[Senate Hearing 111-]
[From the U.S. Government Publishing Office]
COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 2011
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THURSDAY, APRIL 15, 2010
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 (chairwoman)
presiding.
Present: Senators Mikulski, Lautenberg, Pryor, and Shelby.
DEPARTMENT OF JUSTICE
FEDERAL BUREAU OF INVESTIGATION
STATEMENT OF HON. ROBERT S. MUELLER, III, DIRECTOR
OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI
Senator Mikulski. Good morning. The Commerce, Justice,
Science Subcommittee on Appropriations will come to order.
And today, the subcommittee will hear the FBI Director make
the presentation of the FBI's budget and the priorities for
fiscal year 2011. This morning, we are going to begin with an
unclassified hearing that will focus primarily on the FBI's
general budget and their budget request across the entire
agency.
At the conclusion of that testimony and questions, we will
move to a classified hearing to discuss specific budget issues
related to the FBI's classified operations. We will essentially
take a 10-minute break as we move to a secure facility.
Why are we doing this? The FBI has an incredible job, and
we are really proud. Director Mueller, we welcome you. We are
incredibly proud of the FBI and the job that we ask them to do
in our own country, and the job they are doing around the world
to protect the country and to protect the country's interests.
We know that we have asked the FBI, after the terrible
events of 9/11/2001, in which you were on the job only a matter
of days, to take on a new responsibility in terms of national
security. We want to have a chance for you to amplify the needs
that that unique unit has and to make sure that we are
participating in ensuring that you have the resources to do it.
We think the FBI has the right stuff. We want to make sure that
we have given you the right resources.
So, as the chairperson of the subcommittee, I will be
having three priorities with my discussion. One is American and
domestic security, and how are we keeping our families and our
communities safe. The other will be national security, and how
the FBI is working in that arena. And the other is oversight
and accountability. We need a spirit of reform. We need a
spirit of watchdog. Senator Shelby and I want to stand very
close sentry over anything that could be cost overruns where
our budget is heading in the direction of a boondoggle.
The FBI does keep America safe. It is an agency that is on
the job 24 hours a day, 7 days a week, and often, the men and
women serving the FBI themselves are in grave danger as they
protect us from everything from terrorists to organized crime.
Fifty-six field offices, 33,000 staff, 13,000 special agents,
those are all the numbers and support staff. Those are numbers
and statistics, but behind them are men and women trying to
protect us from some of the most despicable predatory behavior.
Five highlights of this new budget are those areas which we
think are absolutely essential in the national interest.
Senator Shelby and I have teamed up in being very concerned
about the issue of financial service fraud. At his chairmanship
and now ranking membership on the Banking Committee, he has
been a leader for calling for more action, more help to deal
with mortgage fraud and other white collar financial services.
This will be a request of $453 million.
At the same time, we know that we want to protect ourselves
against organized crime, and there is a budget request of $116
million for dismantling organized criminal syndicates and
shutting down money launderers. This has significance for both
domestic and also international activity.
Then there is the issue of child predators. What more vile
crime in the world than to do harm to children, whether it is
those who try to reach children on the Internet, to children
who are kidnapped and placed in sexual servitude, to other
aspects of the attack on children.
I think the FBI and this Director have had a very special
commitment to this, and we want to ensure that there is the
$300-some million to deal with everything from children who
have been exploited on the Internet, to those who are forced
into prostitution.
On issues related to the gathering of intelligence on
cybersecurity, there is a request of $182 million; I will be
pursuing that more in our classified hearing. And the issue of
tracking and dismantling of weapons of mass destruction. So we
look forward to working with you on that.
Last year there was $135 million for the FBI's cyber
efforts. This year, there is $182 million, a $46 million
increase. We hope to hear about the need for new agents,
analysts, and professional staff. We want to hear about that,
as I said, in a more amplified, classified situation.
The FBI has also been charged with this national security
mission, and much of the FBI budget increase is for the FBI's
counterterrorism and intelligence. Counterterrorism alone makes
up now 40 percent of the FBI's budget. The FBI requested over
$3 billion for counterterrorism activities, a $113 million
increase from 2010.
We want to hear how these funds are being used. I
understand to disrupt terrorists, investigate terrorist crimes,
and identify, track, capture, and defeat these terrorist
sleeper cells, whether they are operating in the United States
or overseas. I want to know if this budget request tackles
these responsibilities.
In the area of community and American security, which is
the traditional crime-fighting role, we know this FBI wants to
continue to do their work fighting traditional crime-fighting
efforts. We in Maryland are very proud of our Baltimore field
office, the work that they do with the task forces, with the
U.S. attorney. It is not only that they make headlines, but
they really are out there catching the bad guys.
We hope this budget allows the FBI efforts to target
sophisticated criminal organizations who threaten our
communities. The 2011 budget lacks any substantial increases,
however, to deal with violent crime in gangs. We are troubled
by that, and we would like to hear your views on whether you
think this request is appropriate or whether we should consider
more.
In the area of mortgage fraud, the FBI provides $453
million to be able to do this. This is $75 million more. You
are requesting 143 new agents, new forensic accountants, and 39
financial assistants.
I understand that there are over 3,000 mortgage fraud cases
pending. That is amazing. And that is an amazing workload for
the FBI to be handling, and again, we want to make sure you
have the right people and the right support to do that.
We, on this subcommittee, on a bipartisan basis, want to
send a very clear message to the predators--no more scamming,
no more scheming, no more preying on hard-working families--
that if you want to come after families, we are going to come
after you.
I have elaborated on the issue of protecting children, from
Innocent Images to Innocence Lost. We want to make sure we are
doing all we can to target those predators.
A few months ago, a little girl lost her life to a sexual
predator in Salisbury, Maryland. All of Maryland wept. The
General Assembly has acted in increasing sentences. But you
know what? We have got to stop the crimes before they happen,
and there they are. They are out there on the Internet, which
are essentially techno-playgrounds in which they are trying to
recruit our children. We want to make sure we have the right
resources and the right policies.
The other area the subcommittee will be asking about is our
concern to protect against government boondoggles.
Unfortunately, some years ago, the FBI ran into trouble when it
tried to create a virtual caseload. We lost out on over $117
million and what became essentially techno-junk that we had to
throw away.
Now we understand that Sentinel, which should be the crown
jewel, is running into problems. So we need to know, is this
just a delay that comes from developing a complex technological
product that needs to be used by a variety of people here and
around the world? Or are we once more heading for some type of
cost overruns where our agents don't have the tools they need
to connect the dots?
We place very heavy demands on them. They should at least
have the technology that they need, and the taxpayer really
wants value for the dollar. So that is the area where we hope
to be able to go over. You do so much work. We could spend all
day pursuing our questions, but those are the highlights that
we want to pursue.
I would like to now turn to Senator Shelby, who, through
his work on Banking and others, has been a real reformer and a
real crime fighter.
OPENING STATEMENT OF SENATOR RICHARD C. SHELBY
Senator Shelby. Thank you, Senator Mikulski.
First of all, I want to recognize and extend my
appreciation to the men and women of the FBI, who protect this
country from terrorism and crime each day. We owe them a debt
of gratitude, as well as you, the leader, Mr. Mueller.
In a few moments, Director Mueller will tell us how
preventing terrorism is the FBI's top priority. However, the
budget request doesn't necessarily reflect that. While the
White House points to a $25 million increase in the request for
the FBI's counterterrorism efforts, the truth is that there are
irresponsible and drastic cuts to the FBI's terrorism fighting
capabilities.
The cuts totaled nearly $162 million and were all made by
presidential political appointees at the Office of Management
and Budget, OMB. For every new dollar proposed by the White
House to fight terrorists, six of counterterrorism dollars are
cut. It makes no sense to me.
This request fails to support the FBI on several fronts--to
work in theater with U.S. troops in Iraq and Afghanistan in
identifying insurgents and terrorists, to respond to overseas
terrorist incidents, and to assist foreign law enforcement
partners in defeating terrorists who target U.S. interests and
persons. The request cuts the FBI's overseas response funding
by $63 million. Yet I see no decrease in the terrorist threat
or in the FBI's overseas response mission.
The White House does not appear to believe the assessment
of its own Department of Homeland Security that states that
terrorists' use of improvised explosive device, IED, remains
one of the greatest threats to the United States. The
administration ignores the Department of Defense analysis that
IEDs are considered weapons of strategic influence and that the
terrorists' use of IEDs is an enduring global and transnational
threat.
As evidenced by the recent bombings on the U.S.-Mexican
border, as well as the attempted bombings in Detroit and New
York, the threat to the U.S. homeland appears to be increasing.
Yet the administration cut the very funding I believe is
necessary to ensure that the FBI has the tools and the
facilities necessary to respond to this threat.
It is clear from the request that OMB is not relying on the
right people when it is making decisions regarding the threat
this country faces, both domestically and abroad. If OMB had
consulted the experts, they would not have canceled, I believe,
funding for the Terrorist Explosive Device Analytical Center,
TEDAC. TEDAC provides the FBI and the U.S. military with
forensic facilities needed to exploit IEDs and terrorist bomb-
making materials evidence.
OMB's decision to eliminate TEDAC was based on a proposal
from Joint IED Defeat Organization personnel to perform
forensics in theater. Since the release of the President's
budget, the Joint IED Defeat Organization has abandoned the
OMB-proposed approach to set up a Level 3 in-theater forensics
capability.
Ironically, now the Joint IED Defeat Organization is
seeking input from the FBI and the Defense Intelligence Agency
to develop a practical near-term solution that meets the
critical needs of the warfighter. This subcommittee, with an
understanding of the transnational and enduring nature of
terrorism, provided funding for a facility to address this need
that would be well on its way to construction, if not for the
administration.
Today, the Quantico TEDAC is overwhelmed. For the 56,000
boxes of IEDs and materials received since 2004, 37,000 are
awaiting processing. Meanwhile, the FBI receives a monthly
average of 700 new submissions. The FBI estimates that 86
percent of the backlog contains critical information like
biometric intelligence, fingerprints, DNA, and so forth that
would assist the U.S. military, the intelligence community, and
the Federal law enforcement in identifying terrorists.
Director Mueller, I believe the record shows that the
proposal by OMB to cancel TEDAC funding is unwise, and I think
it is very ill-timed. The threat from terrorist use of
explosives is significant, real, and I believe enduring.
The United States needs to prepare for this threat. We in
Congress have tried to give the FBI the tools it needs to do
so. We have that obligation. In the end, the proposed
cancellation there would leave this Nation unprepared and
unprotected and is an unacceptable outcome.
On Tuesday, I sent you a letter outlining concerns
regarding the decision by the FBI to revisit procedures
relating to technical review of DNA data contained within the
National DNA Index System. The Scientific Working Group on DNA
Analysis and Methods is the official working group that advises
the FBI on DNA analysis methods.
In 2008, the group sent letters to the House and Senate
Judiciary Committees strongly opposing the loosening of the
technical review standards and private DNA vendors' labs having
access to the Combined DNA Index System, CODIS. The group's
initial position was requested by the FBI lab director. I find
it hard to believe, Mr. Director, that the strong sentiments
expressed in these letters by your designee have since changed
so drastically.
The State CODIS administrators, the American Society of
Crime Lab Directors, prosecutors, and police departments from
around the country have issued positions opposing the FBI's lab
proposal to loosen review standards. In light of these strongly
stated positions by these subject matter experts, the FBI
laboratory mystifyingly ignored their concerns.
As I have said to you in my letter, I have serious
reservations about how this announcement came about, and I am
deeply concerned that it was possibly influenced by private DNA
vendors exerting pressure on the FBI lab. I believe it is an
abomination to victims, law enforcement, and the Constitution
when Congress, the Department of Justice, and the White House
blindly ignore the professional opinion of the most renowned
DNA experts in the world and begin down the path of considering
changing laws and regulations affecting the integrity of
evidence.
This is an extremely complicated and technical issue. And
while I am not necessarily against evaluating and improving the
current policy, I do believe the decision was hastily made
without appropriate evaluation of the potential unintended
consequences by the FBI laboratory. This issue must be
carefully examined by the FBI and the leadership of all the
State and local labs it directly affects.
I want to continue working with you, Mr. Director, to
ensure that the FBI is provided the necessary resources to
carry out the mission of protecting the American people, and I
look forward to hearing your thoughts on these issues that I
have raised and others this morning.
Senator Mikulski. Director Mueller.
STATEMENT OF HON. ROBERT S. MUELLER, III
Mr. Mueller. Thank you, Chairwoman Mikulski and Senator
Shelby, and I appreciate all the work that this subcommittee
has done over the years to provide us with the resources we
need to do our job.
I also appreciate the opportunity to appear before you to
discuss our fiscal year 2011 budget. We are requesting, as I
believe, Chairwoman Mikulski, you pointed out, approximately
$8.3 billion to fund more than 33,000 FBI agents, analysts, and
staff, and to build and maintain our infrastructure. This
funding is critical to carry out our mission of protecting the
Nation from the ever-changing national security and criminal
threats.
Let me start by discussing a few of the most significant
threats. Fighting terrorism remains our highest priority at the
FBI. Over the past year, the threat of a terrorist attack has
proven to be persistent and global. Al-Qaeda and its affiliates
are still committed to striking us in the United States. We saw
this with the plot by an Al-Qaeda operative to detonate
explosives on the subways in New York City and the attempted
airline bombing on Christmas Day.
These incidents involved improvised explosive devices, or
IEDs, and underscore the importance of our Terrorist Explosive
Device Analytical Center, also known as TEDAC. TEDAC does more
than support our military overseas. It also provides crucial
intelligence in our fight against Al-Qaeda.
Homegrown and ``lone wolf'' extremists pose an equally
serious threat. We saw this with the Fort Hood shootings; the
attempted bombings of an office tower in Dallas and a Federal
building in Springfield, Illinois; and the violent plans
hatched by the Hutaree militia in Michigan.
We have also seen U.S.-born extremists plotting to commit
terrorism overseas, as was the case with the heavily armed Boyd
conspiracy in North Carolina and David Headley's involvement in
the Mumbai attacks. These terrorist threats are diverse, far-
reaching, and ever-changing.
And to combat these threats, the FBI must sustain our
overseas contingency operations and engage our intelligence and
law enforcement partners, both here at home and abroad. And
that is why for fiscal year 2011, we are requesting funds for
90 new national security positions and $25 million to enhance
our national security efforts.
Turning to white collar crime, residential and now
commercial mortgage fraud is the most significant threat in our
efforts to combat financial fraud. Mortgage fraud
investigations have grown five-fold since 2003, approximating
now 2,900 such investigations. And more than two-thirds of
those cases involve losses of more than $1 million.
The FBI has developed new, intelligence-driven methods for
identifying fraud suspects and trends. We are focused on the
most serious cases relating to real estate professionals and
insiders, not just borrowers. Just yesterday, the FBI's San
Francisco field office arrested 18 mortgage bankers, real
estate brokers, and real estate agents for falsifying financial
documents in $25 million worth of loans on 44 separate
properties. This fraud alone resulted in over $10 million in
losses. We anticipate many more of these types of cases in the
coming year.
Now, with passage of the healthcare reform legislation, the
FBI will also be expanding and intensifying our efforts to root
out Medicare and Medicaid fraud. Earlier this week, a Miami
health clinic operator pleaded guilty to committing a $55
million Medicare fraud where HIV and cancer services were never
provided to patients. Instead, he and his partner spent
millions on luxury cars and on thoroughbred racehorses.
As we have in the past, the FBI will use our intelligence-
driven task forces to target those who exploit our healthcare
programs through fraud. Given the planned expansion of these
healthcare programs in the future, this will be among our
highest priorities in the years to come.
Securities fraud is also on the rise. We have 33 percent
more securities cases open today than we did 5 years ago. The
economic downturn exposed a series of multi-billion dollar
Ponzi schemes, unlike any seen in history. We must continue to
deter these offenses by seeking the most serious sentences
possible, like the 50-year sentence for Minnesota tycoon Thomas
Petters handed down just last week.
We are requesting funds for 367 new positions and $75.3
million for our white collar crime program to make sure we
bring to justice those who commit fraud.
Turning next to the cyber threat, cyber attacks come from a
wide range of individuals and groups, many with different
skills, motives, and targets. Terrorists increasingly use the
Internet to communicate, to recruit, to plan, and to raise
money. Foreign nations continue to launch attacks on United
States Government computers and private industry, hoping to
steal our most sensitive secrets or to benefit from economic
espionage. Criminal hackers and child predators pose a
dangerous threat as well, as they use the anonymity of the
Internet to commit crimes across the country and around the
world.
These cyber threats undermine our national security,
victimize our children, and weaken our economy. We are seeking
163 new positions and $46 million for our cyber programs to
strengthen our ability to defend against these cyber threats.
The fiscal year 2011 budget also requests additional funds
for training facilities, information technology, forensics
services, and other enforcement programs. My written statement,
submitted for the record, discusses these requests in greater
detail.
Over the past several years, we have worked to better
integrate our strategic direction with a 5-year budget approach
and more focused human resource management. The FBI's fiscal
management is recognized by the Inspector General's annual
audit as being among the top performers in the Department of
Justice, and we are on pace to achieve our hiring and staffing
goals this year.
Turning for a moment to Sentinel, as you mentioned, Madam
Chairwoman--in order to ensure the success of our new case
management system, we divided the project into four separate
phases. This phased approach has two principal advantages.
First, employees can gain immediate benefits from the new
system as it is being built, and they are. Second, we can
carefully examine what has been delivered to make sure it meets
our expectations and the terms of the contract, as well as
providing a solid foundation for the future phases of
development.
Five weeks ago, we informed our prime contractor that the
last segment of Phase 2 did not fully meet our expectations.
Accordingly, we advised our prime contractor to partially stop
work on Phase 3 and suspend work on Phase 4 until Phase 2 is
fully delivered.
Piloting of the remaining Phase 2 capabilities will
commence this summer. At the conclusion of a 4-week pilot, the
results will be evaluated, any corrective action will be made,
and then enterprise deployment of Phase 2 will occur. We will
be presenting a new outline for the completion of Phases 3 and
4, along with any cost and timeline adjustments at that time.
In the meantime, thanks to this phased approach, Sentinel
is currently being used by thousands of agents and supervisors
each day and will become even more functional and effective
once Phase 2 is complete. I would be happy to discuss this in
more detail as questions are asked.
PREPARED STATEMENT
Chairman Mikulski and Ranking Member Shelby, I would like
to conclude by thanking you and this subcommittee for your
support of the FBI. I look forward to answering what questions
you might have with regard to our 2011 budget or otherwise.
[The statement follows:]
Prepared Statement of Hon. Robert S. Mueller, III
Good morning, Chairwoman Mikulski, Ranking Member Shelby, and
members of the subcommittee. On behalf of the more than 30,000 men and
women of the Federal Bureau of Investigation (FBI), I am privileged to
appear before the subcommittee to present and discuss the FBI's fiscal
year 2011 budget. At the outset, I would like to thank you for your
past support of the Bureau. Your support enables the FBI to achieve its
three-fold mission: Protecting and defending the United States against
terrorism and foreign intelligence threats, upholding and enforcing the
criminal laws of the United States, and providing leadership and
criminal justice services to Federal, State, municipal, and
international agencies and partners.
The FBI's fiscal year 2011 budget requests a total of $8.3 billion
in direct budget authority, including 33,810 permanent positions
(13,057 special agents, 3,165 intelligence analysts (IAs), and 17,588
professional staff). This funding, which consists of $8.1 billion for
salaries and expenses and $181.2 million for construction, is critical
to continue our progress started toward acquiring the intelligence,
investigative, and infrastructure capabilities required to counter
current and emerging national security threats and crime problems.
Consistent with the Bureau's transformation toward becoming a
threat-informed and intelligence-driven agency, the fiscal year 2011
budget request was formulated based upon our understanding of the major
national security threats and crime problems that the FBI must work to
prevent, disrupt, and deter. We then identified the gaps and areas
which required additional resources. As a result of this integrated
process, the fiscal year 2011 budget proposes $306.6 million for new or
expanded initiatives--$232.8 million for salaries and expenses and
$73.9 million for construction--and 812 new positions, including 276
special agents, 187 intelligence analysts, and 349 professional staff.
These additional resources will allow the FBI to improve its capacities
to address threats in the priority areas of terrorism, computer
intrusions, weapons of mass destruction, foreign counterintelligence,
white collar crime, violent crime and gangs, child exploitation, and
organized crime. Also, included in this request is funding for
necessary organizational operational support and infrastructure
requirements; without such funding, a threat or crime problem cannot be
comprehensively addressed.
Let me briefly summarize the key national security threats and
crime problems that this funding enables the FBI to address.
NATIONAL SECURITY THREATS
Terrorism.--Terrorism, in general, and al-Qa'ida and its affiliates
in particular, continue to represent the most significant threat to our
national security. Al-Qa'ida remains committed to its goal of
conducting attacks inside the United States and continues to leverage
proven tactics and tradecraft with adaptations designed to address its
losses and the enhanced security measures of the United States. Al-
Qa'ida seeks to infiltrate overseas operatives who have no known nexus
to terrorism into the United States using both legal and illegal
methods of entry. Further, al-Qa'ida's continued efforts to access
chemical, biological, radiological, or nuclear material pose a serious
threat to the United States. Finally, al-Qa'ida's choice of targets and
attack methods will most likely continue to focus on economic targets,
such as aviation, the energy sector, and mass transit; soft targets
such as large public gatherings; and symbolic targets, such as
monuments and government buildings.
Homegrown violent extremists also pose a very serious threat.
