System (IOOS) within NOAA with
            $16 million set aside for initial funding. However, the amount
            needed to sustain and enhance current observing system efforts
            by the research community is closer to $100 million annually.
            Integrated observations offer critical information on coastal
            processes necessary for addressing issues, such as the health
            of humans and marine life, weather and climate nowcasts and
            forecasts, homeland security, and resource management. Much
            work is still needed to shape the federal government's
            involvement in IOOS and larger global observing efforts. NAML
            urges the Subcommittee to provide adequate funding for IOOS in
            fiscal year 2008 consistent with the needs of the community.
      --National Aeronautics and Space Administration.--NASA's support for
            earth and space sciences is vital in helping us better
            understand our planet. NASA's Earth Science Applications theme
            benchmarks practical uses of NASA-sponsored observations from
            Earth observation systems and predictions from Earth science
            models. The National Academy of Sciences released a report \1\
            this year which calls on NASA to ``renew its investment in
            Earth observing systems and restore its leadership in Earth
            science and applications.'' NAML is one of many groups that
            believe we need a balanced investment in NASA that will
            maintain a strong and vibrant earth and space science
            enterprise. If we are concerned about the fate of the planet,
            NASA's support for science is absolutely crucial to
            understanding and ultimately deciding how to address the
            concerns we are facing. NAML urges the Subcommittee to renew
            its investment in the NASA Earth Science budget for fiscal year
            2008.
    ---------------------------------------------------------------------------
        \1\ Earth Science and Applications from Space: National Imperatives
    for the Next Decade and Beyond, Committee on Earth Science and
    Applications from Space: A Community Assessment and Strategy for the
    Future, National Research Council, January 2007.
    ---------------------------------------------------------------------------
                         innovation and competitiveness
        NAML strongly supports efforts by the Administration and Congress
    to strengthen the nation's position as a world leader in scientific
    innovation and competitiveness.
        As the Nation seeks to expand its investment in the physical
    sciences to increase its international competitiveness, NAML calls on
    the Subcommittee to recognize the integrated and strategic relationship
    between all scientific and engineering disciplines and to support an
    enhanced investment in science and technology across the board as part
    of any long-term economic competitiveness policy. NAML is encouraged
    that the federal government has begun focusing on the physical sciences
    for targeted funding increases, particularly through efforts to double
    the budget of the National Science Foundation (NSF) over the next 10
    years. However, we must ensure that the entire breadth of the physical
    sciences, which include the earth and ecosystem sciences as well, is
    supported so we do not hinder this nation's true innovative potential.
    Other federal agencies involved in the ``physical sciences'' need to be
    supported within the context of innovation, namely the extramural
    research programs within the National Oceanic and Atmospheric
    Administration (NOAA) and the National Aeronautics and Space
    Administration (NASA). Improvements in the quality of education
    provided to our students with a strong foundation in math and science
    as well as support for universities and laboratories that provide
    world-class education and research opportunities will only benefit the
    nation and its science enterprise. As the Subcommittee sets its funding
    priorities for the year we hope it will consider the relevance of NOAA
    and NASA to U.S. innovation and competitiveness.
     implementation of ocean commission recommendations and other federal
                             ocean research reports
        NAML continues to strongly support implementation of the
    recommendations made by the U.S. Commission on Ocean Policy (2004) \2\.
    In addition, NAML looks forward to the implementation of the
    interagency Ocean Research Priorities Plan (2007) \3\.
    ---------------------------------------------------------------------------
        \2\ An Ocean Blueprint for the 21st Century, U.S. Commission on
    Ocean Policy, April 20, 2004.
        \3\ Charting the Course for Ocean Science in the United States for
    the Next Decade: An Ocean Research Priorities Plan and Implementation
    Strategy, NSTC Joint Subcommittee on Ocean Science and Technology,
    January, 2007.
    ---------------------------------------------------------------------------
        NAML believes that public policy with respect to the nation's
    oceans, coasts and Great Lakes should always be based on sound science
    and the most up-to-date information. The U.S. Commission on Ocean
    Policy's analysis of existing policies and future needs has resulted in
    a collection of bold and broad-reaching recommendations for reform. The
    Congress has taken these recommendations to heart in recent years and
    has begun addressing the nation's ocean needs. Federal implementation
    of these recommendations will enable the United States to maintain and
    strengthen its role as a world leader in protecting and sustaining the
    planet's oceans and coasts. NAML is particularly supportive of the
    Commission's recommendation to re-align NOAA's functions to support
    ecosystem-based management approaches. In addition, we fully endorse
    the Commission's recommendations to double the federal investment in
    ocean, coastal, and Great Lakes research as well as its recommendation
    to promote a strong federal investment in ocean, coastal, and Great
    Lakes education, outreach, and stewardship.
        As the Bush Administration states in its decade-focused Ocean
    Research Priorities Plan, ``Scientific discovery driven by competitive
    peer-reviewed investigations is the foundation of the nation's research
    enterprise.'' This plan identifies the nation's most urgent short- and
    longer-term ocean research needs. NAML is encouraged that the
    Administration proposed new funding for ocean issues in its budget
    request for fiscal year 2008. However, we urge the Administration and
    Congress to not overlook the importance of the extramural research
    community to the implementation of the plan's goals. The external
    research community stands equipped and ready to assist the federal
    government in implementing its identified priorities. NAML hopes that
    the dedication to ocean, coastal and Great Lakes issues expressed by
    the federal government in recent years will continue and be further
    enhanced to ensure that the external research community is being
    utilized to the fullest extent possible as the valuable resource that
    it is. In order to be successful, the federal government will need to
    look to the extramural research community to tap into existing
    capabilities to ensure that they are taking the most practical approach
    to ocean governance.
         ocean education, literacy, outreach and workforce development
        NAML believes that an ocean literate populace will lead to a well-
    informed and safe nation. NAML encourages the federal government to
    strengthen its commitment to enhancing ocean, coastal and Great Lakes
    education, literacy and outreach as well as workforce development.
        A strong national ocean policy can only be sustained with the most
    up-to-date and reliable scientific information. To ensure that the
    nation will continue to have the ability to address emerging ocean
    issues in the future, investments are needed today in coastal, ocean,
    and Great Lakes education programs that support learning at all age
    levels, by all disciplines, and for all Americans. NAML strongly
    supports the NSF Centers for Ocean Science Education Excellence (COSEE)
    program, NSF education and human resources generally, and NOAA's Office
    of Education. Such programs provide a rich environment for which
    collaborations and partnerships flourish. A greater understanding of
    the oceans and coastal ecosystems will instill in the American
    population a sense of stewardship for these important environments.
    These programs also yield a diverse workforce that includes a
    significant percentage from underrepresented groups. Preparing these
    cultural bridges would allow us to capitalize upon diverse national
    strengths, ensuring the flow of intellectual talent into ocean,
    coastal, and Great Lakes-related fields.
        NAML member laboratories contribute to maintaining a competitive
    and first-rate marine research and education workforce by providing a
    unique training ground that is conducive to on-the-job learning and
    mentoring. Marine labs, because of their flexibility and
    interdisciplinary nature, are leaders in addressing science,
    technology, engineering, and mathematics (STEM) education disciplines
    and hope to see support for these disciplines enhanced. Marine labs are
    also committed to enhancing diversity within the field of ocean,
    coastal and Great Lakes research and education by fostering
    relationships with community colleges and minority-serving institutions
    (MSIs) to provide distinctive learning opportunities for individuals
    who may not otherwise have an opportunity to participate in ocean,
    coastal and Great Lakes research. NAML hopes to be seen as a model to
    the nation for this type of collaboration.
        The 2006 Conference on Ocean Literacy (CoOL), which convened in
    Washington, DC, and at satellite sites throughout the country, provided
    an unprecedented national platform for discussion on the essential
    principles of ocean literacy and the current challenges and
    opportunities for both formal and informal education efforts in
    educating the public to make informed, responsible decisions about the
    ocean and its resources. NAML hopes that the topics addressed during
    this conference will continue to reach policymakers and the general
    public and will shape future ocean, coastal and Great Lakes education
    policy.
        Thank you for the opportunity to express these views on behalf of
    the National Association of Marine Laboratories. We hope the
    Subcommittee will take these points into consideration as you move
    forward in the fiscal year 2008 appropriations process.
                                     ______

                Prepared Statement of the Sea Grant Association
        Madam Chair and Members of the Subcommittee, on behalf of the Sea
    Grant Association (SGA) I respectfully submit this written testimony
    for the official record. Thank you for the opportunity to express these
    views. The Sea Grant Association joins with other stakeholders in
    urging the Subcommittee to recognize and support the vital research and
    outreach programs of the National Oceanic and Atmospheric
    Administration (NOAA). The community requests that the Subcommittee
    fund NOAA at $4.5 billion in fiscal year 2008. This is a modest request
    when considering the immense impact such an increase would have in
    terms of assisting NOAA in carrying out its mission: to understand and
    predict changes in the Earth's environment and conserve and manage
    coastal and marine resources to meet our Nation's economic, social, and
    environmental needs. Further, SGA requests that, within the overall
    fiscal year 2008 appropriation for NOAA, the Subcommittee appropriate
    $72 million in base funding for the National Sea Grant College Program.
    I will use the remainder of this statement to discuss why it is so
    important to support Sea Grant at realistic levels this year and in the
    future.
        The National Sea Grant College Program is a key component of NOAA's
    extramural research, education and outreach enterprise. This request of
    $72 million is well within the $103 million authorized for fiscal year
    2008 in Public Law 107-299, National Sea Grant College Program Act
    Amendments of 2002, and consistent with the level of base funding
    approved by your Subcommittee (Commerce, Justice and Science) last
    year. Further it is the amount supported in the Senate Dear Colleague
    Letter for Sea Grant which was submitted with 27 signatures to the
    Subcommittee on March 29, 2007 by Senators Maria Cantwell and Olympia
    Snowe.
        The Bush Administration's request of $55 million for fiscal year
    2008 would put Sea Grant at a hard freeze for the third year in a row.
    Implications of such a freeze for the nation with respect to the
    economy, sustainability of natural resources, and national safety and
    security are significant. With the costs of research and education
    rising, the flat-funding of Sea Grant during the last few years have
    forced programs to cut jobs and leave countless high-quality research
    and outreach projects unsupported. The Sea Grant network cannot sustain
    current activities, staff, and operations within this budget scenario.
    This request of $72 million would allow Sea Grant to sustain ongoing
    research and education efforts, address emerging needs, and continue
    assisting NOAA in carrying out its many missions.
                      science serving the nation's coasts
        Research and outreach programs supported by Sea Grant are based on
    competition, undergo rigorous peer-review, and are geared to address
    the many marine, coastal and Great Lakes challenges and opportunities
    that face our citizens. The federal investment in Sea Grant enables a
    nationally coordinated network embedded in the best research
    universities to apply unparalleled intellectual capital to address
    these problems and opportunities while assisting NOAA in addressing its
    missions. Cost-effectiveness is enhanced by access to existing
    university management infrastructure.
        Sea Grant serves the nation in many ways. Sea Grant's unmatched
    access to regional, state and local constituencies through its
    extension and outreach programs ensures that the federal investment is
    targeted at relevant issues. The Sea Grant model contributes to the
    missions of NOAA and other federal agencies, and state and local
    governments, to the benefit of the general public. In addition, marine
    education programs supported by Sea Grant funds reach from kindergarten
    to marine-related business people to elder hostels.
        Sea Grant is a national program addressing national, regional,
    state and local needs. It is a partnership among government, academia,
    business, industry, scientists, and private citizens to help Americans
    understand and wisely use our precious coastal waters and Great Lakes
    for enjoyment and long-term economic growth. This network unites 32
    Programs, over 300 universities, and millions of people. Sea Grant is
    an agent for scientific discovery, technology transfer, economic
    growth, resource conservation, and public education. It is government
    as our citizens want it--visible, tangible, relevant, efficient, and
    effective.
                               an economic driver
        Sea Grant is an investment in America's economic future. Attempts
    to balance our booming coastal economy with its associated impacts on
    the coastal and marine environment have raised the stakes for effective
    government action. America's ocean, coastal and Great Lakes resources
    encompass an immense area with more than 95,000 miles of coastline and
    more than 3.4 million square miles of ocean within the U.S. territorial
    sea. Over half the nation's 280 million people live in coastal counties
    that comprise less than one-fifth of the total land area of the United
    States. The economy of these coastal counties is critical to the
    economic well being of the entire nation, providing a wide array of
    goods and services that account for at least 50 percent of the gross
    national product of the United States. By 2010, U.S. foreign trade in
    goods is expected to double to $5 trillion, with ocean-going cargo
    increasing by 30 percent. Coastal tourism and recreation account for 85
    percent of all U.S. tourism revenues. The oceans, in one way or
    another, account for one out of every six jobs. Tax revenues in coastal
    areas are among the fastest growing revenue sources for state and local
    governments. In fact, the collective economic impact of the coastal
    economy far exceeds U.S. agriculture, and yet federal investments in
    Sea Grant colleges and universities are much smaller than investments
    in the Land Grant college and university system funded by the U.S.
    Department of Agriculture for agriculture and land-based natural
    resource activities, the program after which Sea Grant was modeled.
        Sea Grant has been leading the quest for practical solutions by
    providing research and education on national coastal and Great Lakes
    issues for four decades. Federal dollars appropriated to the Sea Grant
    program are leveraged and matched by state and private funds by at
    least 2 to 1, some states matching 60 percent or more. The matched
    federal investment fills an enormous demand for expertise to tackle
    rapid growth, change, and pressure on coastal resources. In addition,
    the 32 Sea Grant programs, located in every coastal, Great Lakes and
    Gulf Coast state, conduct policy-relevant research linked to an
    extensive outreach and education network. This structure ensures that
    Sea Grant research is useful to coastal resource managers at the
    regional, state and local levels, marine-related businesses and
    industries, and most importantly the general public. Some examples
    where Sea Grant has contributed to economic growth and vitality at the
    local, state and regional levels include:
      --Following the devastation of Hurricanes Katrina and Rita in the
            Gulf Coast in 2005, approximately 3,000 commercial and 35,000
            to 40,000 recreational boats were in need of salvage due to the
            storms. The Washington and Alaska Sea Grant Programs donated a
            surplus 60-ton Traveliftr from Alaska to Plaquemine Parish,
            Louisiana. Without that hoist to move displaced boats to dry
            land for repair, fishermen affected by the hurricanes would
            have been out of work for several years, potentially costing
            millions of dollars in loss to the fishing industry.
      --Sea Grant plays an instrumental role in nature-based tourism by
            promoting low impact uses of natural resources. For example,
            efforts to develop state designated underwater preserves have
            led to new diving activity in Great Lakes coastal communities
            providing an economic stimulus of at least $1.5 million over a
            two-year period.
      --Sea Grant saved taxpayers $120,000 in the annual Beach Sweep/River
            Sweep litter cleanup program in South Carolina. Over the past
            14 years, more than 75,000 volunteers have collected 728 tons
            of trash and have saved state taxpayers more than $1.6 million.
      --Sea Grant research efforts to develop new drugs from marine
            organisms have resulted in discovery and description of more
            than 1,000 compounds that may be vitally important to the
            health industry.
      --Sea Grant training at 5,000 seafood processing plants will prevent
            20,000 to 60,000 seafood-related illnesses a year, which could
            cost consumers as much as $115 million annually.
      --Sea grant specialists are working directly with seaport managers,
            resource managers, commercial interests and the general public
            to address issues associated with ports, harbors and marine
            transportation--ecological and economic centers of America's
            coasts. For example, in Southern California, Sea Grant
            continues to educate local businesses on maritime security and
            business continuity in this, the busiest port complex in the
            United States.
      --Sea Grant research and extension work with hybrid striped bass
            aquaculture has expanded this species from being a
            demonstration project ten years ago to a $25 million annual
            business.
      --In North Carolina, 200 of the 205 new oceanfront homes built to the
            Sea Grant hurricane standards survived Hurricane Fran in 1996,
            compared to more than 500 older oceanfront houses in the same
            area that were destroyed.
               a local approach to addressing national priorities
        Sea Grant has established long-standing working relationships with
    a broad spectrum of stakeholders in every coastal state. Because it is
    science-based and non-regulatory, Sea Grant is viewed as an honest
    broker among a wide range of constituents. The U.S. Commission on Ocean
    Policy called on Congress in its 2004 report to expand the Sea Grant
    program in conjunction with a doubling of all ocean and coastal
    research funding. Further, in January 2007, the Bush Administration
    released its inter-agency Ocean Research Priorities Plan and
    Implementation Strategy, Charting the Course for Ocean Science in the
    United States for the Next Decade. Several of the plan's most important
    priorities dovetail with Sea Grant's strength, experience, and
    relationships with state and local decision makers and ocean, coastal
    and Great Lakes resource managers. Here are just two examples:
        Sea Grant Increases Resiliency to Natural Hazards.--Coastal areas
    of the United States comprise only 10 percent of our nation's land
    mass, yet they are home to over half of all Americans. As witnessed by
    recent record-breaking storm seasons, coastal communities and the
    natural resources and infrastructure on which they depend are at
    increasing risk from hurricanes, tsunamis, coastal storms, shoreline
    change, and sea level rise. Sea Grant institutions and their partners
    pool research, education and outreach capabilities to enhance
    mitigation, preparedness, planning, education, response, and recovery
    in coastal communities throughout the nation. As a result of the 2005
    hurricanes, Sea Grant is working to improve storm modeling and
    community resiliency through regional research initiatives. In
    addition, Sea Grant is working closely with coastal communities to
    develop and implement long-term planning that will allow communities to
    become more resilient to storm events.
        Sea Grant is a Dedicated Steward of Natural and Cultural Ocean and
    Great Lakes Resources.--Domestic seafood production has not kept pace
    with consumer demand; the United States imports an ever-increasing
    amount of seafood consumed domestically. Issues with quality assurance
    and consistent supplies are increasing. At the same time, the nation's
    commercial seafood industry is threatened by the loss of coastal access
    and multiple use conflicts in coastal waters. Sea Grant institutions,
    through the use of their fisheries extension, address the increasing
    needs of the nation's seafood industry by utilizing expertise in
    seafood safety and technology and marine aquaculture.
        The above examples illustrate Sea Grant's connectivity to the
    Administration's stated priorities. As the federal government works to
    implement these priorities, we hope it will look to the National Sea
    Grant College Program--a major component of NOAA's extramural research
    arm--as a resource and as a partner.
        The SGA recognizes and appreciates the difficult funding tradeoffs
    the Subcommittee is forced to make each year. We urge you to consider
    Sea Grant as an investment in the future health and well-being of our
    coastal communities and support the program at $72 million in fiscal
    year 2008.
        Thank you for the opportunity to present these views.
                                 about the sga
        The Sea Grant Association is a non-profit organization dedicated to
    furthering the Sea Grant program concept. The SGA's regular membership
    consists of the academic institutions that participate in the National
    Sea Grant College Program, located within the National Oceanic and
    Atmospheric Administration (NOAA). SGA provides the mechanism for these
    institutions to coordinate their activities, to set program priorities
    at both the regional and national level, and to provide a unified voice
    for these institutions on issues of importance to the oceans, coasts
    and Great Lakes. The SGA advocates for greater understanding, use, and
    conservation of marine, coastal and Great Lakes resources.
                                     ______

