[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                    FEDERAL BUREAU OF INVESTIGATION

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

                                HEARING

                               BEFORE THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 9, 2012

                               __________

                           Serial No. 112-151

                               __________

         Printed for the use of the Committee on the Judiciary







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                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania             JARED POLIS, Colorado
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
MARK AMODEI, Nevada

           Richard Hertling, Staff Director and Chief Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel















                            C O N T E N T S

                              ----------                              

                              MAY 9, 2012

                                                                   Page

                           OPENING STATEMENTS

The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Chairman, Committee on the Judiciary.......     1
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     2

                                WITNESS

The Honorable Robert S. Mueller, III, Director, Federal Bureau of 
  Investigation
  Oral Testimony.................................................     3
  Prepared Statement.............................................     7

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Member, 
  Committee on the Judiciary.....................................    41
Material submitted by the Honorable Steve King, a Representative 
  in Congress from the State of Iowa, and Member, Committee on 
  the Judiciary..................................................    48
Material submitted by the Honorable Maxine Waters, a 
  Representative in Congress from the State of California, and 
  Member, Committee on the Judiciary.............................    58

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    75
Post-Hearing Questions submitted to the Honorable Robert S. 
  Mueller, III, Director, Federal Bureau of Investigation........    91

 
                    FEDERAL BUREAU OF INVESTIGATION

                              ----------                              


                         WEDNESDAY, MAY 9, 2012

                          House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 10:09 a.m., in room 
2141, Rayburn House Office Building, the Honorable Lamar Smith 
(Chairman of the Committee) presiding.
    Present: Representatives Smith, Coble, Gallegly, Goodlatte, 
Lungren, Chabot, King, Franks, Gohmert, Chaffetz, Gowdy, 
Conyers, Nadler, Scott, Watt, Lofgren, Jackson Lee, Waters, 
Pierluisi, Quigley, Chu, and Deutch.
    Staff Present: (Majority) Travis Norton, Counsel; Holt 
Lackey, Counsel; (Minority) Danielle Brown, Counsel; and Aaron 
Hiller, Counsel.
    Mr. Smith. The Judiciary Committee will come to order, and 
we welcome everyone, particularly the Director of the FBI, to 
this oversight hearing.
    And, Director, let me say, considering that we were voting 
until 12:30 last night, this is a pretty good turnout for this 
morning.
    I will recognize myself for an opening statement and then 
the Ranking Member, and then we will proceed with our 
questions.
    Again, welcome, Director Mueller, to today's oversight 
hearing of the FBI.
    When Director Mueller was last in front of this Committee 
just over a year ago, we all believed that it would be his last 
hearing before the House Judiciary Committee as FBI Director 
because his 10-year term was set to expire on September 4, 
2011. But because of the changes of leadership at the 
Department of Defense and the Central Intelligence Agency, the 
President requested and Congress passed a law to allow him to 
be renominated and serve an additional 2 years. Director 
Mueller received this vote of confidence because he has led the 
FBI with integrity and skill through some of the most difficult 
and important years in America's history.
    Director Mueller became FBI Director only days before the 
September 11th terrorist attacks. As the first FBI Director of 
the post-September 11th era, Director Mueller led a historic 
transformation of the agency. He oversaw a rapid expansion of 
the FBI's counterterrorism division and still continued its 
traditional focus on investigating Federal crimes.
    Under his leadership, the FBI has successfully stopped 
dozens of terrorist plots and remained vigilant against the 
threat of al-Qaeda and like-minded groups. This threat did not 
end with the death of Osama bin Laden. Just this week we 
learned that al-Qaeda leaders in Yemen planned to detonate a 
bomb on a U.S.-bound jet around the anniversary of bin Laden's 
death. Fortunately, American intelligence, in cooperation with 
foreign allies, prevented this attack.
    The FBI has also brought to justice inside traders, child 
pornographers, intellectual property thieves, doctors who 
defraud Medicare, and countless other criminals.
    A strong leader at the helm of the FBI is critical to our 
national security. So are strong laws that help investigators 
and intelligence officials keep our Nation safe.
    The FISA Amendments Act of 2008 is scheduled to expire at 
the end of this year unless Congress acts to reauthorize it. 
This law gives the intelligence community the tools it needs to 
determine who terrorists communicate with, what they say, and 
what they may be planning. FISA strikes a balance as it allows 
the FBI to acquire intelligence information about foreign 
terrorists abroad while preserving and protecting the civil 
liberties of American citizens, no matter where they are. I 
hope to hear Director Mueller's views on how FISA has furthered 
the FBI's mission to protect Americans and whether Congress 
should do anything to strengthen or improve this law.
    Again, let me conclude by saying that we appreciate 
Director Mueller's many years of public service. He has been an 
outstanding Director of the FBI, and America is safer and 
better because of his tenure.
    That concludes my opening statement. I will recognize the 
gentleman from Michigan, the Ranking Member of the full 
Committee, Mr. Conyers.
    Mr. Conyers. Thank you, Chairman Smith. I join you in 
declaring Director Mueller a true patriot and one committed to 
the rule of law and the Constitution, and I joined in 
supporting the extension of his term.
    Now, when I first came to the House Judiciary Committee, 
the Director of the FBI was J. Edgar Hoover, and I remind you 
of that to talk about and think about the transition and the 
changes that have gone on in law enforcement and in the FBI in 
particular so that we are looking at how we make the criminal 
justice system a little fairer, make it work better, and 
protect our citizens more. And so I hope that in the course of 
our discussions this morning we get to several considerations 
that are on my mind as we begin this particular hearing.
    One is overincarceration. We put more people in prison than 
any other country on the planet and with less successful 
results, I might add, and so I need to, of course, engage you 
in that issue. And of course when we talk to each other, I am 
also talking to my colleagues as well. These are subject 
matters that we need to examine when the head of the FBI is not 
our witness.
    The other problem that I have got to bring up is what 
effect has our overconcentration on counterterrorism efforts, 
how has that hindered or affected the fight against crime 
inside the U.S., violence, murders, other issues that do not 
fall into the terrorist category?
    And the other matter is the so-called Ryan budget, which 
calls for four-and-a-half thousand fewer FBI agents in 2014. 
That is something that I think we ought to try to have candid 
public discussions about as well. And I include the diversion 
programs and treatment programs for less serious offenses as 
something that we might want to be looking at at the Federal 
level and at the State level as well.
    And then I am sorry to bring up the materials used by the 
FBI--before your tenure, I believe--I know it was--that painted 
Muslims as violent and likely to be--quote, likely to be 
terrorist sympathizers and followers of a, quote, cult leader, 
and the fact that this created great consternation not only in 
the law enforcement community and in the Muslim-American 
community but among all fair-thinking Americans as well.
    As you know, The Washington Post has detailed a series of 
articles about the flawed forensic work at FBI laboratories and 
instances where prosecutors have failed to notify defendants or 
their lawyers when they knew that the evidence was flawed, and 
hundreds of defendants still remain incarcerated at this moment 
because FBI hair and fiber experts may have, in some cases, 
misidentified them as suspects.
    These are the issues that are on my mind as we meet this 
morning, and I welcome your presence here today.
    I thank the Chairman.
    Mr. Smith. Thank you, Mr. Conyers.
    Our only witness is Federal Bureau of Investigation 
Director Robert S. Mueller, III, who has held that position 
since September 4th, 2001. He was first nominated by President 
George W. Bush and last year was nominated by President Barack 
Obama and confirmed by the Senate for an additional 2-year 
term.
    Director Mueller has a long and honorable record in public 
service. After graduating from Princeton and receiving a 
master's degree from New York University, Director Mueller 
enlisted as a Marine in Vietnam. He received a Bronze Star, two 
Navy commendation medals, the Purple Heart, and the Vietnamese 
Cross of Gallantry. After his military service, he received his 
law degree from the University of Virginia.
    Early in his legal career he served as a prosecutor in the 
United States Attorney's offices of San Francisco and Boston. 
After working as a partner in the Boston law firm of Hill & 
Barlow, Director Mueller returned to the Justice Department in 
1989 as an assistant to the Attorney General and later as the 
head of the Criminal Division. In 1998, Director Mueller was 
named United States Attorney in San Francisco, a position he 
held until 2001, when he was nominated to be Director of the 
FBI.
    And, Director Mueller, once again we welcome you today and 
look forward to your statement, and if you will please proceed.

 TESTIMONY OF THE HONORABLE ROBERT S. MUELLER, III, DIRECTOR, 
                FEDERAL BUREAU OF INVESTIGATION

    Mr. Mueller. Well, good morning and thank you, Chairman 
Smith, Ranking Member Conyers, and Members of the Committee. I 
do want to thank you for the opportunity to appear before the 
Committee today and thank you for your continued support of the 
men and women of the FBI.
    As you know and have pointed out, the Bureau has undergone 
unprecedented change in recent years. Since the attacks of 
September 11th, we have refocused our efforts to address and 
prevent emerging terrorist threats. The terrorist threat is 
more diverse than it was 10 years ago, but today we in the FBI 
are better prepared to meet that threat.
    We also face increasingly complex threats to our Nation's 
cyber security. Nation state actors, sophisticated organized 
criminal groups, and hackers for hire are stealing trade 
secrets and valuable research from America's companies, 
universities, and government agencies.
    And, of course, national security is not our only concern, 
as we remain committed to our criminal programs.
    In the economic arena, billion dollar investment fraud, 
health care fraud, and mortgage fraud have undermined the 
world's financial system and victimized investors, homeowners, 
and taxpayers. And while crime rates may be down nationwide, 
gang violence still plagues many neighborhoods, and our 
communities continue to confront violent crime, crimes against 
children, and transnational organized crime.
    And as national security and criminal threats continue to 
evolve, so must the FBI change to counter and prevent those 
threats before they occur. In doing so, we in the Bureau are 
relying on our law enforcement and private-sector partners more 
than ever before. Throughout these efforts, the FBI remains 
firmly committed to carrying out our mission while protecting 
the civil liberties of the citizens we serve.
    Let me begin with the threat from terrorism, which remains 
our top priority. Al Qaeda is decentralized, but the group is 
committed to high-profile attacks against the West, as we 
confirmed from the documents seized from Osama bin Laden a year 
ago. Meanwhile, al-Qaeda affiliates, especially al-Qaeda in the 
Arabian Peninsula, represent the top counterterrorism threat to 
the Nation. AQAP has attempted several attacks on the United 
States, including the failed Christmas day airline bombing in 
2009 and the attempted bombing of U.S.-bound cargo planes in 
2010. And of course we are currently--we in the Bureau are 
currently exploiting an IED, improvised explosive device, 
seized overseas which is similar to the devices used by AQAP in 
the past.
    We also remain concerned about the threat from homegrown 
violent extremists. These individuals have no typical profile, 
and their experiences and motives are often distinct, which 
makes them difficult to find and difficult to stop. These cases 
illustrate why we must continue to enhance our intelligence 
capabilities and to share information to make sure that 
critical information gets to the right people before any harm 
is done.
    Let me turn next to counterintelligence. While we still 
confront traditional espionage, today's spies are also 
students, researchers, business people, or operators of front 
companies. They seek not only state secrets but also trade 
secrets, intellectual property, and insider information from 
government, businesses, and American universities. We are also 
seeing a growing insider threat. That is when employees use 
their legitimate access to steal secrets for the benefit of 
another company or the benefit of another country.
    Turning to cyber, of course, the counterintelligence threat 
is now merging with the cyber threat. Today, so much sensitive 
data is stored on computer networks our adversaries often find 
it as effective or even more effective to steal secrets through 
cyber intrusions.
    The cyber threat has evolved significantly over the past 
decade. The threat ranges from nation states who seek to 
exploit weaknesses in our computer networks to hackers that 
seek information for sale to the highest bidder, and there are 
also hackers and hacktivist groups intent on pioneering their 
own forms of digital anarchy.
    We in the Bureau have built up a substantial expertise to 
address these threats both at home and abroad. We have cyber 
squads in each of our 56 field offices, with more than a 
thousand specially trained agents, analysts, and forensic 
specialists. We have 63 Legal Attache offices that cover the 
globe and assist in addressing the cyber threat. In addition, 
the National Cyber Investigative Joint Task Force brings 
together 20 law enforcement, military, and intelligence 
agencies to stop current and predict future attacks. With our 
partners at DHS, CIA, NSA, and the Secret Service, we are 
together targeting cyber threats facing our Nation.
    Next, let me address our efforts to combat financial 
crimes. The FBI and its partners continue to focus on the most 
egregious offenders of mortgage fraud. At the end of last year, 
the FBI had nearly 2,600 mortgage fraud investigations 
nationwide, and a majority of these cases included losses 
greater than a million dollars. Over the past 4 years, we have 
nearly tripled the number of Special Agents investigating 
mortgage fraud; and working with our Federal and State law 
enforcement partners, our agents and analysts are using 
intelligence, surveillance, computer analysis, and undercover 
operations to find the key players behind large-scale mortgage 
fraud.
    Turning to health care fraud, health care spending 
currently makes up about 18 percent of our Nation's total 
economy, which presents an attractive target for criminals, so 
much so that we lose tens of billions of dollars each year to 
health care fraud. As announced last week, the FBI, HHS, and 
Justice Department continue to bring a record number of cases 
involving hundreds of millions of dollars in fraud; and since 
their inception in March 2007, Medicare Fraud Strike Force 
operations in nine locations have charged more than 1,300 
defendants who collectively have falsely billed the Medicare 
program for more than $4 billion.
    And crime on our streets remains as much of a threat to our 
overall security as terrorism, espionage, or cyber crime. The 
most recent uniform crime report indicates violent crime 
continues to fall, but, as we all know, this does not represent 
every community. For some cities and towns across the Nation, 
violent crime, including gang activity, continues to pose a 
real problem.
    We also continue to confront organized crime. Today's 
organized crime is marked by sophisticated enterprises that run 
multi-national, multi-billion dollar schemes, everything from 
human trafficking to health care fraud and from computer 
intrusions to intellectual property theft. The annual cost of 
transnational organized crime to the U.S. economy is estimated 
to be in the tens of billions of dollars.
    Lastly, FBI remains vigilant in its efforts to keep 
children safe and to find and stop child predators. Through our 
partnerships with State, local, and international law 
enforcement, we are able to investigate crimes across legal, 
geographical, and jurisdictional boundaries. Through our Child 
Abduction Rapid Deployment Teams, the Innocence Lost National 
Initiative, the Office of Victim Assistance, and numerous 
community outreach programs, the FBI and its partners are 
working to make the world a safer place for our children.
    Chairman Smith and Ranking Member Conyers, I thank you for 
the opportunity to discuss the FBI's priorities and the state 
of the Bureau as it stands today. The transformation the FBI 
has achieved over the past 10 years would not have been 
possible without the support of Congress and the American 
people. I thank you for the opportunity to appear here today, 
and I am happy to answer any questions you might have.
    Thank you, sir.
    [The prepared statement of Mr. Mueller follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                               __________