Homegrown violent extremists are not clustered in one geographic area,
nor are they confined to any one type of setting--they can appear in
cities, smaller towns, and rural parts of the country. This diffuse and
dynamic threat--which can take the form of a lone actor--is of
particular concern.
While much of the national attention is focused on the substantial
threat posed by international terrorists to the Homeland, the United
States must also contend with an ongoing threat posed by domestic
terrorists based and operating strictly within the United States.
Domestic terrorists, motivated by a number of political or social
issues, continue to use violence and criminal activity to further their
agendas.
Cyber.--Cyber threats come from a vast array of groups and
individuals with different skills, motives, and targets. Terrorists
increasingly use the Internet to communicate, conduct operational
planning, propagandize, recruit and train operatives, and obtain
logistical and financial support. Foreign governments have the
technical and financial resources to support advanced network
exploitation, and to launch attacks on the United States information
and physical infrastructure. Criminal hackers can also pose a national
security threat, particularly if recruited, knowingly or unknowingly,
by foreign intelligence or terrorist organizations.
Regardless of the group or individuals involved, a successful cyber
attack can have devastating effects. Stealing or altering military or
intelligence data can affect national security. Attacks against
national infrastructure can interrupt critical emergency response
services, government and military operations, financial services,
transportation, and water and power supply. In addition, cyber fraud
activities pose a growing threat to our economy, a fundamental
underpinning of United States national security.
Weapons of Mass Destruction.--The global Weapons of Mass
Destruction (WMD) threat to the United States and its interests
continues to be a significant concern. In 2008, the National
Intelligence Council produced a National Intelligence Estimate to
assess the threat from Chemical, Biological, Radiological, and Nuclear
weapons and materials through 2013. The assessment concluded that it
remains the intent of terrorist adversaries to seek the means and
capability to use WMD against the United States at home and abroad. In
2008, the Commission on the Prevention of WMD Proliferation and
Terrorism concluded that ``the United States Government has yet to
fully adapt . . . that the risks are growing faster than our multi-
layered defenses.'' The WMD Commission warned that without greater
urgency and decisive action, it is more likely than not that a WMD will
be used in a terrorist attack somewhere in the world by the end of
2013.
Osama bin Laden has said that obtaining WMD is a ``religious duty''
and is reported to have sought to perpetrate a ``Hiroshima'' on United
States soil. Globalization makes it easier for terrorists, groups, and
lone actors to gain access to and transfer WMD materials, knowledge,
and technology throughout the world. As noted in the WMD Commission's
report, those intent on using WMD have been active and as such ``the
margin of safety is shrinking, not growing.''
Foreign Intelligence.--The foreign intelligence threat to the
United States continues to increase as foreign powers seek to establish
economic, military, and political preeminence and to position
themselves to compete with the United States in economic and diplomatic
arenas. The most desirable United States targets are political and
military plans and intentions; technology; and economic institutions,
both governmental and non-governmental. Foreign intelligence services
continue to target and recruit United States travelers abroad to
acquire intelligence and information. Foreign adversaries are
increasingly employing non-traditional collectors--e.g., students and
visiting scientists, scholars, and businessmen--as well as cyber-based
tools to target and penetrate United States institutions.
To address current and emerging national security threats, the
fiscal year 2011 budget proposes additional funding for:
--Counterterrorism and Counterintelligence Investigations and
Operations.--90 new positions (27 special agents, 32 IAs, and
31 professional staff) and $25.2 million to enhance
surveillance and investigative capabilities, improve
intelligence collection and analysis capabilities, and enhance
the Bureau's Legal Attache presence in Pakistan and Ethiopia.
--Computer Intrusions.--163 new positions (63 agents, 46 IAs, and 54
professional staff) and $45.9 million for the Comprehensive
National Cybersecurity Initiative to continue the enhancement
of the FBI's capacities for combating cyber attacks against the
U.S. information infrastructure.
--Weapons of Mass Destruction.--35 positions (15 special agents and
20 professional staff) and $9.1 million to develop further the
FBI's capacity to implement countermeasures aimed at detecting
and preventing a WMD incident, improve the capacity to provide
a rapid response to incidents, and enhance capacities to
collect and analyze WMD materials, technology, and information.
--Render Safe.--13 new positions (6 special agents and 7 professional
staff) and $40.0 million to acquire necessary replacement
aircraft critical to the timely deployment and response of
specialized render safe assets.
MAJOR CRIME PROBLEMS AND THREATS
White Collar Crime.--The White Collar Crime (WCC) program primarily
focuses on: Corporate fraud and securities fraud; financial institution
fraud; public corruption; health care fraud; insurance fraud; and money
laundering. To effectively and efficiently combat these threats, the
FBI leverages the resources of our civil regulatory and criminal law
enforcement partners by participating, nationally and on a local level,
in task forces and working groups across the country. For example, the
FBI participates in 86 corporate fraud and/or securities fraud working
groups, 67 mortgage fraud working groups, and 23 mortgage fraud task
forces. By working closely with our partners, to include the sharing of
intelligence, the FBI is better able to develop strategies and deploy
resources to target current and emerging WCC threats.
Financial Institution Fraud.--Mortgage fraud is the most
significant threat within the financial institution fraud program. The
number of pending mortgage fraud investigations against real estate
professionals, brokers and lenders has risen from 436 at the end of
fiscal year 2003 to over 2,900 by the end of the first quarter of
fiscal year 2010. This is more than a 500 percent increase. Over 68
percent of the FBI's 2,979 mortgage fraud cases involved losses
exceeding $1 million per case. Suspicious Activity Reports (SARs)
regarding mortgage fraud increased from 6,936 in fiscal year 2003, to
67,190 in fiscal year 2009. If first quarter trends of fiscal year 2010
continue, the FBI will receive over 75,000 SARs by the end of fiscal
year 2010.
Corporate Fraud.--The majority of corporate fraud cases pursued by
the FBI involve accounting schemes designed to deceive investors,
auditors, and analysts about the true financial condition of a
corporation. While the number of cases involving the falsification of
financial information has remained relatively stable, the FBI has
observed an upward trend in corporate fraud cases associated with
mortgage-backed securities (MBS).
Securities Fraud.--The FBI focuses its efforts in the securities
fraud arena on schemes involving high yield investment fraud (to
include Ponzi schemes), market manipulation, and commodities fraud. Due
to the recent financial crisis, the FBI saw an unprecedented rise in
the identification of Ponzi and other high yield investment fraud
schemes, many of which each involve thousands of victims and staggering
losses--some in the billions of dollars. With this trend, and the
development of new schemes, such as stock market manipulation via cyber
intrusion, securities fraud is on the rise. Over the last 5 years,
securities fraud investigations have increased by 33 percent.
Public Corruption.--The corruption of local, State, and federally
elected, appointed, or contracted officials undermines our democratic
institutions and sometimes threatens public safety and national
security. Public corruption can affect everything from how well United
States borders are secured and neighborhoods protected, to verdicts
handed down in courts, and the quality of public infrastructure such as
schools and roads. Many taxpayer dollars are wasted or lost as a result
of corrupt acts by public officials.
The FBI also created a national strategy to position itself to
effectively address the increase in corruption and fraud resulting from
the Federal Government's economic stimulus programs, including
expanding our undercover capabilities and strengthening our
relationships with the inspectors general community on a national and
local level.
Health Care Fraud.--Some of the most prolific and sophisticated WCC
investigations during the past decade have involved healthcare fraud.
It is estimated that fraud in healthcare industries costs consumers
more than $60 billion annually. Today, the FBI seeks to infiltrate
illicit operations and terminate scams involving staged auto accidents,
online pharmacies, durable medical equipment, outpatient surgery
centers, counterfeit pharmaceuticals, nursing homes, hospital chains,
and transportation services. Besides the Federal health benefit
programs of Medicare and Medicaid, private insurance programs lose
billions of dollars each year to blatant fraud schemes in every sector
of the industry.
Insurance Fraud.--There are more than 5,000 companies with a
combined $1.8 trillion in assets engaged in non-health insurance
activities, making this one of the largest United States industries.
Insurance fraud increases the premiums paid by individual consumers and
threatens the stability of the insurance industry. Recent major natural
disasters and corporate fraud scandals have heightened recognition of
the threat posed to the insurance industry and its potential impact on
the economic outlook of the United States.
Money Laundering.--Money Laundering allows criminals to infuse
illegal money into the stream of commerce, thus manipulating financial
institutions to facilitate the concealing of criminal proceeds; this
provides the criminals with unwarranted economic power. The FBI
investigates Money Laundering cases by identifying the process by which
criminals conceal or disguise the proceeds of their crimes or convert
those proceeds into goods and services. The major threats in this area
stem from emerging technologies, such as stored value devices; as well
as shell corporations, which are used to conceal the ownership of funds
being moved through financial institutions and international commerce.
Recent money laundering investigations have revealed a trend on the
part of criminals to use stored value devices, such as pre-paid gift
cards and reloadable debit cards, in order to move criminal proceeds.
This has created a ``shadow'' banking system, allowing criminals to
exploit existing vulnerabilities in the reporting requirements that are
imposed on financial institutions and international travelers. This has
impacted our ability to gather real time financial intelligence, which
is ordinarily available through Bank Secrecy Act filings. Law
enforcement relies on this intelligence to identify potential money
launderers and terrorist financiers by spotting patterns in the
transactions conducted by them. The void caused by the largely
unregulated stored value card industry deprives us of the means to
collect this vital intelligence. Moreover, stored value cards are often
used to facilitate identity theft. For example, a criminal who
successfully infiltrates a bank account can easily purchase stored
value cards and then spend or sell them. This readily available outlet
makes it much more unlikely that the stolen funds will ever be
recovered, thus costing financial institutions and their insurers
billions of dollars each year.
Transnational and National Criminal Organizations and Enterprises
Transnational/National Organized Crime is an immediate and
increasing concern of the domestic and international law enforcement
and intelligence communities. Geopolitical, economic, social, and
technological changes within the last two decades have allowed these
criminal enterprises to become increasingly active worldwide.
Transnational/National Organized Crime breaks down into six distinct
groups: (1) Eurasian Organizations that have emerged since the fall of
the Soviet Union (including Albanian Organized Crime); (2) Asian
Criminal Enterprises; (3) traditional organizations such as the La Cosa
Nostra (LCN) and Italian Organized Crime; (4) Balkan Organized Crime;
(5) Middle Eastern Criminal Enterprises; and (6) African Criminal
Enterprises.
Due to the wide range of criminal activity associated with these
groups, each distinct organized criminal enterprise adversely impacts
the United States in numerous ways. For example, international
organized criminals control substantial portions of the global energy
and strategic materials markets that are vital to United States
national security interests. These activities impede access to
strategically vital materials, which has a destabilizing effect on
United States geopolitical interests and places United States
businesses at a competitive disadvantage in the world marketplace.
International organized criminals smuggle people and contraband goods
into the United States, seriously compromising United States border
security and at times national security. Smuggling of contraband/
counterfeit goods costs United States businesses billions of dollars
annually, and the smuggling of people leads to exploitation that
threatens the health and lives of human beings.
International organized criminals provide logistical and other
support to terrorists, foreign intelligence services, and hostile
foreign governments. Each of these groups is either targeting the
United States or otherwise acting in a manner adverse to United States
interests. International organized criminals use cyberspace to target
individuals and United States infrastructure, using an endless variety
of schemes to steal hundreds of millions of dollars from consumers and
the United States economy. These schemes also jeopardize the security
of personal information, the stability of business and government
infrastructures, and the security and solvency of financial investment
markets. International organized criminals are manipulating securities
exchanges and perpetrating sophisticated financial frauds, robbing
United States consumers and government agencies of billions of dollars.
International organized criminals corrupt and seek to corrupt public
officials in the United States and abroad, including countries of vital
strategic importance to the United States, in order to protect their
illegal operations and increase their sphere of influence.
Finally, the potential for terrorism-related activities associated
with criminal enterprises is increasing due to the following: alien
smuggling across the southwest border by drug and gang criminal
enterprises; Columbian based narco-terrorism groups influencing or
associating with traditional drug trafficking organizations; prison
gangs being recruited by religious, political, or social extremist
groups; and major theft criminal enterprises conducting criminal
activities in association with terrorist related groups or to
facilitate funding of terrorist-related groups. There also remains the
ever present concern that criminal enterprises are, or can, facilitate
the smuggling of chemical, biological, radioactive, or nuclear weapons
and materials.
Violent Crimes/Gangs and Indian Country.--Preliminary Uniform Crime
Report statistics for 2008 indicate a 3.5 percent decrease nationally
in violent crimes (murder and non-negligent manslaughter, forcible
rape, robbery, and aggravated assault) for the first 6 months of the
year compared to the same period in 2007. This follows a slight decline
(1.4 percent) for all of 2007 compared to 2006. While this overall
trend is encouraging, individual violent crime incidents such as serial
killings and child abductions often paralyze entire communities and
stretch State and local law enforcement resources to their limits. In
addition, crimes against children, including child prostitution and
crimes facilitated through the use of the Internet, serve as a stark
reminder of the impact of violent crime on the most vulnerable members
of society. Since the inception of the Innocence Lost National
Initiative in 2003, the FBI has experienced a 239 percent increase in
its investigations addressing the threat of children being exploited
through organized prostitution. The FBI addresses this threat by
focusing resources on criminal enterprises engaged in the
transportation of children for the purpose of prostitution using
intelligence driven investigations and employing sophisticated
investigative techniques. These types of investigations have led to the
recovery of 915 children, 549 offenders convicted, and the
dismantlement of 44 criminal enterprises.
Gang Violence.--The United States has seen a tremendous increase in
gangs and gang membership. Gang membership has grown from 55,000 in
1975 to approximately 960,000 nationwide in 2007. The FBI National Gang
Intelligence Center (NGIC) has identified street gangs and gang members
in all 50 States and the District of Columbia. Thirty-nine of these
gangs have been identified as national threats based on criminal
activities and interstate/international ties. NGIC estimates the direct
economic impact of gang activity in the United States at $5 billion and
the indirect impact as much greater. Furthermore, NGIC identified a
trend of gang members migrating to more rural areas. NGIC has also seen
an expansion of United States based gangs internationally, with such
gangs currently identified in over 20 countries.
Indian Country.--The FBI has 104 full-time dedicated special agents
who currently address 2,406 Indian Country (IC) cases on approximately
200 reservations. Seventy-five percent of the cases are investigated in
the Minneapolis, Salt Lake City, Phoenix, and Albuquerque Field
Offices. Fifty percent of the cases involve death investigations,
sexual and physical assault of children, and felony assaults, with
little or no support from other law enforcement agencies due to the
jurisdictional issues in IC. As a consequence, there are only half as
many law enforcement personnel in IC as in similar sized rural areas.
Furthermore, tribal authorities can only prosecute misdemeanors of
Indians, and State/local law enforcement do not have jurisdiction
within the boundaries of the reservation, with the exception of Public
Law 280 States and tribes.
To address current and emerging crime problems and threats, the
fiscal year 2011 budget requests additional funding for:
--White Collar Crime.--367 new positions (143 special agents, 39 IAs,
and 185 professional staff) and $75.3 million to address
increasing mortgage, corporate, and securities and commodities
fraud schemes, including a backlog of over 800 mortgage fraud
cases with over $1 million in losses per case.
--Child Exploitation.--20 new positions (4 special agents, 1 IA, and
15 professional staff) and $10.8 million to enhance on-going
Innocence Lost, child sex tourism, and Innocent Images
initiatives.
--Organized Crime.--4 new positions (3 special agents and 1
professional staff) and $952,000 to establish, in partnership
with the Criminal Division of the Justice Department, a new
integrated international organized crime mobile investigative
team to focus on combating illicit money networks and
professional money laundering.
--Violent Crime/Gangs and Indian Country.--2 new positions and $328
thousand to provide enhanced forensic services for Indian
Country investigations. Additionally, $19.0 million is
requested as a reimbursable program through the Department of
the Interior to hire an additional 45 special agents and 36
professional staff to investigate violent crimes in Indian
Country.
Operational Enablers.--FBI operations and investigations to prevent
terrorism, thwart foreign intelligence, protect civil rights, and
investigate Federal criminal offenses require a solid and robust
enterprise infrastructure. Our operational and investigative programs
are vitally dependent on core information technology, forensic,
intelligence, and training services. Growth in FBI national security
and criminal investigative programs and capabilities require
investments in our core infrastructure. The fiscal year 2011 budget
proposes 118 new positions (15 agents, 69 intelligence analysts, and 34
professional staff), and $99.0 million for key operational enablers--
intelligence training and transformation, information technology
upgrades, improved forensic services, and facility improvements--
including construction of a new dormitory building and renovations to
existing facilities at the FBI Academy, Quantico.
Program Offsets.--The proposed increases for the fiscal year 2011
budget are offset, in part, by $17.3 million in program reductions, as
follows: $10.3 million in travel; $3.2 million in training; and a $3.8
million reduction in vehicle fleet funding. The fiscal year 2011 budget
also proposes an elimination of $98.9 million of balances for the
construction of a permanent facility to house the Terrorist Explosive
Device Analytical Center (TEDAC), but maintains current funding and
personnel for the FBI's TEDAC program, which is responsible for
analyzing Improvised Explosive Devices that are used in Iraq and
Afghanistan. In addition, to provide long-term support for overseas
operations, the fiscal year 2011 budget proposes to recur $39 million
of the $101.6 million enacted for Overseas Contingency Operations in
the Consolidated Appropriations Act, 2010, a non-recurral of $62.7
million.
Reimbursable Resources.--In addition to directly appropriated
resources, the fiscal year 2011 budget includes resources for
reimbursable programs, including $134.9 million and 776 full time
equivalents (FTE) pursuant to the Health Insurance Portability and
Accountability Act (HIPPA) of 1996; $148.5 million and 868 FTE under
the Interagency Crime and Drug Enforcement Program; and $189.9 million
and 1,303 FTE for the Fingerprint Identification User Fee and the
National Name Check Programs. Additional reimbursable resources are
used to facilitate a number of activities, including pre-employment
background investigations, providing assistance to victims of crime,
forensic and technical exploitation of improvised explosive devices by
the Terrorist Explosive Device Analytical Center, and temporary
assignment of FBI employees to other agencies.
CONCLUSION
Chairman Mikulski and Ranking Member Shelby, I would like to
conclude by thanking you and this subcommittee for your service and
your support. Many of the accomplishments we have realized since
September 11, 2001, are in part due to your efforts and support through
annual and supplemental appropriations. I'm sure you will agree that
the FBI is much more than a law enforcement organization. The American
public expects us to be a national security organization, driven by
intelligence and dedicated to protecting our country from all threats
to our freedom. For 100 years, the men and women of the FBI have
dedicated themselves to safeguarding justice, to upholding the rule of
law, and to defending freedom.
From addressing the growing financial crisis to mitigating cyber
attacks and, most importantly, to protecting the American people from
terrorist attack, you and the subcommittee have supported our efforts.
On behalf of the men and women of the FBI, I look forward to working
with you as we continue to develop the capabilities we need to defeat
the threats of the future.
Senator Mikulski. Budget or otherwise. Well, thank you very
much, Director Mueller, for that testimony.
Issues related to the cybersecurity initiative, as well as
the Christmas Day bombing attempt and the reforms that were
instituted as a result of that, I am going to bring up more in
our closed, classified hearing. But I want the record to show
that this subcommittee is absolutely committed to the
cybersecurity initiative.
The country is at war. The country is familiar with our
wars in Iraq and Afghanistan, but we are at war right this very
minute with cyber attacks on the United States, from cyber
espionage, as you have said, to potential cyber terrorist
attacks on things like critical infrastructure. And then the
cyber activity that is coming through organized crime, in which
they are leading some of the biggest bank heists in world
history.
I have noted your speeches and, in fact, have been
following cyber crime sprees through the way you have reported
them in various conferences you have attended. It is shocking
the amount of money and the amount of people that are being
bilked. So it is everything from identity theft to cyber heists
to cyber espionage that we will focus on in another
environment.
But we are absolutely committed to that. I have just left a
hearing of the Armed Services Committee, where I introduced
General Alexander to be head of the Cyber Command to protect
.mil. But then there is .gov, .com, and .usa. And the work of
you and the homeland security are crucial.
So, well, let us go to protecting our communities. First,
we want to acknowledge the excellent work that the FBI does in
just being the FBI. The FBI is loved. The FBI is respected and
often is brought into some of the toughest and most brutal
situations. But this white collar crime--insidious, virulent,
and despicable--is really undermining our families.
I would like to ask a question about mortgage fraud. My own
home State in some zip codes has some of the highest mortgage
fraud rates in the country. It is terrible to lose your home
because of an economic downturn, but it is even worse if you
have lost your home to some scam or scum that has bilked you
out of it from predatory lending to others.
So we really want to be able to send a message to those who
want to bilk American families when they are pursuing the
American dream that we are going to come after you. So don't
even go there in the first place. I want them to be so scared
that the FBI will come after them because you have exactly what
you need to do that, that they don't even do it in the first
place. And I want you to go after the ones who have done it.
And I know Senator Shelby feels the same passion I do. So
can you tell us how many agents and accountants and so on you
need for the mortgage fraud workload? Tell us the nature of the
workload and tell us the nature of what you think is the way
you would allocate staff to do that. In other words, do you
need more paralegals, or do you need more agents? What is it
that you need?
MORTGAGE FRAUD/WHITE COLLAR CRIME
Mr. Mueller. Well, let me just start by saying we quite
clearly share your sense of prioritization of these cases. And
since we have 2,900 cases in the mortgage fraud arena alone, we
have to prioritize there. We use a variety of methods of doing
so, and we are leveraging not only our capabilities, but the
capabilities of other Federal, State, and local agencies.