         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, Science, and
    Related Agencies to reject the Administration's proposed cancellation
    of the Victims of Crime Act (VOCA) Fund. This proposal would result in
    the removal of nearly $1.3 billion in funds currently designated to
    support crime victim services programs. Moreover, it would change VOCA
    from a reliable, offender-supported program to one dependent on annual
    appropriations from the General Treasury. Such an action would be
    disastrous for the state and local programs that already struggle to
    meet the needs of all crime victims. We urge Subcommittee members to
    instead raise the cap on VOCA Fund distributions by $375 million for
    the 2008 fiscal year and to provide further program stability by
    extending the time states have to spend this one-time increase in funds
    from the current four years to six years.
        As the leading national resource and advocacy organization for
    victims of crime, the National Center knows the considerable and urgent
    funding needs of those who serve crime victims. Since our founding in
    1985, we have worked with public and nonprofit agencies throughout the
    country, providing information, support, and technical assistance to
    thousands of victims, victim service providers, allied professionals,
    and advocates. Our toll-free information and referral Helpline alerts
    us to the needs of crime victims nationwide. Through our Training
    Institute and our daily interactions with both our members and the more
    than 11,000 crime victim service providers in our referral network, we
    stay informed of their work and know the impact of federal-level
    funding decisions on their ability to meet the needs of victims. In
    short, we hear from victims and service providers every day about the
    impact and importance of the VOCA Fund.
    Understanding the VOCA Fund
        Congress created the VOCA Fund over twenty years ago to ensure on-
    going, dedicated federal support for state and local programs for crime
    victims. The Fund receives no taxpayer dollars; it is made up of solely
    criminal fines and penalties imposed on federal offenders. Most of the
    funds are distributed each year by formula grants to the states to
    support two specific types of programs: (1) crime victim compensation
    programs; and, (2) crime victim assistance programs.
        Crime victim compensation programs directly reimburse crime victims
    or their families for many of the out-of-pocket expenses that directly
    result from the crime. These statutorily defined expenses include
    medical and counseling costs, funeral bills, crime scene cleanup, and
    lost wages. Essentially, these programs step in when victims have no
    insurance, no workman's compensation, and no other assistance available
    to help them meet expenses incurred as a result of the crime.
        In addition to compensation programs, the VOCA Fund supports more
    than 4,400 state and local victim assistance programs. Victim
    assistance programs include rape crisis centers, domestic violence
    shelters, victim assistants in law enforcement and prosecutor offices,
    and other direct service providers for victims of crime. For instance,
    the Fund supports: Child Protect, Inc., serving victims of child abuse
    in Montgomery, Alabama; the Shenandoah Women's Center, serving victims
    of domestic violence and sexual assault in Martinsburg, West Virginia;
    an advocate for elder victims of domestic violence at the Women's
    Community in Wausau, Wisconsin; Jackson Urban League, serving victims
    of homicide in Jackson, Mississippi; Advocates for Survivors of Torture
    and Trauma, serving victims of torture and war trauma in Baltimore,
    Maryland; the state MADD office in Baton Rouge, Louisiana; and the
    Virginia Network for Victims and Witnesses of Crime in Chesterfield,
    Virginia.
        VOCA assistance grant money is crucial in enabling both criminal
    justice system-based and community programs to serve victims of crime.
    As crime increases across the country, so too does the need for victim
    services. If VOCA funding remains stagnant or becomes unreliable due to
    a shift away from the current offender-supported system, states and
    their subgrantees will be unable to adequately address the needs of
    their communities. Moreover, their ability to reach more isolated and
    vulnerable populations will be diminished.
    Why the VOCA Fund Currently Has a Balance
        Seven years ago, Congress acted to ensure the continuing stability
    of VOCA funding. For many years, all the money collected in a given
    year was disbursed during the following year. The nature of the funding
    stream--criminal fines and penalties imposed on federal offenders--
    caused the level of available funding to vary significantly. For
    example, in some years, large fines against corporate offenders would
    cause a surge in deposits. However, in 1999, Congress chose to reserve
    a portion of the deposits from such years to offset lower collections
    in leaner years by placing a cap on the amount of disbursements from
    the Fund. The appropriations conference report noted that ``the
    conferees have taken this action . . . to ensure that a stable level of
    funding will remain available for these programs in future years.'' \1\
    Therefore, as a result of this decision, a variable sum of money--
    called the ``rainy day fund''--is routinely carried over from one
    fiscal year into the next.
    ---------------------------------------------------------------------------
        \1\ H.R. Rep. No. 106-479, at 239 (1999) (Conf. Rep.).
    ---------------------------------------------------------------------------
    Reject the Proposed Cancellation and Protect the VOCA Fund Balance
        For the past two fiscal years, the Administration unsuccessfully
    sought to rescind the balance of the VOCA Fund, withdrawing the money
    from the ``rainy day fund'' and leaving the Fund with a zero balance.
    The Administration's 2008 fiscal year budget request now seeks an
    outright cancellation of the Fund, resulting in the transfer of the
    current balance of the Fund to the General Treasury. Annual tax dollars
    would be used to fund the $625 million VOCA cap, to be offset by
    federal fines collected over the course of the year. Additionally, the
    proposal would take $50 million from under the $625 million cap to be
    designated for the emergency reserve, effectively lowering the amount
    available to states.
        Due to the Fund's allocation formulas, the impact of fluctuations
    falls most heavily on victim assistance grants. A cancellation of the
    VOCA Fund would eliminate the dedicated funding stream that has enabled
    steady support for crime victim services. Each year, victim advocates
    would have to lobby for funding, competing against each other and every
    other federal budget item. Moreover, the proposed cancellation and
    system shift would undermine the Fund's principal philosophy of
    offender accountability as originally proposed by President Reagan's
    1982 President's Task Force on Victims of Crime. As Reagan
    Administration Attorney General Ed Meese testified before a Senate
    subcommittee last year, such a profound change ``would be a perversion
    of the original concept of the Crime Victims Fund and would violate its
    integrity.'' \2\
    ---------------------------------------------------------------------------
        \2\ Crime Victims Fund Rescission: Real Savings or Budget Gimmick?:
    Hearing Before the Subcomm. on Fed. Financial Mgmt., Gov't Info., and
    Int'l Security of the S. Comm. on Homeland Security and Governmental
    Affairs, 109th Cong. (2006) (statement of Ed Meese, Att'y Gen., Ronald
    Reagan Distinguished Fellow in Pub. Pol'y and Chairman of the Ctr. for
    Legal and Judicial Studies, The Heritage Foundation).
    ---------------------------------------------------------------------------
    Fiscal Year 2008 VOCA Funding Should Be Raised by $375 Million; States
            Should Have Six Years to Spend This Money
        Approximately 4,400 agencies rely on continued VOCA funding to
    serve 3.8 million crime victims a year. \3\ Even so, the recent
    increase in crime across the country has meant a heightened demand for
    victim services. Moreover, victim service programs report an urgent
    need to expand their outreach and service components in order to reach
    all victim populations. Without increased VOCA funding, programs in all
    fifty states and six additional jurisdictions will be unable to
    adequately address the needs of their communities and may have to lay
    off staff and limit, or even suspend, programs.
    ---------------------------------------------------------------------------
        \3\ See Office for Victims of Crime, U.S. Dept. of Justice, Victims
    of Crime Act: 2005 Victim Assistance Grant Program Nationwide
    Performance Report (2005); full text available at: http://www.ovc.gov/
    fund/vocanpr_va05.html (accessed on April 11, 2007).
    ---------------------------------------------------------------------------
        One of the most underserved populations of crime victims is victims
    with disabilities. Victims with mental or physical disabilities are
    frequently targets for criminals, and face increased barriers in
    seeking services. For example, studies have shown that almost two-
    thirds of women with disabilities report abuse and violence;
    additionally, in domestic violence situations, these women reported
    staying with their batterers almost twice as long as women without
    disabilities.\4\ However, only 35 percent of shelters recently surveyed
    have disability awareness training for their staff and only 16 percent
    have a dedicated staff person to deliver services to women with
    disabilities.\5\ Without the proper training, shelters and victim
    services programs cannot expect to adequately respond to the needs of
    victims with disabilities.
    ---------------------------------------------------------------------------
        \4\ M.E. Young et al., Prevalence of Abuse of Women with Physical
    Disabilities, 78 Arch. Phys. Med. & Rehabil., Special Issue (1997).
        \5\ Margaret A. Nosek, Ph.D., et al, Baylor College of Medicine,
    Violence Against Women With Disabilities--Fact Sheet #1: Findings From
    Studies 1992-2002.
    ---------------------------------------------------------------------------
        Similarly, dating and sexual violence is frighteningly prevalent in
    the youth population, yet there is a serious dearth of appropriate
    services and resources geared toward helping this underserved age
    group. One in three teens knows a friend or peer who has been hit,
    punched, kicked, slapped, choked, or physically hurt by a dating
    partner.\6\ Approximately 25 percent of high school girls have been the
    victims of physical abuse, sexual abuse, or date rape.\7\
    Understandably, many service providers express a strong desire to
    expand their services to better serve teen victims of crime; however,
    they lack the funding for the staff, training, and outreach programs
    that would make this feasible.\8\
    ---------------------------------------------------------------------------
        \6\ See Liz Claiborne Inc., Omnibuzz Topline Findings: Teen
    Relationship Abuse Research (Feb. 2005).
        \7\ See Cathy Schoen et al., The Commonwealth Fund, the
    Commonwealth Fund Survey of the Health of Adolescent Girls (Nov. 1997).
        \8\ See National Center for Victims of Crime, Results From the
    National Center's 2006-2007 Public Policy Poll (a compilation of the
    National Center's member responses to a survey regarding legislative
    priorities, underserved victims in communities, coming legislative
    sessions, and requests for general feedback); available at: http://
    www.ncvc.org/ncvc/AGP.Net/Components/documentViewer/
    Download.aspxnz?DocumentID=41511 (accessed on April 13, 2007).
    ---------------------------------------------------------------------------
        Service providers also recognize that there are significant
    populations of immigrant victims of crime who do not have access to
    services. These victims are often culturally and linguistically
    isolated from the general society, making them vulnerable to crime but
    also unaware of the services that can help them. Victim service
    providers know that to make inroads in reaching these populations, they
    must make an investment in personnel and in the time needed to build
    trust with existing community members. Without additional funding, such
    critical expansions in services, outreach, and programs are not
    possible.
        There are many other underserved populations of victims across the
    country. In a recent National Center poll of our members, service
    providers indicated a need to reach and serve homeless victims, victims
    with mental illness, racial or ethnic minority victims, and victims who
    are members of the GLBTQ population.\9\ Respondents also mentioned that
    indigent or poor victims, incarcerated victims, and Native American
    victims remain underserved and at risk for greater victimization.
    ---------------------------------------------------------------------------
        \9\ Id.
    ---------------------------------------------------------------------------
        A one-time increase in VOCA funds, coupled with an extension of
    time for states to use that extra funding, would allow the development
    of services targeted at these vulnerable and underserved victim
    populations. Such an investment of funding would enable victim service
    providers to form partnerships with agencies already connected to and
    trusted by those communities.
        Raising the cap on VOCA Fund distributions by $375 million for the
    2008 fiscal year would allow a comfortable Fund balance of
    approximately $300 million to remain for future years to help guarantee
    reliable funding for victim services programs. Moreover, it would
    ensure that the money collected from offenders was actually used for
    the purpose for which it was originally designed and authorized by law.
    Finally, allowing six instead of four years to spend VOCA grant money
    would provide states with the flexibility necessary to address the
    specific assistance needs of their communities.
    Conclusion
        In closing, we urge Congress to reject the Administration's
    proposed cancellation and to affirm the vital importance of protecting
    the VOCA Fund for years to come. Raising the VOCA Fund cap for the 2008
    fiscal year by $375 million and extending the time states have to spend
    the money to six years will permit states to reach additional victims
    while ensuring the future stability of the Fund.
                                     ______