    Mr. Smith. Thank you, Director Mueller.
    Let me recognize myself for some initial questions.
    I mentioned in my opening statement, Director Mueller, the 
fact that the FISA Amendments Act of 2008 is going to expire at 
the end of this year. Just quickly, how important is it that we 
continue those FISA amendments, and should we seek to improve 
them or improve that Act in any way?
    Mr. Mueller. Well, Mr. Chairman, we have seen over the last 
several days, particularly with regard to the IED that was 
recently recovered, that terrorism should be--is and should be 
and continues to be our number one priority and the number one 
priority of a number of our intelligence agencies. The 
amendments that are up for passage again, reenactment at the 
end of this year, are absolutely essential in our efforts to 
address this threat.
    Mr. Smith. Okay.
    Mr. Mueller. It gives not only us, the FBI, the access to 
information that enables us to identify persons both within the 
United States but also without the United States that would 
hurt us but also our intelligence agencies to operate overseas 
to pull in this information under the supervision of the FISA 
court so that we can put together the information we need to 
prevent attacks. It has been essential and remains essential.
    Mr. Smith. Okay, appreciate that. If you can think of any 
way we can improve it and get that information to us in the 
next couple months, that would be helpful as well.
    Mr. Mueller. I think you will have our support and the 
support of the department.
    Mr. Smith. Appreciate that, thanks.
    Let me go to the next subject, which is the drug 
trafficking crisis that we have along our southern border. And 
I know you are as much aware of that as anyone, but, just as an 
example, last week over one night there were 23 people killed 
in Nuevo Laredo, directly across the border from Laredo, Texas. 
To say these people were killed is probably a euphemism. Most 
of them were mutilated and tortured before they died.
    The problem, if anything, I think, is perhaps getting 
worse, but I just wanted to get your feeling about what more we 
could do in this country to address the drug trafficking 
problem that we have along our southern border and what more 
the FBI might be doing.
    Mr. Mueller. Our focus along the southern border is in 
several areas.
    First of all, public corruption. We have a number of 
squads, task forces that address public corruption on our side 
of the border as a result of the amounts of monies that are 
generated through drug trafficking occurring south of the 
border.
    Secondly, we have task forces addressing kidnappings across 
the border, task forces with other Federal authorities and our 
State and local law enforcement to address that particular 
phenomenon, which has, I would say, decreased somewhat in the 
last couple of years.
    And, lastly, and the most important part of it, is the 
accumulation of intelligence that can help our partners south 
of the border. We have a relatively large Legal Attache office 
in Mexico City. We have a number of our offices along the 
border. We have a focus back at Headquarters. Our efforts had 
been to consolidate that intelligence, make it available, and 
integrate it with the intelligence developed by others and 
then, in appropriate circumstances, pass that intelligence on 
to our counterparts south of the border.
    Mr. Smith. Okay. Director Mueller, one of the fastest-
growing crimes in America, and it may well be the fastest-
growing crime, is child pornography on the Internet, which has 
been increasing at about 150 percent a year for each of the 
last 10 years. What more can the FBI do to address this 
particularly horrible crime which, of course, points to the 
least innocent among us as being the primary victims?
    Mr. Mueller. We have numbers of agents that work both with 
themselves but also--by themselves, in particular undercover 
operations on the Internet but also in task forces around the 
country with State and local law enforcement. We also have a 
task force in Maryland, International Task Force where we 
rotate individuals from various countries in to help us address 
the purveyors of child pornography on the Internet wherever 
they may be in the world.
    On the one hand, the growth of child pornography is as you 
have set out, but also we are developing new tools that enable 
us to more quickly identify the persons who are putting this 
stuff on the Internet and making our investigations more--far 
more effective coupled with the growth of intersection with our 
counterparts overseas. Because this is a worldwide phenomenon, 
not just a U.S.--United States phenomenon, and to have any 
impact whatsoever we have to have a global reach.
    Mr. Smith. Okay, thank you, Director Mueller.
    My time is up, and the gentleman from Michigan is 
recognized for his questions.
    Mr. Conyers. Thank you very much, Chairman Smith.
    We have at least three points that I made in my opening 
statement that I would like to review with you. They are the 
overcriminalization that has become a custom inside the 
criminal justice system in America in which we put away more of 
our citizens than any other country on earth and for longer 
periods of time.
    The second thing is the prejudicial Muslim materials that 
were pulled from FBI training that were so slanderous, and the 
third issue is the flawed FBI lab forensic work that sent a lot 
of people to prison, many of whom are still there.
    Could you take your time and let's go through these 
together.
    Mr. Mueller. The first one is the point you make, 
Congressman, about overincarceration. I do believe any 
discussion of that warrants looking at the particular crimes 
that--for which there is incarceration. It is very difficult to 
generalize or to reach some sort of understanding or make 
progress with that generalization.
    I will say there is some areas in which there needs to be, 
in my mind, harsher penalties. We are going into the cyber 
arena in the next number of years, and there should be 
substantial penalties for those persons who abuse their 
capabilities in the cyber arena.
    Let me talk, if I could, for a second about the 
counterterrorism training issue that you raised. Last summer, 
it came to our attention that there were materials in certain 
of our training materials that were being used that were in 
some ways inappropriate, in bad taste. It may have also 
depicted stereotypes. It was brought to our attention 
internally and also externally.
    We put together a panel of experts from within the Bureau 
and also from other agencies, three from other agencies in the 
government, persons with substantial credentials from places 
like Yale, Princeton, Johns Hopkins, to review materials and 
put together a touchstone document of what should be taught. We 
then, understanding that we needed a closer review of this, we 
pulled together 30 personnel, agents and others, to go through 
the training materials we had used in this arena since 2001. 
Went through 160,000 documents and over a thousand videos of 
the training and found that there are 876 documents that were 
inappropriate, and we have removed those from our training.
    But what it also showed us is that we had to put in place a 
screening mechanism to assure that our agents, our analysts, 
our personnel receive the best possible training in addressing 
a subject such as the terrorists in the various--whether it be 
a domestic terrorist or an international terrorist, we need to 
give our persons top-flight training. And it showed us that we 
did have to put into place not only in this area but in other 
areas a system of review of that training to assure that it 
comports with what we expect.
    Going to the last subject, and this was the hair analysis. 
As you pointed out, I think, back in--there was a report done 
in 2004 following a study of certain examiners at the 
laboratory. One of those was a hair and a fiber examiner. The 
other examiners, though, who may have conducted those 
examinations prior to 1996 were not part of that review.
    In 1996, we started using mitochondrial DNA along with hair 
and fiber analysis, and that changed the ball game, so to 
speak. But we are talking now with the Department of Justice in 
terms of how we go back, the universe of cases that we wish to 
review to determine whether or not examiners in cases probably 
prior to 1996 may have overstated the import, the impact of 
their hair analysis. As I say, we are working with the 
Department of Justice to see what kind of review should be 
undertaken.
    Mr. Conyers. And, as you know, there are some people that 
are, I think, still incarcerated on the basis of some of those 
flawed reports.
    Mr. Mueller. Well, we have seen in the--the government has 
and the District of Columbia has at least a couple of cases 
where it looks like the DNA indicated that the analysis that 
was done on hair and fiber was wrong, and we want to make 
certain that we follow up on that class of cases to the extent 
that we can.
    Mr. Conyers. Thank you very much.
    Mr. Smith. Thank you, Mr. Conyers.
    The gentleman from North Carolina, Mr. Coble, is 
recognized.
    Mr. Coble. Thank you, Mr. Chairman.
    Mr. Chairman, first of all, I want to associate myself with 
the words of compliments you and the Ranking Member spoke on 
behalf of Director Mueller. Mr. Mueller, you have indeed been 
an outstanding Director of the FBI.
    Mr. Mueller. Thank you, sir.
    Mr. Coble. Good to have you in the field today.
    In your recent testimony on the FBI's fiscal year 2013 
budget request, you made reference to several criminal threats 
that will receive heightened focus, ranging from white-collar 
crime and health care fraud to organized crime and gang 
violence. Part of that heightened focus requires putting more 
special agents onto these cases. Help me, Mr. Mueller, if you 
will, reconcile the need for more agents to address these 
important criminal threats on the one hand with Federal 
employee pay and hiring freezes on the other. Have you, Mr. 
Mueller, considered asking on behalf of the FBI--considered 
asking Congress to exempt Federal law enforcement officers from 
these actions, much like the President did with the military?
    Mr. Mueller. There are two areas on which I guess I should 
focus. The first is on the 2013 budget that has gone through 
Congress, at least the initial stages in Congress at this 
point, and with that budget we do not face those kinds of 
losses that you are contemplating. If sequestration occurs, 
then it is a different ball game, and we would be seeking to 
put ourselves in the same stature or status as the military.
    I do believe that when it comes to the work that we do in 
the national security arena, whether it be counterterrorism, 
counterintelligence, espionage, or the cyber arena, the work 
that we do in contributing to the national security, not to 
mention the other crimes that you alluded to, organized crime, 
health care fraud, and the like, the Nation can ill afford for 
us to lose a substantial number of agents.
    We have had to, since September 11th, prioritize and make 
certain that all of our persons focus on the most important 
priorities, and that has meant we do not do some things we did 
prior to September 11th, but it is absolutely essential to make 
certain that we do prioritize in order to stop terrorist 
attacks, stop spies, stop cyber intruders, lock up organized 
criminals, child predators, and the like. And, as I say, my 
hope would be that we would do as well if not better than the 
military when it comes to the budget review.
    Mr. Coble. I thank you for that, Mr. Mueller.
    The bipartisan Senate report on the Fort Hood massacre, 
the, quote, worst terrorist attack on U.S. soil, close quote, 
since 9/11, found that political correctness inhibited Hasan's 
superiors from taking actions that may have stopped or at least 
delayed that attack. Can you see why, given that report, why 
some of us may be concerned, even worried that ``materials 
purge'' may be another issue or instance of a governmental 
agency compromising national security under the pressure of 
political correctness? And do you--what can you say, Director 
Mueller, to assure us that you appreciate how pressures for 
political correctness can harm and may have harmed our national 
security efforts?
    Mr. Mueller. I can say absolutely and with certainty that 
political correctness played no role in the efforts we--I 
undertook to make certain that we give the best training to our 
personnel. It does us no good to have personnel who are trained 
with inadequate materials or misguided materials. We have made 
those 876 pages available with an explanation as to why we 
thought they should be--should not be used in further training. 
But by the same token I should say we went through 160,000 
pages, and out of those 160,000 we only found far less than 1 
percent that were at all questionable. And so political 
correctness had nothing to do with it. It was the appropriate 
thing to do, and it was done because we want the best possible 
training for our personnel.
    Mr. Coble. Sir, I didn't mean to imply that it did, but at 
least it is exposed. That was my point.
    Mr. Chairman, I see that red light is about to illuminate, 
so I yield back my time.
    Mr. Smith. Thank you, Mr. Coble.
    The gentleman from New York, Mr. Nadler, is recognized.
    Mr. Nadler. Thank you.
    I would like to follow up a bit sort of on what the 
gentleman from North Carolina was asking. The House is now 
considering on the floor today the Commerce, Justice, Science 
appropriations bill for the next fiscal year, and this includes 
the FBI. Some Republicans believe we should not be abiding by 
the appropriations figures agreed to in the Budget Control Act 
last year and that spending should be much lower. What would 
happen if, as some want, there was a drastic across-the-board 
cut in government funding, including the FBI, of, let's say, 5 
or 10 percent? How would you handle that?
    Mr. Mueller. Again, we would have to prioritize. In my 
opening statement, the lengthier statement that I provided to 
the Committee, you can see the various threats that we are 
facing. We would have to cut down. We would have to find some 
area amongst those priorities where we would have to reduce 
personnel. But it is very hard to pick when you are reducing 
personnel on gang violence, reducing personnel to address the 
cyber threat, reducing personnel in addressing the threat of 
child pornography on the Internet. Every one of those 
priorities we have is a--every one of those priorities is a 
substantial priority to the American public and the security of 
the United States. But we would have to prioritize. That is 
what we had to do after September 11th. We would have to cut it 
again.
    Mr. Nadler. And if the sequestration that was mandated by 
the Budget Control Act were allowed to go into effect January 
1, how many agents would have to be let go? How many 
investigations----
    Mr. Mueller. I would have to get back to you. Several 
hundreds, if not over a thousand. I would have to get back to 
you on that figure.
    Mr. Nadler. How many agents do you have now?
    Mr. Mueller. Approximately 14,000.
    Mr. Nadler. So you are talking 8, 9 percent maybe?
    Mr. Mueller. Maybe something a little bit less. But, yes, 
it would be a substantial, substantial cut.
    Mr. Nadler. Let me switch subjects a moment.
    Under the February 2012, Presidential Policy Directive 
which implements Section 1022 of last year's National Defense 
Authorization Act, or NDAA, the FBI is given lead authority in 
all cases where terror suspects are captured or taken into 
custody by law enforcement. Can you tell us how this policy 
directive was developed and will it help or hurt the FBI in its 
counterterrorism mission?
    Mr. Mueller. I am sorry. I could hear part of the question 
but not the last part of the question. How the directive was 
developed?
    Mr. Nadler. Was developed, and will this directive, as it 
was developed, in your opinion help or hurt the FBI in its 
counterterrorism mission?
    Mr. Mueller. I had some initial concerns about NDAA in two 
areas. The first area was with regard to our continuing 
authorities, and the final passage of the NDAA resolved that 