We currently have 90 task forces working around the country
to address the mortgage fraud crisis. This year, in direct
response to your question, we are requesting 211 personnel, and
another $44 million to address financial fraud.
With this level of cases, we have had to triage, without a
doubt, and prioritize those cases. But we also are utilizing
new methods, as I pointed out, of intelligence, and identifying
scams through looking through a number of real estate records,
real estate indices, and identifying a number of these schemes
where there are quick turnovers and quick profits and the loss
is spread around the community.
We have been very successful in the last couple of years in
terms of indictments. I mentioned one in San Francisco
recently, but I can get you the full rack-up in terms of what
we have accomplished in the last couple of years.
[The information follows:]
Between fiscal year 2007 and fiscal year 2009, there were 829
arrests, 1,194 convictions, 99 dismantlement, 248 disruptions, 1,337
indictments, and 442 information within the FBI's Mortgage Fraud
program.
We can always use more resources in the white collar crime
arena. Not only do we have mortgage fraud, but you have the
Ponzi schemes that I have alluded to. Last year, we had the
Madoff scheme. I alluded as well to the Petters case out in
Minneapolis, where he was recently sentenced to 50 years, and
we have a number of those.
And so, whether it be the mortgage fraud cases, the Ponzi
schemes, the securities fraud cases, or corporate fraud, we
have probably close to 2,000 agents working in our white collar
crime programs. We could always use more, but I think we are
doing a good job in prioritizing and going after those who are
most responsible for taking the public's money through
fraudulent schemes.
Senator Mikulski. Well, am I correct in saying that in
mortgage fraud and other areas of white collar crime,
particularly financial services and also the Medicare/Medicaid
fraud, that this is essentially the type of crime where those
who are accused will bring in very high-priced lawyers because
they often can afford it, and they are going to do incredible
docu-dumps on the FBI and the task forces involved in this. So
these crimes could go on for years.
My question, in terms of your priority--is it that you are
using technology to be able to scan documents, move these cases
more expeditiously? And also, given the fact that this seems to
also be tied to the economic downturn, as well as a greed
spree, that the use of technology and so on will be able to
help your agents? Could you tell us how you are going to set
through those priorities?
TECHNOLOGY
Mr. Mueller. It is a combination of two things. One is that
technology enables us to utilize public records often to
identify mortgage fraud schemes and the potential players. And
with that information, you can identify one or more of those
persons who should be investigated and indicted, fairly
quickly, and then have those persons cooperate against other
persons in the scheme.
The one thing you do not want to have happen is to be
bogged down with rooms and rooms of documents and going through
them over years. These people need to be brought to justice
swiftly, and to do that, in some sense, you have to treat it as
a narcotics case, where you have some individual who is
inculpated in the scheme and press that person to divulge who
others involved were and provide evidence.
And we push hard to do that, and by doing that, regardless
of the quality of the lowering on the other side, the person
will spend a substantial time in jail. Fifty years for Mr.
Petters out of Minneapolis is an appropriate sentence.
SENTINEL
Senator Mikulski. I like the tough talk. We have to ask
some tough questions, though, about another aspect. I want to
come back, if there is time, on the sexual predator issues, as
well as Medicare fraud. I know Senator Shelby has.
But I must raise a question about Sentinel. There have been
delays in the development of Sentinel, the Bureau's new--it is
a case management system, as I understand it. And you know we
were all over the FBI for a number of years now--connect the
dots, manage your cases better, communicate, collaborate, et
cetera. And technology was to be a tool.
The FBI has had problems in doing this in the past. I want
to know where we are on Sentinel. Is this just a normal delay
that is involved in the development of any significant
technology project, or are we on the road to boondoggle, and
what would you be doing to avoid boondoggle?
Mr. Mueller. Well, let me put some context into the
discussion on Sentinel. There have been criticisms of the
Bureau before in terms of technology, legitimate criticisms.
In many areas, we have been, I think, substantially
successful in terms of providing the agents what they need. We
have something like 27,000 BlackBerrys out there. There was a
concern about access to the Internet.
Senator Mikulski. How many BlackBerrys?
Mr. Mueller. Twenty-seven thousand BlackBerrys. We had
problems with all personnel having access to the Internet. We
have 30,000 persons with access to the Internet now. In terms
of connecting the dots, we have developed a number of databases
that enable us to connect the dots.
Now turning to Sentinel, which is a case management system.
In the wake of Virtual Case File, after Phase 1 of the new
contract, we went to what we called an incremental development
plan. Phase 1 of that plan went very well. We implemented it in
2007, which gives some capabilities that are currently being
used by approximately 2,000 of our personnel.
This is a four-phase project. When it came to the end of
Phase 2 last fall, we saw two things happening. Development
tasks were not closing at the planned rate, and costs were
exceeding the planned levels. We had not seen that prior to
last fall.
Upon finding that we had these issues to address, we
brought in three outside objective entities for independent
reviews. We brought in Mitre, Aerospace, and Booz Allen to
determine what the problem was, and to a certain extent, they
attributed the problem to coding defects.
With that information from the third-party independent
reviewers, we issued a partial stop-work order in order to make
certain that the quality of the product that we were receiving
was up to par, and when we went to the field that it would be a
product that would be welcomed by the users and would advance
the users' capabilities on our systems.
We have been in the process in the last several weeks of
clarifying and addressing those problems. My expectation is
that the pilots will be initiated this summer.
I will tell you that when you have a project that goes over
4 or 5 years, some form of delay is, I wouldn't say inevitable,
but needs to be identified, addressed and contained. I think we
have done it here. But when you have a program where the
requirements were laid down in concrete 4 or 5 years ago,
technology changes, business practices change, complexity
requirements change, and one can expect some minor delays. For
us, it is working with our contractor to push it through and
make certain that Phase 2 is completed this summer.
I will say, having been through this path before, I am
cautiously optimistic that we are on the path to get that
accomplished. If I do, at some point, believe that it is not
working, I will take whatever steps are necessary on the
contract to make certain we push through and get Sentinel on
the desks of everyone who needs it.
Senator Mikulski. Well, do you believe that the contractor
has had a sufficient wake-up call and is ready and cooperating
with you, meaning the FBI and its chief information people----
Mr. Mueller. I do believe that is the case. Senior
management, with whom I have been in contact over the duration
of this contract, understands that issues related to quality
control have to be addressed and rectified and has put not just
the senior-level management on it, but the persons that can
accomplish that.
Senator Mikulski. Well, first of all, I want to acknowledge
that you did oversight of the project, and I know--I believe
you have been personally involved in overseeing this. Am I
correct?
Mr. Mueller. Yes, and we wanted oversight from all outside
entities, including Congress. This is something that we want to
make certain is successful. So, yes, I have had personal
oversight of it.
Senator Mikulski. Oh, no, I know you weren't the only one.
But often this is delegated, and then you went to three outside
reviews to be sure that you were keeping this on track. So you
feel confident that you have the plan to move this forward?
Mr. Mueller. Yes.
Senator Mikulski. Do you have an estimate of cost?
Mr. Mueller. Not yet.
Senator Mikulski. Do you have a complete plan on when this
will be fully operational?
Mr. Mueller. No. My expectation is that Phase 2 should be
operational by the fall.
Senator Mikulski. So we will have this back from you before
we mark up our bill?
Mr. Mueller. Yes.
Senator Mikulski. Thank you. Well, thank you very much.
Mr. Mueller. One other thing, if I can, Madam Chairwoman?
It was supposed to be completed in 2010. And this delay, I want
to acknowledge, is going to push it into 2011 for completion of
this project. But my expectation is it will be completed in
2011.
Senator Mikulski. Thank you.
Senator Shelby.
TEDAC
Senator Shelby. Thank you, Senator Mikulski, Chairwoman.
Mr. Director, as I indicated in my opening remarks, the
administration's proposed rescission of $98 million in funding
for the Terrorist Explosive Device Analytical Center is
troubling, given the FBI and the Joint Improvised Explosive
Device Defeat Organization [JIEDDO]--how do you pronounce it?
Mr. Mueller. I think ``jay-doh.''
Senator Shelby. The JIEDDO commander's support for this
facility. Do you believe, Mr. Director, that the TEDAC is a
critical element necessary for the FBI to meet its
responsibilities to the American public?
Mr. Mueller. I absolutely do. I am a great believer in the
benefits of TEDAC. It has shown itself over and over again to
be exceptionally valuable in identifying IEDs, not just in the
United States, but IEDs throughout the world.
Senator Shelby. Did the FBI request additional funding to
construct a facility to support the TEDAC mission above the
amount Congress had already provided? You know we have been
funding this for a number of years.
Mr. Mueller. Well, there was the $98 million I think we are
talking about. And of course, we requested that funding and
appealed it at the appropriate levels.
Senator Shelby. When the FBI was informed of the proposal
by the administration, OMB, to cancel the funding to construct
the facility to support the mission, did the Bureau appeal that
decision to OMB?
Mr. Mueller. Yes, sir.
Senator Shelby. Thank you.
So you basically believe it is necessary we build this
facility because it will help you do your job to protect the
American people?
Mr. Mueller. Yes, sir.
Senator Shelby. It is my understanding, Director Mueller,
that the volume of submissions to TEDAC has overwhelmed its
capacity, resulting in a substantial backlog. The FBI estimates
that 86 percent of the 33,000 evidence boxes within the backlog
contain DNA or fingerprints from a still unidentified insurgent
who was involved in an IED attack against the U.S. military
personnel who may seek to enter the United States.
Today, a terrorist could be stopped at a checkpoint in
Afghanistan and go unidentified because the FBI has not yet
analyzed the evidence against him because you don't have the
facilities.
Mr. Mueller. That is true, Senator. Throughout the world,
the ability to identify persons who leave their fingerprints or
DNA on IEDs is tremendously important, and the backlog to which
you allude needs to be triaged. We have to take the most
serious IEDs and prioritize. And having an additional facility
with additional analysts, both from the military as well as
ourselves, would quite clearly cut deeply into that backlog.
Senator Shelby. It would help you tremendously, would it?
Mr. Mueller. Yes, sir.
DNA POLICY
Senator Shelby. I want to get into DNA policy, Director
Mueller. Reducing the DNA backlog is one of the single most
important issues facing all of law enforcement in this country,
including the Bureau. But in doing so, I think we must do it
the right way and guarantee the integrity of the process.
As stated in the FBI press release, the FBI is performing--
and I will quote--``a review to determine what improvements can
be made to facilitate more efficient and timely uploading of
outsourced DNA data into the NDIS, and no changes have been
made to any procedures or standards to date'' in the press
release.
Nearly every public crime lab in America, including the
FBI's own advisory scientific working group on DNA analysis,
are in favor of keeping the DNA technical review policy as it
currently stands. After having seen the timing of the FBI's lab
press release, correspondence from private DNA lab executives
taking credit for pushing this initiative within the FBI, and
celebratory statements praising the FBI for a position you just
said the FBI has not changed or has indicated, I hope you share
my concern about the origin of this decision.
I understand the FBI has a backlog of almost 300,000 DNA
samples for the Federal DNA database, and I guess my question
is, what are you doing to reduce this backlog? And when do you
plan to have it eliminated completely?
Mr. Mueller. Well, let me start with the backlog and then,
if I could, discuss the uploading of DNA analyses that have
been performed by private laboratories.
Senator Shelby. Okay.
Mr. Mueller. With regard to the backlog, we expect to have
that backlog reduced to almost nothing by September of this
year. We currently do 25,000 uploads into the database per
month. We expect to go to 90,000 by September and reduce the
backlog to the point where we can have a 30-day turnaround.
Now that reduction in backlog is attributable to several
factors. The first was the 2009 budget. You gave us 29
additional personnel who have now been hired and are reducing
that backlog. We are making enhanced use of robotics in new and
different ways. And last, we have realigned staff. All of which
I will say has been done under the auspices of our laboratory
director.
Let me turn to the issue with regard to the role of private
laboratories and nongovernmental entities compared to
Governmental entities. Let me first start by saying that we
have not, are not, and will not consider giving nongovernmental
entities access to CODIS. That is not on the table.
We have been pressured by police departments and others to
look at the technical review process, whereby a review is done
by a private laboratory, and before it is uploaded into CODIS,
there has to be a technical review. What we are looking at is
if there are any ways to improve the efficiency and the timely
uploading of the DNA samples into CODIS without reducing any of
the quality control requirements that would allow, perhaps by
reduction, samples that we do not want ingested into that
system.
Senator Shelby. Do we have your assurance that all voices
of State and local crime labs will be at the table during any
DNA policy review discussion? I mean----
Mr. Mueller. Absolutely. And let me also say that I have
heard what you have said about influence from the outside. I
had not myself heard of that at all. What I had heard, and what
ultimately triggered that I look at it, were requests by
particular police departments that we improve and enhance the
efficiency and the timeliness of the uploading of DNA samples,
for example rape kits, into CODIS.
And in my mind, that is what triggered the review, and it
is appropriate that we do it. It is certainly appropriate that
we have the input of everybody involved as we go through that
review.
Senator Shelby. But the key to it is to protect the
integrity of the system, is it not, and the evidence that comes
from it?
Mr. Mueller. Yes, sir.
Senator Shelby. Thank you, Madam Chairwoman.
Senator Mikulski. Senator Pryor.
MEXICAN BORDER
Senator Pryor. Thank you, Madam Chairwoman.
Director Mueller, thank you for being here today. I just
have a few questions about your agency and some of your
efforts.
We had a hearing in the Homeland Security Subcommittee, one
of the subcommittees that I chair there, not long ago, about
how the Mexican drug cartels are trying to corrupt the Customs
and Border Protection agency here in the U.S., and maybe
others, in terms of trying to provide money so that they will
look the other way when they are bringing in drugs and people
and everything else.
I know that you are very aware of that, but I am glad to
see that there are a number of Federal agencies, including the
FBI, who are trying to work on this. My question is, do you
feel like we are making the right kind of progress there?
Because that is a very disturbing development to me.
Mr. Mueller. I do, Senator. And I can speak to what we are
doing, but also allude to what is being done by other agencies,
particularly DHS.
We have 11 border corruption task forces now, where we have
State, local, and other Federal agencies that are working on
these task forces. From the perspective of the FBI, we have
more than 100 cases of corruption that we are currently
investigating along the border--many, if not most of them being
investigated by these border corruption task forces.
I will also say that with the increase in personnel for
Border Patrol, Immigration, and the like, there has been
enhanced capability in DHS to address that problem, as well as
enhanced exchange of information and working together on what
is a very serious problem on the border.
Senator Pryor. I noticed that there has been a lot of
violence around the border area--especially to the south of us,
but certainly it is spilling over into the United States, and
it is touching the United States in various ways. Is the FBI
concentrating some resources down there to try to get that
under control at least within our borders?
Mr. Mueller. Yes. In addition to addressing public
corruption, the two other areas in which we have expanded our
capabilities are cross-border kidnappings, and intelligence.
With regard to cross-border kidnappings, we have bilateral
kidnapping task forces in Nuevo Laredo, just as an example.
What one finds is that persons who have businesses in Mexico or
family in Mexico, and live in the United States, will travel to
either see family or their businesses, and are kidnapped. And
so, there will be that cross-border dynamic. We have teams
along the border that address that.
I would say that it has been fairly stable over the last
couple of years. We haven't seen a peak. It is still an issue,
but we haven't seen an uptick. These particular task forces
with specialized capabilities have been effective in
identifying the kidnappers and, working either under the
Mexican judicial system or ours, incarcerating them.
One other aspect I will spend a moment on is the Southwest
Intelligence Group. About a year ago, after visits to Mexico
and with our Legal Attache and looking at what we were doing
along the border, I believed that we could enhance our
information sharing by putting together an intelligence group
down in El Paso.
It is a group that includes intelligence from each of our
border offices, as well as our Legal Attache office in Mexico
City and headquarters, so that all are looking at the same
intelligence and driving our activities. But it is also
integrated with the other intelligence agencies and other
intelligence groups that operate out of EPIC, the El Paso
Intelligence Center.
DRUG INTERDICTION METRICS
Senator Pryor. Let me ask about your metrics on how you
measure your effectiveness. You have something like a
kidnapping or a murder, I think it is pretty easy to measure
that, and you can see the numbers move up or down.
But my understanding is that the Mexican drug cartels have
a presence in, I believe, it is 180 U.S. cities. I think there
are three in my State, where they actually have a presence
there, and a lot of the methamphetamine, cocaine, marijuana, et
cetera, is coming up through Mexico.
Are you able to measure how effective your efforts are in
preventing those drugs from coming into the United States in
the first place, and the gang and general criminal activity
that is almost pervasive in our country because of the Mexican
drug cartels?
Mr. Mueller. We traditionally have used a number of metrics
such as the number of kilos of cocaine picked up coming across
the border and the number of leaders who have been indicted and
extradited. These metrics show you something, but not
necessarily what would be most beneficial.
What we try to look at is if you have a pocket--it can be a
gang, it can be Mexican traffickers--where do you have an
impact on the community? Where you have a homicide rate of 20
percent in a particular area of the city one year, what we want
intelligence to do is to look at, who are the shooters? Who is
responsible for this 20 percent in this particular community?
Then, what is the strategy for addressing it?
At the end of the day, I don't care how many leaders are
arrested and go away forever, but I want to see a drop in that
homicide rate, because that is the ultimate test. And so, we
are trying to drive toward a metric system that goes further in
evaluating the impact on the community, as opposed to the
traditional statistics that we ordinarily have touted.
Senator Pryor. Madam Chairwoman, if I could just ask one
more question as a follow-up? Given the presence of the Mexican
drug cartels and the intensity of their activity in Mexico, and
the United States, do we have the right laws on the books? In
other words, do you have enough tools in the toolbox that you
can use?
I know years ago, the Congress passed the Rackateer
Influenced and Corrupt Organizations Act [RICO] and other
things. And in Arkansas, we have passed gang-type laws that, in
effect, are like State RICO-type acts. But do you need any new
laws on the books to help you address this very serious
problem?
Mr. Mueller. In terms of statutes, such as the RICO
statute, the continuing criminal enterprise statute or gang
statutes, not really. I do believe that along the border, as
with the terrorism threats we face in this country, a greater
understanding and necessity of sharing intelligence across the
intelligence community and the law enforcement community is
important.
Looking at a legal structure, a structure that enables us
to share the information, or enables the foreign intelligence
community to more easily share information on U.S. citizens
with law enforcement communities such as ourselves, are areas
that we ought to be looking at down the road. Because
historically we have grown an intelligence community that looks
outward, a law enforcement community that looks inwards--there
are artificial distinctions that terrorists and criminals don't
care about at all. For us to do the kind of work that we need
to do, there has to be the maximum possible integration and
flow of information from the intelligence community, whether it
is in Mexico, Afghanistan, Yemen or Pakistan, with the domestic
community. And there are still legal impediments to that flow
of information that we ought to be working on.
CHILD PREDATORS
Senator Mikulski. Thank you very much, Senator.
Before we wrap up this open session, I have two points that
I want to make. One is on the issue related to predatory
behavior related to children.
In 1996, Innocent Images was established in Calverton,
Maryland, because of a despicable situation with a little boy.
As I understand it, the caseload has grown by more than 200
percent. That the caseload of Innocent Images has gone from 113
cases to where you have 2,500 opened right now in this
situation.
Do you feel that you have enough resources to be dealing
with this magnitude of caseload and also with the fact that
this is now involved with international activity?
Mr. Mueller. We could very easily, tomorrow, double,
triple, or quadruple that caseload. There are so many
opportunities out there. We have to, again, prioritize and
triage. Throughout the country, we work with State and local
law enforcement and hope to better leverage our capabilities
with them.
As horrendous as this is, and everybody recognizes it is,
State and local law enforcement are being cut. And so, the
ability to leverage State and local law enforcement in this
arena is not as great as I would like it to be.
We also have focused on what we call ``Innocence Lost,''
where young children are brought into prostitution rings and
the like. And so, we put our efforts there as well as Innocent
Images.
The last thing I would say where we could always use
additional funds that would be beneficial as part of the
Innocent Images project is to bring our counterparts from
overseas who are doing this to Calverton to work
internationally on child pornography rings. That has been
tremendously beneficial.
So, whether it is Innocence Lost or the projects we have
with our international counterparts coming here for training
and joint investigations, we could always use more resources.
But I think we are doing a very good job with what we have.
Senator Mikulski. So the key here is working with local
partners. Is that correct?
Mr. Mueller. It is, local and international.
MEDICARE AND MEDICAID FRAUD
Senator Mikulski. And my last point is this. We just passed
health insurance reform. And as I moved around my State,
whether it was in diners or grocery stores or listening to
people, they were saying read the bill, and others were saying
expand access. One of the things that people really didn't
believe was that we were going to help reduce costs by reducing
waste, fraud, and abuse. When you use that phrase, they hold
their sides and laugh. They don't think that we really mean it.
I believe that there is a real commitment on this
subcommittee, and people like Senator Tom Coburn had excellent
ideas. I believe Secretary Sebelius. We really have to do
something.
Now I noted in your testimony how you recovered, I think,
$10 million from somebody who was supposed to be helping AIDS
victims, and they were indulging in very lavish lifestyles. Mr.
Director, I believe that there hasn't been nationally, in every
agency, the kind of vigor that we need really in pursuing
Medicare and Medicaid fraud. This is not finger-pointing at you
in any way.
Does the administration now have a sense of real urgency to
pursue this? And No. 2, do you feel in this year's fiscal
request that you have the resources to do this?