     Prepared Statement of the American Indian Higher Education Consortium
        This statement focuses on two areas: National Aeronautics and Space
    Administration (NASA) and National Science Foundation (NSF).
        Mr. Chairman and Members of the Subcommittee, on behalf of the
    nation's 34 American Indian Tribal Colleges and Universities (TCUs),
    which comprise the American Indian Higher Education Consortium (AIHEC),
    thank you for the opportunity to express our views and recommendations
    for fiscal year 2008 on programs that directly affect our institutions.
                           summary of recommendations
        National Aeronautics and Space Administration (NASA).--In fiscal
    year 2001, tribal colleges established a formal cooperative agreement
    with NASA for a project designed to increase access, participation, and
    success of American Indians in high quality K-16 science, technology,
    engineering, and mathematics (STEM) programs. The agreement includes a
    modest program to support TCU STEM education and research programs, as
    well as a summer research opportunities program for TCU faculty and
    students to participate in NASA research projects at the various NASA
    centers around the country. This program and other minority-serving
    programs have demonstrated success in improving STEM education and
    research programs at TCUs and encouraging more American Indians and
    other minorities to pursue degrees and careers in the hard sciences.
    However, NASA recently reorganized its funding priorities resulting in
    severe cuts in education programs overall and the near elimination of
    this modest TCU program. We are requesting that no less than $2.5
    million of the NASA budget be made available to continue to support TCU
    STEM research and education programs.
      --Strengthen NASA's Role in Developing the American STEM Workforce.--
            The ability of NASA to help develop and train the American STEM
            workforce has been severely undercut by NASA's current budget
            policy. In general, we urge the Subcommittee to ensure that
            funding for NASA education programs, particularly, those
            targeting minority serving institutions, is restored to levels
            necessary for a meaningful impact on the ability of Tribal
            College and Universities and other MSIs to prepare their
            students to enter the national science, technology, engineering
            and mathematics workforce. We further urge the Subcommittee to
            examine and address the disproportionate impact that NASA's
            current budget priorities have on minority serving institutions
            and minority students, which represent America's best hope for
            securing a well trained STEM workforce in the future.
      --National Science Foundation (NSF): Tribal Colleges and Universities
            Program (TCUP).--Over the past seven years, this program has
            provided vital assistance to TCUs as they build their capacity
            to provide strong science, technology, engineering, and
            mathematics (STEM) teaching and learning programs for American
            Indians. Since its inception, 29 of the 31 eligible TCUs have
            participated in this program, along with six Alaska Native and
            Native Hawaiian serving institutions. While the impact of the
            TCUP program on Tribal Colleges and Alaska Native and Native
            Hawaiian institutions has been significant, the program funding
            level has not grown above the initial $10 million/year, and can
            no longer sufficiently address the needs of eligible
            institutions. We request that the Subcommittee increase the
            amount of funding for the NSF-TCU program by $5 million, for a
            total of $15 million.
      --TCU STEM Blue Ribbon Panel.--We request that funding be
            appropriated to establish and support a Blue Ribbon Panel
            comprised of national leaders in scientific research and
            education, to be organized and convened by the National
            Academies to (1) monitor and review developments and changing
            policy issues related to STEM research and education at the
            nation's Tribal Colleges and Universities; (2) examine and
            evaluate the current state of Federal program opportunities
            available to TCUs for developing and sustaining STEM education
            and research programs; and (3) prepare a report recommending
            strategies at all levels for improving STEM education and
            research programs at TCUs. Sources of information that will be
            reviewed by the Blue Ribbon Panel will include public symposia
            organized by the Panel, published documents, and written
            comments by members of the scientific research and education
            community, and examination of past and current STEM education
            and research programs at, and technical assistance programs
            for, Tribal Colleges and Universities. We request that the
            Subcommittee appropriate $500,000 for the purpose of
            establishing this TCU STEM Blue Ribbon Panel.
                                 justifications
        In 2007, the report ``Rising above the Gathering Storm--Energizing
    and Employing America for a Brighter Economic Future'' (National
    Academies Press (NAP) 2007) prepared by the Committee on Science,
    Engineering, and Public Policy, warns that America's place as the
    world's leader in science and technology is at risk. The report lists
    the growing need for a competitive and qualified workforce and
    government investment in national research and development as two
    essential ingredients of a formula for maintaining America's continued
    leadership in science and technology. This request addresses the role
    of Tribal Colleges and Universities specifically and minority serving
    institutions generally in these two critical areas.
        America's minority serving institutions--Tribal Colleges and
    Universities, Historically Black Colleges and Universities (HBCUs), and
    Hispanic Serving Institutions (HSIs)--are a primary provider of higher
    education programming for their respective populations. Although only a
    relative small percentage of colleges and universities in the country,
    MSIs serve a much greater proportion of underrepresented minority
    students, for example, HSIs are only about 6 percent of the higher
    education institutions in the country, but produce 33 percent of
    Hispanic science baccalaureates. HBCUs produce the same percentage for
    African Americans (National Science Board, 2004). Studies have shown
    the reservation-based American Indians attending mainstream
    institutions of higher education have a failure rate of 70-80 percent.
    However, these same students have a success rate of 70-80 percent at
    TCUs. Despite these successes, Native Americans, African Americans and
    Hispanics continue to be seriously underrepresented in the sciences
    even as their numbers and proportion in higher education grow (National
    Science Board (NSB), 2004). Supporting MSIs is critical for reaching
    the growing number of underrepresented minority college students, the
    next generation of scientists and engineers.
    National Aeronautics and Space Administration (NASA)
        The NASA AIHEC Cooperative Agreement has served 27 Tribal Colleges
    and Universities with support for faculty and student research at NASA
    Centers, STEM course and curriculum development, research
    instrumentation, research projects, professional development for STEM
    faculty, and information infrastructure improvements supporting the
    delivery of high quality STEM education and research programs. These
    NASA-supported activities have impacted nearly 700 K-12 students and
    teachers, 2,700 Tribal College and University students, and over 150
    faculty members, significantly furthering TCU efforts at recruitment
    and retention of American Indian students, and their preparation for
    careers in science, engineering, and technology fields.
        In 2007, NASA support for Tribal Colleges and Universities under
    the NASA-AIHEC Cooperative Agreement was reduced from $1.2 million to
    approximately $400,000. This reduction has necessitated a significant
    re-scoping of the activities supported under the Cooperative Agreement,
    and thereby has significantly reduced resources available to positively
    affect the educational experience of American Indian students. In
    addition, over the past two years, other vital TCU STEM programs funded
    by NASA were eliminated entirely due to budget restructuring. For
    example, a program to train TCU faculty at multiple campuses in
    geospatial technologies, and another STEM education program involving a
    TCU partnership with other key institutions of higher education were
    both eliminated entirely. The funding for these and other programs must
    be restored to a level at which a significant impact on the TCU
    educational community can be realized.
    National Science Foundation Programs
        Since 2001, NSF's Tribal Colleges and Universities Program has been
    a primary resource for Tribal Colleges and Universities and Alaska
    Native/Native Hawaiian institutions to plan and develop STEM education
    and research programs designed to respond to local and regional STEM
    workforce challenges and opportunities. To date, 29 of the 31 eligible
    TCUs have participated in the program, along with 6 Alaska Native and
    Native Hawaiian serving institutions. Participating colleges and
    universities have enhanced existing degree programs and developed
    entirely new program offerings. Funded institutions have upgraded their
    laboratory facilities, hired instructors, and introduced innovative
    strategies to recruit and retain students. While these TCUP-funded
    activities have had a significant impact on college STEM programs and
    on the students who have enrolled in them, this initiative is still too
    modest in scope to ensure that these activities can be sustained by all
    TCUP-eligible institutions for a period necessary to realize
    significant outcomes in terms of student success in STEM, particularly
    at the baccalaureate and graduate education levels. Additional funding
    is necessary to ensure that all TCUP-eligible institutions are able to
    receive sustained funding necessary to continually develop and improve
    their STEM program offerings in response to changing local and regional
    STEM workforce demands and research opportunities.
        In addition to the TCUP program, a number of other programs for
    which Tribal Colleges and Universities compete within the Education and
    Human Resources Directorate have experienced reductions. Overall, there
    has been a 19 percent cut in inflation adjusted dollars for NSF's
    Education and Human Resources budget since 2004. This is particularly
    difficult to understand given the severe challenges facing the nation
    in preparing the nation's science, technology, engineering, and
    mathematics workforce documented in the above-referenced report
    ``Rising above the Gathering Storm''. The TCUP program should be
    expanded by at least $5 million annually for a total of $15 million to
    allow TCUP-eligible institutions to fully implement STEM education and
    research improvement plans that are responsive to local and national
    STEM workforce development needs, particularly given the shortfall in
    funding for other Education and Human Resources programs.
        Further, based on a motion of the AIHEC Board of Directors, which
    is comprised solely of TCU presidents, we recommend that a policy be
    put in place that stating that any grants or contracts for technical
    assistance under any NSF-TCU program shall be awarded to an Indian
    organization which: (a) the NSF Director finds is nationally based, (b)
    represents a substantial American Indian constituency, and (c) has
    expertise in the field of Tribal Colleges and Universities and American
    Indian higher education. This will help ensure that the unique needs of
    the TCUs, their students and faculties are addressed effectively and
    efficiently in a productive and responsive manner.
        Finally, given the limited pool of applicants and the tremendous
    need to sustain STEM programs for a length of time deemed sufficient to
    achieve improvement at all levels, we urge the subcommittee to direct
    NSF to:
      --Award grants under the NSF-TCU program for a period of five years,
            with ongoing support for an additional five years (without the
            need to re-enter a program competition), provided the programs
            meet appropriate NSF criteria for satisfactory progress; and
      --Refrain from expanding funding priorities under the NSF-TCU program
            into new areas (e.g. K-12 teacher education, which previously
            had been supported by NSF under the Urban and Rural Systemic
            Initiatives) until sufficient funding exists to meet the basic
            STEM needs of TCUs and reliable data demonstrates a significant
            improvement in basic STEM education participation and
            completion rates across TCUs.
        We recognize that a tremendous need exists to address STEM
    education at all levels. However, funding is severely limited under the
    NSF-TCU program and it has not grown in seven years. Therefore, should
    NSF personnel believe additional areas should be addressed or
    additional programs established, beyond those proposed by TCUs under
    the general NSF-TCU program, then new funding should be requested or
    designated, rather than taking funds appropriated for desperately
    needed basic STEM/Technology education and research programs. This is
    particularly important when the new funding priorities imposed on
    grantees under programs such as NSF-TCUP are simply replacing programs
    that have been eliminated elsewhere within NSF.
    TCU STEM Blue Ribbon Panel
        An independent Blue Ribbon Panel on TCU STEM would be empowered to
    examine, evaluate, and make recommendations regarding the design and
    delivery of STEM programs at the Tribal Colleges and Universities, as
    well as research and education funding programs operated by the federal
    agencies. Recommendations provided by such a Panel would provide
    significant impetus in moving Tribal Colleges and University programs
    toward greater effectiveness while ensuring greater accountability. The
    National Academies are the primary source of expert guidance in
    science, engineering, and medicine to academia, industry, the U.S.
    Government, and the general public and as such is the appropriate
    organization to convene and conduct activities within the intended
    scope of this request.
                                   conclusion
        In light of the justifications presented in this statement, we
    respectfully request that Congress appropriate funding for NASA and NSF
    programs that directly impact the STEM programs at Tribal College and
    Universities at the levels recommended. This relatively small
    investment will go a long way toward helping to build the nation's STEM
    workforce while fostering economic self-sufficiency in Indian Country.
    Fulfillment of AIHEC's fiscal year 2008 recommendations will strengthen
    the missions of all of the TCUs and significantly enhance the strong
    positive impact that they have on their respective communities. We
    respectfully request your continued support of TCUs and full
    consideration of our fiscal year 2008 appropriations recommendations.
                                     ______

     Prepared Statement of the California Industry and Government Central
                    California Ozone Study (CCOS) Coalition
        Madam 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 2008 funding request of $150,000
    from the Department of Commerce/NOAA account for CCOS. These funds are
    necessary for the State of California to address the very significant
    challenges it faces to comply with new national ambient air quality
    standards for ozone and fine particulate matter. The study design
    incorporates technical recommendations from the National Academy of
    Sciences (NAS) on how to most effectively comply with federal Clean Air
    Act requirements.
        First, we want to thank you for your past assistance in obtaining
    federal funding for the Central California Ozone Study (CCOS) and
    California Regional PM10/PM2.5 Air Quality Study
    (CRPAQS). Your support of these studies has been instrumental in
    improving the scientific understanding of the nature and cause of ozone
    and particulate matter air pollution in Central California and the
    nation. Information gained from these two studies is forming the basis
    for the 8-hour ozone, PM2.5, and regional haze State
    Implementation Plans (SIPs) that are due in 2007 (ozone) and 2008
    (particulate matter/haze). As with California's previous and current
    SIPs, all future SIPs will continue to be updated and refined due to
    the scientific complexity of our air pollution problem. Our request
    this year would fund the completion of CCOS to address important
    questions that won't be answered with results from previously funded
    research projects.
        To date, our understanding of air pollution and the technical basis
    for SIPs has largely been founded on pollutant-specific studies, like
    CCOS. These studies are conducted over a single season or single year
    and have relied on modeling and analysis of selected days with high
    concentrations. SIPs are now more complex than they were in the past.
    The National Academy of Sciences (NAS) now recommends a weight-of-
    evidence approach that will involve utilizing more broad-based,
    integrated methods, such as data analysis in combination with seasonal
    and annual photochemical modeling, to assess compliance with federal
    Clean Air Act requirements. This will involve the analysis of a larger
    number of days and possibly an entire season. In addition, because
    ozone and particulate matter are formed from some of the same emissions
    precursors, there is a need to address both pollutants in combination,
    which CCOS will do.
        Consistent with the NAS recommendations, the CCOS study includes
    corroborative analyses with the extensive data provided by past
    studies, advances the state-of-science in air quality modeling, and
    addresses the integration of ozone and particulate pollution studies.
    In addition, the study will incorporate further refinements to emission
    inventories, address the development of observation-based analyses with
    sound theoretical bases, and includes the following four general
    components:

    ------------------------------------------------------------------------
                                                                     Year
    ------------------------------------------------------------------------
    Performing SIP modeling analyses...........................    2005-2011
    Conducting weight-of-evidence data analyses................    2006-2008
    Making emission inventory improvements.....................    2006-2010
    Performing seasonal and annual modeling....................    2008-2011
    ------------------------------------------------------------------------

        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.
        For fiscal year 2008, our Coalition is seeking funding of $150,000
    from the Department of Commerce/NOAA account in support of CCOS.
    California has a very complex terrain that includes mountain ranges,
    flat valleys, and long coastal regions. Some meteorological models are
    known to have difficulty in simulating high-resolution airflow over
    such complex terrain. NOAA has a vast amount of experience in applying
    meteorological models in several different areas of the country and
    their scientific know-how is a valuable asset to CCOS. This request
    will be used to continue NOAA's involvement in developing
    meteorological simulations for Central California, specifically longer-
    term simulations of seasonal and annual meteorology. The long-term
    record of meteorological data in the CCOS database can be used to
    improve NOAA's meteorological forecasting abilities and in the
    evaluation of U.S. western boundary conditions for weather forecasting
    models.
        As you know, NOAA is at the scientific forefront of the development
    of meteorological models including the Weather Research and Forecasting
    (WRF) model that is viewed as a replacement for the Mesoscale
    Meteorology Model, Version 5 (MM5). Thus, NOAA's involvement would
    facilitate the use of CCOS measurements in the development and
    refinement of WRF. In addition, NOAA has conducted prior research in
    the CCOS region on atmospheric airflows, sea breeze circulation
    patterns, nocturnal jets and eddies, airflow bifurcation, convergence
    and divergence zones, up-slope and down-slope flows, and up-valley and
    down-valley airflow. Thus, CCOS provides the opportunity to draw from
    or extend this research for a longer, multi-year time period. This
    research provides fundamental data needed to understand airflow over
    complex terrain, and has national applicability.
        If we receive the funds requested this year to complete this
    research project, this will be our final request.
        Thank you very much for your consideration of our request.
                            cooperative partnership
    Private Sector
        Western States Petroleum Association; Pacific Gas and Electric
    Company; Electric Power Research Institute; NISEI Farmers League and
    Agriculture; Independent Oil Producers' Agency; and 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; and Yolo-Solano Air Quality Management
    District.
    State Government
        California Air Resources Board; and California Energy Commission.
    Federal Government
        Environmental Protection Agency; Department of Agriculture;
    Department of Commerce; National Oceanic and Atmospheric
    Administration; Department of Transportation; Department of Interior;
    and Department of Energy.
                                     ______

        Prepared Statement of the Marine Conservation Biology Institute
        On behalf of the Marine Conservation Biology Institute (MCBI), I
    thank the members of the Commerce, Justice, Science, and Related
    Agencies Appropriations Subcommittee for the opportunity to submit
    written testimony on fiscal year 2008 appropriations for NOAA. MCBI is
    a national, nonprofit environmental organization interested in
    advancing the science of marine conservation biology and securing
    protection for ocean ecosystems. Our headquarters are in Bellevue,
    Washington and we also have offices in California and Washington, DC.
        MCBI is a member of the Friends of NOAA Coalition and supports the
    Coalition's recommendation for funding NOAA at $4.5 billion in fiscal
    year 2008, the same amount recommended by the Senate for fiscal year
    2006 and 2007, and the same amount currently being recommended by the
    House Oceans Caucus. In addition, we support funding augmentation for
    several important conservation programs and activities as follows: $3.2
    million for the Marine Protected Areas Initiative; $14.5 million for
    the National Undersea Research Program; $78 million for the National
    Marine Sanctuaries Program; and $7.7 million for conservation of the
    Hawaiian monk seal. Our justifications for these requests are as
    follows:
        National Marine Protected Areas Center (MPA Center) is responsible
    for the implementation of Executive Order 13158, ``Marine Protected
    Areas'' (MPAs), which President Clinton issued in May 2000. The
    objective of the executive order is to protect ``significant natural
    and cultural resources within the marine environment for present and
    future generations by strengthening and expanding the Nation's system
    of marine protected areas.'' (Exec. Order No. 13158, 65 Fed. Reg.
    34,909 (2000)). Federal agencies are directed to use their existing
    legal authorities to develop an effective national system of marine
    protected areas, including expansion of existing protected areas and
    the creation of new ones. The MPA Center is housed within NOAA's
    National Ocean Service (Office of Ocean and Coastal Resource
    Management).
        MPAs are designated to protect marine ecosystems, processes,
    habitats, and species, and contribute to the restoration and
    replenishment of resources for social, economic, and cultural
    enrichment. The MPA Center's specific goals include designing a
    framework for a national system of MPAs, developing innovative
    approaches to understanding the ecosystem effects and human dimensions
    of MPA design and management, facilitating coordination among MPA
    agencies and stakeholders, and conducting outreach and education about
    place-based ocean management. Cuts in funding have greatly impacted the
    MPA Center's activities. The Center has lost 75 percent of its staff
    since 2005. This has severely impacted the Center's ability to
    implement the President's executive order, and to facilitate national,
    state and local MPA coordination.
        MCBI recommends $3.2 million for the MPA Center in fiscal year
    2008, enabling it to get back on track with its goals and work plans.
    In addition to allowing the Center to continue the work below, this
    funding would also allow the Center to rehire the seven staff that were
    lost under previous budgets. Funding at this level would enable the
    Center to:
      --Complete its Draft Framework for a national system of MPAs. Funding
            at the fiscal year 2006 level could delay this project another
            1-2 years.
      --Allow for more stakeholder and advisory committee participation.
            Funding at the fiscal year 2006 level will only allow minimal
            external consultation with stakeholders.
      --Continue and accelerate the West Coast Pilot Project. Funding at
            fiscal year 2006 levels would delay critical components of this
            important project another 3-4 years, and significantly limit
            its ultimate utility to the region as a model for the rest of
            the national system of MPAs. Completion of the Pilot Project
            would be extremely helpful to the Governors of California,
            Oregon, and Washington, who jointly seek to create an ocean and
            coastal resource action plan for the Pacific Coast.
        National Undersea Research Program (NURP) is a key vehicle in
    implementing many of the priority topics identified by the U.S.
    Commission on Ocean Policy's Ocean Research Priority Plan. These topics
    include ``Stewardship of Natural and Cultural Resources,'' ``Improving
    Ecosystem Health,'' the ``Ocean's Role in Climate,'' and ``Increasing
    Resilience to Natural Hazards.'' Through its regional science centers,
    NURP provides scientists with the advanced underwater technologies
    needed to conduct important research, such as remotely operated and
    autonomous underwater vehicles, human occupied submersibles, advanced
    technical diving, and underwater laboratories. NURP is the nation's
    only federal scientific program that specializes in providing the
    undersea technology needed to help us better manage Earth's last
    frontier.
        NURP-sponsored research has contributed to improving methods for
    assessing fish populations, locating and mapping areas of deep sea
    corals, and assessing the impacts of overfishing, climate change, and
    water pollution. Additionally, NURP activities will be an integral part
    of the Deep Sea Coral Research and Technology Program at NOAA, newly
    authorized by the Magnuson-Stevens Fishery Conservation and Management
    Act in 2006.
        In fiscal year 2008 NURP and NOAA's Ocean Exploration (OE) Program
    will be merged into a new Office of Ocean Exploration and Research
    (OER). The office will support exploration, research, and advanced
    technology development efforts.
        Cuts in funding have greatly impacted NURP's activities. In fiscal
    year 2006, funding was cut by more than 60 percent of fiscal year 2005
    levels to $4.1 million. This reduced level of funding has continued in
    fiscal year 2007. MCBI recommends $14.5 million for NURP in fiscal year
    2008. This amount would enable NURP to:
      --Complete the second year of an east coast MPA site identification
            project, organized by the NURP University of Connecticut
            Center. This project, at the Stellwagen Bank National Marine
            Sanctuary, aims to identify the full range of ecosystems and
            habitats that should be protected in an MPA network.
      --Map deep sea coral habitat in the Gulf of Maine, providing valuable
            information to marine resource managers. Funding at fiscal year
            2006 levels would not support this project.
      --Continue a Lake Superior project examining the impacts of PCBs on
            fish and human health.
      --Map and characterize the new deep sea coral Habitat Areas of
            Particular Concern (HAPCs) and shelf edge MPAs off the
            southeast U.S. coast.
      --Obtain vital climate records from west coast deep-water corals.
            This project was approved for funding in fiscal year 2006 and
            fiscal year 2007 but was deferred in both cases due to budget
            cuts, and is at risk of cancellation.
      --Undertake an ecosystem connectivity cruise off the west coast and
            Northwestern Hawaiian Islands. This project was originally
            planned for fiscal year 2008 but has been delayed because
            budget uncertainties.
        The National Marine Sanctuaries Act authorizes the Secretary of
    Commerce to designate and manage areas of the marine environment for
    resource protection. Currently, the National Marine Sanctuary Program
    (NMSP) is responsible for the management and oversight of 13 national
    marine sanctuaries comprising over 18,000 square miles, and for the
    Papahanaumokuakea Marine National Monument.
        The NMSP is responsible for education, research, monitoring and
    management programs. In order to successfully carry out its objective,
    each sanctuary develops, reviews, and implements a comprehensive
    management plan. Each site also carries out local research, monitoring
    programs, cultural programs, education and outreach programs,
    enforcement, and permitting. The NMSP headquarters offers oversight,
    guidance, and support to each sanctuary site. Recent NMSP
    accomplishments include the discovery of deep sea corals in the Olympic
    Coast National Marine Sanctuary, the documented increase of marine life
    in the Florida Keys Tortugas Ecological Reserve (part of the Florida
    Keys National Marine Sanctuary), and research that led to the
    International Maritime Organization approving a shift in the shipping
    lanes in the Stellwagen Bank National Marine Sanctuary region to reduce
    whale/ship strikes to protect endangered whales.
        For the last few years the NMSP has seen its budget fall from
    approximately $68 million (including ORF and PAC accounts) in fiscal
    year 2005 to approximately $55 million in fiscal year 2006. As of April
    13, 2007, the NMSP has received approximately $35 million of its fiscal
    year 2007 budget for ORF; the PAC numbers are still unknown. In fiscal
    year 2008, the President requested approximately $50 million for the
    NMSP. However, $8 million of the allocation is specifically for the
    Papahanaumokuakea Marine National Monument. As it stands now, the NMSP
    operations budget of approximately $36 million has been unchanged for
    three consecutive years.
        Increased funds are needed to ensure that the NMSP can continue to
    meet its growing responsibilities and keep up with inflation.
    Furthermore, the NMSP will be unable to meet the management benchmarks
    that must be met before the congressional moratorium imposed on new
    sanctuary designations can be lifted. MCBI recommends that the NMSP
    receive $78 million for fiscal year 2008. This amount would restore the
    NMSP's funding to the fiscal year 2005 enacted level of $68 million,
    plus another $10 million for construction and facilities. This amount
    includes the President's $8 million request for the management of the
    Papahanaumokuakea Monument. As it stands now, the NMSP operation budget
    has been roughly the same for three consecutive years.
        The Hawaiian monk seal is one of the most endangered marine mammals
    in the world and is the only marine mammal species whose entire range
    lies within the U.S. jurisdiction. Most Hawaiian monk seals reside in
    the Papahanaumokuakea Marine National Monument in the Northwestern
    Hawaiian Islands (NWHI). Over the last 50 years, the Hawaiian monk seal
    population has declined by more than 60 percent to an estimated 1,252
    individuals, its lowest level in recorded history. A number of human
    and environmental factors have contributed to this decline, including
    overfishing; environmental cycles; entanglement in marine debris;
    predation by sharks; injuries and deaths caused by aggressive adult
    male monk seals; habitat modification and loss; and disturbance by
    humans.
        The Hawaiian monk seal is currently spiraling into extinction. What
    happens next will be crucial to the monk seal's recovery prospects. The
    National Marine Fisheries Service (NMFS) and its partner agencies must
    aggressively budget for and carry out key recommendations of the draft
    recovery plan, which include the following:
      --Implement a suite of actions to improve female survival in the 6
            main subpopulations, including: conservation of habitats and
            prey base; research on juvenile survival factors; interventions
            to protect juveniles, especially females, until they are strong
            enough to care for themselves; and protection of females from
            male seal aggression and shark predation.
      --Continued removal of hazardous debris from monk seal habitat.
      --Maintain and expand field efforts to carry out research and
            management actions in the NWHI.
      --Develop and implement a coordinated plan with the state, local, and
            non-governmental organizations to encourage growth of the monk
            seal population in the Main Hawaiian Islands (MHI) and prevent
            harmful human interactions with the seals that reside there;
            and consider a best-site relocation program for seals in the
            MHI to optimize their survival prospects.
      --Determine and take reasonable steps to reduce the probability of
            exposure of monk seals to new diseases (e.g. distemper).
        Historically, Hawaiian monk seal recovery efforts have been funded
    primarily by NMFS and have focused heavily on scientific research. Much
    more attention now needs to be paid to hands-on interventions to save
    the seals from dying. For fiscal year 2008, MCBI recommends $7.7
    million for monk seal conservation under the following programs:
      --$3 million allocated to the monk seal in the Marine Mammal and Sea
            Turtle ESA base, under the NMFS, Office of Protected Resources.
            These funds would support direct intervention and research
            activities.
      --$500,000 as part of the Marine Mammal Initiative (Cetaceans and
            Monk Seals), under NMFS, Office of Protected Resources. These
            funds support the annual summer field camp and monk seal
            population assessment through the Marine Mammal Initiative.
            NOAA staff and volunteers must be supported on the six main
            seal islands over a five-month period to observe seals, collect
            data, and undertake urgent conservation activities.
      --$3 million is needed for marine debris removal through the Coral
            Reef Conservation Program line item and the National Marine
            Sanctuaries Program under the National Ocean Service. These
            funds would ensure debris removal from all islands in the
            Papahanaumokuakea Marine National Monument and protect seals,
            birds, and sea turtles from entanglement death.
      --$1.2 million is needed in for the Hawaiian Monk Seal Program line
            item. These funds support salaries, benefits, and travel costs
            for NMFS seal program staff. Additional staff is needed to
            carry out the required level of conservation activities.
        In summary, MCBI respectfully requests that the subcommittee
    augment funding for the ecosystem and species protection programs
    mentioned above. Thank you for the opportunity to share our views on
    appropriations for NOAA.
                                     ______