concern. The second concern is what would happen at the time of 
an arrest where events are fast moving, and would there be 
confusion with regard to who does what when. And the directive, 
in my mind, resolves those issues. And it makes it relatively 
clear that if we had a terrorism case that fell within the 
parameters of NDAA, we would continue to work that case in 
conjunction with the Department of Defense. So I was satisfied 
with the bill as well as the directive as assuring us that we 
would be able to do our job effectively, given both the 
directive and the statute--changes in the statute, I should 
say.
    Mr. Nadler. Okay. And would you recommend any changes in 
the statute when it comes up again this year?
    Mr. Mueller. I would have to look at it and see what was 
proposed. You asked about the development of the----
    Mr. Nadler. Policy directive.
    Mr. Mueller [continuing]. Procedures, the policies. That 
was done in a number of working groups, with the Justice 
Department, Department of Defense, DHS, and the like. That is 
how it was developed.
    Mr. Nadler. Okay. My last question. Last month, we passed a 
couple of--we, the House, not the Senate, passed some 
legislation regarding cyber legislation, the CISPA. From the 
FBI's perspective, do these bills go far enough, too far in 
assisting you in what you need to deal with, in the powers that 
you need to deal with the cyber security threat?
    Mr. Mueller. There are a variety of issues with regard to 
how you address the cyber threat. The bills address one aspect 
of it, I think, and that is how you protect the infrastructure 
and who was going to be involved in that, how they are going to 
be involved.
    There are two areas that we will have continuous concern. 
The first area is, not necessarily addressed in the bills, is 
the mandatory reporting of substantial cyber incidents, which 
we believe should be part of the statute at some point in time; 
and the second is the sharing of intelligence. We saw that we--
in the days leading up to September 11th, we saw how we were 
disadvantaged by the inability in some cases and cultural 
insensitivity in other cases to sharing intelligence. It is 
absolutely essential in the cyber arena, as you had in the 
counterterrorism arena, that intelligence be shared.
    Somewhat different, though, is the importance of sharing 
information that is obtained from the private sector, because 
often the victims are the private sector. And so to the extent 
that those bills address the sharing of intelligence 
particularly with us, we are supportive.
    Those are the two issues that we are concerned about in any 
cyber legislation, whether that which has recently been passed 
or otherwise.
    Mr. Nadler. Thank you. I see my time has expired.
    Mr. Smith. Thank you, Mr. Nadler.
    The gentleman from Virginia, Mr. Goodlatte, is recognized.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Director Mueller, welcome.
    Director, do you agree that no United States citizen 
arrested in the United States should be indefinitely detained 
without all the rights of due process? What is your 
interpretation of Section 1021 of the National Defense 
Authorization Act?
    Mr. Mueller. Could you repeat the question again, if you 
wouldn't mind?
    Mr. Goodlatte. Sure. The question is whether or not you 
agree that no United States citizen apprehended, seized, 
captured, arrested in the United States should be indefinitely 
detained without all the rights of due process provided by our 
Constitution?
    Mr. Mueller. I believe that should be the case.
    Mr. Goodlatte. So do you have concern over the language 
that is in the National Defense Authorization Act called 
Section 1021 which does not clarify the status of U.S. citizens 
in that regard?
    Mr. Mueller. I haven't focused on that aspect of the Act as 
much as I had focused on the other aspects of the Act, but I do 
believe it gives--affirms the President's authority to make 
what decisions the President believes are necessary to thwart a 
terrorist attack.
    Mr. Goodlatte. But that might include seizing a U.S. 
citizen in their home in Chicago, Illinois, and then detaining 
them indefinitely without charges.
    Mr. Mueller. I have not--I am not certain that is the case, 
but I have not read the OLC opinions, and I have not followed 
the debate on it.
    Mr. Goodlatte. Sure. Well, we would look forward to the 
opportunity to work with you to make sure it is clear that U.S. 
citizens have that protection, and we are in the process of 
working through that here in the Congress.
    Let me ask you another question. Last week, the FBI 
arrested five men in Cleveland, Ohio, who were involved in a 
terrorist plot to bomb a bridge. Some of these men were members 
of the Occupy Cleveland movement. Has the FBI seen an increase 
in this type of left wing extremist terrorist activity and is 
the Occupy movement a breeding ground for this type of 
extremism? And if those within the Occupy movement perceive 
that their demands are not being met, what is the likelihood 
that we will see them resorting to more of this type of 
violence?
    Mr. Mueller. As to the last aspect of your question I can't 
speculate. I will tell you that, because it is individuals who 
were arrested last week, I am limited to, and I direct you if I 
could, to the complaint that was filed and the facts that are 
laid out in the complaint which focus on their conduct, not 
necessarily the conduct of others.
    Mr. Goodlatte. And how about my first question which was 
have you seen an increase in this type of left wing extremist 
terrorist activity?
    Mr. Mueller. Well, I wouldn't--I would say--I wouldn't 
necessarily go with the predicate left wing terrorist attack. I 
would say persons who have violated the laws in this particular 
way. We have not seen necessarily an increase. It is episodic.
    Mr. Goodlatte. And how about if it is ideologically driven 
without characterizing the particular ideology?
    Mr. Mueller. Again, these individuals violated the law. 
That is why they were arrested.
    Mr. Goodlatte. Thank you.
    In recent years, we have seen many reports of confidential 
and secret government information leaking out and being posted 
on the Internet. The WikiLeaks cases are perhaps the most 
prominent example. But an FBI report last year also drew 
attention to the growing problem of foreign students and 
professors engaging in espionage and intellectual property 
theft on campuses. When millions of secret documents can be 
walked out of a government building or a lab on a thumb drive 
in a back pocket, the risks of espionage, leaks, and theft 
increase. Does the FBI have the tools that it needs to protect 
confidential information and the records that contain much 
private information about individual citizens and corporate 
secrets and confidential government secured information? Do you 
have the tools that you need in the Internet era to protect 
against that?
    Mr. Mueller. Well, let me speak--I will speak to the 
protection of information within the databases of the FBI. Yes, 
I will say, yes, we have quite obviously concern not only about 
insiders but also hackers from outside, and I believe we have 
state-of-the-art capabilities to protect our databases. That 
does not mean it cannot be done. It is a continuous worry for 
anybody who heads up any department.
    But we have taken--and I do believe it is the best you have 
out there to assure the protection of our data. When it goes--
as you point out, often, data is contained in universities or 
colleges or elsewhere, and to the extent that we have--we as an 
entity have--are working with those institutions, we of course 
seek to assure that those institutions have up-to-date security 
to protect whatever they may have on our----
    Mr. Goodlatte. Thank you. My time has expired. But with 
regard to my first question, I would also call to your 
attention legislation that was just signed into law by Governor 
McDonnell of my State--it was House Bill 1160--which basically, 
in addressing this concern about unlawful seizures of citizens 
in their homes, directs that no State agency in Virginia can 
cooperate with any Federal agency for the enforcement of that 
provision in the NDAA. So if you could look at that further and 
respond to the Committee with your thoughts about how we can 
correct this problem and protect our citizens here at the 
Federal level, we would very much welcome it.
    Mr. Mueller. Thank you, sir.
    Mr. Goodlatte. Thank you, sir.
    Mr. Smith. Thank you, Mr. Goodlatte.
    The gentleman from Virginia, Mr. Scott, is recognized.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Mueller, there is not a lot we agree on around here, 
but your reconfirmation was one of them, and so I appreciate 
your service.
    A few years ago, according to published accounts, the 
United States participated in waterboarding, a practice for 
which there is an international consensus that it constitutes 
torture. What was the FBI participation in that practice?
    Mr. Mueller. None.
    Mr. Scott. And why was the FBI not participating?
    Mr. Mueller. We----
    Mr. Scott. Is that because you told----
    Mr. Mueller. Our guidelines, the guidelines we adopted some 
years ago, preclude our participation.
    Mr. Scott. And did you issue an order for them not to 
participate in what is generally perceived to be torture?
    Mr. Mueller. The guidance was, make certain that we follow 
our guidelines when it comes to interrogation of persons in our 
custody or in the custody of others.
    Mr. Scott. And so your conscience prevented the FBI from 
participating in torture; is that right?
    Mr. Mueller. I don't want to characterize our action.
    Mr. Scott. Well----
    Mr. Mueller. I can tell you that our guidelines precluded 
it, and our guidance was you follow our guidelines.
    Mr. Scott. Well, let me tell you, that is why you have 
universal support. Because that practice, had the FBI not 
participated because it didn't follow the guidelines, was a 
breath of fresh air.
    One of the problems that we noticed in the early--right 
after 9/11 was that the personnel in the FBI and CIA may not 
have reflected the ethnic representation that we needed to 
appropriately fight terrorism. Could you make a brief comment 
on where you are now or for the record submit an ethnic 
breakdown of the staff at the FBI?
    Mr. Mueller. I can, I think, give you some larger figures. 
Forty-three percent of our workforce now are women and a full 
25 percent are representatives of various minority groups.
    For a greater breakdown, I would have to get you additional 
figures. I will tell you----
    Mr. Scott [continuing]. For the record.
    Mr. Mueller. We still have work to do, but we continuously 
strive to have our workforce reflect the communities in which 
we serve and operate.
    Mr. Scott. Thank you.
    My colleague from New York talked about the budget and 
talked about numbers of agents. Can you translate that into how 
it would affect your ability to get the job done?
    Mr. Mueller. As I pointed out, we would have to prioritize, 
and it would be a question of which of the priorities that are 
listed either in my opening oral comments or in my more lengthy 
submission to the Committee. We will have to cut back. Now--and 
cutting back in an age where crime is global in ways that it 
was not 10 years ago, and by that I mean whether it be 
organized crime, whether it be cyber crime, white-collar crime, 
gangs, MS-13 and the like, they are globalized, and 
consequently that entity that has the best chance for 
addressing globalized criminal activity is the FBI. And, 
consequently, if you cut us from doing it at a point in time 
where much of the crime is globalized, it is a double hit in 
some sense.
    Mr. Scott. You mentioned organized crime. One organized 
strategy is what is called organized retail theft where groups 
go in and pretty much clean shelves of hotly desirable--very 
desirable items and have them sold on eBay or other Internet. 
Can you say what you are doing about organized retail theft and 
whether or not more agents would be helpful?
    Mr. Mueller. To be blunt, we would work with State and 
local law enforcement entities in a particularly egregious 
situation. But organized retail thefts are not a priority, and 
even with additional agents I can think of other higher 
priorities. But I will tell you that the guidance is that there 
is an egregious series of crimes, persons are hurt, injured, 
amounts are substantial, then we would make an exception to our 
usual prioritization to try to help out State and locals to 
address that problem.
    Mr. Scott. We have the same problem with consumer ID theft 
where you can solve those crimes, but it is labor intensive, 
and I think if we had more agents on it, not cutting agents but 
increasing agents, we could be more effective in dealing with 
organized retail theft and identity theft.
    Mr. Mueller. Well, if I may say what we have tried to do 
over the last several years with the scarcer resources, develop 
task forces where we will have an agent or two agents but the 
task forces will be augmented by State and local law 
enforcement. So you have access not just to State laws but also 
Federal laws and we are much more effective in utilizing our 
personnel, and this is an area in which in certain cities 
around the country where there is rampant crime in these areas 
where a task force would be our approach.
    Mr. Smith. Thank you, Mr. Scott.
    The gentleman from Texas, Mr. Gohmert, is recognized for 
questions.
    Mr. Gohmert. Director, welcome back. Last we spoke, we 
weren't expecting to see each other in this setting again, and, 
as the Chairman pointed out, you got an additional 2 years. 
There was no objection to your having 2 years because they 
presented it at a time when nobody knew they were going to be 
bringing up your extension of 2 years, so there was nobody else 
on the floor. And it went rather smoothly since nobody knew 
they were bringing it up.
    There are some of us that are still concerned about the 
thousands and thousands of years of experience we have lost due 
to your former 5-year up-or-out policy, but I want to get to 
the concerns about the purging of material, of training 
material. Now, we have a document here that points out in the 
9/11 Commission report there were 322 references to Islam. In 
the current FBI counterterrorism lexicon there are zero 
references to Islam, to zero references to jihad. And when we 
talk about--we will hear about the outreach programs that the 
FBI had to the Muslim community.
    We have done some looking, and apparently in June of 2002 
you had given a speech to the American Muslim Council that your 
spokesman said was, quote, the most mainstream Muslim group in 
the United States, that is the American Muslim Council, and the 
head of the AMC was a guy named Alamoudi. That same year, the 
AMC board adviser, former acting president, Jamil Al-Amin, was 
arrested for murdering a Georgia police officer. Alamoudi was 
arrested himself in 2003 in a Libyan assassination plot 
targeting the Saudi Crown Prince, later identified by the U.S. 
Treasury as one of al-Qaeda's top fund-raisers in the U.S.
    Then there is the 2003--October 2003, just days before a 
ceremony honoring Detroit Muslim leader Imam Hamad. The story 
on him, your own Director's award for exceptional public 
service. The FBI contacted Hamad to tell him he wasn't going to 
receive the award, and later, when your spokesman said that 
there was unflattering information about Hamad that had been 
made public during the deportation proceedings of one of his 
close associates, and the INS had fought for two decades to 
deport this guy that was about to get the award. He was 
suspected in supporting the popular front of the liberation of 
Palestine or Palestine, and that is a designated terrorist 
organization.
    And, again, the reason I am bringing these things up is 
because we have got people, we know there are three subject 
matter experts that your office has refused to identify who 
have gone through and purged these materials. We were not even 
told whether they were U.S. citizens, whether they are one of 
these people that would have gotten the award, that didn't get 
the award that had all these other suspected problems.
    We know that Al-Arian, the Palestinian Islamic Jihad 