This budget was submitted before we passed healthcare
reform. But if we are going to show the taxpayer we are really
serious about helping pay the bill by making sure that we get
value for our dollar, value medicine, and also making sure we
come after those who engage in fraud in Medicaid and in
Medicare, could you share that with us? And that will be my
last question on this.
Mr. Mueller. We have received additional resources this
year. I can tell you that in the future, we will be asking for
substantial additional resources, and not just for us, but also
with HHS, because much of the record keeping is in that domain.
In order to get ahead of the curve, identifying the schemes
could be done at the point of contact or the point of
reimbursement, as opposed to waiting for the field work when
they become endemic in a particular community.
We currently have seven task forces spread around the
country, and we are in cities where we have identified the
greatest threat. We will continue to do these intelligence
reports as to where the threats are and come back for
additional resources to address those threats once we identify
particular pockets in the United States where it is most
prevalent.
Senator Mikulski. Well, I am going to back you 100 percent
on this because I want to say promises made, promises kept. We
are really going to go after that fraud and abuse.
Senator Shelby?
INNOCENT IMAGES
Senator Shelby. Thank you, Senator Mikulski.
I want to follow up in the area where she has been going.
Mr. Director, in July 2007, you testified before the House
Judiciary Committee that, and I will quote you, ``Child
exploitation is a substantial priority for the FBI,'' and I
know it is. When asked why the FBI was not doing more then, you
said, to the extent that I can obtain additional resources to
address child pornography, you would be willing to do so, in
other words.
Since that time, Congress has increased annual funding for
the FBI's Innocent Images program from $10 million to $52
million. That is an increase of over 500 percent--perhaps not
enough, I know. Has the FBI increased the number of child
exploitation cases referred for prosecution here, and about how
many? And if you don't know offhand--oh, I think you do
offhand. You have got great staff here.
Mr. Mueller. I can tell you in 2006, we had 918 arrests, in
2007, 1,114 and in 2008, 1,110. They were about the same in
2007 and 2008, and I would have to get you 2009. They have
increased, but I hope that they would increase even more.
[The information follows:]
In fiscal year 2009, there were 1,062 arrests.
I will tell you, though, that I am not certain that the
arrests in the United States totally reflect the work that has
been done. Many who are involved in this activity can see the
kind of attention it gets in the United States and often go
offshore. The customers will be in the United States, but the
focal point, the servers, the information will be in computers
and servers in countries that have much more lax rules and much
less developed approaches to addressing this.
One of the benefits that we have had from the Innocent
Images project as we have grown it is the international
capability. So, you will have the encrypted servers in the
Netherlands or Romania or someplace else and will begin the
investigation here. They will be investigated here, but the
arrests will be made overseas. And so, it is a worldwide
phenomenon. Borders are meaningless.
When you look at the metrics for the success of the
program, we have to look at not just what is happening in the
United States--we are pretty darned good at it--but what is
happening internationally. And we are becoming even better at
it internationally.
Senator Shelby. But it is a sordid problem, is it not? And
it is billions of dollars involved worldwide, is it not?
Mr. Mueller. It is, indeed.
Senator Shelby. We know you are committed to fighting that.
And some of the people in the local and State law enforcement,
they petition us at times and say the Bureau is not doing
enough, are you not involved. But I believe you are involved.
It is just a heck of a problem to get your hands around, isn't
it?
Mr. Mueller. It is. And there is not an FBI agent, analyst
or support staffer in the United States who doesn't, when you
can identify and free a victim who has been abused and it goes
on the Internet. There is nothing more rewarding than freeing a
victim from this kind of activity.
Senator Shelby. But a lot of that child pornography is paid
for through the credit card system, is it not?
Mr. Mueller. It is.
Senator Shelby. We have had hearings on that in the Banking
Committee, and are working with the FBI and the Justice
Department on that. And a lot of it can be traced to
international crime syndicates, can it not?
Mr. Mueller. It can. Much of the credit card usage is
traced. Being on Banking, you know, groups like this are always
looking for the next financial capability which minimizes any
records. And consequently, these groups, such as organized
criminal groups and terrorist groups, are always looking for
the next card that will leave no trail whatsoever.
And they have been valuable tools in identifying the
networks, and hopefully, they will continue to be valuable
tools to identifying the networks to the extent that they leave
some sort of trail that we can follow.
Senator Shelby. Thank you.
Thank you, Madam Chairman.
ADDITIONAL COMMITTEE QUESTIONS
Senator Mikulski. If there are no further questions,
Senators may submit additional questions for the subcommittee's
official hearing record. We request the FBI's response 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
CYBERSECURITY INITIATIVE
Question. The FBI requested $182 million for the Cyber Initiative
in fiscal year 2011. The FBI has unique authorities to collect domestic
intelligence and investigate foreign intrusions to government and
private networks.
Cyber intrusions are increasing, and threaten the U.S. economy and
security. Foreign firms are hacking into U.S. corporate networks,
stealing trade secrets and reducing U.S. competitiveness.
Terrorist groups and foreign nations building cyber intrusion
abilities could shut down power grids and financial systems, and steal
U.S. counterterrorism information, like IED jammer technology.
Could you describe the FBI's unique role in the protecting
cyberspace, and what can you do that other agencies can't?
Answer. The FBI has a unique role in protecting cyberspace, as the
FBI is the only agency within the U.S. law enforcement and Intelligence
Community (IC) that has primary domestic law enforcement, counter-
terrorism, and counter-intelligence authorities over all domestic
investigative aspects of computer intrusion cases. Cyberspace
transcends national borders, and the threat actors that operate through
cyberspace utilize computers and networks, both domestically and
abroad, to achieve their goals. While many threat actors may physically
reside in another country, rarely do they reach out directly to their
target. Instead, threat actors frequently ``hop'' from one computer to
the next to cover their tracks, include passing through both foreign
and domestic networks.
The FBI's ability to work with domestic victims of cybercrime and
cyber espionage, and ferret out U.S.-based criminal and espionage
operations has enabled U.S. Government and private sector targets alike
to thwart attacks and help determine attribution. The FBI augments the
rest of the USIC by providing this domestic role under a mature set of
Constitutional, statutory, and executive branch authorities,
established investigatory guidelines, and tightly interwoven judicial
and congressional oversight, which helps protect the privacy and civil
liberties of U.S. citizens. Similarly, through the federated efforts of
the FBI's 56 Field Offices, the FBI can quickly target and collect
information domestically and provide quick notification to potential
victims of cyber crime, espionage, or attack.
The FBI also provides community leadership in the form of the
National Cyber Investigative Joint Task Force (NCIJTF) which, by
mandate of the President, is led by the FBI as the multi-agency
national focal point for coordinating, integrating, and sharing
pertinent information related to cyber threat investigations. This
shared information is then used to determine the identity, location,
intent, motivation, capabilities, alliances, funding, and methodologies
of cyber threat groups and individuals--all of which is necessary to
support the U.S. Government's full range of options across all elements
of national power.
Question. How do we make sure that agencies communicate, coordinate
and cooperate?
Answer. The FBI-led National Cyber Investigative Joint Task Force
(NCIJTF) provides a collaborative work environment that promotes
communication, coordination, and cooperation amongst member agencies.
In fact, the NCIJTF recently received an award from the Office of the
Director of National Intelligence for its successful role in
interagency collaboration.
Question. How will you attract tech-savvy analysts and agents when
they could make more money in the private sector?
Answer. Fundamentally, the FBI's ability to attract individuals who
can make more money in the private sector relies on employee
patriotism, the FBI's proud history, and the FBI's continuing ability
to provide its workforce with meaningful, cutting edge opportunities to
protect the country. The FBI Cyber Division and Directorate of
Intelligence work in conjunction with the Human Resources Division to
recruit tech-savvy analysts and agents.
Question. How will you keep pace with the advanced technology used
by our adversaries?
Answer. The FBI Cyber Division has a Cyber Education and
Development Unit which provides continuing specialized high-tech
training to agents and analysts to keep pace with adversary cyber
capabilities. The FBI Science and Technology Branch seeks to enable the
FBI's continuing ability to collect, forensically recover, and
manipulate information lawfully acquired in cyber cases. Still,
numerous challenges remain. The FBI implemented a ``Going Dark''
program in response to the need to maintain lawful electronic
surveillance, intelligence collection, and evidence gathering
capabilities which, if eroded, will severely impact the FBI's ability
to keep pace with our adversaries.
Question. Is the FBI's budget request for the cyber initiative
adequate to meet your responsibilities?
Answer. The terrorist, nation-state, and criminal cyber threat,
which takes advantage of systemic vulnerabilities in our increasingly
networked, computer driven environment, continues to outpace the
ability of the FBI and its government and private sector partners to
drive it down or even keep it in check. Budget increases, however, have
helped the law enforcement and the intelligence community better
monitor and report on the threat, and have increased tactical successes
to include the prevention of specific acts of network and data
compromise.
Question. How will you expand you capabilities in future years?
Answer. The FBI expects future capabilities to focus on improved
capacity, agility and efficiency, particularly with regards to analysis
and collection; enhanced community situational awareness; and expanded
collaboration with critical infrastructure owners and operators.
CHRISTMAS DAY BOMBING ATTEMPT
Question. In the aftermath of Christmas Day attempted bombing, the
FBI was criticized for its handling of terrorist suspect Umar Farouk
Abdulmutallab (Ab-dool-mu-tall-ab), who was immediately interrogated by
local FBI agents, rather than specialized terrorist investigators.
Abdulmutallab was given a Miranda warning 10 hours after arrival,
rather than being placed in military custody.
What is the success rate when terrorist suspects comply with the
FBI in terms of valuable intelligence gathered and for convictions in
Federal courts?
Answer. The FBI has a long history of successfully collecting
valuable intelligence from the interrogation of detained terrorism
subjects. Through interviews of individuals held in Federal criminal
custody in the United States, as well as detainees held in U.S.
military or foreign service custody abroad, the FBI has collected
information that has led to the disruption of terrorist plots and has
saved American lives. The FBI's rapport building techniques, as well as
the legal incentives built into the Federal criminal process, routinely
convince terrorist subjects to cooperate and provide voluntary
statements during interviews. The results of these interviews are
rapidly disseminated to the United States Intelligence Community (USIC)
through the publication of Intelligence Information Reports (IIRs) and
other intelligence products. Terrorist subjects who cooperate with the
FBI contribute greatly to the USIC's understanding of terrorist
networks by exposing operational activity, identifying leadership
structures and associates, describing training methods, locating
facilities and exposing facilitation networks.
Question. What value do FBI interrogations provide that outside
terrorist interrogation unit does not?
Answer. The FBI cannot speak for other terrorist interrogation
units and can only stress that the FBI has had a long history of
successfully collecting valuable intelligence, leading to the
disruption of terrorist plots and successful prosecutions of
terrorists.
Question. Can you describe for us Mr. Abdulmutallab's cooperation
pre-Miranda warning? What was his cooperation post-Miranda warning and
is he cooperating now?
Answer. Although during his initial pre-Miranda interview, Umar
Farouk Abdulmutallab deliberately provided misleading information to
investigators, he did admit to facts and readily apparent details about
the attack, including his desire to detonate the bomb over the United
States. The details of the story he told were fabricated and contained
misleading information lacking intelligence and investigative value.
Initially, post-Miranda, Umar Farouk Abdulmutallab indicated he did
not want to answer any additional questions regarding his bombing
attempt. Subsequent to his indictment on January 6, 2010, FBI Detroit
was able to gain his cooperation with law enforcement. In late January,
Abdulmutallab agreed to begin participating in a series of proffer
sessions in exchange for the possibility of a future plea agreement. He
remains available for interviews as needed.
Question. Under what circumstances could Mr. Abdulmutallab have
been turned over to the military to be held as an enemy combatant? Who
would need to provide you that guidance--the President, the Attorney
General?
Answer. Pursuant to Homeland Security Presidential Directive-5, the
Attorney General has lead responsibility for any terrorism act
committed within the United States. Consistent with that
responsibility, the FBI will respond to the scene of any such attempted
terrorist attack and will conduct an appropriate investigation in
compliance with the Attorney General's Guidelines for Domestic FBI
Operations. The FBI has no legal authority to proceed against a
terrorism suspect who is arrested within the United States in any venue
other than an Article III court.
There have been only two instances since 2001 in which civilians
arrested within the United States were placed in military custody for
some period of time. In both instances, the individuals were initially
taken into custody and detained by Federal law enforcement officials.
The transfers from law enforcement to military custody occurred by
order of the Commander in Chief, and the civilians were later returned
to Article III courts for disposition of their cases.
Question. Why was Mr. Abdulmutallab not on the No-Fly List?
Answer. The Terrorist Screening Center (TSC) did not receive a
nomination to watchlist Umar Farouk Abdulmutallab prior to December 25,
2009, and, as a result, he was not watchlisted in the Terrorist
Screening Database (TSDB). The inclusion of an individual on the No Fly
list (which is a subset of the TSDB) requires both sufficient
biographical information and sufficient derogatory information, so the
possession of only one of these would have been insufficient for
inclusion on the No Fly list. It is the FBI's understanding that
information provided by the State Department contained sufficient
biographic information but lacked sufficient derogatory information to
place Abdulmutallab on the watchlist. We also understand that
additional fragmentary information that included sufficient derogatory
information but lacked sufficient biographic information was available
from another agency, but that information was not linked to
Abdulmutallab until after the attempted Christmas day attack.
Following the attempted terrorist attack on December 25, 2009, the
President initiated a review and as a result, TSC was given two
instructions.
--Conduct a thorough review of the TSDB and ascertain the current
visa status of all known and suspected terrorists, beginning
with the No Fly list. That process has now been completed.
--Develop recommendations on whether adjustments are needed to the
watchlisting Nominations Guidance, including biographic and
derogatory criteria for inclusion in Terrorist Identities
Datamart Environment (TIDE) and TSDB, as well as the No Fly and
Selectee lists. The Nominations Guidance refers to the Protocol
Regarding Terrorist Nominations that the TSC issued to the
watchlisting and screening community in February 2009, and its
appendices issued at various dates (collectively, ``2009
Protocol''). The Presidentially-directed review has been
completed and adjustments have been made to the 2009 Protocol.
The updated document has been renamed the ``Watchlisting
Guidance.''
The Watchlisting Guidance was developed by an interagency working
group that included representation from the Department of
Justice, Department of Homeland Security, Central Intelligence
Agency, National Security Agency, Department of Defense,
Department of State, Department of Treasury, and the Office of
the Director of National Intelligence. In response to the
President's January 7, 2010 corrective actions memo, the
interagency working group thoroughly reviewed the 2009 Protocol
and applicable appendices to develop recommendations for the
National Security Council/Homeland Security Council (NSC/HSC)
Deputies Committee's approval.
Based on these recommendations, the NSC/HSC Deputies Committee
approved the entire Watchlisting Guidance for issuance to the
watchlisting and screening community in July 2010.
OVERSEAS CONTINGENCY OPERATIONS
Question. The fiscal year 2011 request includes funding for
Overseas Contingency Operations (OCO) totaling $38 million, which is
$63 million less than fiscal year 2010 omnibus of $101 million.
OCO support FBI operations in Afghanistan and Iraq, including
international deployment, overtime and hazard pay, other
counterterrorism requirements. Administration says DOD is pulling out
of Iraq. But FBI is ramping up operations in Iraq and Afghanistan,
working side-by-side with our military forces. FBI's presence is
expected to remain for years to come in both. The Bureau stills need
sufficient resources to carry out its mission.
What will the $38 million requested for OCO be used for?
Answer. Current plans for the $38 million requested for fiscal year
2011 Overseas Contingency Operations funding include support for
technical collection efforts focused on terrorist targets, equipment
and supplies for deployed personnel, language support, investigative
operational costs, and funding for the Afghanistan mission.
Question. What is the reason for the $63 million reduction for
Overseas Contingency Operations support for FBI activities?
--What strain will this reduction place on FBI personnel stationed
overseas?
--Can you tell us what you would not be able to do if this funding
was cut?
--Will this reduced funding level put FBI personnel in danger?
--Would the loss of this funding make it more difficult for the
Bureau to work internationally to combat and prevent terrorism?
Answer. The President must make many tough decisions as he prepares
the annual budget request. The Overseas Contingency Operations (OCO)
resources provided for in the President's fiscal year 2011 budget
request will allow the FBI to continue to support its presence in Iraq
and Afghanistan. The $38 million requested for fiscal year 2011 OCO
funding will provide support for technical collection efforts focused
on terrorist targets, equipment and supplies for deployed personnel,
language support, and investigative operational costs.
Question. How long will there be an FBI presence in Afghanistan and
Iraq?
Answer. Currently, the FBI plans to maintain its presence in
Afghanistan and Iraq and keep open its Legal Attache offices in those
countries.
RENDER SAFE MISSION
Question. The FBI is now responsible for the Render Safe mission,
which involves dismantling a radiological device on U.S. soil.
The fiscal year 2011 budget request includes $91 million for the
FBI's ``Render Safe''. This provides $35 million for a multi-year
purchase of two new specially-configured aircraft to carry out the
Render Safe mission. The FBI currently uses one leased plane to carry
out its mission. The lease that will end in fiscal year 2013.
Why does the FBI need two new planes when it currently conducts its
mission with one?
Answer. Please note that classified details are required for a
complete understanding of these Render Safe responses. Further
information may be provided under classified cover.
Due to a National Security Council (NSC) imposed cost ceiling
during the initial response development, the current lease provides a
primary aircraft with secure and redundant communications systems and a
backup aircraft to cover and support unexpected primary aircraft
mechanical failure and maintenance down time. However, the current back
up aircraft does not have the necessary communications systems to
support the transmission and receipt of time critical data or the
ability to communicate directly with on-site responders, FBI
Headquarters Assets, and national leadership; facilitating the
development of a Render Safe solution. As a result of the lack of
communications on the backup aircraft, the U.S. Government assumes
operational risk during maintenance down time (approximately 45 days
per year). Outfitting both aircraft with the specialized communications
is a critical mission component providing positive command and control
from the responding Render Safe assets to the national leadership and
the Department of Energy (DOE) National Laboratories. This link allows
mandatory mission decisions to be relayed from the President and/or
Attorney General to the response force. The in-flight communications
also link the response force to the DOE National Laboratory, allowing
the radiography to be simultaneously analyzed by the scientists and
bomb technicians while en route to the incident site; thus, reducing
the time required to assess the device once at the incident site.
Without this capability, the response time from deployment of Render
Safe assets to disarmament is increased, thus increasing the risk of
mission failure.
Based on a 15-year mission life, acquisition of new response
aircraft is approximately $225,000 less expensive than extending the
existing aircraft lease, if leasing were an option. Purchasing the two
aircraft:
--Complies with the U.S. Government capital leasing regulations and
OMB Circular A-11 stipulations.
--Saves approximately $225,000 over a 15 year period versus current
lease of the same duration, if leasing were an option. Saves
approximately $94 million over a 15 year period versus a two-
aircraft lease of the same duration.
--Increases the FBI's ability to respond to multiple incidents; thus,
in times of emergency the overall USG Emergency Render Safe
response is increased by 100 percent.
--Increases the range of the response aircraft by approximately 25
percent.
--The new aircraft will include a modular design for the
communications and antennae array. The new communications and
antennae configuration will require a less intrusive (hull
penetration) process to upgrade technologies as they change;
thus creating a cost savings for labor.
Question. What is the cost of the current lease and how often has
the current plane been used?
Answer. Please note that classified details are required for a
complete understanding of these Render Safe responses. Further
information may be provided under classified cover. The annual lease
cost for the Render Safe mission aircraft is $14.48 million. As noted
in the previous response, the identified aircraft lease cost does not
include the secure and redundant voice and data services and
infrastructure used to establish the communications architecture.
Due to the deployment criteria agreed to by the National Security
Councils Principals Committee, the Render Safe alert aircraft and
responders maintain a stringent response requirement that renders the
aircraft unavailable for other FBI mission taskings. Over the past year
the alert aircraft has flown to support the following:
--Execution of four no-notice deployment exercises.
--Execution of four full scale, interagency field exercises, used to
test Render Safe operational plans, and provide all echelons of
the national response the experience to successfully face this
threat.
--Weekly communications exercises with the interagency response
assets and command centers.
--Re-location of the Render Safe alert response due to inclement
weather at the alert staging location.
Question. What are the final overall costs for these new planes,
including the special equipment and dedicated personnel?
Answer. Acquiring two, specially-configured, refurbished aircraft
will cost approximately $74.3 million and will require $14.1 million in
annual Operations and Maintenance (O&M) to provide for the crew and
ground support personnel.
The aircraft can be purchased and refurbished within 1 year for
$35.8 million and would require the recurral of the fiscal year 2011
requested funding, plus an additional $2.7 million in the second year
for specialized aircraft outfitting and mission preparation.
Based upon the proposed schedule, one of the two aircraft will be
operationally available by the middle of the second year, and the
second aircraft will be operationally available by the end of the
second year, thus both will require O&M funding in the second year.
Question. Why is it important that you purchase these planes rather
than renew the current lease?
Answer. The FBI conducted a Lease-Versus-Buy analysis in accordance
with regulations established in the OMB A-11 circular, which determined
that the requirement for the FBI to develop and maintain this
capability prohibited the long-term continuation of the current
aircraft lease.
The analysis also revealed that lease values quickly exceeded 90
percent of the market value of the aircraft and that the FBI would
experience a payback within approximately 5 to 6 years when aircraft
are purchased rather than leased. With a 10-year minimum capability
requirement, the lease term exceeds 75 percent of the estimated
economic lifetime of the asset, which is at least 25 years.