          Prepared Statement of the National Corn Growers Association
        The National Corn Growers Association (NCGA) appreciates the
    opportunity to share with the subcommittee our appropriations
    priorities for fiscal year 2008. Specifically, our top priority in the
    fiscal year 2008 Science, State, Justice and Commerce appropriations
    bill is the National Science Foundation's (NSF) Plant Genome Research
    Initiative (Initiative).
        NCGA is a national organization founded in 1957 and represents more
    than 32,000 members in 48 states, 47 affiliated state organizations and
    more than 300,000 corn farmers who contribute to state checkoff
    programs for the purpose of creating new opportunities and markets for
    corn growers.
        NCGA's top priority in the fiscal year 2008 Science, State, Justice
    and Commerce appropriations bill is increased funding to $150 million
    for the National Science Foundation (NSF) Plant Genome Research
    Initiative (initiative). The initiative is supported by the Interagency
    Working Group on Plant Genomes under the auspices of the National
    Science and Technology Council within the Office of Science and
    Technology Policy.
        In 1997, NCGA spearheaded the effort on legislation that authorized
    major plant genome research, which resulted in the Plant Genome
    Research Initiative. Obtaining genome sequence information frequently
    leads to breakthroughs in the study of a particular organism. The goal
    of the initiative is to understand the structure and function of all
    plant genes at all levels from molecules to organisms and to ecosystems
    and indeed, the initiative has led to an unprecedented increase in our
    understanding of the genomics and genetics of plants. The initiative
    also changed the way research is conducted in plant biology and helped
    to attract a new generation of scientists to the plant sciences field
    at U.S. colleges and universities.
        Bringing agriculturally important plant species into the genomic
    age is an important goal. Initial major accomplishments included the
    completion of the model laboratory plant Arabidopsis and rice genome
    sequences. Completion on those genomes demonstrated that genomic
    sequence was the most comprehensive way toward gene discovery--a first
    step toward identifying the role of each gene. Building upon lessons
    learned sequencing smaller plant genomes, sequencing the corn genome
    became feasible. Arabidopsis, a member of the brassicaceae, or mustard,
    family, has a genome of 125 million base pairs. Rice's genome, has 430
    million base pairs. Sequencing the corn genome had been considered
    difficult because of its large size and complex genetic arrangement.
    The genome has 50,000 genes scattered among the haploid genome size of
    2.3 billion nucleotides--molecules that form DNA--that make up its 10
    chromosomes.
        In 2004, valuable corn research was made available through NCGA to
    research scientists working to understand the maize genome through the
    availability of sequencing data from Ceres, DuPont and Monsanto. This
    information, combined with the corn sequence data already in the public
    domain, significantly accelerated the identification of genes within
    the entire corn genome and was a precursor to the effect that the full
    corn sequence will have on the research community.
        In 2005, NSF, the United States Department of Agriculture (USDA)
    and the Department of Energy (DOE) awarded $32 million to sequence the
    corn genome. NSF selected a consortium of four research institutions to
    sequence the maize genome: The University of Arizona, Washington
    University in St. Louis, Iowa State University in Ames and Cold Spring
    Harbor Laboratory in Cold Spring Harbor, New York. The goal of the
    Maize Genome Sequencing Project is to unravel the complete DNA sequence
    of the maize plant and to determine the number of genes and their
    position on the chromosomes--the tiny bundles of DNA that form the
    storage units of genetic information. Corn is pushing the state of the
    art of genetic research to new levels as its genome has complexities
    beyond any plant sequenced to date. The highly repetitive regions of
    DNA, formerly considered ``junk'' DNA, are extremely prevalent in corn,
    and have been shown to have a significant impact on how the genetic
    engine of life truly works. These issues have posed significant
    challenges to researchers interested in crop improvement, plant
    molecular biology, or genome evolution. Using a physical map that
    covers about 95 percent of the maize genome map, scientists generate a
    draft sequence to reveal the locations of regulatory elements within
    stretches of so-called non-coding ``junk'' DNA. Focus of the project
    does center on gene-containing regions and are sequenced in detail.
    This sequencing strategy enables the consortium to sequence the corn
    genome at a fraction of the cost that was necessary to decipher the
    human genome, which is only slightly larger than the corn genome.
        Today, genomic research technology and techniques are ready to
    complete a high quality corn genome sequence. The result will be the
    complete sequence and structural understanding of the entire corn
    genome, annotated functional sequences, and their locations on corn's
    genetic and physical map. This genome will be the most complex
    eukaryotic genome to be sequenced to date, including the human genome.
    The corn genome sequence will, in turn, help in the eventual completion
    of other major crop genome sequences, as itself benefited from
    knowledge gained through the prior completion of other genome
    sequences. It will also hold clues to improve the growth and
    development of other related grass crops, such as wheat, sorghum,
    millet and barley. Importantly, access to all of this information is
    shared through GenBank, a public repository for genome-sequence data.
        With increased funding, we will be much closer to achieving the
    goal of this initiative--understanding the structure and function of
    all plant genes. The corn industry, including the academic research
    community, grain handlers, growers, and seed companies support the corn
    genome sequencing project. A complete corn genome sequence and the
    application of its information will provide a wide range of benefits.
    Industry, both public and private, will be able to expedite their
    breeding programs and increase their knowledge of corn's important
    agronomic traits. Corn growers will be able to plant varieties of corn
    that are better suited to market and environmental needs, such as pest
    resistant traits. Quality researchers will continue to be attracted to
    the field of plant genomics and genetics.
        Consumers will also benefit from more abundant and sustainable
    food, feed and fuel supplies. Corn is not only grown for food and feed,
    it is converted to a myriad of processed food products--literally
    thousands of products in the typical supermarket contain corn.
    Improvements aim at increasing yield and nutritional value and
    optimizing the properties crucial for grain products such as flour and
    pasta. The production of corn-based products with enhanced nutritional
    value that are safer and less allergenic will directly benefit
    consumers.
        Corn is also an important material for many industrial purposes and
    products including rubber, plastics, fuel and clothing. Corn is a model
    system for studying complex genomic structure, organization and
    function, and its high quality genetic map will serve as the foundation
    for studies that may lead to improved biomass and bioenergy resources
    from corn and related plant species.
        The request for the Directorate for Biological Sciences (BIO) is
    $633 million, and increase of $25.15 million, or 4.1 percent, over the
    fiscal year 2007 request of $607.85 million. The Directorate for
    Biological Sciences supports research, infrastructure, and education in
    the biological sciences at U.S. colleges, universities, non-profit
    research institutions, and other research and education organizations.
        BIO includes a subactivity request for Plant Genome Research (PGR)
    of $101.22 million, an amount that does not contemplate an increase
    from the fiscal year 2007 request and is a slight decrease from fiscal
    year 2006 actual spending. PGR subactivity was initiated in fiscal year
    1998, as part of the initiative. In general, 36 percent of the PGR
    portfolio is available for new research grants. The remaining 64
    percent is used primarily to fund continuing grants made in previous
    years, which includes corn genome sequencing. PGR supports corn genome
    sequencing jointly with USDA and DOE. The Administration's proposal
    would contribute the third and last increment in support of the
    interagency corn sequencing project that began in fiscal year 2005.
        PGR also supports the Arabidopsis 2010 project. This project in
    fiscal year 2007 and 2008 could receive up to $25 million per year. It
    is important to note that model systems research such as this project,
    has been traditionally supported through NSF's core budget and not PGR.
    This change may result in a reduction of resources available for
    economically significant plants, such as continued work on new projects
    involving the rice genome and future new project stemming from corn
    genome work, during flat budget cycles. The Arabidopsis 2010 project
    and the NSF's PGRP complement each other and provide a broad base of
    support for the plant biology research community. It is critical that
    both activities receive enough support to achieve their goals.
        Maintaining and improving upon the resources available for crop
    systems is now more important than ever, as agriculture tries to meet
    the demands of consumers worldwide by providing a safe and secure
    supply of resources for human and animal nutrition, fiber, bioenergy,
    and industrial feeds. Continued strong governmental support of basic
    agricultural research is essential to ensure that the innovation
    pipeline remains robust. NCGA requests that this subcommittee include
    in the fiscal year 2008 Science, State, Justice and Commerce
    appropriations bill an increase in funding to $150 million for the
    National Science Foundation Plant Genome Research Initiative.
        Thank you for the support and assistance you have provided to corn
    growers over the years. Please feel free to contact Lisa Kelley at 202-
    628-7001 if you need any additional information.
                                     ______

        Prepared Statement of the Great Lakes Indian Fish and Wildlife
                                   Commission
        Agency Involved: Department of Justice
        Program Involved: COPS Tribal Resources Grant Program (TRGP)
    Summary of GLIFWC's Fiscal Year 2008 Testimony
        GLIFWC requests that Congress: (1) continue funding the DOJ COPS
    Tribal Resources Grant Program at $31,065,000 in fiscal year 2008 (i.e.
    the same level as requested by the Administration in fiscal year 2007
    and appropriated by both the House and Senate), and (2) specifically
    authorize eligibility for tribes' special law enforcement agencies,
    including fish and wildlife departments and game wardens, to
    participate in the COPS Tribal Resources Grant Program.\1\
    ---------------------------------------------------------------------------
        \1\ Unlike previous years and without notice or explanation, the
    Fiscal Year 2006 Application Guide for the TRGP provides: Special law
    enforcement agencies such as fish and wildlife departments, game
    wardens, park and recreation departments, and environmental protection
    agencies are not eligible to apply under this program at this time. The
    status of GLIFWC's fiscal year 2007 TRGP eligibility is unknown at this
    time.

    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 23 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 reservation communities 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.
    These partnerships evolved from the inter-governmental cooperation
    required to combat the violence experienced during the early
    implementation of treaty rights in Wisconsin. As time passed, GLIFWC's
    professional officers continued to provide a bridge between local law
    enforcement and many rural Indian communities. GLIFWC remains at this
    forefront, using DOJ funding to develop inter-jurisdictional legal
    training attended by GLIFWC officers, tribal police and conservation
    officers, tribal judges, tribal and county prosecutors, and state and
    federal agency law enforcement staff. DOJ funding has also enabled
    GLIFWC to certify its officers as medical emergency first responders
    trained in the use of defibrillators, and to train them 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. These networks include
    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 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 six 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 video cameras to
    increase officer safety.
        Emergency Response Equipment and Training.--Each GLIFWC officer has
    completed and maintains certification as a First Responder and in the
    use of life saving portable defibrillators. Since 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 maintains
    certification in ice rescue techniques and was provided a Coast Guard
    approved ice rescue suit. In addition, each of patrol areas 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 a number of
    vehicles that were purchased over a decade ago, including 10 ATV's and
    16 patrol boats and the GPS navigation system on its 31 foot Lake
    Superior Patrol Boat. These vehicles are used for field patrol,
    cooperative law enforcement activities, and emergency response in the
    1837 and 1842 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 Equip Three Additional Officers.--Funding has been
    contracted to provide three 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 re-affirmed the
    existence of the Chippewa's treaty-guaranteed usufructuary rights in
    Minnesota v. Mille Lacs Band, 526 U.S. 172 (1999). As tribes have re-
    affirmed rights to harvest resources in the 1837 ceded territory of
    Minnesota, workloads have increased. But for GLIFWC's COPS grants, 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: (1)
    national homeland security concerns, (2) state and local governmental
    fiscal shortfalls, (3) staffing shortages experienced by local police,
    fire, and ambulance departments due to the call up of National Guard
    and military reserve units, and (4) the need to cooperatively combat
    the spread of methamphetamine production in rural areas patrolled by
    GLIFWC conservation officers.
        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) and provide sheriffs
            departments valuable assistance with natural disasters (e.g.
            floods in Ashland County and a tornado in Siren, Wisconsin).
      --search and rescue for lost hunters, fishermen, hikers, children,
            and the 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, Bayfield, Burnett, Sawyer, and Vilas Counties in
            Wisconsin).
      --use of a thermal imaging camera (purchased through the COPS
            program) to track an individual fleeing the scene of an
            accident (Sawyer County, Wisconsin).
      --organize and participate in search and rescues of ice fishermen on
            Lake Superior (Ashland and Bayfield Counties in Wisconsin),
            Lake Superior boats (Baraga County in Michigan and with the
            U.S. Coast Guard in other parts of western Lake Superior), and
            kayakers (Bayfield County in Wisconsin).
        GLIFWC is proposing to utilize DOJ TRGP funding for training and
    equipment to: (1) recognize, secure and respond appropriately to
    potential methamphetamine production sites, (2) identify addicts while
    on patrol, and (3) improve community awareness through hunter safety
    classes. Simply put, supporting GLIFWC's officers 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 in the states of Wisconsin,
    Minnesota, and Michigan. The COPS Tribal Resources Grant Program
    provides essential funding for equipment and training to support
    GLIFWC's cooperative conservation, law enforcement, and emergency
    response activities. We ask Congress to support increased funding for
    this program.