leader, had meetings and conversations with high-ranking 
officials at DOJ and the Department of Homeland Security, and 
that was despite him being the subject of a FISA wiretap 
warrant since the early 1990's, and his home was raided in 19 
95.
    We know that in 2008 you had handed one of your Director's 
Community Leadership Awards to Imam Yahya Hendi, who testified 
during Al-Arian's trial as a defense witness, and Hendi then 
served as a moderator during a 2000 fundraiser for the 
Benevolence International Foundation, which was shut down in 
2002 because they were a designated terrorist organization 
supporting al-Qaeda, of all groups.
    This just goes on and on, and I am very concerned that 
since there are people, potentially of terrorist organizations, 
terrorist ties, as we have seen, that the FBI has made these 
types of mistakes before in trying to judge character, we would 
like to know who these subject matter experts are that are 
going through the FBI material and purging that of reference to 
jihad and Islam and these types of things.
    Would you identify those people for us?
    Mr. Mueller. Well, there was quite a bit in that question, 
again.
    Mr. Gohmert. Well, some of it is background that I hope 
that you are aware of.
    Mr. Mueller. I cannot address all of what is said there. I 
will say at the outset that we make every effort to make 
certain that in our outreach, that we--outreach to that segment 
of the Muslim community that is supportive of America. And the 
vast, vast majority of the Muslim-American community has been 
exceptionally supportive.
    Mr. Gohmert. You know you are not answering my question, 
Director.
    Mr. Mueller. If I may, if I may.
    Mr. Gohmert. It was very pointed. Are you going to identify 
the subject matter experts? That is the question.
    Mr. Mueller. If I may finish my answer.
    Mr. Gohmert. But are you going to answer that question?
    Mr. Smith. Let the Director respond to the question.
    Mr. Gohmert. I will when he answers the question.
    Mr. Mueller. As I was saying, outreach is very important to 
us. We make every effort to make certain that we have 
appropriate persons.
    With regard to the individuals who are reviewing the 
individuals, there are 5 individuals, not three, and we are 
happy to give you their backgrounds and consider giving the 
names if you find it important. We would hope there would be 
some confidentiality in doing that, but we have nothing to hide 
in this regard.
    Mr. Gohmert. So you are going to identify those.
    Mr. Mueller. We will discuss the circumstances under which 
we would identify those individuals, yes.
    Mr. Gohmert. All right, and could we also get the documents 
you produced to the terrorists that were convicted in the Holy 
Land Foundation trial?
    Mr. Mueller. We have invited Congress to come and look at 
these documents. A number of Congress persons have come and 
looked at the documents.
    Mr. Gohmert. Okay. I wasn't aware of that. I will be there 
to look. Thank you.
    Mr. Smith. The gentleman's time has expired.
    The gentleman from North Carolina, Mr. Watt.
    Mr. Watt. Thank you, Mr. Chairman.
    And thank you, Director Mueller, for being here. You may 
have noticed that I was here for your testimony and then left 
because we have a hearing going on in Financial Services, on 
which I also serve.
    I want to spend some time talking about what is going on in 
the mortgage fraud area. During the time that we were working 
in Financial Services on what turned out to be the Dodd-Frank 
legislation, I had a lot of constituents who were saying to me, 
when are some of these people going to be put in jail?
    And my response always was, look, my primary focus at this 
point is to try to make sure that we don't have the same kind 
of things that led to this financial and economic meltdown 
occur again, so my priority is really not trying to deal with 
people who have done--who got us here but trying to figure out 
how not to be there a second and third and fourth time.
    But since we have done Dodd-Frank, and I have continued to 
get a number of inquiries from people who are saying, when is 
somebody going to go to jail for all of these things. Now, you 
indicated that there were--you had nearly 2,600 mortgage fraud 
investigations. I guess the question I am asking and that my 
constituents are asking me has to do with, what have those 
investigations led to? And there seems to still to be a of the 
lack of prosecutions and accountability resulting from those 
investigations.
    Now, I understand that you are not on the prosecution side; 
you are on the investigating side and the building of the case 
side. But can you give us any information about what those 
2,600 investigations have led to in terms of prosecutions, 
convictions, or how many of them are still in the prosecution 
process, what we might expect going forward on that front?
    Mr. Mueller. Let me--I actually thought I had the figures, 
but I don't have the figures here today. I will have to get you 
the figures in terms of prosecutions, but there have been 
literally thousands of prosecutions in many multi-million 
dollar scams that have been successfully prosecuted with 
individuals going to jail for tens of years.
    I was recently in Florida, and I talked to a group down 
there and pointed out that several prosecutions where there 
were groups of individuals and particularly, in particular, 
housing complexes who--and they rolled over houses fraudulently 
for a number of years. And if I am not mistaken, one of the 
principals was going to jail for something like 30 years. I 
will have to get you the facts on that.
    Mr. Watt. That would be very helpful, because to somebody 
who serves on the Financial Services Committee in particular, 
we get a lot of inquiries. I guess we see periodically in local 
communities that somebody has been prosecuted, going to jail, 
but if we could get an overall picture of what has happened, a 
number of prosecutions, da-da-da-da-da on a nationwide basis, 
it would allow us to respond more effectively to people who are 
saying, I haven't seen anybody prosecuted or going to jail as a 
result of this.
    The second part of that is the higher ups in the hierarchy, 
the more visible national prosecutions, how many of those have 
there been, and how successful have they been to get to some of 
the people at the higher corporate levels who may have been 
involved in bringing down substantial financial institutions 
ultimately and resulted in massive housing loss, foreclosure 
loss of various kinds?
    Mr. Mueller. Let me, there have been a number of 
prosecutions, particularly in New York, that have dominated the 
newspapers over the last year, particularly when it comes to 
insider trading, and the first use of Title 3 wire intercepts 
and that kind of white-collar crime.
    We have also had a number of securities fraud, you know, 
prosecutions and corporate institutional fraud. In fact, our 
investigations, I believe, in the securities arena, are up some 
55 percent, 50, 55 percent over 2008, and also up almost 40 
percent in the corporate fraud arena.
    Again, I will have to give you have a breakdown of the 
cases and give you some sense of what we are doing in that 
regard.
    Mr. Watt. My time has expired, but I think it would be very 
helpful if we could get a broader picture of this statistical 
picture, not only of your part of it, the investigatory part, 
but the prosecution and conviction side of it, for those of us 
who are facing constituents who still are going through 
substantial foreclosures and have lost their homes. They want 
to see some results, and I think there are results, so I 
appreciate your agreeing to follow up after the hearing on 
that.
    Mr. Mueller. Yes, sir.
    Mr. Smith. Thank you, Mr. Watt.
    The gentleman from Utah, Mr. Chaffetz, is recognized.
    Mr. Chaffetz. Thank you, and Director, thank you for your 
service and thank you for being here. I am going to try to 
touch on three subjects. I need to move fairly quickly.
    On the anniversary of the killing of Osama bin Laden, was 
there a specific and/or credible threat of terrorism upon the 
United States of America?
    Mr. Mueller. We did not believe so, and you are referring 
no doubt to the fact that----
    Mr. Chaffetz. There was an arrest.
    Mr. Mueller. The IED that had come up, and I think it is 
fair to say that that plot had been thwarted at the time.
    Mr. Chaffetz. Let me move quickly to Fast and Furious, have 
you ever spoken with Attorney General Holder or Secretary 
Napolitano about the Fast and Furious case?
    Mr. Mueller. I would have to think, certainly not Secretary 
Napolitano. Unless you are talking about the killing of Brian 
Terry. If that is part of the question, then, quite obviously, 
yes, because we are conducting that investigation and both are 
concerned about how that investigation is going and get 
periodic updates.
    With regard to the wider Fast and Furious examination, I 
don't believe I have. I will tell you, our people have talked 
to the Department of Justice because we had to produce 
documents and the like, but I do not recall having a particular 
discussion with the Attorney General.
    Mr. Chaffetz. The Attorneys General's Office has called 
Fast and Furious itself, even though they ran it and operated, 
quote-unquote, fundamentally flawed. There are literally close 
to 2,000 weapons that have been released.
    Other than the two guns that were found at the scene of 
Brian Terry, have you or the agency come across any guns that 
were purposefully released by our government under Fast and 
Furious? Have they shown up at any crime scenes? Have you come 
across any of these guns in anything that has happened here in 
the United States?
    Mr. Mueller. I would have to check on that.
    Mr. Chaffetz. If you could get back to me on that, I would 
certainly appreciate it. I would also appreciate it, Director, 
if we could get a clarification as to whether there were two 
guns or three guns that were found at that gun--at that scene. 
And even the letter we got most recently back to Chairman Issa, 
I think, was not as crystal clear as we would like it to be. I 
am not asking you to respond to that, but other, to just follow 
up with this afterwards.
    Mr. Mueller. I would be happy to respond to it, two guns. 
Two guns, I replied to that previously. There were two guns. 
There was some, I think, misinterpretation of information on 
the evidence control sheet that seemed to indicate the 
potential or possibility of a third gun. But only two guns were 
recovered.
    Mr. Chaffetz. Okay, thank you. I want to move now to the 
more recent Jones case that came before the Supreme Court that 
had to go with GPS devices put on cars so that they could be 
tracked. There is some concern, I would guess, in law 
enforcement that this ruling 9-0 by the Supreme Court would 
change the way law enforcement is able to track.
    I just want to get your thoughts and perspective on that 
quickly, get a sense of how many GPS devices were being 
inserted onto cars and how this would affect what you are doing 
at the FBI.
    Mr. Smith. Director Mueller, would you pull your mike just 
a little bit closer to us.
    Mr. Mueller. Is that better?
    Mr. Smith. Yes.
    Mr. Mueller. Okay. You know, first of all, I would say, 
several hundred, there were 200 investigations were impacted by 
the Jones decision, somewhat over 200. And one impact it has is 
the need for additional surveillances. When you have the use of 
GPS devices, you do not have to have teams of surveillance 
agents because you know where the individual may be at any 
particular point in time.
    And in certain investigations, that is going to mean that 
we are going to use very precious, valuable surveillance 
resources, where before we had the electronic capability to 
monitor individuals.
    I am aware of efforts, I believe your bill, to address the 
issue, and I would say this, my looking at--initial just quick 
review, indicates that the definition of that kind of 
information that would be protected and require a warrant, 
would expand the things such as telephone toll records, which 
we have traditionally gotten with subpoenas and the like, 
because a toll record may have a geographical indicator in it 
in the area code.
    And so as one thinks of legislation in this arena, I would 
try to keep in mind the impact it would have on our ability to 
do much of the work we do, particularly since the information 
we get from GPS devices and the like contributes to the 
probable cause that is necessary to conduct the investigation, 
the further investigation, using enhanced investigative 
techniques.
    Mr. Chaffetz. And the intent of the legislation is not to 
preclude those, when you have probable cause, what it is 
concerned about is just the ever expanding use of GPS to track 
and follow, not just by law enforcement but individuals who 
surreptitiously want to follow somebody else. And my time has 
expired, but I appreciate being able to work with you.
    I hope you do find that there is a need to clarify the law 
based on what Justice Alito, Mr. Weinstein and Weissman have 
also said about this and the need for Congress to further 
define the parameters of what would be needed so that there is 
clarity for the FBI and other law enforcement moving forward.
    Mr. Smith. Okay. Thank you, Mr. Chaffetz.
    The gentlewoman from California, Ms. Lofgren, is 
recognized.
    Ms. Lofgren. Thank you, Mr. Chairman.
    And thank you, Mr. Director, for being here. You have 
served your country with tremendous distinction, and we are 
honored by your presence here today.
    I want to talk about technology. I remember visiting with 
you and looking at your plans for your new computer systems 
many years ago, and I want to know where we are on that. It 
started in 2000 for me with the Virtual Case File. We spent a 
lot of money. That was abandoned in January of 2005.
    In 2006, the FBI planned this new Sentinel system, we spent 
a lot of money, over $425 million. That was, I guess, kind of 
rescoped in 2008 with an additional $26 million, but it wasn't 
finished by the target date. In 2009, it was extended again. In 
July of 2010, the second phase had more problems, and in 
September of 2010, the agency announced a plan to have the 
agile methodology with the new target completion date of 
September, which was not met.
    And then, in October, there was a, I understand, a bureau-
wide test exercise, which showed problems, insufficient 
hardware capacity.
    And the IG gave a report in December that the FBI was still 
trying to determine the costs of the additional hardware and 
had delayed its planned deployment until May. Well, it is May 
now.
    Where are we on this much awaited and extremely expensive 
system?
    Mr. Mueller. Unfortunately, I am very aware of that 
history, and I can tell you that it has been one of the most 
difficult challenges.
    But as it comes to a couple of things that--points along 
the way that were important. First of all was when we first 
received, we received the first phase, received from the 
contractor the second phase. The second phase did not work, and 
we rescoped, as you said, the contract, brought much of it in-
house and saved a heck of a lot of money in the agile 
development applications that we were using.
    In September of last year, we had the test, and we had 
anticipated as a result of the test that we would put it in 
place, but what we found is we had to replace certain of the 
architecture, the infrastructure, in order to support it. We 
have done that now. We are in the final testing phases, and my 
expectation is this summer, we will transfer our databases over 
or transfer our investigations over to the new Sentinel--so we 
think it is a go.
    Ms. Lofgren. We are going to hit on it this summer.
    Mr. Mueller. I always knock on wood. And I would expect----
    Ms. Lofgren. Maybe what I would do is come over and visit 
with you again and spend a number of years just to look at the 
system, if that would be a possibility.
    Mr. Mueller. We would be happy to----
    Ms. Lofgren. I want to talk about another technology issue. 
In your testimony, you, under going dark, I think you talked 
about the concern that the communications providers are not 