Additionally, the present value of the minimum lease payments over the
life of the lease, which would be a minimum of 10 years, exceeds 90
percent of the fair market value of the asset at the inception of the
lease. As a consequence, the FBI cannot lease aircraft to meet the
mission requirements.
OMB A-11 circular rules include the following:
--Ownership of the asset remains with the lessor during the term of
the lease and is not transferred to the Government at or
shortly after the end of the lease period.
--The lease does not contain a bargain-price purchase option.
--The lease term does not exceed 75 percent of the estimated economic
lifetime of the asset.
--The present value of the minimum lease payments over the life of
the lease does not exceed 90 percent of the fair market value
of the asset at the inception of the lease.
--The asset is a general purpose asset rather than being for a
special purpose of the Government and is not built to unique
specification for the Government as lessee.
--There is a private-sector market for the asset.
The chart below demonstrates the breakout of the Fair Market Value
and the allowable lease years:
ANALYSIS OF CURRENT AIRCRAFT LEASE
------------------------------------------------------------------------
------------------------------------------------------------------------
Fair Market Value......................... $90.0 million
90 percent FMV............................ $81.0 million
Annual Lease Costs........................ $14.8 million
Years Lease Allowed \1\................... 6.8
Start/End Date............................ FY2007/FY2013
------------------------------------------------------------------------
\1\ Present Value of Lease Payments 90 percent FMV.
Question. How would you carry out your Render Safe mission without
these aircraft?
Answer. Please note that classified details are required for a
complete understanding of these Render Safe responses. Further
information may be provided under classified cover.
During mission transition coordination, the Department of Defense
(DOD) stipulated that they were unable to support the FBI with
dedicated airlift and could only support the Render Safe mission with
``in-system select'' aircraft. The aircraft support would have an
estimated 6-12 hour arrival time from notification. This would not meet
the mission response requirement mandated by national leadership.
Discounting the current leased Render Safe aircraft, the FBI does
not have any aircraft that satisfy the Render Safe mission operational
requirements. Without the procurement of the requested aircraft, the
FBI will be unable meet the directed domestic emergency Render Safe
response time and would seek relief of the mission through the
executive branch. This would require DOD to reassume the primary
response and reduce the U.S. Government's emergency Render Safe
response capability. The FBI would continue to maintain the primary
response to incidents requiring Render Safe operations within the
National Capital Region on the current response timeline.
FBI ACADEMY
Question. Increased training and lodging levels at the FBI Academy
have strained the facility infrastructure. It is operating at full
capacity, and of the Academy's three dorms, two date back to 1972 and
one dates back to 1988 and are not up to industry standards. In fiscal
year 2010, Congress provided $10 million for an FBI Academy
Architecture and Engineering study.
The fiscal year 2011 request includes $74 million to expand
facilities at the FBI Academy in Quantico, Virginia, which includes:
--$67.6 million to expand training facilities and build new dorm.
--$6.3 million to renovate existing dorms.
What are the specific infrastructure challenges at the FBI Academy?
Answer. The primary challenge is the aging infrastructure and the
capacity of the infrastructure support systems, such as electrical,
heating ventilation and air conditioning (HVAC), sewer, and water. Some
of the oldest infrastructure components (firing ranges) were installed
in the 1950s. The main ``Academy'' complex was constructed in 1972, and
its infrastructure has gone 38 years without any appreciable upgrades
or expansion. The Academy's core infrastructure was originally designed
to support approximately 500,000 square feet of space, but the FBI's
Quantico complex now consists of more than 2,100,000 square feet. Due
to the age of the facilities, scheduled and unplanned repairs regularly
eliminate 8 percent of bed and classroom space. The $6.3 million
requested in the fiscal year 2011 President's budget for the renovation
of existing dormitories would help address this infrastructure
challenge at the Academy.
The second infrastructure challenge at the FBI Academy concerns the
classroom and dormitory capacity of the facility given increasing
demands on the organization. With the extensive growth of the FBI's
mission and workforce since 9/11, the Academy has been forced to use
temporary classroom structures at Quantico and lease private sector
space, with students being housed in local area hotels. These stop-gap
arrangements are an inefficient use of student time on campus, and
negatively impact the quality of education and training that FBI
students receive. Additionally, these stop-gap arrangements consume
significant annual resources that would be better directed to
maintaining and expanding Academy facilities. The $67.6 million
requested in the fiscal year 2011 Request to Congress for the
construction of a new dormitory and training facility would help
address this infrastructure challenge at the Academy.
Question. How will your training requirements for the Academy
continue to expand?
Answer. In addition to the increased number of students requiring
specialized training at the Academy, the length of the programs for new
agents and intelligence analysts (IAs) has also been extended. Existing
curriculums were restructured to focus on areas such as foreign
counterintelligence, cyber threats, and counterterrorism, among others.
Additional courses devoted to legal requirements, analytical and
technological tools and tradecraft have also been added. Joint training
between new agents and IAs has also been expanded. This has
significantly increased the total training weeks per year--by more than
90 percent since 1995--creating scheduling conflicts amongst the
competing student groups at the Academy. There are also new
requirements for specialized training; for example, with increased
emphasis on Human Sources, additional interview rooms are required for
practical exercises.
From 2005 to 2008, there has been a 201 percent increase in the
number of FBI regional training events (19,851 to 39,894). The FBI
would be better served by hosting more of these regional training
events at the FBI Academy campus given the fact that courses require
access to FBI classified networks and space, which are generally
unavailable in non-FBI facilities.
Question. When do you expect the results of the FBI Academy
Architecture and Engineering study?
Answer. The FBI's Acquisition Review Board met on June 24, 2010,
and approved a Design-Build acquisition package with the Naval
Facilities Engineering Command (NAVFAC). A purchase order was provided
to NAVFAC on July 29, 2010, to initiate the beginning of the design
work. The estimated completion date for the preliminary (15 percent)
design work is July 2011. The scope of that effort includes
architecture and engineering design services for:
--Site survey, campus-wide utility survey and analysis, topography
survey, geotechnical survey and environmental assessment.
--Programming, site analysis and planning and conceptual design
options.
--Detailed construction cost estimates and schedules.
Question. What are the top three improvements you want to see at
the Academy?
Answer. Upgrade and expansion of the entire Academy exterior
infrastructure systems, to include electrical, HVAC, sewer, water,
data, IT, telephone, and security to bring outdated facilities up to
code and industry standards.
Complete renovation including interior and infrastructure upgrades
for FBI Academy dormitories, upgrading critical life, health, and
safety infrastructure to meet current industry standards and codes.
Complete renovation and interior infrastructure upgrades for all
original Academy classroom buildings, to include upgrading critical
life, health, and safety infrastructure and modernizing classroom
spaces to better utilize current technology and instruction practices
and expand capacity.
LEGAT OFFICES
Question. The FBI is now a global intelligence and law enforcement
agency. The Legat offices (which stand for ``Legal Attache'') are the
FBI's front line operations overseas. The FBI operates in over 60
countries around the world.
Do you plan to expand the Legat offices?
Answer. The International Operations Division's Executive
Management (IOD EM) periodically evaluates the distribution of our
Legat offices in order to ensure that the FBI is best prepared to meet
the current and emerging global threats. IOD EM has developed and
utilized numerous tools, as well as received input from Legat and
Headquarters personnel to better understand the gaps in our current
infrastructure, to address emerging threats and increasing workload
demands. As a result of this process, the FBI requested the opening of
a new Legat office in Addis Ababa, Ethiopia and the expansion of the
Legat Islamabad, Pakistan in the fiscal year 2011 budget. IOD is
currently in the process of refining its 5 year expansion plan, which
will be the basis for requesting future expansions of the Legat
Program.
Question. How important are these offices to fighting the global
war on terror?
Answer. The FBI's international presence is critical to the FBI's
mission to protect the United States against terrorist attacks. The
Legal Attache (Legat) Program integrates the FBI's efforts with
international counterparts and serves as a force multiplier. The Legat
Program leverages the expertise and information from international law
enforcement and intelligence counterparts to coordinate global efforts
to defeat terrorism. Effective coordination and information sharing
requires the FBI to develop working-level partnerships and
relationships built on trust, mutual respect, and two-way information
sharing. This cannot be accomplished without a permanent international
presence. As such, every agent and analyst involved in the Legal
Attache Program exponentially increases the overall capabilities of the
FBI's domestic workforce and provides the most effective means possible
to combat international terrorism and criminal threats.
Question. Do the Legat offices have the equipment (IT,
telecommunications) they need?
Answer. The FBI equips Legats with the same tools and technology
available to the domestic field offices. As part of the several ongoing
information technology initiatives, the FBI recently doubled the
bandwidth of all the Legat offices in Fall 2009 so that Legat personnel
could access critical intelligence databases. The Legat Program is also
in the process of constructing Sensitive Compartmented Information
Facilities (SCIFs) in a majority of offices, which will enable the
deployment of higher-level classified computer systems to all Legats.
Information technology systems at the higher-level classification level
are required for communications with other U.S. Intelligence Community
partners and to exploit any information obtained to identify possible
U.S.-based connections.
Question. How satisfied are you with the level of interagency
cooperation in the Embassy's where the Legats operate?
Answer. The Legats have made great strides over the years to
enhance interagency cooperation in the Embassies. Overall, we are very
satisfied with the level of cooperation that currently exists and
continue to strive to enhance and maintain key relationships in the
Embassies. These in-country relationships are critical to ensure
sharing of information and coordination of operations related to the
FBI's mission.
MORTGAGE FRAUD--PREDATORY LENDING
Question. The collapse of the subprime mortgage market has brought
about an explosion of mortgage fraud cases all across the United
States. Predatory lenders destroy families and communities, and
undermine faith in financial systems. The FBI's mortgage fraud workload
is sure to increase as more predatory lenders are exposed.
Last year, this subcommittee gave you $75 million to hire 50 new
agents and 60 forensic accountants dedicated to investigating mortgage
fraud, bringing the total number working on this problem to over 300
agents. We need to continue this surge in mortgage fraud
investigations.
How many more agents, forensic accountants and analysts will you
need to address the mortgage fraud workload?
Answer. Congressional support in prior fiscal years has greatly
enhanced the FBI's capability to address mortgage fraud; however, both
the scope and available resources to address the criminal threat
continues to require the FBI to prioritize investigations. The mortgage
fraud workload of the FBI is escalating, and in fiscal year 2010, over
68 percent of the FBI's 3,045 mortgage fraud cases involved losses
exceeding $1 million per case. Moreover, the FBI anticipates it will
receive over 75,000 Suspicious Activity Reports (SAR) in fiscal year
2010, an increase of over 241 percent since 2005. FBI intelligence,
industry sources such as the Mortgage Asset Research Institute (MARI),
and recent reports by the Special Inspector General of the Troubled
Asset Relief Program (SIGTARP) predict an increase in foreclosures,
financial institution failures, regulatory agency/independent auditor
fraud referrals, and governmental housing relief fraud. These risk
based indicators of mortgage fraud indicate that even prioritized
investigations will persist or grow in fiscal year 2011 and beyond.
Therefore, the nature of the criminal problem, the prolonged economic
downturn, increased foreclosures, and continued profitability of
mortgage fraud combine to create a prognosis of increased mortgage
fraud workload, which will require a significant increase in FBI
resources to address the threat.
The FBI has approximately 358 special agents, 26 intelligence
analysts and 39 forensic accountants/financial analysts devoted to
investigating mortgage fraud matters in fiscal year 2010. While the FBI
has made every effort to implement new and innovative methods to detect
and combat mortgage fraud, even if the FBI focuses on the most
egregious cases, only a portion of cases referred can be addressed with
the current level of available resources. Using the FBI's current
resource level, from August 1, 2008 through September 30, 2009, the FBI
helped obtain 494 mortgage fraud convictions. On 06/18/2010, Operation
Stolen Dreams was concluded and, with the assistance of 7 participating
Federal agencies, has thus far resulted in 650 indictments and 391
convictions.
Question. Will you be able to add agents to conduct these
investigations, even as you lose criminal agents to counterterrorism
work?
Answer. While it is accurate that the FBI moved criminal
investigative resources to counterterrorism in the months and years
immediately following September 11, 2001, more recently the FBI has
reallocated resources from lower priority white collar criminal
programs to address the growing mortgage fraud problem. The FBI has
more than 358 special agents addressing mortgage fraud, and many of
those resources have come from other lower priority white collar crime
investigations. For example, since fiscal year 2007, the FBI doubled
the number of mortgage fraud investigators, leaving only 106 special
agents available to investigate the approximately 1,900 remaining
financial institution fraud investigations. As previously mentioned,
congressional support for mortgage fraud in prior fiscal years has
greatly enhanced the FBI's capability; however, both the scope and
available resources to address the criminal threat continues to require
a prioritization of investigations.
Question. What new training will you need to give agents and
analysts to investigate predatory lenders?
Answer. Predatory lending occurs primarily during the loan
origination process and the FBI is continuing to investigate loan
origination fraud. Therefore, the FBI will continue to educate
analysts, investigators, and accountants on ways to identify and
investigate schemes where industry insiders target vulnerable
populations, and how to address this and other loan origination
schemes. Successfully addressing the problem will require understanding
the ways to identify where origination fraud has occurred, what factors
leave a community vulnerable, and which techniques can be best employed
to mitigate the threat.
In addition to new training that will be developed, the FBI
continues to provide regular training to new and experienced agents and
regularly shares information on best practices, emerging trends, and
successful sophisticated techniques with its law enforcement partners.
For example, the Mortgage Fraud training courses focus on proactive
intelligence, basic mortgage fraud investigative tools and resources,
and enforcement measures that can be used to efficiently and
effectively combat mortgage fraud. The training also provides an
understanding of the mortgage lending process, including the entities,
paperwork, and regulatory agencies involved. These training classes
include industry and law enforcement experts, such as the Housing and
Urban Development--Office of the Inspector General and the Federal
Deposit Insurance Corporation, to educate agents, analysts, and
forensic accountants on the various types of mortgage fraud schemes,
including predatory lenders.
Question. How can you do more to help State and local officials
investigate predatory lenders?
Answer. As mentioned previously, addressing loan origination fraud
where a vulnerable population is exploited by industry insiders is
largely a matter of identifying and understanding who is vulnerable,
how they are targeted, and the best means of mitigating that
vulnerability. The FBI uses its 23 task forces and 67 mortgage fraud
working groups not only to pool resources to investigate the crime
problem, but also to share valuable intelligence. By expanding these
partnerships and building on our current successes, the FBI can
continue to work with State and local officials to address this crime
problem.
HEALTH CARE FRAUD
Question. Now that the historic healthcare reform legislation is
law, we must do more to combat healthcare and insurance fraud that cost
U.S. citizens more than $60 billion annually. We need to make sure law
enforcement has the resources it needs to investigate these crimes and
prosecute the scammers.
What role is the FBI already playing in healthcare fraud
investigations and prosecutions?
Answer. The FBI investigates fraud committed against government
sponsored programs and private insurance programs. The vast majority of
FBI investigative resources within healthcare are devoted to the
identification and prosecution of subjects involved in defrauding
Medicare, Medicaid, and private insurers.
The FBI also investigates healthcare industry qui tam matters that
involve civil actions undertaken by the United States against companies
that defraud healthcare systems or engage in activity that is
potentially harmful to the public. These investigations involve the
dedication of significant investigative resources, and often result in
significant monetary judgments.
In addition to these types of fraud, the FBI investigates threats
to public safety in the pharmaceutical supply chain, including Internet
pharmacy matters and related drug diversion activity. These
investigations are often worked closely with the Drug Enforcement
Administration, the Food and Drug Administration, Immigration and
Customs Enforcement, and other law enforcement agencies. Additionally,
the FBI proactively works with Health and Human Services--Office
Inspector General (HHS-OIG), State Medicaid Fraud Control Units, and
private insurers in the healthcare industry in an effort to curb Health
Care Fraud (HCF).
The FBI has approximately 400 special agents and 300 professional
support personnel devoted to investigating HCF matters. These
investigative resources are allocated to FBI field offices based on
threat indicators in the field office's area of responsibility.
In the 24 month period between 10/01/2007 through 09/30/2009, the
FBI indicted 1,745 subjects in HCF investigations, and helped obtain
1,332 convictions. More significantly, FBI HCF investigations resulted
in approximately $3.7 billion in court-ordered criminal forfeiture and
restitution obligations, representing a substantial return on the
investment of investigative resources. This figure does not include the
more than $4 billion in civil recoveries obtained pursuant to qui tam
investigations, which are worked with the Civil Division of the
Department of Justice.
The FBI is an active participant in the Health Care Fraud Prevent
and Enforcement Action Team (HEAT), an interagency effort announced in
May 2009 between the Department of Justice and the Department of Health
and Human Services to improve coordination and enforcement of
healthcare fraud cases. HEAT's creation and ongoing collaboration has
allowed top-level law enforcement agents, criminal prosecutors and
civil attorneys, and staff from DOJ and HHS to examine lessons learned
and innovative strategies in our efforts to both prevent fraud and
enforce current anti-fraud laws around the country. As part of HEAT,
the FBI has agents assigned to each of the Medicare Fraud Strike Force
teams that are now in seven different cities around the country.
Question. With passage of the historic Patient Protection and
Affordable Care Act, what new responsibilities does the FBI have to
combat healthcare fraud?
Answer. Under the Patient Protection and Affordable Care Act
(PPAC), the FBI will have new or additional responsibilities, which
include:
--Increased requirements for the FBI to ensure Health Care Fraud
(HCF) losses, particularly to the Government sponsored programs
Medicare and Medicaid, are properly detected and calculated so
court ordered restitution and/or forfeiture calculations can be
recorded;
--More vigorous enforcement of the anti-kickback statute as part of
the False Claims Act; and
--More investigative/enforcement responsibilities involving
obstruction of Government HCF investigations that utilize
Health Insurance Portability and Accountability Act (HIPAA)
subpoenas as this act elevates HIPAA subpoenas to the same
level as Federal grand jury subpoenas.
Question. What is the Medicare Fraud Strike Force and what role
does the FBI play in it?
Answer. The FBI is the primary investigative agency assigned to the
DOJ Medicare Strike Force. Initiated in March 2007, the Strike Force
became part of the overall Health Care Fraud Prevention and Enforcement
Team (HEAT) initiative in 2009, under the oversight of the Attorney
General and the Secretary of HHS. The Strike Force is currently active
in 7 cities (Miami, New York, Los Angeles, Detroit, Tampa, Baton Rouge,
and Houston), with a total of 63 investigative personnel from the FBI
assigned to Strike Force teams. In addition, 83 FBI special agents are
assigned to non-Strike Force HCF matters in Strike Force cities. In
each Strike Force location, multiple teams comprised of FBI and HHS-OIG
personnel, along with USDOJ and USAO prosecutors, are responsible for
identifying, investigating, and prosecuting HCF directly related to
Medicare. In each Strike Force city, the FBI has dedicated special
agents, analysts, and professional staff to Strike Force investigative
operations that target Medicare fraud. In addition to the personnel
dedicated directly to the Strike Force, other non-Strike Force special
agents and analytical personnel conduct HCF investigations outside the
Strike Force. In total, the FBI has approximately 411 special agents
and 301 professional support personnel assigned to HCF, of which 15
percent are devoted directly to Strike Force matters. In terms of
accomplishments, the FBI and HHS-OIG aggressively investigate instances
of fraud against Medicare, with over 2,500 HCF FBI investigations
pending during fiscal year 2010. FBI initiatives under the Strike Force
have included infusion therapy fraud, durable medical equipment, home
health, and other schemes that resulted in significant dollars losses
to Medicare from fraud and abuse.
For fiscal year 2011, Dallas and Chicago have been identified as
new Strike Force cities. Accordingly, the FBI has increased HCF
staffing levels in these cities to support the introduction of the
Strike Force, with 33 special agents now assigned to those locations.
At the Headquarters level, the FBI is a member of the HEAT
committee and multiple subcommittees at DOJ that play a key role in
identifying future Strike Force locations and establishing policy
regarding deployment of resources. The FBI has established a team of
analytical personnel at the Financial Intelligence Center (FIC) to
evaluate Medicare data, conduct trend analysis, and identify potential
fraud and abuse within Medicare and Medicaid. The FBI is also in the
process of gaining direct access to CMS data. With this information and
real-time analysis capability, the FBI will be better able to identify
fraudulent billing and claim activity related to Medicare.
As part of the Strike Force, the FBI has established investigative
working relationships with numerous State programs offices and private
insurers. These partnerships allow the FBI to monitor and investigate
HCF that crosses both public and private programs.
Question. Do you believe we need to commit more funding to stop
fraud in Medicare, Medicaid and other healthcare benefits programs?
Answer. Continued funding to combat fraud in Medicare, Medicaid,
and other healthcare benefits is needed. The resources available to the
FBI to combat healthcare fraud (HCF) are provided to the FBI through
Health Insurance Portability and Accountability Act (HIPAA) and other
healthcare specific congressional appropriations. The FBI receives the
majority of its funding for HCF via mandatory funding provided through
HIPAA. The passage of the Affordable Care Act provided that FBI HCF
resources received under HIPAA would be tied to inflation, and would
increase with inflation until fiscal year 2020.
However, inflationary adjustment calculations for FBI HCF funding
are tied to increases in Consumer Price Index--Urban (CPI-U) which were
zero in 2009 and 2010. The 2011 increase is estimated to be only 1.1
percent. This has resulted in a freeze of baseline funding for the FBI
at fiscal year 2008, 2011 will only provide $2.5 million in additional
funding.