                  [From Outdoor Life Magazine, December 2006]

                           Meth Wars in Deer Country
        As its cost in dollars and lives mounts, the fight against
    methamphetamine now involves sportsmen to a degree no one predicted a
    handful of years ago. Across the rural countryside, meth labs have
    invaded the lands where we fish and hunt.
        One December evening in 2004, Wildlife Officer Amy Snyder heard
    shots after legal shooting hours in a popular duck-hunting area in
    Madison County, Tenn. She put on hip boots and set out into the marsh.
    But when she arrived at the blind where she thought the shooting had
    occurred, she found it unoccupied.
        Then Officer Snyder noticed a chemical odor in the air. She shined
    her light around and in the grass saw a large glass mason jar filled
    with what looked like corn hominy. She kicked over the jar, saw rubber
    hoses coming out of the top and panicked.
        ``It was a meth lab, actively cooking,'' Snyder recalls. ``What I'd
    done was extremely dangerous. The stuff could have exploded, not to
    mention what might have happened if I'd surprised the cookers at
    work.''
        Snyder had reason to be unnerved. The February before in Greene
    County, Ind., Conservation Officer Mike Gregg got a report of
    suspicious activity deep inside the Hillenbrand Fish and Wildlife Area.
    Gregg went in alone to investigate on a cold winter day and caught the
    unmistakable acrid tang of anhydrous ammonia, a liquid fertilizer and
    key component in the manufacture of methamphetamine. He got closer and,
    to his surprise, noticed a man trying to hide beneath the root ball of
    a fallen tree.
        ``He took off and I chased him through the snow,'' Gregg says.
    ``When I caught up to him, he pulled a 9 mm pistol on me. I had to
    shoot him in the leg to subdue him. He was typical of the methers we
    see: paranoid, armed and violent.''
        The prior March, Alabama conservation officer Jimmy Hutto learned
    just how paranoid, armed and violent meth cookers can be. While
    arresting a man for fishing without a license, he found meth and soon
    was involved in serving a search warrant on the suspected cooker. But
    the man's property was wired to detect intruders. And when Hutto broke
    down the door to the lab, the cooker was waiting and shot the
    conservation officer in the abdomen. Hutto died two weeks later.
                                a rural scourge
        These incidents are not isolated. Law enforcement and conservation
    officials we contacted across the country describe a wave of
    methamphetamine manufacturing activity that has crashed across the
    rural countryside in the last five years, causing a dramatic change in
    the way game wardens operate and in the way hunters, anglers and other
    recreationists should conduct themselves afield.
        ``The landscape is changing,'' says Keith Aller, deputy director of
    law enforcement for the U.S. Bureau of Land Management. ``Twenty years
    ago meth was an outlaw biker thing, an urban thing. But in the past
    five years we've seen cookers take their labs to the forests and rural
    areas to avoid detection and to dump the toxic by-products of their
    work. We've also seen meth addicts exploiting public lands to pay for
    their habits. I don't want to sound alarmist, but people need to
    understand what we're up against these days and what they might
    encounter when they head outdoors.''
                                 meth's history
        Methamphetamine was first synthesized in Japan in 1919 and was
    widely prescribed to Allied and Axis combatants to keep them awake
    during protracted World War II battles. Marketed as Benzedrine in the
    1950s, it was the drug of choice for people who wanted to lose weight.
    A decade later, outlaw biker gangs in the United States learned the so-
    called ``Birch'' or ``Nazi method'' of manufacturing the drugs from
    over-the-counter cold medicines, and created the market for speed.
        Congress made the drug illegal without a prescription in 1970, but
    by the early 1980s new recipes had made meth easier to cook and more
    potent, offering the user a 6- to 24-hour high that also damaged the
    brain.
        This super-meth took off in Hawaii and Southern California first,
    manufactured by Mexican drug cartels. But soon the drug was being
    manufactured by mom-and-pop cookers, and within 20 years it spread
    eastward through the Rocky Mountains, into the Midwest and onto the
    East Coast. An urban phenomenon at first, it turned rural as the rank
    odors associated with its production caused cookers to set up in less
    populated areas to avoid detection. That practice has placed some meth
    labs in the same woods and waterways as hunters, anglers and other
    outdoorsmen.
        Consider that in 2003 the greatest number of reported meth lab
    seizures on Department of Interior lands occurred on those managed by
    the Fish & Wildlife Service (38 laboratories), followed by the Bureau
    of Land Management (31 laboratories), National Park Service (8
    laboratories) and Bureau of Indian Affairs (6 laboratories). That same
    year, the National Forest Service discovered 56 working labs on its
    land.
                                hunters and meth
        But those numbers are believed to be only a fraction of the
    activity on federal land, not to mention state and private property.
    And anecdotal evidence of meth invading the outdoors is easy to come
    by.
        In November 2004, for example, deer hunters on state land near
    Reelsville, Ind., came upon a duffel bag containing an actively cooking
    meth lab. They wisely backed away from the potentially explosive
    situation and notified the local police, who quickly dismantled and
    removed it.
        Twelve months earlier in Ashley County, Ark., deer hunters tipped
    sheriff's investigators to the fact that methamphetamine manufacturers
    had taken over remote deer blinds and were using them as labs.
    Narcotics detectives ended up finding four cooking operations set up in
    Ashley County deer blinds. In Wright County, Minn., four years before,
    cookers decided to use ice-fishing shanties to manufacture meth on
    Waverly Lake. Game wardens notified Sheriff's Sergeant Todd Hoffman of
    the activity. When Hoffman arrived to investigate, he noticed a solvent
    smell seeping from one of the shacks.
        Some of the more dangerous ingredients found in meth labs include
    lithium battery acid, charcoal lighter fluid and paint thinner. But the
    most common component--other than cold and allergy medicines that
    contain the drug pseudoephedrine--is anhydrous ammonia. Cookers
    sometimes steal this fertilizer from storage tanks on rural farms,
    ranches and supply stores.
        Needing more evidence to justify a search, Hoffman sifted through a
    nearby trash pile. When he picked up a thermos, anhydrous ammonia gas
    erupted from the vessel.
        ``My face began to burn, and for five or ten seconds I couldn't
    breathe,'' Hoffman told the Minneapolis City Pages newspaper. ``I
    thought my face was dissolving.''
        Hoffman was lucky not to have been seriously injured: When
    anhydrous ammonia contacts skin, it forms ammonium hydroxide, a highly
    caustic liquid that burns. Exposure to low levels of some meth
    ingredients like anhydrous ammonia can cause flu-like symptoms. Higher
    levels of exposure can cause lung and eye damage, chemical burns and
    even death.
        Idaho Fish and Game officer Clint Rand was involved in a meth-
    related theft in 2000. Rand pulled over to help a disabled vehicle only
    to be shot at four times by the occupants, who had recently stolen
    anhydrous ammonia from a fertilizer supply store in Farmington, Wash.,
    at gunpoint.
        ``Rand was very lucky not to have been hit,'' says Idaho Fish and
    Game law enforcement bureau chief Jon Heggen. ``But they blew out his
    windshield. It affected him and his family greatly. He recently decided
    to retire. That said, we're not experiencing the level of activity seen
    in other parts of the country. We've found labs in abandoned mines and
    dumps in the forest, but it's not widespread. However, it only takes
    one to get your attention. Meth goes beyond the bad guys trying to harm
    you. The stuff they leave behind in those dumps can kill you.''
                               toxic waste dumps
        Indeed, as any law enforcement or conservation officer familiar
    with meth will tell you, one of the truly insidious aspects of the drug
    is that the waste associated with its manufacture is as dangerous as
    the drug, the labs or the users.
        According to the National Drug Intelligence Center, every pound of
    meth creates 5 to 7 pounds of toxic waste. Of the 32 chemicals required
    to make meth by the Nazi method, for example, a third of them are so
    poisonous that cleanup workers have to wear biohazard suits and
    respirators.
        The chemical residues of meth manufacture can include lye,
    phosphorous, hydrochloric acid and iodine. Dump sites can include
    contaminated coffee filters stained red from the dye in cold medicines,
    mason jars or Pyrex baking dishes, rubber and plastic hosing, plastic
    bottles, salt, industrial solvent tanks, discarded methanol or alcohol
    bottles, white gas containers and propane tanks with the brass fittings
    stained blue or green from contact with anhydrous ammonia.
        According to congressional testimony, it can take up to eight hours
    and $5,000 to $20,000 to clean up a meth lab. Depending on its size,
    the manpower and money required to clean up a meth dump site are less.
    But when the lab or the dump is outdoors, there are hidden costs, such
    as contamination of groundwater and the potential poisoning of game,
    hunting dogs or humans--all things that law enforcement officers who
    patrol the great outdoors are forced to keep in mind these days.
                          law enforcement's new burden
        ``Before 2000, we'd be hard-pressed to find a meth dump. Now it's
    not uncommon to find two or three a week,'' says Patrol Captain Dennis
    Whitehead, who oversees law enforcement in Kentucky's Daniel Boone
    National Forest. ``Drug crimes have come to the forest in a big way.
    We're not just squirrel cops anymore. Sometimes forty percent of our
    job is associated with drugs. We've had cookers use campsites. We've
    had them drive roads with the stuff cooking in their cars. We've even
    had a ring of poachers who were shooting deer and trading the meat for
    meth. In the last five years, being a forest ranger has changed one
    hundred and eighty degrees, and it's all due to that drug.''
        Indiana conservation officer Gregg agrees: ``Meth has changed my
    job. It's gotten to the point where as a conservation officer these
    days you're better off going into a situation thinking you may be
    dealing with meth rather than a game violation.''
        The state-by-state statistics back up Gregg's grim assessment. The
    Drug Enforcement Administration reports that in 1999 in Indiana, there
    were 151 methamphetamine incidents where law enforcement officials,
    including conservation officers, had to deal with labs, dump sites or
    disposal of cooking chemicals or equipment.
        The following year the incidents in Indiana more than doubled to
    353. By 2004, the latest year for which numbers are available, the
    state reported 1,074 cases in which law enforcement officials had to
    confront meth labs or dumps in the course of their work.
        The situation was even worse in Missouri, where the number of meth
    incidents jumped from 439 in 1999 to 2,885 in 2003 before falling
    slightly (to 2,788) in 2004. In those years nearly 70 percent of the
    dumps were found in the Mark Twain National Forest, one of the best
    places to hunt in the state.
                                sportsmen warned
        Iowa had the second-highest number of meth-lab incidents in 2004.
    Like several other states, including Montana, South Dakota and
    Tennessee, Iowa has taken to informing hunters and other outdoor
    enthusiasts about the threat.
        The Iowa Division of Natural Resources, for example, now posts
    warnings on its Web site and at its offices around the state, alerting
    hunters to the potential hazards they face from meth when afield.
        ``It's sad to say, but many of our best hunting and fishing areas
    are conducive to cooking and dumping meth,'' says Lowell Joslin, chief
    of law enforcement for the Iowa DNR. ``We've found as an agency that
    one of the best things we can do is put information out to sportsmen.
    We want to educate them about meth so they know for their own health
    what to do when they encounter a lab or a dump, and also to have them
    report what they find to the nearest law enforcement agency.''
        Like many rural states these days, Iowa provides its conservation
    officers with extensive training in drug enforcement and drug lab/drug
    dump recognition and management. The state also includes a
    methamphetamine awareness component in its hunter-safety courses.
        ``In every hunter-ed course I teach, I talk about meth,'' says Iowa
    conservation officer Kirby Bragg. ``It's just a smart thing to do. For
    a while there out in the field I was running across active labs or the
    remnants of labs two to five times a week. The most memorable incident
    occurred opening day of deer season in 2003. I spotted a guy in a van
    parked with his motor running on a road adjacent to one of our more
    popular hunting areas. I didn't know if he was hunting or what. When I
    tried to approach him, he took off and we ended up in a high-speed
    pursuit. Turns out he had an active lab going in the back of the van.
    Moving meth labs are essentially moving bombs. We never had to deal
    with that kind of thing ten years ago.''
        Nor did outdoor law enforcement officials have to deal with the
    kind of random paranoid violence that BLM ranger Steven Martin faced in
    California in 2003.
        ``He was driving on a remote section of BLM land and happened on
    two guys sitting in a car,'' says BLM deputy director Aller. ``When he
    approached, they immediately opened fire and then took off into the
    hills. These were young kids, eighteen to twenty, with no history of
    violence. But meth was found in the car and when they were finally
    apprehended, they told investigators they felt their best option was to
    kill the ranger when he stopped them. That's extreme, but that's what
    meth does to people.''
        Another incident Aller cites shows how far meth addicts are willing
    to go to support a habit, and how that can lead to the destruction of
    property and murder.
        ``The BLM administers two hundred and sixty million acres out west,
    and that land includes all sorts of recreational, archeological and
    paleontological resources that can be and have been stolen by addicts
    and sold to buy more meth,'' Aller says. ``In early 2005, for example,
    one of our special agents in Oregon got word that a group of meth
    addicts were dismantling a BLM bridge and selling it as scrap aluminum.
    It sounds screwy, but that's what they were doing. Anyway, our bridge
    was disappearing, so the agent began to investigate, and he identified
    the people he thought were responsible and started doing interviews. It
    turns out that the suspects believed one of their own was cooperating,
    so they killed him. Because of a bridge. Again, extreme, but that's
    what meth does.''
                                 fighting back
        Thankfully, there is some good news on the prevention front: In the
    past year, many of the rural states hit hardest by the drug have passed
    strong laws limiting access to over-the-counter cold and allergy
    medicines that contain pseudoephedrine. Many are based on a law first
    passed in Oklahoma that resulted in an 80 percent reduction in meth lab
    seizures in that state since April 2004.
        The laws require products containing pseudoephedrine to be sold
    behind the pharmacy counter. They also limit the purchase of
    pseudoephedrine products to 250 thirty-milligram pills a month and
    require buyers to present I.D. and sign for the medicine at the time of
    sale.
        Iowa, one of the hardest-hit states, has gone several steps
    further, requiring a prescription for pseudoephedrine medicines. And
    some Iowa counties have started distributing locks that prevent
    anhydrous ammonia from being stolen from retailers.
        ``It's helped,'' says Iowa conservation officer Kirby Bragg. ``I
    haven't run across as many labs or dumps this year as I did just two
    years ago.''
        Indiana conservation officer Mike Gregg has seen a similar drop but
    cautions all outdoor enthusiasts to be careful in the woods and on
    lakes.
        ``It has slowed a little,'' Gregg says. ``The new laws are good and
    so are ideas like locking up anhydrous tanks. But meth cookers are
    clever. We've already seen them shifting from using anhydrous ammonia
    to using red phosphorous in their labs. We're also hearing about them
    experimenting with cold alcohol as a component. When it comes right
    down to it, meth is highly addictive and highly lucrative, and it isn't
    going away anytime soon. People who live or recreate in rural areas
    need to be aware of its dangers.''
                     what to do if you encounter a meth lab
        Okay, so you come across what looks like a high school chemistry
    experiment that stinks or a pile of trash dumped somewhere in your
    hunting woods or streamside of your favorite trout river. What do you
    do?
        First, err on the side of caution. Meth labs and meth dumps are
    dangerous places. If actively cooking, meth labs are highly volatile
    and can explode. And meth dumps are filled with toxins. So get back. If
    you're hunting with dogs, get your dogs back, too. If you've got a
    binocular, use it to confirm what you're looking at.
        With an active lab or a dump, you'll see a combination of these
    items: glass jars, rubber tubing, thermometers, aluminum foil,
    blenders, cheesecloth, coffee filters, funnels, gas cans, hot plates,
    paper towels, propane, Pyrex dishes, rubber gloves, strainers, duct
    tape and clamps.
        The chemicals involved are harder to identify unless they're
    labeled. But expect that any lab or dump might contain the following:
    acetone; isopropyl or rubbing alcohol; cold pills containing ephedrine
    or pseudoephedrine; drain cleaner (sulfuric acid); engine starter
    (ether); iodine; HEET gasoline additive; lithium batteries; matches for
    red phosphorous; muriatic acid, anhydrous ammonia; Red Devil lye; salt;
    or trichloroethane, which ironically is a common gun-cleaning solvent.
        If, based on what you can see from a distance, you believe you've
    stumbled onto a lab or a dump, back completely out of the area and
    contact the closest law enforcement department, including rangers and
    conservation officers. They'll get hazardous-materials experts to
    dismantle and clean up the mess.
        ``We don't want hunters or anglers to get hurt, but if they locate
    some of the meth activities and report them, it's a big help to us,''
    says Lowell Joselin, chief of law enforcement for the Iowa Division of
    Natural Resources.
                                     ______

     Prepared Statement of The Trust for Public Land, Land Trust Alliance,
     The Nature Conservancy, The Conservation Fund, The Ocean Conservancy,
        Association of National Estuary Programs, and Restore America's
                                   Estuaries
        On behalf of The Trust for Public Land, Land Trust Alliance, The
    Nature Conservancy, The Conservation Fund, The Ocean Conservancy,
    Association of National Estuary Programs, and Restore America's
    Estuaries, we would like to thank you for your strong support of our
    nation's Coastal Zone Management Program, and coastal land
    conservation. We are writing today in support of the Coastal and
    Estuarine Land Conservation Program (CELCP).
        Created by Congress in 2002, CELCP protects ``those coastal and
    estuarine areas with significant conservation, recreation, ecological,
    historical or aesthetic values, or that are threatened by conversion
    from their natural or recreational states to other uses.'' Thus far,
    this program has invested over $177 million towards 119 conservation
    projects in 25 of the nation's 35 coastal states, and has helped
    preserve some of America's greatest coastal treasures. All federal
    funding has been leveraged by at least an equal amount of state, local
    and private funds. NOAA has a proud 200-year tradition of sound
    management of our nation's coastal resources, and the CELCP program
    further builds upon that achievement. We hope to continue this federal-
    state partnership and encourage you to fund CELCP at $80 million for
    fiscal year 2008.
        Our nation's coastal zone is under significant pressures from
    unplanned development. In fact, it is estimated that by 2025, nearly 75
    percent of the nation's population will live within 50 miles of the
    coast, in addition to millions more who enjoy America's storied
    coastlines. Across the nation, beaches and waterfronts have always been
    the destination of choice for Americans. Billions of dollars of the
    country's GDP are generated by coast-based economic activities,
    inexorably linking our coastal zone with the economic health of the
    nation.
        As a result of this economic boom, rapid, unplanned development has
    marred once-pristine viewsheds and substantially reduced public access
    to the coast. The resulting increase in impervious surfaces has
    correspondingly increased non-point source pollution and seriously
    degraded coastal and estuarine waters. The loss of coastal wetlands has
    drastically impaired estuaries, some of the most productive habitat on
    earth. The U.S. Commission on Ocean Policy has also stressed the
    importance of land conservation as part of its broader recommendations
    to Congress and the Nation.
        Increased funding for CELCP will complete a substantial number of
    important coastal conservation projects around the country, many of
    which still hang in the balance from the yet-undecided fiscal year 2007
    allocation. While we are optimistic at the first-time inclusion of
    CELCP in the President's fiscal year 2008 proposed budget, the proposed
    funding level is vastly lower than what is needed on the ground and
    well below what your subcommittee has historically proposed. While this
    signal of the Administration's growing support for the program is an
    important and welcome milestone in the evolution of the federal-state
    CELCP partnership, the strong support of Congress is paramount. Again,
    we urge you to sustain that partnership this year by using your
    discretion to fund CELCP at $80 million in fiscal year 2008. We look
    forward to working with you as this process moves forward.
                                     ______