required to maintain intercept capabilities in their networks. 
And especially given the not-wonderful experience with your own 
technology development, I think that raises a few concerns. 
First, the technological capability, direct private sector 
technology firms.
    Secondarily, whether it is your view that the Federal 
Government ought to be dictating to private sector 
communications firms, including Internet providers, what their 
technology ought to be.
    And, finally, a question, as you can, I guess, guess by my 
questions, I have a deep concern--I think the American public 
would have a concern about the American public building in back 
doors to the Internet, because although we want to get the bad 
guys, we also value the privacy rights of Americans online--if 
you have considered or are aware of the apparent plans of 
Russia and China to take over the governance of the Internet 
from ICANN, which has been engineer-driven, multinational but 
apolitical, since we entered a contract with ICANN in the mid-
1990's. There is a meeting in mid-October for the U.N. To take 
it over with perhaps a more politicized agenda and certainly 
likely less collaboration with Western law enforcement. Have 
you considered that, and have you had a role in formulating 
Administration policy on that? Two questions.
    Mr. Mueller. Well, let me focus on the issue of where I 
think there has to be an accommodation. We go to court. We make 
a showing to a court that these individuals are engaged in 
crime--it could be terrorism; it could be espionage; it could 
be distribution of child pornography and that we need the 
communications--whether it be through an ISP or a large 
corporation, and the court finds the probable cause and directs 
that corporation to be responsive to that court order 
requirement.
    And yet these, many of these companies are very wealthy, 
have not considered at the outset how they should need to be 
responsive to a court order. And so what we are seeking is 
responsiveness to a court order and in many of these companies 
they can afford to do it, and many of these companies that can 
afford to do it, particularly at the outset, at the outset, to 
understand that they have an obligation to be responsive to 
court orders when there is a court order that directs it.
    And so the accommodation we are looking for is the 
corporations in their own way put themselves in a place, in a 
position to be responsive to a court order that they know, can 
anticipate, is coming down the road.
    Now, how we do that is probably the issue that is at the 
heart of this. But I think it is a very valid objective, 
particularly in this day where communications are not done by 
the telecommunications companies necessarily; they are done by 
a number of other companies, many of whom are in your district, 
and we have to have accommodations, an accommodation so that we 
get that information we need or else we will be behind the 
eight-ball when it comes to terrorists, to child pornography, 
espionage and the like.
    Mr. Smith. Thank you, Ms. Lofgren.
    Ms. Lofgren. Mr. Chairman, I noted that Mr. Gohmert had an 
extended period. I wonder if Mr. Mueller----
    Mr. Smith. Let me make something clear, because I am a 
little bit put off by that. The Chairman does initially and 
occasionally give Members a few extra seconds.
    I don't want that to necessarily to set a precedent. And in 
this case, your time has far exceeded that of Mr. Gohmert, so I 
would like to stay within the schedule if we could.
    Ms. Lofgren. Mr. Chairman, if we could ask then Mr. Mueller 
off schedule, I think it is an enormously important issue for 
the country that Russia and China are seeking to take over 
governance of the Internet, and I think it is something that 
the FBI might wish to comment on. Perhaps----
    Mr. Smith. That might be for another time. I also notice 
that you and the director have agreed to have a personal 
meeting and follow up on some of the issues you have raised, 
which were certainly legitimate issues. And I am hoping that 
you will take advantage of that opportunity, too.
    Mr. Mueller. I would be happy to do that.
    Mr. Smith. The gentleman from Arizona, Mr. Franks, is 
recognized.
    Mr. Franks. Thank you, Mr. Chairman.
    And Mr. Director, I am glad that you are here, sir.
    And with that, unceremoniously, I am going to yield my time 
to my colleague from Texas, Mr. Gohmert.
    Mr. Gohmert. Thank you. I appreciate my friend from 
Arizona.
    I have a blast that was emailed out from the Islamic 
Society of North America director on February 14, 2012, which 
they were basically sounded like they were spiking the 
football. They had had the meeting again with you, and they 
said the director has also informed participants that to date, 
nearly all related FBI training materials, including more than 
1,600 pages--or 160,000 pages of documents, were reviewed by 
subject matter experts multiple times.
    They also said material was pulled from the curriculum if 
even one component was deemed to, one, include factual errors; 
two, be in poor taste; three, be stereotypical and; for, four, 
lack precision. And then we had also gotten--one of the lines 
that had been purged simply says in training, other self-
described jihadist groups can differ with al-Qaeda and like-
minded groups in targeting tactical preference and their 
ultimate political goals, although many jihadist groups overlap 
in terms of target tactics and goals. And apparently that was 
found to be offensive to say that there were some jihadist 
groups that overlap in terms of target because apparently that 
fits the criteria of being stereotypical.
    And I want to go back to the subject matter experts. You 
have mentioned, as we have been told, there were five subject 
matter experts that were doing this purge and that two of them 
were interagency. But three of them were outside the agency, 
and we know Imam Magid, the president of the named co-
conspirator in the Holy Land Foundation trial, for which there 
was plenty of evidence, as the Fifth Circuit Court of Appeals 
said, to substantiate that they were supporting terrorism, even 
though the Attorney General decided he did not want to pursue 
them, or his office--he didn't take credit for that decision, 
but--and, in fact, he left that to an acting U.S. Attorney to 
say that there wasn't evidence when, actually, he was on the 
record before the district court and the Fifth Circuit saying 
there was plenty of evidence there.
    But the concern still goes back to who are these subject 
matter experts? You were ready to give a couple of awards to 
people for their civic leadership and assistance that ended up 
not being worthy of being recognized. There are people that 
have access to you directly, like most Americans would not 
have, who have ties that are certainly questionable. And so I 
think it is worth, when my friends across the aisle pointed 
out, America knowing who are these people that are purging our 
documents? And why is it so offensive to say that many jihadist 
groups overlap in terms of targets and tactics and goals?
    Do you have a comment on that? You had said that you may 
talk about their backgrounds, but who in the world gets to know 
who these people were? Most of us have very secure 
classifications even though we find out that people like 
Elibihari, that is on the Homeland Security Advisory Group, got 
a secret classification from Secretary Napolitano. And from the 
evidence, it is very clear that man could never have been 
vetted, could never have gotten a security clearance, unless 
the Secretary bypassed all the laws and requirements to give 
him that.
    So I just keep coming back to the importance of knowing who 
it is that is actually cleaning out the FBI training materials.
    Mr. Mueller. Well, let me say that I addressed the issue of 
the way forward on the individuals. We will try to accommodate 
the Committee on that.
    With regard to the meeting with members of the American 
Muslim, American Arab, Sikh communities, I have periodically, 
as do our Special Agents in Charge of each of our offices, have 
meetings with members and representatives of the Muslim 
community.
    The meeting to which you refer was one that I stopped in 
at, and I gave exactly the same review of what--the process we 
had undertaken to review these materials that I have given 
today and in previous testimony. And so I think we have done, 
appropriately addressed the issues with regard to the training.
    Again, I finish, as I did before, and welcome you down to 
review those materials yourself and to hear the explanations as 
to why we thought that these particular pages were 
inappropriate. And I, again, would point out that we had 
160,000-plus pages that were appropriate in terms of training. 
So it is not as if we have purged a substantial amount of our 
training materials.
    Mr. Smith. Thank you, Mr. Gohmert.
    The gentlewoman from Texas, Ms. Jackson Lee, is recognized.
    Ms. Jackson Lee. Mr. Chairman, thank you very much.
    Mr. Mueller, I am over here. Good morning, how are you? 
Thank you again for your service.
    It looks like we have traveled this journey for a number of 
years. And, again, I thank you for your work and the work that 
you have done, even in my State of Texas.
    I just want to make one statement. Our special agents in 
charge are very important, and I think you have heard me to say 
this again, I continue to encourage them to interface with the 
community. Obviously, their work is work that relates to their 
duties, but that is just a public statement I want to make. And 
I think you joined in with me in times past for them to engage, 
even as they engage in local law enforcement.
    I, too, have a series of questions, but I would make one 
statement and not to join with my colleagues but thank you for 
your graciousness and would like to have an opportunity to meet 
with you. Today I will be discussing the national epidemic of 
bullying, which we have seen. Obviously I am not asking you to 
intrude in local jurisdictions, but cyberbullying, 
cyberbullying has become an epidemic as well, and it crosses 
State lines, and it tracks, if you will, national security 
issues in terms of its depth and breadth. And so I would like 
to meet with you on that issue. I will not pose that question 
as we speak, but I know that we can find ways to address that 
because it deals with children.
    I do want to raise a series of questions, as I indicated, 
and I want to go right to the National Defense Authorization 
Act in your testimony that mentioned that you had a quarrel or 
questions about the FBI and the military showing up. There was 
provision to the legislation to weaken that, if you will, depth 
of coverage of the military. Can you just quickly say, does 
that work through your issues with respect to that separation, 
and I think that is enormously important, including the 
prosecution of terrorists in civilian courts?
    Is that where we stand today?
    Mr. Mueller. Yes.
    Ms. Jackson Lee. Does that help the FBI?
    Mr. Mueller. It does. The statute directed the President to 
develop procedures that would assure continuity of 
investigation, continuity of the interrogation in like 
circumstances. And that directive issued by the President does 
resolve those issues.
    Ms. Jackson Lee. And does it move you closer to both the 
idea of what your work is supposed to do but also the respect 
for civil liberties, as you look at it as a lawyer and former 
judge.
    Mr. Mueller. Yes.
    Ms. Jackson Lee. Let me thank you very much for the lab 
that many utilize, DNA lab that many law enforcement submit 
their requests through.
    Can you tell me what your timeframe is? As you well know, 
there is a huge backlog of rape kits across America. It is 
almost tragic that women are waiting.
    What is the involvement of the FBI lab? Are you getting 
these labs? I know--excuse me, are you getting these kits? Do 
you get them on particular cases? Do you get them on more 
heinous cases?
    Can you just answer that question and how we could be of 
greater help for that backlog?
    Mr. Mueller. The first step for us was to reduce our own 
backlog.
    Ms. Jackson Lee. Right.
    Mr. Mueller. And to do backlogs, we had the backlog in 
terms of ingestion in the samples given, changes in the 
statutes around--federally and in the country. We reduced that 
backlog 2 years ago, and last year, we reduced to almost 
nothing the backlog of nuclear DNA examinations. And so--and 
that was by dint of additional personnel given to us by 
Congress, as well as developing a new--more mechanical 
techniques that enabled us to expedite those examinations.
    That does not necessarily help jurisdictions around the 
country who have backlogs of samples that need----
    Ms. Jackson Lee. Yes.
    Mr. Mueller. We do not have the funding or capability 
federally to step in and assist State and local.
    I don't think there is one of us who wouldn't like to have 
the ability to make certain that all those tests, samples, are 
sitting on the shelves of a police department, somebody went 
through the DNA protocol.
    But, again, it is a matter of funding and particular police 
departments or in State agencies.
    Ms. Jackson Lee. Let me ask these two questions, and I 
appreciate the Chairman's indulgence for you to be able to 
answer. I will add the rape kits to our discussion in office.
    But let me just, in your answer, indicate what an impact 
the sequestration would have in terms of staffing. But I would 
like to go straight to two points.
    The Stand Your Ground laws have taken up--their major stand 
across America, and they have, in essence, created a quandary. 
One of them, of course, is Mr. Zimmerman's case, which you have 
been involved in investigating.
    I raise the question as to what is the FBI involvement in 
some of these cases that come in extreme results?
    And, lastly, I have heard my colleague talk a lot about 
Muslims. What kind of team does the FBI have on domestic 
terrorism, particularly what I call wilderness groups, as well 
as this article from Reuters, ``Florida Nabs White Supremacists 
Planning ``Race War.''' This happened today.
    Do you have a separate sector? How do you relate to that 
kind of terrorism, and how do we have the investigative 
component that matches or complements State authorities?
    Mr. Mueller, thank you.
    Mr. Mueller. With regard to domestic terrorism, ever since 
1995 and the bombing of Oklahoma City, we have been aware that 
we cannot take our eye off domestic terrorists who have the 
capability and maybe the will to undertake such terrorists 
attacks.
    We have had a number of cases over the years. The most 
recent one was in Spokane where an individual undertook to 
develop an IED to set it off on the birthday of Martin Luther 
King.
    Ms. Jackson Lee. Yes.
    Mr. Mueller. If you will recall, the persons who were 
cleaning the area beforehand found the IED, and we were able to 
identify the individual. He has been sent away for a good long 
time. So we have separate domestic terrorism entities that are 
every bit as effective and efficient as we hope we are in the 
counter, international terrorism arena.
    And as to the--I didn't pick up the first part of the 
question.
    Ms. Jackson Lee. The impact on sequestration or loss of 
employees through major cuts.
    Mr. Mueller. We will, again, as I say, have to prioritize. 
We would not, we would not take people away from 
counterterrorism, whether it be domestic terrorism, 
international terrorism. We will not take them away from the 
espionage cases. We will not take them away from the important 
cybercases. And we will have to prioritize, and other areas, 
particularly in the criminal arena, will suffer.
    Ms. Jackson Lee. And Stand Your Ground?
    Mr. Smith. Thank you, Ms. Jackson Lee.
    The gentleman from California.
    Ms. Jackson Lee. Mr. Chairman, may I put something in the 
record, please?
    Mr. Smith. What would you like to put into the record?
    Ms. Jackson Lee. Well, first of all, thank you, Mr. 
Mueller. We will speak afterwards.
    But in any event, I would like to put in the article from 
Reuters, ``Florida Nabs White Supremacists Planning a ``Race 
War.''' I ask unanimous consent to place this in the record.
    [The information referred to follows:]