In fiscal year 2010, the FBI received $3.9 million in 2-year
supplemental funding from the Health Care Fraud Abuse and Control
Account (HCFAC) discretionary appropriation to hire 12 additional
special agents and 3 investigative professional staff personnel for the
Medicare Fraud Strike Forces. The positions were allocated in fiscal
year 2010. The fiscal year 2011 President's budget, currently pending
before Congress, requests additional discretionary HCFAC funding to
provide for the annualization of these positions as well as additional
FBI healthcare fraud positions.
In fiscal year 2011, approximately 82 percent of all FBI HCF
funding will be used to pay employees salaries (Comp/Benefits), with
most of the remaining 18 percent absorbed by infrastructure costs such
as case investigative funding, office space, equipment, supplies, and
transfers. The FBI does not receive funding to support HCF initiatives
in the area of drug diversion, qui tams, or staged auto accidents. As a
result, the FBI has established investigative priorities with HCF to
ensure the FBI remains committed to combating HCF and ensuring
investigative resources are allocated to the highest priority
investigative matters.
STOPPING INTERNET CHILD PREDATORS
Question. Sexual predators use Internet as their new weapon of
choice to target children. More children are online and at risk. The
Innocent Images program, located in Calverton, Maryland, allows the FBI
to target sexual predators on the Internet. The Innocent Images
workload has increased dramatically, from 113 cases opened in 1996 to
2,500 cases opened in 2007--a 2,000 percent increase. FBI's budget
request includes $53 million for the Innocent Images program. Last
year, Congress provided $14 million more for Innocent Images, but the
fiscal year 2011 request is only $300,000 more.
How are you addressing the growing threat of child predators on the
Internet, given that the request includes no new resources to
investigate child predators who prey on children online?
Answer. Unfortunately, the ever-growing challenges that the
Internet poses to law enforcement in pursuit of child predators have
greatly increased. In response, the FBI's Innocent Images National
Initiative Program (IINIP) strives to ensure that limited resources are
maximized and equitably leveraged against the most egregious threat of
child predators on the Internet. Specifically, IINIP is aggressively
targeting producers, online sex rings, and mass distributors of child
pornography.
Question. Can you give us an update on your Innocent Images
International Task force? How many international officers have been
trained in Calverton? How many countries have joined these Task Forces?
Answer. The Innocent Images International Task Force (IIITF) has
evolved into a cohesive task force model, which includes partnering
with the FBI's international offices (Legats) in order to identify,
initiate, and further long-term enterprise investigations targeting
online child exploitation transnational enterprises. The FBI's
partnerships strategically formed with the IIITF member agencies have
resulted in several joint investigations and case coordination
meetings. The Innocent Images National Initiative Program (IINIP) has
established a communication platform, defined protocols for
intelligence sharing, and increased operational coordination of
transnational online child sexual exploitation investigations with our
IIITF members. Both our domestic and international partners, as well as
non-government organizations, have benefited from an expansion of the
IIITF operational capabilities and liaison relationships. As of August
2010, 90 Task Force officers have been trained in Calverton from 42
countries.
STATE AND LOCAL LAW ENFORCEMENT--FIGHTING VIOLENT CRIME
Question. The Justice Department estimates there are roughly 1
million gang members in 30,000 gangs in all 50 States and the District
of Columbia. With gang membership rising and violent crime continuing
to be a problem, local law enforcement needs a strong partnership with
Federal Government.
Currently, there are 160 Safe Streets Violent Gang Task Forces.
These partnerships allow FBI agents and State and local law enforcement
to work as teams to fight street crime. However, the FBI has not had
the resources to expand this program and requests no additional funding
in fiscal year 2011.
How are joint Federal-State task forces effective in helping local
law enforcement fight violent crime?
Answer. As part of the Safe Streets Violent Crime Initiative, the
FBI currently operates 163 Violent Gang Safe Streets Task Forces in 56
FBI Field Offices. These Task Forces are comprised of 746 FBI agents,
1,548 deputized State or local law enforcement officers (Task Force
officers), and 44 other Federal law enforcement officers (Task Force
agents). Through July 2010, the Violent Gang Safe Streets Task Forces
have made 5,515 arrests and helped obtain 2,508 convictions.
In another part of the Safe Streets Violent Crime Initiative, the
FBI manages 43 Violent Crimes Safe Street Task Forces, which are
comprised of 200 FBI agents and 317 Task Force officers, and focus on
violent crimes such as kidnapping, extortion, bank and armored car
robbery, Hobbs Act commercial robbery, and murder for hire. Through
July 2010, the 43 Violent Crimes Safe Street Task Forces have made
1,106 arrests and helped obtain 447 convictions.
The Task Forces help local law enforcement fight violent crime and
gangs in several ways. Task Forces avoid redundancy in the response of
law enforcement to violent crimes that have both a Federal and a State
or local nexus. The FBI initiates and coordinates investigative efforts
and intelligence sharing with affected local, State, and Federal law
enforcement agencies, thereby avoiding the duplication of investigative
and enforcement efforts and maximizing resources. Task Forces also aid
areas where Federal law enforcement is the only realistic option to
combat violent crime.
The following are examples of Task Force successes:
Newport News, Virginia.--The Dump Squad Gang first came to the
attention of Newport News law enforcement in 2000. Members of the Dump
Squad, which claimed affiliation with the Bloods Street Gang, engaged
in narcotics distribution, firearms offenses, and a host of violent
crimes, including violent crimes targeting local law enforcement. Using
intelligence to identify the gang's structure, and a strategy focused
on unsolved homicides, drug-related robberies, and aggravated assaults,
in March 2009 the Task Force obtained 39 charges of violence in aid of
racketeering against 10 of the Dump Squad's 30 known or suspected
members. To date, all but one of the defendants has been convicted.
Information derived from cooperating defendants has closed several
unsolved homicides, and the areas previously controlled by the Dump
Squad have seen a significant reduction in major violent offenses since
the arrests.
Easton, Pennsylvania.--The Easton Police Department requested
Federal assistance due to a sharp rise in gang- and drug-related
violence attributed to gangs from local neighborhoods and from New York
City. Through the use of controlled crack cocaine purchases,
consensually monitored and recorded conversations, judicially
authorized wiretaps, physical surveillance, search warrants, the
development of confidential human sources and cooperating defendants,
and other law enforcement techniques, in March 2008 the Task Force
obtained Federal indictments against 40 individuals and State charges
against an additional 10 individuals. The mayor of Easton has advised
that, since these arrests, the city of Easton has not experienced a
single drug or gang related homicide. According to the Easton Police
Department, this has been the longest period of time without such an
occurrence in over 15 years.
Question. What additional resources would you need to expand the
program?
Answer. The FBI's Violent Gang Safe Streets Task Force Initiative
and the FBI's Violent Crime Safe Streets Task Forces both work with
State and local law enforcement to fight violent crime and gangs. Two
key resources that are needed to continue these programs: (1) funding
for special agents, and (2) funding for investigative techniques and
equipment.
The FBI requires investigative resources to maintain the number of
Safe Streets Task Forces in operation. Funding for FBI special agents
would enable the FBI to open additional Safe Streets Task Forces in
areas across the United States where Federal law enforcement assistance
for local agencies has been non-existent. The equipment resources are
necessary due to the increase in investigative productivity that would
come from the expansion of the number of Safe Streets Task Forces that
the FBI would be able to operate with additional special agents.
To assist local law enforcement in the war on gangs, the FBI would
like to use its Violent Gang Safe Streets Task Forces. These task
forces would give the FBI a chance to prevent violent crime through the
proactive suppression of criminal street gangs operating in areas
across the United States where there is little or no Federal law
enforcement presence. Proactive suppression of the threat would
correlate to a direct decrease in violent crime in the areas where new
Violent Gang Safe Streets Task Forces are operated.
To assist local law enforcement in the war on violent crime, the
FBI would like to use its Violent Crime Safe Streets Task Forces. This
would allow field offices to realize the benefits of working closely
with State and local agencies to address their violent crime problem.
STATE AND LOCAL LAW ENFORCEMENT--FIGHTING TERRORISM
Question. Joint Terrorism Task Forces (JTTFs) are teams of Federal
and State law enforcement working together to identify and respond to
terrorist threats at the local level. There are now more than 100 JTTFs
led by the FBI. Local and State police rely on the FBI for information,
guidance, leadership and training, as well as for critical intelligence
information about threats to our country.
How beneficial are the Task Forces?
Answer. The participation of State, local, and Federal law
enforcement partners on Joint Terrorism Task Forces (JTTFs) creates a
``force multiplier'' benefit. By having State and local officers and
participants from other Federal agencies, the JTTFs are able to address
many more cases than the FBI could handle alone. The utilization of the
JTTFs is not, however, limited to local responses to terrorist threats.
The members of the JTTFs, including Task Force officers, representing
State, local, and other Federal agencies, are frequently deployed
overseas to investigate terrorism cases at a global level.
The FBI is faced with a formidable task that experience has shown
is best achieved through the utilization of the vast resources and
personnel dedicated to task forces. JTTFs cover thousands of leads in
response to calls regarding counterterrorism-related issues. These
leads address potential threats to national security and require a
significant amount of coordination and resources. Overall, greater
interaction and cooperation between FBI special agents and their
counterparts exist due to the task force concept, which has led to a
more focused, integrated, and resource conscious approach to
counterterrorism investigations.
At the direction of the FBI's Counterterrorism Division (CTD),
National Joint Terrorism Task Force (NJTTF), the JTTFs have implemented
numerous tripwires across the United States to various industries such
as mass transportation, storage facilities, and bulk fuel distributors
to provide indicators of potential use/targeting by terrorists. The
JTTFs have disseminated Tripwire Indicator Cards to such industries and
businesses in their respective areas of responsibility for awareness
and contact information.
The significant benefit of the JTTFs is the unique expertise,
perspectives, and tools each agency provides, whether at the Federal,
State, local or tribal level. For example, U.S. Immigration and Customs
Enforcement can provide support to ongoing counterterrorism
investigations through their databases, as well as through their
ability to charge terrorism subjects with immigration and customs
violations outside the FBI's jurisdiction. The participation of State
and local law enforcement agencies provides the ability to charge
terrorism subjects on unrelated State charges where the offenses do not
meet the threshold for a Federal offense. The Department of Energy and
the Nuclear Regulatory Commission's participation provides highly
specialized expertise and capabilities that would prove invaluable upon
receipt of legitimate terrorist threats to U.S. nuclear power plants.
The participation of multiple Department of Defense (DOD) assets
provides expertise across several areas including, but not limited to,
criminal investigations, intelligence, human intelligence, and
combatant command operations. Each participatory law enforcement agency
offers its own statutory authorities which provide far greater latitude
in charging terrorism subjects.
Question. Will their role be expanded in the future?
Answer. The FBI expanded the number of Joint Terrorism Task Forces
(JTTFs) to ensure greater access to Federal, State, and local agencies.
There are currently 104 JTTFs across the United States in 56 FBI field
offices and 48 FBI resident agencies. Currently, there are 656 State
and local agencies that participate on JTTFs nationwide. In addition,
JTTFs include representatives from the U.S. Intelligence Community and
the Departments of Homeland Security, Defense, Justice, Treasury,
Transportation, Commerce, Energy, State, and Interior, among others.
The FBI anticipates that both the level of Federal, State, and local
participation and the number of JTTFs will grow in the future to ensure
the mitigation of emerging threats.
SENTINEL
Question. There have been delays in the development of Sentinel,
the Bureau's new case management system. These important technological
tools and computer upgrades are supposed to help protect our citizens.
The FBI has a dangerous legacy of failed programs like Sentinel, and I
want to know the facts behind these delays.
What has caused the delays in Sentinel, and how will these problems
be handled?
Answer. The FBI's leadership believes it prudent to ensure that the
Sentinel application meets the needs of its users.
Phase 2, Segment 4 began in January 2009 with a scheduled
completion date of October 16, 2009. In October 2009, the FBI evaluated
Segment 4 for acceptance and determined that the segment was not ready
for deployment. Lockheed Martin (LM) requested, and the FBI approved,
two separate schedule extensions to provide them the opportunity to
complete the integration, testing, and resolution of noted
deficiencies. The FBI conditionally accepted Segment 4 in November
2009, but identified a number of ``liens'' that were to be resolved. In
December 2009, Program Management Office (PMO) testers and FBI
executive management identified a significant number of deficiencies
and system change requests. The PMO initiated the first of three
independent assessments to evaluate the quality, usability, and
maintainability of the code delivered. Resources were diverted from
Phase 3 to address the corrective actions and functionality
enhancements in Phase 2.
In March 2010, the FBI issued a partial stop-work order to suspend
part of Phase 3 and all of Phase 4 development to focus LM's resources
on the successful delivery of Phase 2, Segment 4 system capabilities.
In July, the FBI extended the stop-work order and expanded it to
include the remainder of Phase 3.
During the period between the partial stop work and the full stop
work order, the FBI gathered additional information that led to the
decision to reexamine the program's path forward. The use of an
incremental development strategy allowed this opportunity. This was
also an appropriate step to mitigate unwarranted program cost and
schedule overrun. The FBI is currently examining an alternative
approach that will bring Sentinel to a successful conclusion.
Question. Have any capabilities actually been deployed? Is anyone
using them, and, if so, what is the user feedback?
Answer. Yes, capabilities have been deployed. Various capabilities
have been deployed in the past, as well as necessary hardware and
infrastructure upgrades that improve the operation of the system, but
are not directly visible to the user.
--Since the completion of Phase 1, there have been significant
upgrades to Sentinel's functionality, including the addition of
a more modern, user-friendly web-based interface, customizable
``workboxes'' that summarize a user's cases, automated movement
of files between Sentinel and the automated case system,
improved online help and search functions, and hyperlinks
within cases.
--Sentinel has implemented a security architecture that enforces the
confidentiality, integrity, and availability of all classified
and privacy data. The FBI has also integrated an Intelligence
Community standard marking tool to minimize cost and maximize
standardization of markings to enable security and appropriate
sharing.
--Segment 4 of Phase 2 was deployed FBI-wide on July 26, 2010,
offering the most significant capabilities to users since Phase
1.
New capabilities include:
--Four electronic forms:
--The Electronic Communication, a revised form used to record
information pertaining to a case and document
administrative matters. It is also used to share
information, similar to an inter-office memorandum.
--The Lead Request Form, a new form used to document the request
for work to be performed by another individual or a group
within the FBI, referred to as ``setting the lead.''
--The Import Form, another new form used to import other documents
and attachments into Sentinel.
--The Interview Form (FD-302), a revised form that will continue to
serve as a testimonial record of investigative activity.
--Electronic Workflow.--A series of connected steps for creating and
sharing documents and obtaining approval. Digital signatures
will be applied to the documents through the approval process.
Employees will be able to track the progress of the document.
This eliminates the need to physically move a document from one
place to another, increasing efficiency, saving time, and
routing costs.
Question. When will the project be completed? How much over budget
will it be?
Answer. As indicated previously, functionality and capabilities
have been deployed and are in use by the FBI. The cost of delivery of
the capabilities through Phase 2 exceeded the contract value and
schedule, but the Bureau has yet to exceed the $451 million program
budget. There is currently $45.5 million of ceiling still available
within the program budget.
Utilizing the remaining available program budget authorization, the
FBI hopes to take advantage of the technology advancements that have
been made since the Sentinel contract was awarded in March 2006. It is
believed all of the functionality objectives of Sentinel can be
achieved by altering the engineering approach and leveraging the
advancements in commercial available software, as well as other FBI IT
projects.
As the FBI Director stated in recent congressional testimony:
``There was an overarching budget for this project. The FBI hopes to
stay within that budget. There are ongoing negotiations, but I am
mindful of the necessity of maximizing the products that we get and
minimizing the cost to the taxpayer. Which is why . . . we're looking
at alternative capabilities and with less reliance on contractors that
can prove to be more expensive than if you can do it yourself in-
house.''
Question. What are you doing to address the budget and schedule
impacts?
Answer. Given the delays associated with completion of Phase 2, the
FBI is consulting with industry experts to evaluate our plan to finish
Sentinel. The FBI is examining ways to reduce costs and limit our
reliance on contractors. That process is underway but it is incomplete.
Once that assessment is finished, the FBI can brief the subcommittee on
the results.
The FBI extended the stop-work order to allow outside experts to
review its plan to finish this project and to ensure the LM resources
are focused on the completion of Phase 2.
Question. Is the system not functioning correctly? Are the problems
small, unrelated issues, or are there signs of larger systematic
issues?
Answer. Yes, Sentinel is working and is currently being used by
thousands of FBI employees every day. On July 26, 2010, the FBI
deployed the remainder of Phase 2 across the FBI. Phase 2 has been
tested in the field and will give all FBI users the ability to create
investigative reports, conduct searches, and manage their daily work
far more efficiently.
There have been a range of problems identified with the system that
required additional time to resolve. These problems resulted in
schedule delays and cost impacts. Through multiple external
assessments, the fundamental architecture and systems have been found
to support capabilities that will enhance the FBI's mission.
At present the FBI is consulting with industry experts on a
potential plan to complete Sentinel. The FBI is also reviewing ways to
reduce costs and limit our reliance on contractors. This review is
underway, but it is not complete; the FBI anticipates this review will
be completed by early fall 2010.
NATIONAL SECURITY LETTERS
Question. National Security Letters (NSL's) are useful counter-
terrorism tools that allow the FBI to conduct searches without getting
court orders, and allow agents to analyze telephone, computer and bank
records without warrants.
The PATRIOT Act made NSLs easier to obtain, but also requires the
Inspector General (IG) to monitor the use of NSLs and report back to
Congress.
The IG released two reports on NSLs which found significant
intelligence violations. The IG estimates over 6,000 NSL violations
from 2004-2006. That's 8 percent of all NSLs issued. Violations
include:
--Eleven ``blanket NSLs'' without proper approval in 2006.
--Unauthorized collection of over 4,000 billing records and phone
numbers.
This subcommittee recognized a problem with NSL management, and
provided $10 million in fiscal year 2010 to establish the Office of
Integrity and Compliance for oversight of NSLs.
What are you doing to improve NSL training for FBI employees?
Answer. Following the first Office of Inspector General (OIG)
Report on National Security Letters (NSLs), the FBI's National Security
Law Branch (NSLB) developed a new NSL training module that incorporated
the findings of the IG. This training addressed the common errors
discussed in the OIG's Report, including typographical errors,
confusion regarding 18 U.S.C. Sec. 1681v, and required legal reviews
and approvals. In December 2007, FBI's NSLB and Training Division
developed and launched an online training course concerning NSLs. In
addition to live training, the online training course continues to be
used for refresher training and for training personnel whose duties now
require them to handle NSLs. NSLB is currently reviewing the online
training course to ensure that this training remains up-to-date. The
FBI also deployed a separate NSL subsystem in the Foreign Intelligence
Surveillance Act Management System (FISAMS) in January 2008, and
simultaneously launched a training course in FISAMS on creating NSLs.
The training was mandatory for all employees involved in issuing NSLs,
and the training continues to be used for refresher training and for
training new personnel handling NSLs.
Question. Will you make NSL training mandatory for all employees
involved with NSLs?
Answer. Yes, the National Security Letter (NSL) training is
mandatory for all employees involved with NSLs.
Question. Do you agree with the IG's recommendation that the Office
of Integrity and Compliance needs more staff to carry out its oversight
role?
Answer. The Office of Integrity and Compliance's (OICs) personnel
has increased since its inception in fiscal year 2007, from 12
employees to 16 employees. Staffing needs are reviewed periodically on
an enterprise-wide basis. Personnel allocations are made through a
principled process that considers a number of factors, including
operational needs, funding, risk, opportunity, and mandated
congressional allocations. In that regard, it is our understanding that
the Inspector General's recommendation was based, at least in part, on
the assumption that audits performed as part of the compliance process
would be conducted by OIC personnel. That is incorrect. OIC requests
the FBI's Inspection Division to conduct such audits. OIC and the
Inspection Division work closely to identify and prioritize auditing
requirements and to develop audit protocols for targeted risk areas.
OIC's personnel needs will continue to be monitored.
Question. Do you have the right computer systems to improve the way
you issue and track NSLs?
Answer. Yes. In January 2008, the FBI deployed the National
Security Letter (NSL) subsystem in the Foreign Intelligence
Surveillance Act Management System to address reporting and other
issues in the NSL process. The subsystem prompts the drafter to enter
information about the subject, the predication for the NSL, type of
NSL, recipients of the NSL, and the target of the NSL. The subsystem
routes the NSL to various higher-ranking officials who must review and
approve the NSL request before it can be issued. After all required
approvals have been obtained, the subsystem generates the electronic
communication (EC) and the NSL for signature by the special agent in
charge, assistant director in charge, or designated FBI-Headquarters
approving official. Thereafter, the subsystem automatically uploads the
EC documenting the NSL and the NSL itself into the FBI Automated Case
System. This process collects all the information required for
congressional reporting.
TERRORIST WATCHLIST
Question. The Terrorist Watchlist is the intelligence community's
main list of terrorism suspects, and is maintained at the FBI's
Terrorist Screening Center. It is shared with the Intel community at
the National Counterterrorism Center.
More than 1.1 million known or suspected ``terrorist identities''
are on the list, representing approximately 400,000 individuals. A
single individual can generate numerous ``terrorist identities'' or
records. 20,000 names are added each month.
The Inspector General recently reported that the terrorist
watchlist continues to have unacceptable errors, noting that the FBI is
delayed in reporting names to the terrorist watch list by up to 4
months. FBI also failed to remove names once determined that they do
not pose a threat, while other information was simply inaccurate or
outdated.