     Prepared Statement of the Fond du Lac Band of Lake Superior Chippewa,
       Nisqually Tribe of Washington, Puyallup Tribe of Washington, and
             Shoshone-Paiute Tribes of the Duck Valley Reservation
        Chairwoman Mikulski, Ranking Member Shelby and members of the
    Subcommittee, we respectfully submit the following written testimony
    regarding funding for tribal law enforcement and justice programs
    within the Department of Justice budget. In fiscal year 2008, as in
    past years, the President has proposed significant cuts to several
    grant programs that provide critical funding to tribal law enforcement
    agencies and justice systems. If enacted, these cuts will cripple
    tribal justice systems. We respectfully request that you reject these
    proposed cuts. We would also like to endorse the recommendations made
    by the Senate Committee on Indian Affairs in its ``views and
    estimates'' letter.
                                  introduction
        The need for law enforcement resources across Indian country is
    severe. Today, there are 1.3 law enforcement officers per 1,000
    citizens in Indian county, compared to 2.9 law enforcement officers per
    1,000 citizens in non-Indian communities. It is estimated that more
    than 2,000 additional officers are required across Indian country just
    to meet minimum safety standards. Police officers working on
    reservations frequently have to patrol alone because of personnel
    shortages. Understandably, newly-trained and veteran officers often
    leave to take jobs that require less of a risk to their personal
    safety, exacerbating officer shortages. Equipment needs are also great.
    Tribal law enforcement agencies need stable funding to address these
    core shortages. This need has become even more severe in recent years
    because of increased methamphetamine use, production and trafficking on
    reservations. It is a vicious cycle--lack of funding for even the most
    basic elements of a law enforcement program is part of what contributes
    to the perception that reservations are ``lawless.'' This perception is
    what makes our communities attractive to drug dealers, which in turn
    increases the need for resources.
        Of course, effective crime prevention takes more than just police
    officers. Tribes also operate court systems, detention facilities, drug
    treatment services and other alternatives to detention. Many tribes
    have also invested in preventative programs, such as youth centers,
    youth activity programs and drug education. As governments, we
    recognize our responsibility for fostering positive change and
    rehabilitation, even in our jails. More often than not, the inmates are
    people from our community who will be returning to the community when
    they are released, so we have a particular incentive to help them
    pursue positive changes. Without all of these services, though, we are
    stuck in a cycle of arresting and locking up our own people.
                                    requests
        Office of Justice Programs, State and Local Law Enforcement
    Assistance.--For fiscal year 2008, the Department of Justice has
    requested $550 million for state and local law enforcement assistance
    within the Office of Justice Programs. Instead of breaking the funding
    request down into specific grant programs--as in past years, the
    Administration instead requests $312 million for flexible public safety
    grants under the Byrne Public Safety and Protection program and $180
    million for a violent crime reduction partnership initiative. However,
    this reorganization of the OJP budget camouflages an overall decrease
    of $900 million for all the programs included in this category. While
    such flexible funding initiatives can often be useful to tribes, the
    Administration's proposal would (1) significantly reduce the overall
    funding amount and (2) eliminate any specific set-aside for tribes. We
    are greatly concerned that, without this set-aside, tribal programs
    will lose funding because they are forced to compete with all other
    programs. We request that Subcommittee reject any decrease in the
    programs and, specifically, we ask that the following tribal justice
    programs be funded at least at fiscal year 2007 levels:
      --Tribal courts--No less than $8 million.
      --Indian Country Grant program--No less than $5 million.
      --Correctional Facilities on Tribal Lands--No less than $20 million
            to address the facility needs documented by the Office of the
            Inspector General.
      --Bureau of Justice Assistance, Indian Alcohol and Substance Abuse
            Demonstration Program--No less than $5 million.
        Tribal Youth Program.--The Administration again proposes an overall
    decrease of $100 million for child safety and juvenile justice
    programs. As with state and local law enforcement assistance, the
    proposal would consolidate several programs into the new Child Safety
    and Juvenile Justice Initiative, a single, flexible, competitive grant
    program. This would encompass funding for Juvenile Justice and
    Delinquency Prevention, Juvenile Delinquency Block Grants, Internet
    Crimes Against Children, and several other grant programs. By combining
    these programs, however, the Administration tries to hide its overall
    reduction and also eliminates the set-aside for tribes typically
    provided by the Tribal Youth Program earmark. We ask that the
    Subcommittee provide at least as much funding for these programs as was
    provided last year. Most importantly, we ask that the Subcommittee
    restore the $10 million earmark for the Tribal Youth Program.
        Indian Country COPS.--The Administration proposes to completely
    eliminate funding for the Indian Country COPS program. The
    justification provided is that tribes can apply for competitive grants
    under other OJP programs, but--as described above--the Administration
    is in fact decreasing funding for those programs. Since its
    establishment in fiscal year 1999, the COPS program has provided
    essential public safety services in Indian County and has assisted
    tribes in increasing the number of law enforcement officers. We simply
    cannot afford to lose these officers, which is what will occur if COPS
    funding is cut. We ask the Subcommittee to restore funding for the COPS
    program at $33.2 million, the fiscal year 2007 amount.
        Office of Violence Against Women.--The Office of Violence Against
    Women administers the programs authorized by the Violence Against Women
    Act (VAWA). The most recent VAWA reauthorization provided for a range
    of important intervention, support and enforcement programs.
    Importantly, that law also provides that 10 percent of all appropriated
    funds be set aside for Indian tribes. These programs are of critical
    importance in Indian country, where the rates of domestic violence are
    extremely high. As Congress found, Indian women are battered at a rate
    of 23.2 per 1,000 (compared with 8 per 1,000 among Caucasian women).
    From 1979 through 1992, homicide was the third leading cause of death
    of Indian females aged 15 to 34, and 75 percent were killed by family
    members or acquaintances. Rape is also far too common--1 out of every 3
    American Indian and Alaska Native women are raped in their lifetimes.
    Indian women experience 7 sexual assaults per 1,000 (compared with 4
    per 1,000 among Black Americans, 3 per 1,000 among Caucasians, 2 per
    1,000 among Hispanic women, and 1 per 1,000 among Asian women).
    Unfortunately, these programs have never been funded up to authorized
    levels. For fiscal year 2008, the Administration proposes yet another
    decrease. We ask the Subcommittee to restore funding for VAWA programs
    to at least $387 million, the amount provided in fiscal year 2006.
        Office of the United States Attorney.--We would like to see funding
    increased for local Assistant U.S. Attorneys with responsibilities for
    Indian country law enforcement sufficient to support at least one full-
    time position. Currently, the part-time hours of many Indian country
    AUSAs make effective law enforcement on our Reservations difficult.
                                    context
        We would like to give the Committee a picture of the law
    enforcement systems in our communities and some of the specific needs
    we face.
        Nisqually Tribe.--The Nisqually Reservation is located in
    Washington State. Our Reservation is approximately 5,000 acres. We
    serve approximately 6,000 Indian people in our service area, about 600
    of whom are enrolled tribal members living on the Reservation, and the
    rest of whom live in surrounding areas. We have a land-based police
    force with nine officers, which is solely responsible for enforcing
    tribal law and also works closely with local police on other matters.
    Our police also have extensive marine water enforcement duties. We
    employ two water patrol officers to patrol over 100 square miles of
    Puget Sound for both the treaty salmon fishery and treaty shellfish
    harvesting. We also provide hunting enforcement for over 50,000 acres
    of land in the Tribe's usual and accustomed area within the Nisqually
    River watershed. Besides our police department, we have a tribal court
    with two full-time judges, and we employ ten detention officers at our
    45-bed detention facility (built in 2002). Like many other tribes, we
    are struggling to cope with escalating methamphetamine use and
    associated increases in gang activity and property crime related to
    dealing and manufacturing.
        Shoshone-Paiute Tribes.--The 463-square mile Duck Valley
    Reservation straddles the border of Nevada and Idaho. We have
    approximately 1,700 tribal members, about 900 of whom live on the
    Reservation. Our population is very young--nearly 70 percent of our
    people are under the age of 34. Much of our law enforcement is handled
    by the Bureau of Indian Affairs. However, the DOJ has been an important
    source of funding for us--for example, we have received grants in the
    past to construct a juvenile detention facility and to encourage
    enforcement of protection orders. At this time, our greatest need is
    more help from federal law enforcement officials, such as regional
    AUSA.
        Puyallup Tribe.--The Puyallup Reservation is located in the
    urbanized Seattle-Tacoma area of the State of Washington. The 18,061-
    acre reservation and related urban service area contains 17,000 plus
    Indian people from over 435 Tribes and Alaska Villages. The Puyallup
    Nation Law Enforcement Division currently has 26 commissioned officers
    to cover 40 square miles of reservation in addition to the usual and
    accustomed areas. We currently operate with limited equipment, patrol
    vehicles requiring constant repair and insufficient staff levels. With
    the continuing increase in population, increase in gang related
    activities on the Puyallup Reservation and the impact of the increase
    in manufacturing of methamphetamines in the region, the services of the
    Puyallup Nation Law Enforcement Division are exceeding maximum levels.
        The demand on law enforcement services will increase as tribal
    governments continue to enhance civil and criminal justice
    administration and as tribal governments play an integral role in
    securing America's borders, citizens and physical infrastructure. This
    demand is further impacted by the existing and growing ``gang problem''
    within the boundaries of the Puyallup Reservation. These gangs are
    different than other reservations due to our urban setting (Puget Sound
    region of the State of Washington), five other city boundaries next to
    our exterior boundaries, six separate local jurisdictions and
    Interstate 5 traversing through the reservation. In an effort to combat
    these gang activities, the Puyallup Tribal council created a Gang Task
    Force from the Tribal Police Department, representatives from various
    Tribal Services Divisions and community members. The Gang Task Force
    developed a gang policy that includes a four-prong approach to gang
    related activities: (1) enforcement, (2) intelligence, (3) education,
    and (4) and physical-mental health. We have begun to implement this
    strategy, but such a major law enforcement undertaking will require
    more officers, additional and continued training, specialized
    equipment, and adequate detention facilities for adults and juveniles.
        A major area of concern is the status of the Tribe's Regional
    Detention Facility. Due to damages from the February 2001 Nisqually
    earthquake, we have had to relocate to modular/temporary facilities. As
    a regional detention facility, the relocation to the modular facility
    not only impacts the Tribe's ability to house detainee's but also the
    approximately 173 native inmates that were incarcerated at the Puyallup
    Incarceration facility during the period of 2001-2002. Relocation to
    the modular facility has also impacted the Tribes ability to house
    juvenile detainees. With no juvenile facilities, our youth are sent to
    non-Native facilities. Both the Department of the Interior and the
    Department of Justice have essentially stopped providing construction
    funding since 1998. Yet the need for new and replacement facilities is
    still great.
        Fond du Lac Band of Lake Superior Chippewa.--The Fond du Lac Band's
    law enforcement program grew out of the Band's responsibilities for
    enforcing conservation laws that protect natural resources and regulate
    Band members who hunt, fish and gather those resources both within and
    outside the Reservation pursuant to rights reserved under Treaties with
    the United States in 1837 and 1854. The Band's rights to hunt, fish and
    gather on lands ceded under these treaties have been recognized and
    upheld by the federal courts and the United States Supreme Court. Under
    established Band conservation law, the Band is responsible for
    enforcing regulations over approximately 8,000,000 acres in northern
    and central Minnesota. It is also essential that the Band continue to
    manage its on-reservation resources in order to meet the demands of an
    increasing population. The on-reservation resources are vitally
    important to Band members as they provide the foundation for our
    culture, subsistence, employment and recreation.
        Following a Minnesota Supreme Court decision in 1997 holding that
    the State did not have jurisdiction to enforce traffic laws on roads
    within Indian reservations, the Band needed to establish a Tribal law
    enforcement department to address on-reservation law enforcement needs.
    The Band has done this, using a combination of tribal funds and federal
    funds (made available through the Community Oriented Policing Services
    (COPS) program and the Bureau of Indian Affairs), and by entering into
    cooperative agreements with local law enforcement agencies. Due in
    large part to that decision, the Band responds to a few thousand calls
    every year including traffic stops, domestic assaults, disturbance,
    theft and drug and alcohol related incidences, to name just a few. The
    Band has also experienced an increase in law enforcement
    responsibilities as a result of the insurgence of methamphetamine and
    prescription drug use on our Reservation. Drug-related deaths and crime
    are dramatically increasing on our Reservation which in turn
    drastically increases our law enforcement responsibilities.
        With these increased responsibilities, the Band has begun to plan
    and develop strategies to address our law enforcement needs, including
    staffing, training, equipment, and educating our youth to prevent crime
    and drug use. The Band currently operates its law enforcement program
    with ten officers but would be able to better address the growing law
    enforcement needs if the Band had 15-20 officers, which would require
    additional funding for staffing, training, recruitment and retention.
    Further, the current budget does not allow the Band to offer
    competitive salaries needed to recruit and retain officers. Additional
    tribal officers would also enable the Band to ensure that a School
    Resource Officer be permanently located at the Ojibwe School and would
    allow the Band to implement programs aimed at educating youth about a
    career in tribal law enforcement. The Band is also developing a tribal
    process for issuing and enforcing orders for protection, which will
    compliment our existing family support services programs. In regards to
    equipment, the Band would be more efficient if it had its own
    intoxilizer instead of having to transport arrestees an hour away to
    the St. Louis County Jail for DWI processing. Lastly, and of
    significant importance, the Band anticipates that additional funding
    will be necessary to address support costs associated with upgrading to
    the advanced dispatching system already in use by St. Louis and Carlton
    Counties.
                                   conclusion
        The need for law enforcement resources in each of our communities
    is great. We ask that the Subcommittee recognize the important role
    that the Department of Justice plays in providing law enforcement
    resources to tribes. At a minimum, we ask you to reject the
    Administration's proposal to eliminate specific tribal programs under
    its jurisdiction. If we can provide any additional information, please
    do not hesitate to contact our counsel, Mary J. Pavel or Addie C.
    Rolnick at Sonosky, Chambers, Sachse, Endreson & Perry, LLP, 1425 K
    Street NW, Ste. 600, Washington D.C. 20005; 202-682-0240 (tel); 202-
    682-0249 (fax); mpavel@sonosky.com; arolnick@sonosky.com.
                                     ______

              Prepared Statement of the UNH Cooperative Extension
        Madam Chairwoman and Honorable members of the Subcommittee, I
    appreciate the opportunity to provide testimony in support of an
    appropriation of $1,300,000 from NOAA's Coastal and Estuarine Land
    Conservation Program to protect the 288-acre Isinglass River
    Conservation Corridor in New Hampshire.
        In addition, I would like to urge your support for a substantial
    increase in overall funding for the Coastal and Estuarine Land
    Conservation Program in fiscal year 2008 to enable the protection of
    significantly more coastal resources than in previous years. While we
    are pleased that the program has been recommended in the President's
    budget for $15 million, this level, while a good first step, is
    inadequate when compared to the needs from across the country, and what
    Congress has historically provided for this program.
        I work with UNH Cooperative Extension as an Educator in Land and
    Water Conservation in 62 communities within Rockingham County and north
    to the extent of the Great Bay watershed. My involvement with
    conservation over the past three years has resulted in the successful
    completion of more than 130 projects covering in excess of 6,000 acres.
    The Isinglass River Conservation Corridor is one of the most exciting
    that I have been involved with during this period. My role from the
    outset has been to bring the landowner, the community, a regional land
    trust Bear-Paw Regional Greenways and the Trust for Public Lands
    together to try to find a way to conserve the keystone property in this
    important river corridor.
        Of New Hampshire's many waterways, only 14 rivers have the
    distinction of being officially recognized by the state's Rivers
    Management Protection Program for outstanding natural and cultural
    resources. The Isinglass River, which flows freely for its entire 18-
    mile course through the southeastern portion of the state, is one of
    these select few. Winding its way through one of the most rapidly
    developing portions of the state, the scenic and ecological conditions
    which make the Isinglass so unique are increasingly in jeopardy. As
    expanding development is frequently accompanied by habitat loss,
    degradation of water quality, and loss of recreational opportunities,
    programs such as the Coastal and Estuarine Land Conservation Program
    (CELCP) have been established to help protect and preserve landscapes
    vital to the healthy functioning of ecosystem processes.
        The Isinglass River property is 288 forested acres bounded to the
    west, northwest, and northeast by the Isinglass River. It is surrounded
    by 1,500 acres of contiguous forest, and has 7,800 feet of river
    frontage. The Isinglass River property is the top priority for the
    State of New Hampshire for CELCP funding in fiscal year 2008 and is
    located in a section of the river that is identified as a Conservation
    Focus Area in the New Hampshire Coastal Management Plan. In 2005, the
    New Hampshire State Wildlife Action Plan categorized the river corridor
    as Tier I habitat, the highest quality designation in the State. The
    current landowner has already submitted a subdivision plan for 72
    housing lots, which would forever fragment this large, undeveloped
    block of land along the Isinglass River.
        The length of the Isinglass River provides home to a variety of
    wildlife, including mink, otter, raccoon, deer, moose, black bear and
    bobcat, all of which would be threatened if development were to
    proceed. A wildlife inventory of the Isinglass corridor has confirmed
    the presence of several species classified at the federal and state
    level as threatened, endangered, or of special concern, which include
    the American bald eagle, common loon, osprey, Cooper's hawk, wood
    turtle, Blanding's turtle and spotted turtle. There is also the
    presence of a seven-acre beaver impoundment. The Isinglass River itself
    is considered an important fishery. Naturally occurring warm-water game
    fish include small and largemouth bass in the lower portion of the
    river. The New Hampshire Department of Fish and Game annually stocks
    more than 3,000 rainbow trout and 2,500 brook trout in the headwaters.
    In addition, over 73,000 Atlantic salmon fry are being stocked as part
    of an ongoing anadromous fish restoration effort. Several species of
    concern also are known to live in the Isinglass River, including the
    American eel, banded sunfish, bridle shiner, and the blacknose shiner,
    a fish located in only one other waterway in the state.
        The Isinglass River property will offer recreational benefits as
    well as habitat protection. A trail network already exists on the
    property, which makes hiking a main activity. Pig Lane, the road that
    provides access to the Isinglass River property, is used extensively
    for mountain biking. Hunting and fishing have long been historic uses
    of the property, and access for these activities will continue. The
    Isinglass River itself has been used extensively for fishing, boating,
    and other recreational uses. The river is considered to be an important
    seacoast trout stream and is heavily utilized by local anglers. Due to
    the free-flowing nature of the Isinglass River it provides both
    challenging whitewater and relaxing flatwater boating opportunities for
    canoeists and kayakers. Because of the importance of Isinglass River,
    as a fishery and recreational boating destination, New Hampshire Fish
    and Game would be interested in constructing and maintaining a car-top
    boat launch with access through Pig Lane.
        A fiscal year 2008 Coastal and Estuarine Land Conservation Program
    (CELCP) appropriation of $1.3 million, directed to the Town of
    Strafford, is needed to acquire and conserve this property. This
    appropriation will be matched with funds from the New Hampshire Land
    and Community Heritage Investment Program, New Hampshire Fish and Game,
    and private donations, and the value of match properties. The Town of
    Strafford has already committed up to $200,000 towards acquisition of
    this property.
        Thank you, Madam Chairwoman, for the opportunity to provide this
    testimony.
                                     ______