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                               __________

    Mr. Smith. Without objection.
    The gentleman from California, Mr. Gallegly, is recognized 
for his questions.
    Mr. Gallegly. Thank you very much, Mr. Chairman.
    I, in the interest of time, I want to welcome you, first of 
all, Director Mueller. I miss our regular meetings in the 8 
years I served on the Intelligence Committee, and it is great 
to see you back.
    What I would like to do, with the Committee's concurrence, 
is I have four or five issues. I would like to ask you a brief 
question. Perhaps you could give me a very short answer. And 
with unanimous consent, you could provide us with a follow up, 
maybe a couple of paragraphs or something that could maybe fill 
in some of the blanks.
    The first question I had has to do with al-Qaeda, and there 
are actually two questions I will put into and try to make one 
out of it. First of all, as it relates to our Southwest border, 
do you see any growing evidence of al-Qaeda or any other 
terrorist organization working to exploit our border with the 
attempt of launching another terrorist attack on our own soil? 
That would be first part of that question.
    The other is having to do with al-Qaeda and the continuing 
concern about, particularly in Yemen, the focus on targeting 
U.S. airplanes. Of course, it is becoming more and more 
unsettling to American travelers, as you well know.
    And if you see any added support that you might be able to 
get from Congress, who could help you in doing that job, maybe 
you could briefly answer that, and then I will move on to a 
couple of other issues.
    Mr. Mueller. As to the Southwest border and al-Qaeda, we 
have not seen an increase of effort by al-Qaeda to come across 
the Southwest border.
    On the other hand, when you open the question up to other 
terrorist groups, I would say that we have a continuing concern 
about Iranian influence, actors, and Hezbollah.
    I would say the indication of this, most recently, was the 
arrest of Arbabsiar, the Iranian individual who thought he was 
dealing with a cartel associate in the expectation of killing 
the Saudi Arabian ambassador here in Washington, which is 
indicative of efforts of Iran and others to operate south of 
the border with the impact to north of the border.
    Well, and the IED--the second question, I am sorry, the 
second question with regard to Yemen, having obtained the most 
recent explosive device from Yemen, it again reinforces the 
necessity to address--and those who were responsible for the 
production of those devices in Yemen. And the intelligence 
communities, law enforcement communities, need the full support 
of Congress to make that happen.
    Mr. Gallegly. Director Mueller, regarding smuggling and 
human trafficking that we have on our southern border, I know 
this continues to be an ongoing issue.
    One thing that I would like to get your assessment on, 
particularly as it relates to the smuggling of drugs, do you 
see the weakening of laws in, for instance, in the California 
State legislature, weakening our drug laws, some to the point 
that many legislators believe that drug use is a victimless 
crime, do you see this as having any strengthening effect on 
the drug cartels, particularly from Mexico?
    Mr. Mueller. I really would not be in a position to comment 
on that, most because I am not that familiar with----
    Mr. Gallegly. I didn't expect that you would, but I tried.
    There is another issue that we have discussed in the past, 
having to do with activities within our Federal penitentiaries. 
This isn't limited to Federal penitentiaries, but since you are 
a Federal representative, probably you could speak more 
directly to the Federal penitentiaries, rather than the State 
prisons and even local jails.
    I have a growing concern for the infiltration of certain 
people operating under the guise of being clerics to 
indoctrinate very vulnerable people that are already filled 
with hate. I know that we have a way of vetting who comes in to 
counsel and to--so on and so forth.
    Can you give us a brief statement on the process of vetting 
and/or surveillance to make sure that our vetting is correct?
    Mr. Mueller. Well, early on, after September 11th, we 
worked closely with the department, the Federal department of 
prisons, to assure that the appropriate teaching, again, the 
appropriate teaching was being conducted within the Federal 
Department of Prisons and so that has been an ongoing process 
since probably 2002.
    At the same time, we have over 100 Joint Terrorism Task 
Forces around the country. And one of the mandates of that 
Joint Terrorism Task Force is to see and develop intelligence 
as to what threats there may be within the prison system.
    You know, on many of the State and local prison systems, on 
many, I will tell you, some, maybe many, the task forces, you 
will have personnel assigned on the State and local prison 
authorities, corrections authorities, to work closely with the 
Joint Terrorism Task Force to address that concern.
    Mr. Gallegly. Mr. Chairman, the red light is on. If I could 
just ask that the director respond to us----
    Mr. Mueller. Happy to do so.
    Mr. Gallegly. And/or follow up on a couple of other issues. 
One being you mentioned the issue of health care fraud. We 
discussed this before in this hearing, in this meeting, venue, 
I think, last time, about Medicare fraud and principally 
Eastern European involvement. If you could bring us up to date 
on that, also on the gang issues in some of our metropolitan 
areas, particularly where illegal immigrants are the 
predominant population in specific gangs.
    With that, Mr. Chairman, with unanimous consent, I would 
ask that he, the gentleman answer those for the sake of the 
Committee and be placed in the record of the hearing, and I 
would I yield back.
    Mr. Smith. Thank you, Mr. Gallegly.
    The gentlewoman from California, Ms. Waters, is recognized.
    Ms. Waters. Thank you very much, Mr. Mueller, I want to 
thank you for being here.
    You have a tough job and sometimes we don't make it any 
easier for you, but I am pleased that you are here. I have two 
areas that I am very interested in.
    I have been tracking your diversity with your special 
agents, and, as you know, this question has come up many times. 
It appears that you still only have about 4 percent African 
Americans in your special agents, and I want to know why you 
haven't been able to do better in recruitment and hiring of 
African Americans in the FBI.
    In addition to that, I am really concerned about some 
information that I just learned. I attended a briefing 
yesterday that was organized by the Washington Bureau of the 
American Civil Liberties Union, and they shared with me some 
very troubling information that I want to talk about because it 
reminds me of COINTELPRO, the most controversial FBI program, I 
think, under the J. Edgar Hoover that caused a lot of concern 
in this community.
    The FBI's current Domestic Investigations and Operations 
Guide permit FBI agents to track racial and ethnic facilities 
and certain racial and ethnic behavior. The FBI documents 
recently obtained through Freedom of Information Act requests 
by the ACLU demonstrate how the FBI is identifying and mapping 
American communities by race, ethnicity and national origin all 
over the country through a program that you have called Domain 
Management.
    The documents show that FBI analysts across the country are 
associating criminal behaviors with certain racial and ethnic 
groups and then using U.S. Census data and other demographic 
information to map where those communities are located to 
investigate them.
    For instance, in 2009, the Atlanta FBI field office 
published an intelligence note from your Domain Management that 
purports to examine the so-called Black separatist threat in 
part by documenting the growth of the Black population in 
Georgia over the preceding years.
    I want to know how does the size of the Black population in 
Georgia have any bearing on the number of Black separatists in 
a given area or the threat that they pose? Did the FBI map 
Black communities in Georgia in its examination of the Black 
separatist threat?
    The other thing that I am concerned about is the Atlanta 
FBI field office intelligence, no documents that members of the 
New Black Panther Party were at former Congresswoman Cynthia 
McKinney's side during the elections, and they appeared at 
events protesting police violence in the community. We also 
have the information that indicates that Congresswoman Cynthia 
McKinney has been under surveillance and has been tracked for 
quite some time now.
    Does the FBI feel that participation in the political 
process or protesting police violence constitutes a threat of 
any kind? Do you think it is appropriate for the FBI to track 
Americans' First Amendment protected activity in this way?
    Does the FBI list of major terrorism cases, past and 
present, a more comprehensive list of terrorist attacks going 
back to 1930, detailed in an FBI report, entitled ``Terrorism 
2002 to 2005,'' include any terrorist acts committed by anyone 
who could fairly be described as a member of a Black separatist 
group? So that is a lot that I have asked, but I am really 
interested.
    Do you have a program called Domain Management that is 
similar to the old COINTELPRO program.
    Mr. Mueller. We have, yes, we have domain managers. We have 
a program that requires our intelligence analysts to identify a 
threat in a particular area.
    And an aspect of that program may depend on the threat 
information we got from a source, either inside the United 
States or outside the United States.
    But let me start by saying that we do not investigate 
individuals or groups solely on the basis of ethnicity or race.
    There may be occasions where we know a particular entity--
it can be a gang, it could be a terrorist group, it can be 
organized crime--preys on certain groups and communities. And 
in those situations, where there may be victims or what have 
you, the data in terms of those communities may bear on that 
intelligence analysis. But we do not have anything regarding--
--
    Ms. Waters. But Domain Management, is that directed 
toward----
    Mr. Mueller. Pardon.
    Ms. Waters. Domain Management program, is that directed 
toward certain communities?
    Mr. Mueller. No. It is the threats. I mean, what is your 
mortgage fraud in that community in Los Angeles? Where is the 
mortgage fraud? Domain management means look at your particular 
division or your district and identify the threats and the 
existence of those threats and how you are going to address 
that threat. That is domain management. That is identifying the 
threats and how you are going to allocate the resources to 
address the threats.
    Ms. Waters. And what is mapping?
    Mr. Smith. The gentlewoman's time has expired.
    Ms. Waters. I ask unanimous consent for at least 1 more 
minute.
    Mr. Mueller. Well, mapping----
    Mr. Smith. Let me say to the gentlewoman, without 
objection, she will be recognized for an additional 30 seconds 
in order to allow the Director to answer the last question.
    Ms. Waters. Is Cynthia McKinney under surveillance and has 
been tracked by your--this report.
    Mr. Mueller. I don't know where that comes from. I do not 
think it has any validity whatsoever.
    Ms. Waters. It is in your report.
    Mr. Mueller. Then I would appreciate seeing it. I am not 