How much time does it take the FBI to add someone to the watch
list, and what are you doing to cut that time?
Answer. The DOJ Inspector General Reports (issues 08-16 and 09-25)
are based on data collected approximately 2\1/2\ years ago and many
aspects of the FBI watchlist process and internal oversight have
completely changed. At the time of the report, there was no formal
policy requiring case agents to submit watchlist nominations,
modifications, or removals in a specified timeframe. After an internal
study of the issue, the FBI provided new guidance in January 2009
(before the issue of 09-25) requiring agents to submit all watchlist
nominations, modifications, or removals within 10 business days. This
time is needed in order to take raw intelligence received from a
variety of sources and conduct initial database checks and additional
investigation to ensure that the reasonable suspicion standard is met.
Specific identifying details such as name, date of birth, address,
social security number, etc is vital to populate the watchlist and
ensure that another person with a similar name and date of birth is not
incorrectly encountered. The FBI's Counterterrorism Division (CTD),
Terrorist Review Examination Unit (TREX) at FBI Headquarters, which
reviews these submissions for accuracy and compliance with the United
States Government (USG) watchlisting policy, then has an additional 5
business days for nominations and 10 business days for modifications or
removals to complete their oversight actions.
FBI formal guidance was approved on December 7, 2009, which
included the ability to expedite the watchlist process when a specific
threat or urgent circumstance demands immediate action. This expedited
process has been used and results in immediate placement on the
watchlist and selectee/no-fly list by personnel assigned to the
Terrorist Screening Center (TSC). The FBI's CTD TREX follows through
with all necessary documentation submitted from the field that supports
the immediate watchlisting action taken.
While a remarkable achievement in less than 18 months, the FBI is
taking additional steps to reduce the time it takes to get a person
watchlisted. Most significant is the updating and integration of two
manual forms into a single database which incorporates all FBI business
workflow and tracks the submission record from the time it is created
by a case agent all the way through export by the FBI for watchlisting.
The FBI's CTD TREX led an interagency team of experts to update the
forms and ensure all data fields match those used by the National
Counter Terrorism Center (NCTC) Terrorist Identities Datamart
Environment. Not only is the database expected to reduce the processing
time for case agents and CTD's TREX, but also reduces the NCTC ingest
time from over 8 minutes per record down to under 30 seconds. This
database also incorporates compliance metrics and reports with much of
the data automatically generated. The database has been in development
for the past 10 months and is nearly ready for field-level testing with
anticipated deployment to all field offices by the end of the calendar
year.
Question. How are you improving training for your staff to increase
accuracy in adding names to the list and removing names from the list?
Answer. To increase the accuracy and speed of a watchlist
nomination or removal, the FBI's CTD TREX personnel were trained as
Subject Matter Experts (SME) in watchlisting. In order to apply
criteria which is consistent with the USG watchlisting guidance, SME's
from the TSC provided baseline training to CTD's TREX personnel. This
training included detailed review of current watchlist policy, along
with specific examples which required students to apply the standard.
Supplementing this training is a mandatory monthly unit training which
focuses on new guidance, trends, and round-table problem solving. As a
result of this training upgrade, the number of rejections from the TSC
for FBI nominations which do not meet the watchlisting criteria has
dropped to nearly zero. To assist new personnel and provide a detailed
reference guide for all employees, the CTD's TREX updated and expanded
the unit Standard Operating Procedures, which contains step-by-step
procedures for each watchlisting task.
An important aspect of the CTD's TREX transition is the
reorganization of personnel into four distinct teams and conversion of
four GS-12 positions into GS-13 supervisors, who are responsible for
the internal workflow and resolution of problems. These supervisors
identify topics for additional unit training.
Question. What are the major obstacles in shortening the time it
takes to place someone on the no-fly list?
Answer. There are few obstacles to quickly place the subject of an
FBI investigation on the No Fly list when intelligence indicates the
person presents an imminent threat and meets the established No Fly
criteria. Procedures are in place to support such action, and the
process has been tested with real-world threats. The Counterterrorism
Division's (CTD) Terrorist Review Examination Unit (TREX) is in direct
contact with the Terrorist Screening Center to complete an expedited
addition to the No Fly list. For example, when case agents identified
the subject of the recent attempted Times Square bombing, the CTD's
TREX used the expedited nomination process to add this individual to
the No Fly list in less than 1 hour. The subject then attempted to fly
later that same day and was prevented from departing the country.
Question. Have you given your managers in field offices more
responsibility to review nominations before they are sent to
headquarters?
Answer. The FBI has given field supervisors more responsibility to
ensure all subjects of FBI investigations are properly added, modified,
or removed from the watchlist. Quarterly file reviews now include a
mandatory certification by the field supervisor that the watchlist
status for the subject of the investigation has been reviewed and is
accurate. The Counterterrorism Division's (CTD) Terrorist Review
Examination Unit (TREX) provides each supervisor a mid-month report
which alerts them of cases currently showing non-compliance and allows
them to rapidly correct these deficiencies. Supervisors also receive
best practices gleaned from field offices which show consistent
outstanding compliance. For example, many field offices require
submission of the watchlisting form at the same time as the case
opening paperwork. The CTD's TREX has incorporated a detailed feedback
system using mandatory Primary and Alternate Watchlist Coordinators in
each field office. Not only are problems resolved through a single
point of contact for the office, but also trends and changes in policy
are communicated through the coordinators.
Question. Are you working with the Director for National
Intelligence (DNI) to make sure this problem is fixed across all
intelligence agencies?
Answer. As part of the President's taskings following the attempted
terrorist attack on December 25, 2009, the FBI's Terrorist Screening
Center (TSC) was directed to ``develop recommendations on whether
adjustments are needed to the watchlisting Nominations Guidance,
including biographic and derogatory criteria for inclusion in the
Terrorist Identities Datamart Environment and Terrorist Screening
Database, as well as the subset Selectee and No Fly lists.'' The
Nominations Guidance referred to the TSC issued on February 25, 2009,
and eight appendices issued at various dates (collectively, 2009
Protocol). The Presidentially-directed adjustments to the 2009 Protocol
and all the appendices were approved by the Deputies in July 2010 and
have been renamed ``Watchlisting Guidance.''
The Watchlisting Guidance was developed by TSC's Interagency Policy
Board Working Group, which functioned as a sub-Interagency Policy
Committee (IPC) for the White House National Security Staff's
Information Sharing and Access (ISA) IPC. Both the IPC and the sub-IPC
included representation from the Department of Justice, Department of
Homeland Security, Central Intelligence Agency, National Security
Agency, Department of Defense, Department of State, Department of
Treasury, Office of the Director of National Intelligence, the National
Counterterrorism Center, the FBI, and the TSC. In response to the
President's January 7, 2010, ``corrective actions'' memo, the sub-IPC
thoroughly reviewed the 2009 Protocol and applicable appendices to
develop recommendations for the IPC and the Deputies Committee. The IPC
also recommended a new appendix on the handling of terrorism
information collected when there is a positive match to a known or
suspected terrorist.
Based on these recommendations, the National Security Council
(NSC)/Homeland Security Council (HSC) Deputies Committee incrementally
approved certain modifications to the Watchlisting Guidance for
immediate implementation on March 5 and April 5, 2010. The NSC/HSC
Deputies Committee approved the entire Watchlisting Guidance for
issuance to the watchlisting and screening community on July 16, 2010.
FBI LONG TERM PLANNING
Question. Every national security and defense agency releases a 5-
year budget--except the FBI. I sit on the Senate Intelligence Committee
and the Defense Appropriations Subcommittee, where I am provided with
DOD, NSA, the CIA budget requirements not just for this year, but for 5
years. This long-term view helps us know what it will really take to
keep our Nation safe. I only see the FBI's budget 1 year at a time,
even though the FBI's intelligence and counterterrorism activities are
a key part of the national intelligence strategy. The administration's
exclusion of the FBI in the Intel 5-year budget implies that the FBI
plays a secondary security role.
Why is the FBI excluded from providing us with information on its
counterterrorism needs in future years?
Answer. The FBI and the Department continue to develop goals that
include appropriate analysts, technology, and facilities to address the
national security and intelligence community needs. While the FBI and
the Department cannot share predecisional, deliberative budget
information, we will continue to inform the subcommittee of our
programs and needs and be sure the subcommittee's policy and funding
decisions are made in the context of all appropriate information.
Question. Do you agree that the FBI should provide Congress with
its long term budget plans just like the rest of the intelligence
community?
Answer. The FBI and the Department continue to develop goals that
include appropriate analysts, technology, and facilities to address the
national security and intelligence community needs. While the FBI and
the Department cannot share predecisional, deliberative budget
information, we will continue to inform the subcommittee of our
programs and needs and be sure the subcommittee's policy and funding
decisions are made in the context of all appropriate information.
Question. In spite of this OMB muzzle on budget numbers for future
years, can you provide the subcommittee with information on your long-
term requirements? Specifically:
--The numbers of agents and analysts
--Technologies and equipment
--Partnerships with State and local law enforcement
Answer. The FBI and the Department continue to develop goals that
include appropriate analysts, technology, and facilities to address the
national security and intelligence community needs. While the FBI and
the Department cannot share predecisional, deliberative budget
information, we will continue to inform the subcommittee of our
programs and needs and be sure the subcommittee's policy and funding
decisions are made in the context of all appropriate information.
______
Question Submitted by Senator Frank R. Lautenberg
Question. In January, I asked the Department of Justice for
information about the June 2009 shooting of two soldiers in Arkansas by
Abdulhakim Muhammad, who claims to be a member of Al Qaeda. The
Department has not responded. I understand that the FBI had
investigated Mr. Muhammad prior to the shootings.
Was Mr. Muhammad on a terrorist watch list at the time of the
shootings?
Answer. The Terrorist Screening Center (TSC) would be pleased to
provide a members briefing regarding the watchlist status of the above-
referenced individual. It is the general policy of the United States
Government to neither confirm nor deny whether an individual is in the
TSC's Terrorist Screening Database (TSDB) because it is derived from
sensitive law enforcement and intelligence information. The
nondisclosure of the contents of the TSDB protects the operational
counterterrorism and intelligence collection objectives of the U.S.
Government, as well as the personal safety of those involved in
counterterrorism investigations. The TSDB remains an effective tool in
the U.S. Government's counterterrorist efforts because its contents are
not disclosed. It is important to note that the watchlist contains only
the identities of known or suspected terrorists which meet the
``Reasonable Suspicion'' standard for inclusion in the TSDB. As records
meeting this criterion are continually added to the watchlist, modified
to be more accurate, or removed for a variety of reasons, the watchlist
is constantly being updated to serve as a more accurate tool for the
TSC's terrorism screening and law enforcement partners.
______
Questions Submitted by Senator Richard C. Shelby
TERRORIST EXPLOSIVE DEVICE ANALYTICAL CENTER--1
Question. As indicated in my opening remarks the administration's
proposed rescission of $98 million in funding for the construction of
the Terrorist Explosive Device Analytical Center is troubling
especially given the FBI's and the JEIDDO commanders support for this
facility.
Director do you believe that TEDAC is a critical element necessary
for the FBI to meet its responsibilities to the American public?
Answer. Yes. The forensic and technical exploitation of improvised
explosive devices (IEDs) by the Terrorist Explosive Device Analytical
Center (TEDAC) supports the intelligence and information requirements
of the military, intelligence, homeland security and law enforcement
communities. TEDAC is also recognized by coalition partners, friendly
foreign governments, and U.S. partners as the focal point within the
U.S. Government for exchanging information from IED attacks against
U.S. interests abroad and at home. TEDAC receives IEDs not only from
Iraq and Afghanistan, but also other foreign countries and areas, such
as Pakistan, the Philippines, and the Horn of Africa. IEDs remain the
terrorist primary weapon of choice against U.S. interests and these
groups operate world-wide. Exploitation conducted by the TEDAC to date
has resulted in the identification of over 400 terrorists previously
unknown to the U.S. Government. The information derived from the
exploitation of devices submitted to TEDAC is available to U.S. law
enforcement as well as our coalition partners. Continued identification
of these subjects is vital to preventing terrorist attacks and
identifying terrorist networks operating in the United States and
abroad.
Question. Did the FBI request additional funding to construct a
facility to support the TEDAC mission above the amount the Congress had
already provided?
Answer. Regarding budget deliberations, the nature and amounts of
the President's decisions and the underlying materials are
confidential. The administration's position was transmitted in the
budget.
Question. When the FBI was informed of the proposal to cancel the
funding provided by Congress to construct a facility to support the
TEDAC mission, did the Bureau appeal that decision to OMB?
Answer. Regarding budget deliberations, the nature and amounts of
the President's decisions and the underlying materials are
confidential. The administration's position was transmitted in the
budget.
Question. Director Mueller, do you believe that TEDAC as funded by
this subcommittee is still necessary and if you do believe it is
necessary can you tell us why Redstone Arsenal was chosen as the
location to build this facility?
Answer. The administration's position was transmitted in the
budget. However, I can describe why Redstone Arsenal was chosen as the
location to build the facility. Upon receipt of funding in the fiscal
year 2008 appropriation for a Terrorist Explosive Device Analytical
Center (TEDAC) facility, the FBI acquired architectural and engineering
services to design and plan the facility. Among the first steps was to
conduct an independent site selection study, to identify, evaluate and
recommend sites that would meet TEDAC's operational requirements. Due
to the need to transport, process, and test explosives materials, site
selection was limited to U.S. military installations. Using publicly
available data for 17 requirements, divided into three categories--
operational (e.g., length of runways, explosives disposal capability,
weather to support continuous year-round operations), workforce (e.g.,
science and engineering employees as percentage of workforce, proximate
agencies and universities doing similar or related work), and quality
of life (e.g., cost of living, 4-year colleges and university
availability, and housing), the independent study identified and rated
eight potential sites. Based on weighted scores of the evaluation
requirements, the U.S. Army Redstone Arsenal, Huntsville, Alabama, was
ranked highest among the eight sites. Once a primary site was
identified, the FBI contracted architectural and engineering firm
initiated preliminary geotechnical engineering, wetlands, and cultural
surveys, as well as a preliminary surface soil screening of various
parcels at Redstone Arsenal to confirm the suitability of the site.
Based upon the site selection and favorable preliminary site studies,
FBI executive management accepted the recommendation of Redstone
Arsenal as the site for a permanent TEDAC facility.
TEDAC--2
Question. Homeland Security Presidential Directive-19 (HSPD-19)
Combating Terrorist Use of Explosives in the Homeland, states, in part,
``Terrorists have repeatedly shown their willingness and ability to use
explosives as weapons worldwide, and there is ample intelligence to
support the conclusion that they will continue to use such devices to
inflict harm. The threat of explosive attacks in the United States is
of great concern considering terrorists ability to make, obtain, and
use explosives''
Is that statement describing the threat from terrorist use of
explosives still accurate?
Answer. Yes. Terrorists and insurgents continue to show their
willingness to use explosives as a primary tactic against U.S. and
coalition forces. Due to the low cost and ease of availability of
improvised explosive devices (IED) components and precursors to
explosives, along with the success that terrorists and insurgents have
had with explosive attacks, they will continue to use explosives to
inflict harm. IEDs and explosives have been the method of attack in
recent domestic incidents as well, such as the Christmas Day attempt to
bomb a Northwest Airlines flight, the Times Square car-bombing attempt,
the attempt to detonate IEDs in New York City subways and other
locations, and the attempts to blow up Federal buildings in Texas and
Illinois.
Question. Under HSPD-19, the Attorney General was directed to
prepare a national strategy on how to deter, prevent, protect against,
and respond to explosives attacks. Does the new TEDAC facility enable
the FBI to fulfill its assigned responsibilities under the HSPD-19
national strategy and implementation plan?
Answer. A new Terrorist Explosive Device Analytical Center (TEDAC)
facility would enable the FBI to continue meeting its responsibilities
under the HSPD-19 strategy and plan, and provide an enduring capability
to operate at increased capacities at times when long term conflicts
and increased attacks. A new TEDAC facility would have full dedicated
capabilities to function as a center of excellence, to analyze and
report on evidentiary submissions from improvised explosive device
(IED) attacks. A new facility would provide timely actionable
intelligence on new tactics, techniques and procedures of IED activity
against U.S. interests, and will be able to operate at a high capacity
when needed.
TEDAC--3
Question. Director Mueller, the volume of submissions to TEDAC has
overwhelmed its capacity, resulting in a substantial backlog. The FBI
estimates that 86 percent of the 33,000 evidence boxes within that
backlog contain DNA or fingerprints from a still unidentified insurgent
who was involved in an IED attack against U.S. military personnel and
who may seek to enter the United States. Today, a terrorist could be
stopped at a checkpoint in Afghanistan and go unidentified because the
FBI has not analyzed the evidence against him or her.
Are you concerned that individuals involved in IED attacks against
our military personnel could go undetected and therefore could enter
the United States and engage in terrorist activities?
Answer. Yes. The potential biometric information within the
Terrorist Explosive Device Analytical Center (TEDAC) backlog--
fingerprints and DNA--could enable the identification of an unknown
terrorist or insurgent attempting to enter the United States.
Processing of the backlog to harvest fingerprints and DNA, and the
uploading of such information into national databases such as the FBI's
Integrated Automated Fingerprint Identification System (IAFIS), which
is used by the Department of Homeland Security and Department of State
to screen persons at the border and applying for visas, and the
Combined DNA Index System (CODIS), is critical to preventing persons
associated with IED attacks from gaining entry to the United States and
to identifying such persons who may have already gained entry.
Question. Can you provide this subcommittee with any instances
where this has occurred?
Answer. Example 1: In July 2009, the Terrorist Explosive Device
Analytical Center (TEDAC) conducted an Integrated Automated Fingerprint
Identification System (IAFIS) search against fingerprints recovered
from an improvised explosive device (IED) cache in 2008. These prints
were matched to an individual admitted to the United States as a
refugee in 2009. Although the individual had been enrolled in the
Department of Defense biometric systems in 2008, he was not identified
as a U.S. refugee until the TEDAC ran prints recovered from cache
materials against IAFIS records.
Example 2: In March 2010, the TEDAC identified fingerprints
recovered from an item found in an IED cache in Iraq. The fingerprints
belonged to a foreign national who had traveled to the United States on
a valid B2 (business) visa in the past and whose visa remains valid.
The TEDAC is assisting the law enforcement agencies of the foreign
country with the investigation via the Legal Attache office.
Example 3: In June 2010, the TEDAC matched fingerprints recovered
from a document found in an IED cache in 2004 with an individual
admitted as refugee in 2009. The match was made between the original
print and records in the IAFIS criminal file submitted by local law
enforcement as a result of criminal activity on the part of the
refugee.
Example 4: In 2009, the TEDAC identified a large number of
unexploited documents and media which had been submitted as IED items.
As a result of this effort, the TEDAC identified the print of an
individual granted a visa to enter the United States on a handwritten
document associated with the kidnapping and murder of two U.S. soldiers
in Iraq in 2006. In addition, the TEDAC discovered other information
which, when exploited, identified new subjects in the United States who
had foreign contacts attempting travel to the United States.
OVERSEAS CONTINGENCY OPERATIONS
Question. Last year, the administration requested and Congress
supported $101 million for FBI overseas contingency operations. This
funding allows the Bureau to deploy agents and analysts overseas to
work side-by-side with U.S. military personnel to assist in identifying
terrorists and insurgents. The bureau also uses these funds to work
with foreign law enforcement in places such as Southwest Asia, and the
Horn of Africa, to counter Al-Qaeda affiliates that target U.S.
persons. Now only 1 year after requesting funding for overseas
contingency operations, this administration is proposing to cut that
funding by $63 million.
Director Mueller, would the loss of this funding make it more
difficult for the Bureau to work internationally to combat and prevent
terrorism?
Answer. Obviously, more funding for purchasing equipment,
logistics, training, etc. is always better than less. That said, the
FBI will continue to work effectively internationally to combat and
prevent terrorism.
Question. Why would the administration cut your funding for this
critical mission by $63 million?
Answer. In light of constrained resources, the President must make
many tough decisions in developing the annual budget request.
SERIAL MURDERS AND RAPES
Question. Recently, the Washington Post ran an article about a
serial rapist who is believed responsible for as many as 17 attacks
over the past 13 years--these attacks have occurred in Maryland,
Virginia, Rhode Island and Connecticut. Now, it appears this serial
rapist has returned to Virginia and is suspected of forcing three
trick-or-treating teenage girls into a wooded ravine at gunpoint.
Thirteen years, seventeen attacks, and still at large.
When you have instances like this one, where the same person can
victimize women--including teenagers--for 13 years and in multiple
States, we need to ensure the FBI is able to assist our local police
departments and sheriff's offices with forensic, behavioral, and other
investigative assistance and expertise.
Director Mueller, are you satisfied that the Bureau is doing enough
to assist State and local law enforcement in addressing serial crimes,
like this one? If not, what additional capabilities do you believe are
needed?
Answer. The FBI supports State and local law enforcement to address
serial crimes in multiple capacities. The first is through enhancement
and maintenance of the Combined DNA Index System (CODIS) database. DNA
profiles generated from serial crimes are entered into the CODIS
database system, including the National DNA Index System (NDIS), and
compared to millions of crime scene and offender profiles. When DNA
profiles are linked to different crimes and/or offenders, leads and/or
perpetrators are identified and reported by FBI to the State and local
law enforcement agencies who are investigating these crimes.