       Prepared Statement of the Clear Creek Nature and Cultural Tourism
                                    Council
        Madam Chairwoman and Honorable members of the Subcommittee, I
    appreciate the opportunity to present this testimony in support of an
    appropriation of $705,000 from NOAA's Coastal and Estuarine Land
    Conservation Program to acquire potential parkland along Clear Creek in
    Webster, Texas.
                            note about organization
        Identified for acquisition with fiscal year 2008 funds are
    approximately 90 acres in several ownerships within the proposed Clear
    Creek Park boundaries. Once acquired, the City of Webster will own and
    maintain the land as a public park and conservation area. Purchase of
    these properties is critical to the protection of habitat and
    recreational open space along Clear Creek, one of the few remaining
    unchannelized stream and river corridors in the Houston metropolitan
    area. Development is currently the largest threat to habitat in the
    Galveston Bay estuary, and some parcels within the park area have
    already been sold. If additional tracts in the proposed Clear Creek
    Park area are developed, the creek's floodway would be degraded by loss
    of wetlands and increase in runoff pollutants.
        The Clear Creek corridor offers the potential for significant
    recreational opportunities for residents and visitors. Several parks
    operated by local governments extend along the creek, including Harris
    County's Challenger Seven Memorial Park, Galveston County's Walker Hall
    Park, and League City's Erikson Tract and Clear Creek Nature Park. In
    order to enlarge and further link this important corridor of parks and
    reserves, the City of Webster has proposed the acquisition of
    approximately 200 acres along the northern banks of the creek for a new
    Clear Creek Park. Within the planned park area, the City of Webster
    envisions building a trail along Clear Creek for hiking and biking. The
    trail will also feature access to launch sites on the creek for
    canoeing and kayaking, small piers for fishing, observation points and
    decks for bird watching, and picnic areas for families. The multiple
    opportunities along the trail are expected to accommodate and
    contribute to outdoors and environmental education. The opening of a
    trail would also advance the Galveston Bay Estuary Program's goal of
    increasing public access to Galveston Bay and its tributaries.
        Galveston Bay was recognized in 1988 as an estuary of national
    importance in the EPA's National Estuary Program, one of 28 such
    estuaries in the nation. The comprehensive management plan of the
    Galveston Bay Estuary Program identified wetlands habitat loss and
    degradation as a priority problem in the estuarine system. Webster lies
    at the lower end of the Clear Creek watershed and is home to diverse
    communities of ecologically important coastal habitats and systems.
    Riparian forests of willow oaks, water oaks, and cedar elms provide
    habitat for amphibians, owls, hawks, neotropical migrant birds, and the
    reddish egret, a state-listed threatened bird species. Along the creek
    banks are several areas of coastal prairie. Near Clear Lake and the
    entrance to Galveston Bay, marshes, wetlands, and embayments support
    fish, waterfowl, and migrant birds.
        An appropriation of $705,000 from the Coastal and Estuarine Land
    Conservation Program (CELCP) is needed in fiscal year 2008. Clear Creek
    Park will protect critical coastal land and provide multiple
    recreational possibilities to residents of Webster and other nearby
    communities.
        In addition to specifically funding Clear Creek, I urge your
    support for a substantial increase in overall funding for the Coastal
    and Estuarine Land Conservation Program in fiscal year 2008 to enable
    the protection of significantly more coastal resources than in previous
    years. While I am pleased that the program has finally been recommended
    in the President's budget for $15 million, this level, while a good
    first step, is inadequate when compared to the needs from across the
    country, and what Congress has historically provided for this program.
        Thank you, Madam Chairwoman, for the opportunity to present this
    testimony in support of the Clear Creek project and the CELCP program.
                                     ______

                  Prepared Statement of The Nature Conservancy
        Thank you for the opportunity to offer the recommendations of The
    Nature Conservancy on the fiscal year 2008 budget for the National
    Oceanic and Atmospheric Administration (NOAA).
        In general, we are concerned that funding for oceans in general and
    NOAA specifically is declining. The Conservancy urges the Committee to
    provide appropriations for NOAA at or approaching $4.5 billion, as
    recommended by the Joint Oceans Commission Initiative and the Friends
    of NOAA Coalition. This funding level for NOAA would allow enhancements
    in the development of an integrated ocean and atmospheric observing
    system; increased research and education activities, expanded ocean
    conservation and management programs; and provide critical improvements
    in infrastructure (satellites, ships, high performance computers,
    facilities), and data management. Such an increase would represent
    significant progress toward addressing recommendations contained in the
    reports of the U.S. Commission on Ocean Policy and the Pew Oceans
    Commission.
        The Conservancy works to identify priorities for coastal and marine
    conservation through marine ecoregional plans. We identify present and
    likely future threats to marine biological diversity before attempting
    to identify appropriate strategies for conservation. At more than one
    hundred marine sites around the world, the Nature Conservancy has used
    a variety of strategies for marine conservation including habitat
    restoration of important nursery and spawning areas, removal of
    invasive species, coastal land acquisition, private conservation of
    submerged lands, elimination of destructive practices, establishment of
    protected areas, management of extractive marine resources activities,
    and reduction of nutrient and toxic inputs to coastal systems. No
    single strategy works everywhere and at every site, multiple
    conservation approaches are needed. The selection of appropriate
    approaches depends on the biological, socioeconomic, and political
    circumstances at each site.
        The National Oceanic and Atmospheric Administration (NOAA) is an
    important partner to the Conservancy in many aspects of our
    conservation work:
      --We rely upon NOAA's data, research, and monitoring of coastal and
            marine systems, and have several shared priorities on which we
            collaborate. For example, NOAA's Coastal Services Center
            maintains a strong customer-service, partnership-oriented
            approach to providing needed information and technical
            assistance to states, local governments, other federal
            agencies, and the private sector to inform decision-making.
      --We rely on NOAA's programs that support site-based conservation--
            those that fund conservation and restoration activities, and
            those that provide for management of coastal and marine
            systems. NOAA's ability to meet its requirements under various
            resource management statutes could be significantly improved by
            enhancing the agency's ability to fund on-the-ground
            conservation needs. Programs such as Coastal and Estuarine Land
            Conservation, Community-based Restoration, Open Rivers
            Initiative are excellent examples of NOAA taking a practical,
            community-oriented approach to conservation and management of
            coastal and marine resources. These programs should be
            expanded.
      --NOAA's contributions to state and local implementation and
            educational programs help to ensure that the human capacity
            exists to address environmental management issues at the
            necessary scale. We are concerned that NOAA's support for human
            capacity to implement programs within the agency and at the
            state and local levels is often the first to go in tight budget
            environments. The Committee should provide funding for staff
            capacity to provide technical assistance, efficiently manage
            grants and programs, and help to measure effectiveness.
        Finally, we would like to offer the Committee our recommendations
    regarding funding levels and guidance regarding implementation of a
    number of key NOAA programs.
    NOAA Habitat Restoration
        The Nature Conservancy requests increased funding for habitat
    conservation and restoration to support fisheries management
    objectives, protected species recovery, and other coastal and marine
    management requirements. Through existing programs, NOAA has clearly
    demonstrated their capability to achieve results by advancing
    constructive, on-the-ground and in-the-water habitat conservation.
    Habitat losses have a substantial impact on the health and productivity
    of marine ecosystems, yet NOAA's ability to work closely with
    communities around the country to stem or reverse these losses is
    constrained by the relatively small amount of funding they receive.
        We would urge you to consider increasing funding for the following
    programs in NMFS Office of Habitat and in the Office of Protected
    Resources:
                National Marine Fisheries Service--Office of Habitat,
                        Fisheries Habitat Restoration
        Penobscot River Restoration ($10 million in fiscal year 2008).--In
    a 2004 study, the National Research Council \1\ identified removal of
    dams as a top priority near term action required to recover Atlantic
    salmon in Maine. Removal of the Veazie and Howland dams and
    modifications proposed at Howland dam on the mainstem of the Penobscot
    River--Maine's largest river system--present a remarkable opportunity
    to recover a species. This project will improve access to almost 1,000
    miles of habitat for Atlantic salmon, thousands of miles of habitat for
    American eel, and hundreds of miles for alewives. Atlantic sturgeon,
    shortnose sturgeon (both federally listed), tomcod, and smelt will
    recover lost access to their historic habitat ranges. Additionally,
    this project will provide benefits to the Penobscot Indian nation, will
    provide new recreational opportunities, and will come with no net loss
    of power production from the river, maintaining a clean and secure
    energy source for Maine's residents.
    ---------------------------------------------------------------------------
        \1\ National Research Council. Atlantic Salmon in Maine. National
    Academies Press. 275 pp. 2004.
    ---------------------------------------------------------------------------
        Community-based Restoration Program ($20 million in fiscal year
    2008).--Currently this program, with its exceptional 10-year track
    record, is able to fund only about 15 percent of the proposals it
    receives. Additional funds would be well-spent.
        Open Rivers Initiative ($10 million in fiscal year 2008).--In
    addition to the large barriers on rivers like the Penobscot, there are
    hundreds of thousands of small degraded barriers on rivers and streams
    across the United States. This Initiative is part of a multi-agency
    commitment to address this problem. We urge you to ensure that this new
    program is additive to NOAA's habitat restoration capacity, and doesn't
    reduce funding available for existing programs.
                National Marine Fisheries Service--Office of Protected
                        Resources
        Cooperation with the States ($5 million in fiscal year 2008).--
    Through this program, authorized under Section 6 of the Endangered
    Species Act, NMFS may provide grants to support conservation actions
    that contribute to recovery, including management, outreach, research,
    and monitoring projects that have direct conservation benefits for
    listed species, recently de-listed species, and candidate species that
    reside within that State. A comparable program for cooperation with
    states on ESA activities exists in U.S. Fish and Wildlife Service has
    been very successful in catalyzing and funding activities that
    contribution to the recovery of listed species.
        With the exception of jointly managed species (Atlantic salmon)
    activities related to NMFS jurisdiction species are not eligible for
    funding under the FWS program. NMFS has management responsibility for
    56 listed marine species in the United States. While substantial
    federal funding is directed to Pacific salmon species under their
    jurisdiction, there are few resources available to support proactive
    conservation efforts geared toward recovery of the other 30 species for
    which they have sole or joint management responsibility.
        With increased funding under this program, states would have a
    strong incentive to enter into cooperative agreements with NMFS under
    Section 6 and NMFS would have tools and resources to support more on
    the ground conservation efforts to abate threats to listed species
    (most grants to date have been for research or monitoring activities).
        This program has received $990,000 each year since fiscal year
    2003. On average, approximately 80 percent of appropriated funds have
    been granted each year with a minimum 25 percent non-federal cost
    share. Remaining funds are used for program management.
    Coastal and Estuarine Land Conservation Program (CELCP)
        The Nature Conservancy supports funding CELCP at $80 to $100
    million for fiscal year 2008 and looks forward to working with the
    Committee to guide selection of high priority projects. We recognize
    that this is a substantial increase of prior year funding levels, but
    feel that it is warranted given the extraordinary circumstances
    surrounding the fiscal year 2007 budget and the pent-up demand left
    over from what we expect to be comparatively low funding levels in
    fiscal year 2007. We believe that the list of projects developed in
    fiscal year 2007 by NOAA to identify important, eligible and ready
    projects was a significant improvement to the program and hope that a
    similar list will be made available soon to offer guidance for the
    fiscal year 2008 process. We hope that it will be useful to the
    Committee as you make decisions regarding the future direction of this
    important program.
        We are concerned that NOAA continues to impose a $3 million per
    project cap in the guidance for the call for proposals. We are
    concerned that this cap may be either unnecessarily constraining or may
    lead to inflated project proposals. States should be encouraged to
    request what is needed to complete a given project within an
    appropriate timeframe, and should work with NOAA and the Congress to
    ensure adequate funding is available within budget constraints.
        Finally, we are increasingly concerned about the lack of dedicated
    staff capacity for CELCP at NOAA. Current practice is to assess a
    percentage of the project appropriation to cover NOAA staff costs. The
    problem is that up to a point, the costs of running a program are
    fixed. NOAA needs a dedicated line of funding to support program
    administration and management, and should be prohibited from assessing
    a percentage of project allocations to cover administrative costs.
    Coral Reef Conservation Program and Coral Reef Watch
        The Conservancy has developed a strong partnership with NOAA's
    Coral Reef program, and we are delighted with their enthusiastic desire
    to work together on improving resilience of coral reefs, developing
    approaches for sustainable financing for coral conservation activities
    at the local level, and other creative approaches to reducing threats
    to corals. We would urge you provide $30.5 million for the program in
    fiscal year 2008, an increase over the Administration request of
    $25.797 million. The $30.5 million requested would include $1.5 million
    to support ``Local Action Strategies,'' a unique partnership between
    NOAA and states and territories to address threats to coral reefs at
    the local level.
        However, we are concerned with the decision made in the fiscal year
    2006 conference to cut funding for NESDIS coral monitoring in fiscal
    year 2006. Funding for Coral Reef Watch was included in bills produced
    by both chambers and the President requested $737,000 for this modest
    but effective program known as ``Coral Reef Watch.'' The program has
    received full funding in fiscal year 2007. In 2005, not only did NESDIS
    scientists in this program predict a major coral bleaching event in the
    Caribbean, but these scientists were able to reach out to NMFS, NOS and
    partners in the region to use the attention generated by the event to
    help local managers take action to help reefs recover from the
    devastating effects of bleaching.
    Gulf of Mexico Governor's Alliance
        The Administration's budget included a request for $5 million to
    help implement the Gulf of Mexico Governors' Action Plan. The
    Conservancy urges the Committee to provide at least this amount to
    leverage action on the commitments made by the Gulf Coast Governors.
    The Alliance identified five priority issues that are regionally
    significant and can be effectively addressed through increased
    collaboration at state, local, and federal levels:
      --Improvement in Gulf water quality, with an emphasis on healthy
            beaches and shellfish beds;
      --Restoration and conservation of coastal wetlands;
      --Environmental education;
      --Identification and characterization of Gulf habitats to inform
            management decisions; and
      --Reductions in nutrient loading.
    Pacific Coast Salmon Recovery Fund
        The Pacific Coast Salmon Recovery Fund (PCSRF) has funded hundreds
    of successful on the ground salmon conservation efforts, and we are
    pleased that NOAA and the states receiving these funds have greatly
    improved tracking the process of restoration and management under this
    important program.
        This program is a critical complement to federal salmon recovery
    and management efforts. It enables the state to initiate restoration of
    salmon habitat and manage fisheries in areas beyond the reach of the
    federal government, e.g. on private lands. The PCSRF enables the states
    to leverage significant amounts of state funding to address the needs
    of private landowners in complying with the Endangered Species Act,
    maintaining the economic viability of these lands, while greatly
    contributing to economic recovery.
        We are concerned about the decline in funding for the program, from
    $89 million in fiscal year 2004 and fiscal year 2005 to $67 million in
    fiscal year 2006, and $66.8 million in the President's fiscal year 2008
    request. The Conservancy strongly supports $100 million for this
    program. We are also concerned how the funds are allocated across the
    five states involved in the program. We feel that the conservation
    activities oriented towards recovery and protection of salmon should be
    the primary purpose of this program, and therefore urge the committee
    to consider including report language in this year's appropriation that
    more explicitly links expenditures of PCSRF funds to recovery actions
    identified in federal and state salmon recovery and management plans,
    where applicable.
        Thank you for this opportunity to share with the Committee the
    Conservancy's priorities in NOAA's fiscal year 2008 budget. We would be
    pleased to provide the Committee with additional information on any of
    the Conservancy's activities described here or elsewhere. You may
    contact Erika Feller at 703-841-5374 or via email at efeller@tnc.org,
    if you have questions on which we might be of assistance.
        The Nature Conservancy is an international, nonprofit organization
    dedicated to the conservation of biological diversity. Our mission is
    to preserve the plants, animals and natural communities that represent
    the diversity of life on Earth by protecting the lands and waters they
    need to survive. Our on-the-ground and in-the-water conservation work
    is carried out in all 50 states and in 27 foreign countries and is
    supported by approximately one million individual members. We have
    helped conserve nearly 15 million acres of land in the United States
    and Canada and more than 102 million acres with local partner
    organizations globally.
        The Conservancy owns and manages approximately 1,400 preserves
    throughout the United States--the largest private system of nature
    sanctuaries in the world. We recognize, however, that our mission
    cannot be achieved by core protected areas alone. Therefore, our
    projects increasingly seek to accommodate compatible human uses to
    address sustained human well-being.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Alexander, Senator Lamar, U.S. Senator From Tennessee, Questions
      Submitted by...................................................   375
    American:
        Astronomical Society, Prepared Statement of the..............   415
        Indian Higher Education Consortium, Prepared Statement of the   448
        Institute of Biological Sciences, Prepared Statement of the..   426
        Museum of Natural History, Prepared Statements of the......427, 429
        Public Power Association, Prepared Statement of the..........   420
    Association of National Estuary Programs, Prepared Statement of
      the............................................................   465