familiar with what you are looking at.
    Ms. Waters. Thank you very much.
    Mr. Smith. Thank you, Ms. Waters.
    The gentleman from Iowa, Mr. King, is recognized.
    Mr. King. Thank you, Mr. Chairman.
    Director, on your left, I appreciate your testimony here 
today and I will start with low-key material.
    I am looking at our report here, a DOJ victims report, a 
typical crime victims report and that has on it the categories 
of age, educational attainment, school, et cetera, race, 
ethnicity, all the categories that I think we should be 
tracking as far as crime is concerned for the victims report, 
that is fine.
    The next one I look at is a hate crime incident report. It 
has similar categories, maybe not exactly identical, but it has 
categories for race and ethnicity as well in the hate crime 
incident report.
    Then when I go to the uniform crime report, the older 
report, and that is module E-3, for the record. It has 
categories there for race, but no category for ethnicity. It 
says White, Black, American Indian or Alaskan native or Asian 
or Pacific Islander. Neither does it have a category, as the 
other two forms do, for mixed race. And I would just ask if 
that perhaps is an oversight? Is it something you would 
consider bringing up to date so that our typical crime report 
would include the broader definitions of mixed race and 
ethnicity?
    Mr. Mueller. Yes, I am not certain why that is. I know--
well, I assume that what we try to do is take that information, 
where that information is relevant to a particular violation of 
law, but I would look at that. I am not familiar with that 
distinction, but we will get back to you on that.
    Mr. King. And I appreciate that, and I would just state 
that I am interested in it because there are a lot of numbers 
thrown around about actual crime perpetrators and the victims. 
And this Congress is going far more toward looking at race and 
ethnicity of the victims of the crimes. And the George 
Zimmerman case in Florida is one that comes to mind that caused 
me to think about it.
    So I will be very interested in that response. And then 
also I would ask you with regard to voter fraud, there has been 
much more publicity about voter fraud in the path few months, 
something I have been interested in at least a decade or a 
little more since the 2000 elections in Florida. What are you 
finding in voter fraud? Do you anticipate prosecutions coming 
forward? Has anything happened under your tenure that should be 
pointed out to me that I might have missed as far as voter 
fraud investigations?
    Mr. Mueller. I again would have to get back to you. Let met 
get back to you, but obviously, the allegations of voter fraud 
spike in or about elections. We would have to go back and look 
at what has been done. Yes, we have done cases. I am not 
personally familiar and cannot tell you right now what those 
cases might be.
    Mr. King. Did you get a call when the young man presented 
himself to pick up Attorney General Eric Holder's ballot here a 
couple of months ago? Was that something that was brought to 
your attention? I know that film, the video of that, came 
before this Committee about a month ago.
    And a young White male in his early twenties stepped into 
the voting location in, I believe it was Arlington, Virginia, 
and presented himself as Eric Holder, a 61-year-old African 
American male, a young Caucasian male in his early twenties, 
and they were ready to present him a ballot. Would that kind of 
thing be of interest to the FBI?
    Mr. Mueller. I am not--this is the first I have heard about 
that incident.
    Mr. King. I am quite surprised at that. I guess maybe the 
Attorney General wasn't alarmed either that his vote might have 
been disenfranchised so easily.
    But I will go on to something that I am perhaps more 
concerned about, and that is the publicity that has unfolded 
here just this week, and I would cite and ask unanimous consent 
to enter into the record a Newsweek article, dated May 14, 
2012, entitled, ``Why Can't Obama Bring Wall Street to 
Justice,'' and a Forbes magazine article, dated May 7, 2012, 
entitled ``Obama's DOJ and Wall Street: Too big for Jail.''
    These are subjects----
    Mr. Smith. Without objection, those articles will be made a 
part of the record.
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    Mr. King. Thank you, Mr. Chairman.
    These articles point out that Attorney General Holder and 
his lieutenants, at least its published in the documents, a 
history of bundling funds, as much of a half a million or more 
dollars for the campaign of the President, coming from 
Covington, a number of them, who have clients that might have 
been those clients that were under investigation because of the 
Wall Street meltdown in 2008.
    I would point out that in 2009, the President established 
the Financial Fraud Enforcement Task Force. That task force has 
brought some prosecutions, small, little, I think, petty crimes 
by comparison. And one example, the case that we have would be 
of Goldman Sachs settling for a $550 million settlement to the 
SEC, no criminal prosecution.
    So, in the pattern of the financial history since 2008, can 
you point out any criminal investigations for the alleged 
perpetrators that brought about or might have accelerated this 
Wall Street meltdown that we saw in 2008?
    Mr. Mueller. Absolutely. I will get you those. There have 
been a number of prosecutions up in New York and a number 
around the country. I will get you those, and I will say that 
we have had full support from the Department of Justice in any 
white-collar criminal case we had, whether it be corporate 
fraud or securities fraud.
    Mr. King. And in closing, Director--and I mean closing, Mr. 
Chairman--very short, the words of Lloyd Cutler, who was 
underneath Jimmy Carter, he said: ``The appearance of conflict 
is dangerous to public confidence in the administration of 
justice as true conflict itself. Justice must not only be done; 
justice must also be seen to be done.''
    Thank you, and I yield back.
    Mr. Smith. Thank you Mr. King.
    The gentleman from Puerto Rico, Mr. Pierluisi.
    Mr. Pierluisi. Thank you, Mr. Chairman.
    Director Mueller, like my colleagues, I want to thank you 
for your service. You have one of the most challenging jobs in 
our government, and you perform it with great skill, so thank 
you.
    Director, I would like to talk to you about the drug-
related violence that we are seeing in the U.S. jurisdictions 
of Puerto Rico and the U.S. Virgin Islands and to express my 
respectful but strong belief that the FBI and all Federal law 
enforcement agencies need to do far more to deal with this 
problem.
    Let me briefly summarize the situation for you. While 
violent crime has decreased nationally, violent crime in Puerto 
Rico and the U.S.V.I. has been on the rise for over a decade 
now.
    The homicide rate in each territory is about six times the 
national average and almost three times higher than any State. 
Puerto Rico has nearly the same number of murders each year 
that Texas does, even though Texas is home to 25 million 
people, and Puerto Rico's population doesn't reach 4 million.
    According to estimates, three-quarters of the homicides in 
Puerto Rico are linked to the international drug trade. As the 
U.S. Government has increased resources in the Southwest 
border, what is happening is this is like a moving target. The 
drug traffickers are changing routes and are hitting the 
Caribbean once again. This is a problem of national scope.
    About three-quarters of the cocaine that enters Puerto Rico 
is then transported to the U.S. mainland because Puerto Rico is 
part of the U.S. This is not a foreign country. Once the drugs 
enter the islands, they are easily delivered to the States. 
There is no Customs, no heightened scrutiny.
    In order to reduce drug-related violence in Puerto Rico and 
to make the island a less attractive trans-shipment point for 
these trafficking organizations, both the Governor of Puerto 
Rico and I have requested that the Administration establish a 
Caribbean Border Initiative along the lines of the Southwest 
Border Initiative, and now we have a Northern Border 
Initiative.
    What is happening is that there is no initiative, no 
stretch, no comprehensive multi, cross-agency counter-drug 
strategy for the Caribbean, and the consequences are crystal 
clear: The violent deaths of tens of thousands of my 
constituents, and I can, and I will have to say that if this 
were happening in the States, it would be an outrage, it would 
be a national emergency.
    I am not the only one, though, who believes that the 
Federal Government has yet to dedicate the resources and 
personnel necessary to address this problem.
    The CJS appropriations bill that the House would approve 
this week includes the following language. I quote, ``the 
committee is aware that efforts by Federal law enforcement to 
reduce drug trafficking and associated violence in the 
Southwest border region have affected trafficking routes and 
crime rates in the Caribbean. The committee expects the 
Attorney General to address these trends by allocating 
necessary resources to areas substantially affected by drug-
related violence and reporting such actions to the committee,'' 
end quote.
    I know, I am the first one who realizes that we have fiscal 
constraints, but this is a matter of prioritizing limited 
resources and responding to problems in relation to their 
severity. Your agents on the ground in Puerto Rico are doing 
terrific work. In fact, I met with your SAC just recently. But 
I don't believe they are doing--you have enough of them down 
there and that you have the necessary resources, not only the 
FBI but the other agencies within DOJ and DHS. So all I am 
asking is that we need to deal with this with a sense of 
urgency, and I would like to hear from you at least briefly on 
this. It is serious, Director.
    Mr. Mueller. There are maybe three aspects of it that we 
need to address. One is the drug trafficking. That is 
principally the responsibility of DEA, but we work closely with 
DEA. Secondly is the homicide rate and the deaths there which, 
you are absolutely right, are horrendous. In any other city it 
would be the principal focus. And the third is public 
corruption.
    And our efforts have been in the violence. Some of the 
violence is tied in to the drug trafficking, but often with the 
gangs in Puerto Rico it is turf and it is not necessarily 
associated with the drug trafficking but is an issue all of its 
own. And our efforts are directed at addressing the homicide 
rate and the gangs and developing intelligence to take them 
out, but you have got hundreds, as you well know better than I, 
and then secondly public corruption.
    We had Operation Guard Shack which you are familiar with in 
which we literally arrested I think it was over a hundred 
police officers who were involved in covering for the narcotics 
trade. And so we prioritize Puerto Rico, our efforts, in these 
particular areas: additional resources, more persons behind 
bars.
    Ms. Waters. Mr. Chairman, I have a unanimous consent----
    Mr. Smith. Thank you, Mr. Pierluisi.
    The gentlewoman from California is recognized for a 
unanimous consent request.
    Ms. Waters. I would like to have inserted into the record 
the intelligence note from Domain Management Intelligence 
related to the Black separatist threat FBI Atlanta.
    Mr. Smith. Okay, without objection.
    [The information referred to follows:]