In addition, the FBI's National Center for the Analysis of Violent
Crime (NCAVC) provides behavioral-based operational support to Federal,
State, local, tribal, and foreign law enforcement, as well as
intelligence and security agencies involved in the investigation of
unusual, high-risk, vicious, or repetitive violent crimes, communicated
threats, terrorism, and other matters. The NCAVC is a component of the
Critical Incident Response Group (CIRG), and consists of the Behavioral
Analysis Unit (BAU) and the Violent Criminal Apprehension Program
(ViCAP).
The BAU interacts with State/local law enforcement agencies on a
daily basis, providing support to their investigations through services
such as crime analysis, profiles of unknown offenders, linkage
analysis, investigative suggestions and interview/interrogation
strategies. BAU staff members also provide training to thousands of law
enforcement personnel every year on topics such as serial murder,
sexual assault, behavioral analysis of violent crimes, and other
related topics. BAU operational services are supported by their
research program, in which BAU personnel collaborate with outside
academic/scientific individuals and organizations to study violent
offenders and how they commit their crimes. Insights gained through
research are refined into innovative investigative techniques, and are
shared with the law enforcement community through training
presentations and publications. A book written specifically for
criminal investigators on the topic of serial murder was published by
the BAU. Thousands of copies have been distributed to law enforcement
investigators nationwide, and it is available on the FBI Web site.
ViCAP maintains a national database, which represents a
comprehensive collection of information related to both solved and
unsolved homicides, sexual assaults, missing persons and unidentified
human remains. The database allows participating law enforcement
agencies to make cross-jurisdictional matches of significant violent
crimes, and ViCAP personnel can assist those agencies in the
identification and linkage of similar cases based upon factors detailed
in the ViCAP Web submissions. ViCAP can also provide analytical support
that includes, but is not limited to: the creation of maps, matrices
and timelines, and the use and/or coordination of other resources and
databases.
INNOCENT IMAGES
Question. Mr. Director, in July 2007, you testified before the
House Judiciary Committee that ``child exploitation is a substantial
priority'' of the FBI. When asked why the FBI was not doing more, you
said, ``. . . to the extent that I can obtain additional resources to
address child pornography'' you would ``be willing to do so.'' Since
that time, Congress has increased annual funding for the FBI's
``Innocent Images'' program from $10 million to $52 million. That's an
increase of over 500 percent.
Has the FBI increased the number of child exploitation cases
referred for prosecution?
Answer. The FBI does not track the number of cases referred to
Federal, State, local, or international partners for prosecution. The
Innocent Images program does, however, capture statistics related to
arrests, information/indictments, and convictions.
In fiscal year 2010, the Innocent Images National Initiative (IINI)
Program documented the following statistical accomplishments: 954
arrests; 933 information/indictments, and 983 convictions.
Question. How many actual agents and analysts are assigned full-
time to child exploitation?
Answer. The FBI measures special agents dedicated to a program by
counting agent work years, i.e., funded staffing levels (FSL). In
fiscal year 2010, the FBI utilized 245 FSL for Innocent Images. Also,
there are 11 full-time Innocent Images intelligence analysts dedicated
to the program at the national level, as well as additional field
office intelligence analysts who work the program as assigned. Innocent
Images also includes dedicated forensic examiners and management and
program analysts.
Question. Can you tell this subcommittee why--after Congress has
increased FBI funding fivefold--we are hearing reports from law
enforcement across the United States that the FBI's commitment of
resources and personnel to the child exploitation crisis is decreasing?
We know you are committed to fighting child exploitation and would
appreciate your assistance in getting to the bottom of this.
Answer. Time Utilization and Record Keeping (TURK) data clearly
demonstrates the FBI's commitment of time and resources to the Innocent
Images program. In 2001, TURK information reported the utilization of
154 funded staffing level (FSL) for Innocent Images. In 2009, TURK
information reported 251 special agent FSL for Innocent Images. This
year, TURK is expected to surpass last year's numbers. In addition, the
FBI continues to facilitate State and local prosecutions through FBI-
led Cyber Crime Task Forces and is responsible for successfully
leveraging international support through its Innocent Images
International Task Force (IIITF).
dna policy
Question. Director Mueller, reducing the DNA backlog is one of the
single most important issues facing all of law enforcement. But in
doing so, we must do it the right way and guarantee the integrity of
the process.
As stated in the FBI Lab press release, and I believe I heard in
your statement, the FBI is performing ``a review to determine what
improvements can be made to facilitate more efficient and timely
uploading of outsourced DNA data into NDIS and no changes have been
made to any procedures or standards to date''. Nearly every public
crime lab in America, including the FBI's own advisory Scientific
Working Group on DNA Analyses, are in favor of keeping the DNA
technical review policy as it currently stands.
After having seen the timing of the FBI lab's press release,
correspondence from private DNA lab executives taking credit for
pushing this initiative with the FBI, and celebratory statements
praising the FBI for a position you just said the FBI has not changed,
I hope you share my concern about the origin of this decision.
I understand the FBI has a backlog of almost 300,000 DNA samples
for the Federal DNA database. What are you doing to reduce this backlog
and when do you plan to have it eliminated completely?
Answer. The FBI received $30.6 million in the fiscal year 2009
budget, which has enabled the FBI to hire staff, purchase high-volume,
high-speed testing equipment, and increase automation. The robotics are
fully implemented, a majority of the positions received are filled, and
the new hires are either handling samples or completing their training.
The FBI also reorganized its lab in order to maximize efficiency.
As of July 1, 2010, the backlog for the National DNA Index System/
Combined DNA Index System database is 165,303 samples. The FBI has
steadily reduced the backlog by over 147,000 samples from its peak of
312,379 samples in December 2009. The FBI expects to eliminate the
backlog in September 2010.
Question. Did I hear you correctly in your statement that the FBI
is not considering any policy changes regarding access to the National
DNA Index System and access by private laboratories?
Answer. The FBI is not considering policy changes regarding access
by private laboratories to National DNA Index System/Combined DNA Index
System. Administration of this system of law enforcement identification
information is a governmental function and only government agencies
should have direct access to the system.
Question. Can I have your assurance that all voices of State and
local crime labs will be at the table during any DNA policy review
discussion?
Answer. The FBI maintains an ongoing dialogue with the many various
stakeholders of CODIS in an effort to better understand and represent
the needs of the entire law enforcement and forensic communities
regarding this valuable system. This dialogue is carried out, in part,
through regular exchanges and meetings of the American Society of Crime
Laboratory Directors (ASCLD) and the International Association of
Chiefs of Police (IACP), as well as among professional and accrediting
organizations; meetings with CODIS State administrators; an annual
CODIS users meeting; and the Scientific Working Group on DNA Analysis
Methods (SWGDAM). As participation in CODIS is voluntary, the FBI
believes a cooperative approach with stakeholders ensures maximum
participation and partnership.
______
Questions Submitted by Senator George V. Voinovich
INTELLECTUAL PROPERTY ENFORCEMENT PRIORITIZATION
Question. I have been a long-time champion of increased efforts to
enforce intellectual property (IP) rights in the United States and
abroad. These crimes against American companies and American workers
result in significant economic losses, and the nature of these products
imposes serious health and welfare risks on the public. Unfortunately,
a March 2008 GAO Report (GAO-08-157) found that among the five key
Federal agencies that play a role in enforcing IP rights, such
enforcement is not a top priority.
Since this report was issued, and in light of passage of the PRO-IP
Act and other Congressional actions to emphasize the need for an
increased focus on IP enforcement, what specific steps or activities
has the Federal Bureau of Investigation (the ``Bureau'') undertaken to
increase the prioritization of intellectual property rights protection?
Answer. The FBI's highest Intellectual Property Rights (IPR)
priorities are theft of trade secrets and the distribution of
counterfeit goods that pose an immediate threat to health and safety.
The FBI's goal is to disrupt and dismantle international and domestic
criminal organizations that manufacture, distribute, and procure
intellectual property unlawfully.
Through funding received in the fiscal year 2009 appropriation, and
in accordance with the Prioritizing Resources and Organization for
Intellectual Property (PRO-IP) Act, the FBI designated 31 special
agents to solely work IPR investigations. Through funding received in
the fiscal year 2010 appropriation, and in accordance with the PRO-IP
Act, the FBI designated an additional 20 special agents to work IPR
investigations. The disbursement of investigative resources provides 22
of the 25 DOJ Computer Hacking and Intellectual Property (CHIP) units a
local and highly qualified agent facilitating the surging of resources
on the highest priority IP matters.
In fiscal year 2010, the FBI Cyber Division conducted an extensive
strategic review of the IPR program. This effort included a review of
the threat information from our partners in industry associations,
international and domestic law enforcement, and the Intelligence
Community. In addition, the FBI reviewed and analyzed the current case
portfolio to ensure the most significant threats were addressed. This
analysis provided the foundation for the consolidation of certain IPR
investigative resources into four enhanced squads in Los Angeles, New
York, San Francisco, and Washington, DC. The enhanced squads will
facilitate the development of Subject Matter Experts (SMEs) in priority
IP areas and allow for the greater use of complex investigative
techniques in penetrating, disrupting, and dismantling criminal
organizations which thrive from the counterfeiting of goods.
The FBI provided extensive IPR training to domestic and
international partners, as well as significantly increased intensive
training on Statutory Authorities; DOJ Enforcement Efforts; Major Case
Initiatives; Case Studies; Intelligence Analysis for IPR Cases; Federal
Partner Efforts (Department of Homeland Security--U.S. Immigration and
Customs Enforcement, Department of Homeland Security--U.S. Customs and
Border Protection, Food and Drug Administration, U.S. Postal Inspection
Service); and Industry Subject Matter Expert Presentations (e.g.,
International Anti Counterfeiting Coalition). Currently, all special
agents receive an overview of the laws governing IPR violations during
New Agents Training (NAT) at the FBI Academy. Development is underway
for a comprehensive core IPR curriculum that will be integrated into
the standardized NAT and in furtherance of the Agent Career Track
curriculum. All Cyber Career Track agents receive additional IPR
specialized training during the 2 week, post NAT program. This training
consists of IPR program overview, PRO-IP Act overview, case initiation/
investigative techniques, guidance regarding the importance of
interagency partnerships, and the benefits of industry coordination
efforts. The FBI also provides cross program training to IPR designated
special agents in organized crime (OC) and counterintelligence matters.
Conversely, OC and counterintelligence designated agents also receive
IPR program training. This cross program training ensures the highest
priority IPR investigations are developed regarding theft of trade
secrets and those with an OC criminal enterprise nexus.
The FBI established an Intelligence Fusion Group at the National
Intellectual Property Rights Coordination Center (NIPRCC) with partner
agencies to define the IPR threat picture/domain, share strategic
intelligence, establish joint collection requirements, produce joint
intelligence products, and develop the Intellectual Property Rights
Committee National Strategy. In August 2010, the FBI deployed a special
agent and an intelligence analyst team to Beijing, China, and New
Delhi, India, to establish stronger working relationships in countries
posing significant threats to U.S. Intellectual Property and to provide
input to the IPR Domestic/International Domain Threat Assessment. The
FBI is also an integral part of the Department of Justice's Task Force
on Intellectual Property and worked closely with the administration to
develop the Joint Strategic Plan on Intellectual Property Enforcement.
Question. What are the next five specific steps the Bureau will
undertake to continue to increase the priority of IP enforcement?
Please provide a timeline to implement these steps.
Answer. In coordination with National Intellectual Property Rights
Coordination Center (NIPRCC) Intelligence Fusion Group, the FBI is
leading the Domestic/International Domain Threat Assessment effort.
This comprehensive intellectual property (IP) assessment will include
not only information from NIPRCC partner agencies, industry,
investigative case information, open source, and human source
reporting, but also threat information from component teams in target
rich international locations such as Beijing and New Delhi. Target date
for completion is Spring 2011.
FBI will increase case openings in the high priority investigation
areas of theft of trade secrets and health and safety.
The FBI intends to place an additional special agent in both
Beijing and New Delhi for a period of 1 year to augment existing
resources. This placement of additional resources in IP target rich
locations overseas will support the FBI's international mission to
defeat national security and criminal threats by building a global
network of trusted partners and strengthening international
capabilities. Dedicated personnel will enhance strategic partnerships
with foreign law enforcement, intelligence and security services, and
other government agencies by sharing knowledge, experience,
capabilities, and exploring joint operational opportunities to increase
international IP enforcement efforts. Target date for deployment is
November 2011. The FBI will continue its involvement with the Joint
Liaison Group (JLG), IP Working Group through attendance at the
biannual meetings with the Chinese Ministry of Public Security (MPS)
regarding joint criminal investigations. The next scheduled JLG meeting
is November 2010. In support of this effort, the FBI will, in
conjunction with the Computer Crimes and Intellectual Property Section,
fund and provide approved training in selected cities in China. Target
date is dependant upon China's MPS.
The FBI will fund and lead the collaborative effort to design and
establish the NIPRCC Web site. The site will support IPR enforcement,
awareness, education, and networking through the following:
--Incoming complaint submission
--Facilitate inter-agency lead deconfliction
--Provide IPR information, awareness, education, and outreach
--Showcase upcoming enforcement training opportunities
Full implementation is targeted for fiscal year 2011.
The FBI is currently developing an IPR curriculum that will be
integrated into the standardized New Agent Training (NAT) at the FBI
Academy. Target date for completion is June 2011.
RELATIONSHIP BETWEEN INTELLECTUAL PROPERTY THEFT AND CRIME/TERRORISM
Question. A 2009 RAND study, as well as other analysis, concludes
that there was clear evidence that terror groups, as well as organized
criminal enterprises, engage in various forms of IP theft because it is
a low-risk, high-profit enterprise. Are you aware of any specific
Government-wide systematic review of the ties between and among terror
groups and/or organized crime and IP theft? If not, are you aware of
any plans within the Department of Justice or any other department or
agency to conduct such a review?
Answer. The FBI collaborated and produced a joint National
Intellectual Property Rights Coordination Center (NIPRCC) intelligence
product entitled ``Intellectual Property Crime: Threats to the United
States'' dated 06/24/2010 in which the following information was
presented as it relates to ties among terror groups and/or organized
crime and IP theft:
--The NIPRCC assesses with high confidence that intellectual property
crime poses a more far-reaching and serious threat than just
economic loss to the rights holder by putting public safety at
risk, funding organized crime and terrorist activity, and
eroding the United States' technological advantage.
--As part of the previously described Domestic/International Domain
Threat Assessment effort, the FBI, in conjunction with the
NIPRCC, will evaluate available intelligence regarding possible
ties between and among terror groups and/or organized crime and
IP theft. This assessment will seek to identify intelligence
gaps and make recommendations for further actions to address
the existing and/or emerging threat.
THE NATIONAL INTELLECTUAL PROPERTY RIGHTS COORDINATION CENTER
Question. As noted in the 2008 GAO Report, the National
Intellectual Property Rights Coordination Center (the ``Center'') was
created to improve and coordinate Federal IP enforcement efforts, and
its mission has received specific expressions of support from members
of this subcommittee over a number of years. Despite this support, the
GAO Report stated that for a variety of reasons the Bureau's
participation in the Center has been spotty to non-existent.
--Please provide a detailed description of the Bureau's role in
supporting the Center.
--In late 2008, the Center relocated to a new facility. Since this
move, please provide a description of the Bureau's staffing
resident to the facility, including a description of the roles
being played by these employees. In addition to any resident
staff, please describe how other Bureau staff has worked with
the Center to coordinate IP enforcement initiatives and
investigations.
Answer. On April 15, 2010, the FBI's IPR Unit (IPRU) collocated
within the National Intellectual Property Rights Coordination Center
(NIPRCC).
--Five FBI Headquarters (HQ) special agents assigned to the
operational IPRU, which is embedded within the NIPRCC.
--Three FBI-HQ agents assigned to the NIPRCC conduct investigations
and deconflict leads and case information with partner
agencies.
--Two FBI-HQ agents assigned to the NIPRCC provide strategic
guidance, facilitate the development of intelligence, and
oversee the field office IPR programs, agents, and
investigations.
The FBI established an Intelligence Fusion Group (IFG) at the
NIPRCC with the partner agencies to define the IPR threat picture/
domain, share strategic intelligence, establish Intellectual Property
Rights Commission joint collection requirements, produce joint
intelligence products, and develop the IPRCC National Strategy. Members
of the IFG include FBI, U.S. Immigration and Customs Enforcement, U.S.
Postal Inspection Service, U.S. Patent and Trademark Office, U.S.
Customs and Border Protection, National Crime Intelligence Service, and
the Food and Drug Administration. Through this process, the FBI led the
drafting of the June 2010 National Joint Product Intelligence
Assessment entitled, ``Intellectual Property Crime: Threats to the
United States.'' Through the IFG, the FBI continues its development of
Threat Tasking Packages (TTPs) based on established IPR Collection
Requirements. Once completed, the TTPs will be forwarded to field
offices nationwide whose responses will help formulate a National
Domain Threat picture.
Through a coordinated effort by the partner agencies at the NIPRCC,
the ICE Field Operations unit oversees a weekly coordination and
investigative case deconfliction meeting. During this meeting partner
agencies discuss recently initiated investigations and task the partner
agencies to query their respective databases for any investigative
overlap. This coordination streamlines the effective use of limited
resources. This coordination meeting is also used to deconflict
incoming leads and to investigate opportunities to initiate joint
agency investigations.
Question. If no staff has been resident at this new facility,
please provide a detailed explanation of why. When do you expect such
staffing to be completed?
Answer. The FBI currently has personnel dedicated to this facility.
Question. Outside the efforts of the Center, what programs has the
Bureau created to reach out to companies, trade associations, and other
stakeholders in terms of improving referrals and investigations related
to IP enforcement?
Answer. The FBI strengthened its coordination with law enforcement
and industry point of contacts regarding Organized Crime as
demonstrated by participation and shared training during the 7th Annual
International Conference on Asian Organized Crime and Terrorism in St.
Paul, Minnesota, May 16-21, 2010. This annual conference brings
together law enforcement officers and industry from all over the world
to strategize and learn about the latest trends in Asian Organized
Crime. A segment of this training focused on counterfeiting activities
of Asian Organized Crime Groups.
The FBI provided comprehensive intellectual property rights program
training in September 2009 for those special agents funded by the act,
which included industry subject matter expert presentations (e.g.,
International Anti Counterfeiting Coalition). This interface with IP
industry representatives established points of contacts for case
referrals.
The FBI has led a Major Case Initiative, Fractured Skies, focusing
on counterfeit aircraft investigations since 2007 and is now
coordinating the initiative from the National Intellectual Property
Rights Coordination Center (NIPRCC). Members of the Fractured Skies
Task Force (FSTF) consist of representatives from Immigration and
Customs Enforcement, National Aeronautics and Space Administration, Air
Force--Office of Special Investigations, Defense Criminal Investigative
Service, Department of Transportation--Office of Inspector General,
Federal Aviation Administration, Naval Criminal Investigative Service,
United States Coast Guard, and the United States Patent and Trademark
Office. The goal of the FSTF is to share intelligence, report and refer
case information, and initiate joint investigations regarding
counterfeit aircraft parts.
FBI provided subject matter expert training during aircraft
industry conferences, such as Surface Mount Technology Association
Center for Advanced Lifecycle Engineering and Aerospace Industries
Association. This interface with industry representatives also
established points of contacts for case referrals.
During the 2010 International Anti-counterfeiting Coalition spring
conference co-sponsored by the U.S. Immigration and Customs
Enforcement, the FBI participated in roundtable discussions regarding
the IP threat and future usage of best practices. This event was the
launch of the NIPRCC Informal Advisory Working Group, mirroring the FBI
led quarterly industry meetings. Both of these working groups, at the
management and executive level, will be coordinated and held through
the NIPRCC.
The FBI continues to support InfraGard public outreach efforts
(with over 37,000 members) and partners with the National White Collar
Crime Center to form the premier cyber crime reporting and referral
portal at the Internet Crime Complaint Center (www.ic3.gov).
Question. If the Bureau were to receive additional IP enforcement
funding, for example $10 million, please describe how you could use
such funding to increase IP enforcement activities, and how quickly
such resources could be deployed and the effect such resources would
have on reducing IP theft.
Answer. Should the FBI receive an additional $10 million to
increase intellectual property enforcement activities, the funding
would be used to hire additional personnel and for non-personnel
funding as delineated below:
--Twenty-seven Special Agent positions (25 field positions, 2 Program
Managers assigned to the National Intellectual Property Rights
Coordination Center (NIRPCC);
--Two Professional Support Employee positions (Management Program
Analysts) assigned to the NIPRCC;
--Ten Field Ratio, Professional Support positions;
--One Field Ratio, Information Technology position;
--Six Field Ratio, Investigative Support positions; and
--$175,000 in non-personnel funding
The above cited personnel would be deployed within a 6 to 12 month
period upon receipt of congressional funding. This time period allows
for processing of Field Office intra-divisional personnel realignments
and New Agent Training, hiring and transfers. Additional agents would
result in increased case openings on high priority threat areas, which
would lead to the disruption and dismantlement of more organized,
international intellectual property rights criminal enterprises.
Senator Mikulski. The subcommittee will temporarily recess
and reconvene in Hart 219, the Intelligence Committee hearing
room, to continue the discussion in a classified arena.
SUBCOMMITTEE RECESS
This subcommittee stands in recess until Thursday, April
22, at 10 a.m., when we are going to take the testimony of the
NASA Administrator.
Thank you very much.
Mr. Director, we will see you over there. We will convene
no later than 11:30 a.m.
Mr. Mueller. Thank you.
[Whereupon, at 11:15 a.m., Thursday, April 15, the
subcommittee was recessed, to reconvene at 10 a.m. Thursday,
April 22.]