    Bement, Dr. Arden, Jr., Director, National Science Foundation....   131
        Prepared Statement of........................................   133
    Byrd, Senator Robert C., U.S. Senator From West Virginia,
      Questions Submitted by.........................................   105

    California Industry and Government Central California Ozone Study
      (CCOS) Coalition, Prepared Statement of the....................   451
    Clark, John F., Director, United States Marshals Service,
      Department of Justice..........................................   226
        Biographical Sketch of.......................................   235
        Prepared Statement of........................................   228
        Questions Submitted to.......................................   289
    Clear Creek Nature and Cultural Tourism Council, Prepared
      Statement of the...............................................   470

    Domenici, Senator Pete V., U.S. Senator From New Mexico,
      Questions Submitted by.......................................287, 340
    Dudas, Jon W., Director, U.S. Patent and Trademark Office,
      Department of Commerce.........................................    40
        Prepared Statement of........................................    42

    Earp, Naomi Churchill, Chair, Equal Employment Opportunity
      Commission.....................................................   343
        Prepared Statement of........................................   349
        Summary Statement of.........................................   346

    Feinstein, Senator Dianne, U.S. Senator From California,
      Questions Submitted by.........................................   157
    Fight Crime: Invest in Kids, Prepared Statement of...............   422
    Fond du Lac Band of Lake Superior Chippewa, Prepared Statement of
      the............................................................   465

    Gaviota Coast Conservancy, Prepared Statement of the.............   421
    Great Lakes Indian Fish and Wildlife Commission, Prepared
      Statement of the...............................................   458
    Griffin, Hon. Michael D., Ph.D., Administrator, National
      Aeronautics and Space Administration...........................   161
        Opening Remarks..............................................   166
        Prepared Statement of........................................   167
    Gutierrez, the Honorable Carlos M., Secretary, Office of the
      Secretary, Department of Commerce..............................     1
        Prepared Statement of........................................     7

    Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted
      by.............................................................   374

    Investment Company Institute, Prepared Statement of the..........   406

    Jeffrey, Dr. William, Director, National Institute of Standards
      and Technology, Department of Commerce.........................    32
        Prepared Statement of........................................    34

    Kennedy, Senator Ted, U.S. Senator From Massachusetts, Questions
      Submitted by...................................................   377
    Kohl, Senator Herb, U.S. Senator From Wisconsin, Questions
      Submitted by...................................................   103

    Land Trust Alliance, Prepared Statement of the...................   465
    Lautenbacher, Vice Admiral Conrad, Jr., Administrator, National
      Oceanic and Atmospheric Administration, Department of Commerce.   117
        Prepared Statement of........................................   124
        Questions Submitted to.......................................   152
        Summary Statement of.........................................   121
    Leahy, Senator Patrick J., U.S. Senator From Vermont:
        Prepared Statement of........................................   297
        Questions Submitted by................................100, 256, 323
        Statement of.................................................   295

    Marine Conservation Biology Institute, Prepared Statement of the.   453
    Meuller, Hon. Robert S., III, Director, Federal Bureau of
      Investigation, Department of Justice...........................   295
        Prepared Statement of........................................   306
    Mikulski, Senator Barbara A., U.S. Senator From Maryland:
        Opening Statement of.........................................     1
        Prepared Statement of........................................   301
        Questions Submitted by............................61, 152, 249, 369
        Statements of....................................117, 161, 197, 343

    National:
        Association of Marine Laboratories, Prepared Statement of the   439
        Center for Victims of Crime, Prepared Statement of the.......   446
        Corn Growers Association, Prepared Statement of the..........   456
        Employment Lawyers Association, Prepared Statement of the....   381
        Federation of Community Broadcasters, Prepared Statement of
          the........................................................   419
        Fish and Wildlife Foundation, Prepared Statement of the......   416
        Marine Sanctuary Foundation, Prepared Statement of the.......   434
        Treasury Employees Union, Prepared Statement of the..........   407
    Nisqually Tribe of Washington, Prepared Statement of the.........   465
    Northwest Indian Fisheries Commission, Prepared Statement of the.   435

    Pacific Salmon Commission, Prepared Statement of the.............   413
    Population Association of America/Association of Population
      Centers, Prepared Statement of the.............................   438
    Puyallup Tribe of Washington, Prepared Statement of the..........   465

    Reed, Senator Jack, U.S. Senator From Rhode Island, Questions
      Submitted by...................................................   104
    Restore America's Estuaries, Prepared Statement of...............   465

    Sea Grant Association, Prepared Statement of the.................   443
    Shelby, Senator Richard C., U.S. Senator From Alabama:
        Questions Submitted by......................109, 160, 252, 272, 289
        Statement of.............................3, 119, 163, 198, 298, 345
    Shoshone-Paiute Tribes of the Duck Valley Reservation, Prepared
      Statement of the...............................................   465
    Stevens, Senator Ted, U.S. Senator From Alaska, Question
      Submitted by...................................................   288
    Sullivan, Michael J., Acting Director, Bureau of Alcohol,
      Tobacco, Firearms and Explosives, Department of Justice........   197
        Biographical Sketch of.......................................   209
        Prepared Statement of........................................   203
        Questions Submitted to.......................................   249
        Summary Statement of.........................................   202

    Tandy, Hon. Karen P., Administrator, Drug Enforcement
      Administration, Department of Justice..........................   209
        Prepared Statement of........................................   212
        Questions Submitted to.......................................   256
    The Conservation Fund, Prepared Statement of.....................   465
    The Nature Conservancy, Prepared Statements of.................465, 471
    The Ocean Conservancy, Prepared Statement of.....................   465
    The Trust for Public Land, Prepared Statement of.................   465

    UNH Cooperative Extension, Prepared Statement of the.............   469
    University Corporation for Atmospheric Research, Prepared
      Statement of
      the............................................................   430

    West Creek Preservation Committee, Prepared Statement of the.....   424

                                 SUBJECT INDEX

                                  ----------
                                                                       Page

                             DEPARTMENT OF COMMERCE

                 National Institute of Standards and Technology

    Additional Committee Questions...................................    61
    American Competitiveness Initiative..............................    51
    Center for Nano-Scale Science Technology.........................    58
    Disaster Resilient Structures Studies............................    51
    Effectiveness of Manufacturing Extension Partnership.............    59
    National Institute of Standards and Technology:
        Collaboration With Industry..................................    60
        Funding Increase for American Competitiveness Initiative.....    57
    Safety of Nano-Technology........................................    58

                National Oceanic and Atmospheric Administration

    Additional Committee Questions...................................   151
    American Competitiveness Initiative..............................   136
    Aquaculture......................................................   153
    Coastal:
        Non-Point Pollution..........................................   157
        Zone Management Grants.......................................   158
    ``Counterfeit'' Fish.............................................   152
    Fiscal Year:
        2006 Accomplishments.........................................   125
        2008 Budget Request..........................................   123
            Highlights...............................................   127
    Funding Increases for National Oceanic and Atmospheric
      Administration Satellite Program...............................   146
    Funding Levels for Severe Weather Research.......................   159
    GOES Satellite Construction Time.................................   156
    GOES-R Program TRL Level.........................................   155
    International Polar Year Projects................................   144
    International Whaling Commission.................................   145
    National Academy of Sciences Report on Climate Change............   135
    National Oceanic and Atmospheric Administration:
        Center for Weather and Climate Prediction Project............   154
        Corps Reauthorization........................................   160
        Disaster Response Centers....................................   138
        Sea Grant Program............................................   139
        Tsunami Warning Program......................................   134
    NPOESS and GOES-R Funding Request................................   155
    NRDC vs. Rodgers Settlement Implementation.......................   158
    Ocean Initiative Funding.........................................   160
    Polar Satellites.................................................   148
    Probability of GOES-R Operational Gap............................   156
    Progress on the U.S. Ocean Action Plan...........................   152
    Regional Fisheries Council.......................................   138
    Renewable Energy Research........................................   142
    Susquehanna Basin Monitoring System..............................   135
    Tsunami Warning System...........................................   134
    Weather Modification Research....................................   140

                            Office of the Secretary

    Additional Committee Questions...................................    61
    Addressing:
        Patent Pendency and Application Backlog......................    16
        Recruitment, Training and Retention Challenges...............    19
    Augustine Report on Immigration..................................    24
    BEA's R&D Budget Initiative......................................   109
    CAFTA--Sock Trade................................................   109
    Census Deputy Director...........................................    30
    Continued Dumping Subsidy Offset Act of 2000.....................   106
    Departmental Management:
        Media Questions..............................................    79
        WCF and A&R..................................................    61
    Doha Dispute Settlement Negotiations.............................   107
    DVD Piracy in Mexico.............................................   114
    Dynamics of Economic Well-Being..................................    91
    Economic Development Administration Cut..........................    87
    Economic Development Representative..............................    86
    ESA Headquarters Staffing and Funding Levels.....................    90
    Executive Summary................................................    13
    Federal Consistency Standards and the CZMA for Florida and
      Alabama........................................................   112
    Funding for NOAA Education Programs..............................    92
    Funding Levels for Severe Weather Forecasting....................   113
    Gross Domestic Product Revision..................................    22
    Improved Measurement of Services.................................    91
    Increase Examiner Retention......................................    94
    ITA:
        Assistant Secretary Status...................................    92
        CAFTA Nations................................................   114
        Chinese Subsidy Programs.....................................    92
        Export Fee Increase..........................................    91
        Trade Act 2002...............................................   105
        Western Hemisphere Travel Initiative.......................100, 101
    Long-term Metric/Goal for Patent Pendency........................    94
    Manufacturing Extension Partnership (MEP)........................    28
        And Economic Development Administration Funding..............    26
        And Energy Costs.............................................   104
        Defense Suppliers............................................   103
        Funding Levels...............................................    97
        Program......................................................   102
    Meeting With Senator Reed's Staff on the Efficiency of Regional
      Development Accounts...........................................    27
    National Oceanic and Atmospheric Administration (NOAA):
        Exclusion from American Competitiveness Initiative...........    22
        JOCI and the Ocean Policy Scorecard..........................   110
        National Polar Orbiting Operational Environmental Satellite
          System.....................................................    23
    NTIA:
        Appropriation Language.......................................    98
        Public Safety Interoperable Communications Grant Program.....   110
    Patent and Trademark Office:
        Allowance Versus Patent Rejection............................   113
        Examination Quality..........................................    97
        Remediation Plan.............................................    12
    Promoting Innovation.............................................    12
    Reauthorization of the NOAA Corps................................   112
    Retention Rate...................................................    94
    Security of Personally Identifiable Information on Laptops and
      Other Portable Devices.........................................   111
    Special Bill Language............................................    80
    Staffing Breakout................................................    87
    Survey of Income and Program Participation.......................   104
    Technology Administration Staffing and Unobligated Balances......    97
    Timeline for Achieving Strategic Plan Goals and Objectives.......    95
    2010 Census:
        Cost Effectiveness...........................................   110
        Handheld Computers...........................................   114
    United States PTO:
        Patent Backlog...............................................    94
        Report ``The Path to the Future, the Next Steps''............    13
    Unobligated Balance Levels.......................................    87
    Work With User Community to Evaluate Quality.....................    97
    WTO:
        Appellate Body...............................................   108
        Disputes.....................................................   106

                        U.S. Patent and Trademark Office

    Additional Committee Questions...................................    61
    Cost of Intellectual Property Theft..............................    53
    Human Capital Management Reviews.................................    54
    Intellectual Property:
        Law Enforcement..............................................    52
        Theft........................................................    52
    Patent and Trademark Office:
        Applications and Pendency....................................    48
        Examination Quality..........................................    53
        Retention and Training.......................................    49
    Relationship with Food and Drug Administration...................    56

                             DEPARTMENT OF JUSTICE

              Bureau of Alcohol, Tobacco, Firearms and Explosives

    Accomplishments..................................................   203
    Additional Committee Questions...................................   248
    ATF's Mission....................................................   203
    Crime Gun Traces.................................................   241
    Explosives.......................................................   254
    Federal Firearms Licensees.......................................   250
    Firearms Trafficking.............................................   205
    Fiscal Year 2008 Budget Request..................................   203
    Funding Shortfall................................................   252
    Gangs and Gun Trafficking........................................   252
    National Center for Explosives Training and Research.............   239
        Redstone.....................................................   253
    Other Programs and Activities....................................   206
    Project Safe Neighborhoods and Anti-gang Efforts.................   204
    Tiahrt Amendment.................................................   249
    Trace Data Disclosure............................................   243
    Virginia Tech....................................................   240
        Situation....................................................   236

                        Drug Enforcement Administration

    Additional Committee Questions...................................   248
    Cocaine..........................................................   260
    DEA:
        NM Resources.................................................   287
        State and Local Assistance...................................   256
    Despite the Accomplishments, the Challenges Remain...............   217
    Drug Use.........................................................   268
    Enforcement Successes Over the Last 12 Months....................   213
    Financial Investigations.........................................   274
    Fiscal Year 2008 Budget Request..................................   217
    Hiring Freeze....................................................   245
    International Drug Issues........................................   262
    Internet.........................................................   278
    Marijuana........................................................   286
    MET Program......................................................   283
    Methamphetamine...........................................264, 272, 288
        Labs in Alaska...............................................   243
    Prescription Drug Abuse..........................................   257
    Salaries and Expenses Account....................................   217
    Southwest Border and Meth Enforcement Initiative.................   246
    Surveillance.....................................................   282
    Teenage Drug Use is Down.........................................   212
    United States/Mexico Collaboration...............................   284

                        Federal Bureau of Investigation

    Additional Committee Questions...................................   323
    Background Checks to Investigate Crime...........................   319
    Budget Request...................................................   313
    Child Pornography................................................   304
    Combating Terrorism............................................303, 306
    COPS Program.....................................................   318
    Defeating Foreign Intelligence Operations........................   308
    Foreign Intelligence Operations..................................   304
    Guns to Terrorists...............................................   319
    Indian Country Methamphetamine Problems..........................   340
    Infrastructure and Information Technology........................   305
    Integrated Wireless Network......................................   326
    Intellectual Property Enforcement................................   327
    Intelligence Analysts............................................   320
    Internet Crime...................................................   341
    National Security Letters......................................312, 328
    Political Landscape ``Informational Briefings'' by White House
      for Senior Government Officials................................   339
    Preventing the Acquisition of Weapons of Mass Destruction (WMD)/
      Render Safe....................................................   307
    Privacy/DNA Sampling.............................................   329
    Reduce Child Exploitation and Violent Crimes.....................   308
    Sentinel.......................................................314, 323
        Contractors Involved in Virtual Case File....................   316
    Strengthening Infrastructure and Information Technology..........   309
    Terrorism........................................................   311
    Training at Quantico.............................................   321
    2008 Budget Request..............................................   306
    ``Unfunded FTE'' Reduction.......................................   309
    Violent Crime.............................................310, 316, 324
    Weapons of Mass Destruction......................................   304

                         United States Marshals Service

    Adam Walsh.......................................................   290
    Adam Walsh Child Protection and Safety Act.......................   232
    Additional Committee Questions...................................   248
    Fiscal Year 2008 Budget Request..................................   229
    Former Marshal's Daughter Heroic Efforts in Campus Shooting......   293
    Fugitive Investigations..........................................   233
    Gangs............................................................   292
    Gulf Coast Task Force............................................   289
    High-threat Trial Security.......................................   231
    Homeland Build Up................................................   292
    Judicial Threat Intelligence and Investigations..................   229
    Marshals D.C. Superior Court.....................................   291
    Southwest Border Enforcement.....................................   232
    Summary of Fiscal Year 2006 Accomplishments......................   228
    The Mission of the United States Marshals Service................   228
    2007 Global War on Terror Supplemental...........................   235
    Witness Security Program.........................................   234

                    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

    Additional Committee Questions...................................   369
    Backlogs.........................................................   369
    BRAC in Maryland.................................................   374
    Downsizing Baltimore Office......................................   363
    EEOC:
        Oversight of EEO Offices.....................................   373
        Fiscal Year 2008 Budget Request..............................   349
    Funding..........................................................   362
    Headquarters Relocation Plans....................................   367
    National:
        Call Center..................................................   366
        Contact Center and Repositioning.............................   352
    Office Closures..................................................   354
    Repositioning Plan.............................................355, 360
    Salvation Army Litigation........................................   357

                 NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    Aging National Aeronautics and Space Administration
      Infrastructure.................................................   182
    American Competitiveness Initiative..............................   191
    Chinese ASAT Test................................................   192
    Earth Observing Sensors..........................................   179
    Education Program................................................   183
    Hubble Space Telescope...........................................   179
    Independent Program Analysis Organization........................   190
    Manned Flight of Orion Vehicle...................................   181
    Math and Science Institutions....................................   187
    National Academy of Sciences Report on Earth Science.............   193
    Orion Crew Return Vehicle/Ares Launch Vehicle....................   189
    Precursor Program for Lunar Exploration..........................   181
    Propulsion Research and Development..............................   182
    Ranking Member Shelby Closing Remarks............................   195
    Science, Technology, Engineering and Mathematics (STEM)..........   184
    Space Shuttle Retirement.........................................   188
    Status of the Exploration Activities.............................   192

                          NATIONAL SCIENCE FOUNDATION

    Experimental Program to Stimulate Competitive Research (EPSCoR)..   140
        Program Enhanced.............................................   148
    International Polar Year and the Alaska Region Research Vessel...   143
    National Science Foundation:
        Days.........................................................   147
        Education Programs and American Competitiveness Initiative...   137
        Facility Funding.............................................   149

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