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                               __________

    Mr. Smith. The gentleman from South Carolina, Mr. Gowdy, is 
recognized.
    Mr. Gowdy. Thank you, Mr. Chairman. Because of his long-
serving service to this Committee and because of his exemplary 
service as the Attorney General from California, I am going to 
let Mr. Lungren go before me, and I will go last.
    Mr. Smith. Okay. The gentleman from California, Mr. 
Lungren, is deferred to.
    Mr. Lungren. What a nice fellow. I sure appreciate that.
    I was recalling when I was a kid growing up and listening 
to Notre Dame football games, one of the stars of Notre Dame 
was a halfback, Aubrey Lewis, one of the most highly recruited 
players at that time. I think he had over 200 scholarship 
offers. He was in the first class of FBI agents which included 
Blacks. He was an African-American, one of the very first 
agents and served, died about 11 years ago, but I always 
remember that. So I guess the FBI can do better, as was 
suggested, but, as a kid, I remember him being a hero who went 
to the FBI, and it was kind of exciting to see that happen.
    Mr. Director, let me ask you this: I am concerned always 
about the proper relationship between the executive branch and 
the legislative branch, deeply aware of the tremendous job the 
FBI does and the Department of Justice does in looking at 
public corruption. But I also think it ought to be done in the 
proper way, and I think the Ted Stevens case was a black mark 
on the department. And the conduct of the lead FBI agent in the 
investigation in prosecution of former Senator now deceased Ted 
Stevens has been called into question.
    Among the improper conduct, the agent failed to write post-
interview memos, including the government's key witness--when 
the government's key witness provided information favorable to 
the defense. Allegedly, the agent also participated in an 
intentional effort to conceal Brady and other material from the 
attorneys for Senator Stevens, which are required under law. 
Those are disturbing.
    And I have always thought that when you find improper 
conduct by officials that action needs to be taken, not only 
because it is a matter of justice but also to make it very, 
very clear to others in the department that such action will 
not be tolerated and that, in fact, direct and specific and 
immediate recourse will be taken. Can you tell us what has 
happened in that case?
    Mr. Mueller. Yes. We had actually two agents involved. One 
of them--one of the agents brought to the attention of the 
court the issues that were disclosed, and another agent is the 
one to whom you are referring is going through our OPR process 
at this point. We are taking into account the most recent 
report from the person appointed by the court; and, as I say, 
that person is going through the OPR process at this juncture.
    Mr. Lungren. I appreciate that. But, you know, Ted Stevens 
has been--died in a plane accident sometime ago. He was 
defeated in his election in part because of the actions that 
were taken against him officially by the Department of Justice, 
including actions by the FBI agent. It is little solace to 
people who I believe are attempting to serve this country well 
in positions of authority that an agency required to uphold the 
law and being a coequal branch of government had at least that 
alleged improper activity. It must have been some improper 
activity, because the court seemed to think it was. And yet 
here we are after this passage of time, and nothing has taken 
place. I know you want to be fair about it, but is there going 
to be a resolution of that any time in the future?
    Mr. Mueller. Yes. There has been an investigation and 
findings; and, as I say, it is going through the process. The 
individual has a right to present----
    Mr. Lungren. Yes, he does. But Members of Congress and 
elected officials and appointed officials have a right to be 
treated fairly by the executive branch. I know you take this 
very seriously. I know your history.
    Mr. Mueller. Absolutely, absolutely.
    Mr. Lungren. I took it very seriously as Attorney General 
of California. We investigated and prosecuted all sort of 
people. I put them in prison.
    Mr. Mueller. And occasionally we did it together.
    Mr. Lungren. Yes. But the point is, on the other side of 
it, I think you have an obligation--your institution has an 
obligation to be absolutely fair. Because if, in fact, you make 
an error, you have not only done an injustice to the 
individuals but you have done an injustice to their 
constituents whose decision to elect someone in office is 
reversed or individuals in the voting booth have made decisions 
based on improper information.
    So I would just hope that that could be--I don't know if 
the word is accelerated, but certainly there needs to be some 
posture to suggest that at least publicly it is taken 
seriously, that consequences flow from it, and that people 
should understand that you take it as seriously as I know you 
do. But in the absence of completed action, I am not sure that 
message is out there.
    I have a whole lot of other questions, but my time is up. I 
thank the gentleman from South Carolina for being so generous.
    Mr. Smith. Thank you, Mr. Lungren.
    The gentleman from South Carolina has been very patient and 
very gracious, and he is now recognized.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Director, I want to start by thanking you for your service 
to our country as a Federal prosecutor and now as the Director 
of the Bureau. And, again, as I did last time you were here, I 
want to compliment the Bureau agents in the State of South 
Carolina, Spartanburg and Greenville. They are always extremely 
well prepared. They are professional. They are a credit to the 
Bureau. And if you ever have a chance to tell them, I know a 
word from someone they respect as much as you would mean a lot 
to them, so----
    My first question really isn't a question. It is more a 
therapeutic rant.
    With the trial going on with KSM, you know, Director, to 
have a female prosecutor suggest or female defense attorney 
suggest what female prosecutors ought to have on, to have a 
defendant take his shirt off in trial, and to have defendants 
claim that their religion will not allow them to look at women 
who are dressed a certain way, but that same religion does not 
prevent them from stoning rape victims and burning women with 
jet fuel is just outrageous to me, and I don't expect you to 
comment unless you want to, but the notion that we ever were 
going to try this case in the media center of the world to give 
an even bigger platform to these defendants--I will tell you, I 
had judges come down a lot harder on me because I poured water 
in a cup too loud than this judge is coming down on these 
defendants and these attorneys. And I doubt there is a thing in 
the world you can do about it, but when I read about it and 
when I juxtapose that with the way American defendants and 
American prosecutors and defense attorneys are treated in 
ordinary court, it just strikes me that we are contorting 
ourselves like an Olympic gymnast to want the world to think 
that we are fair with animals.
    So, with that, Mr. Watt and Elijah Cummings from Maryland 
and I don't ever vote the same way, I don't think. If we have, 
it has been by accident. But we do agree on this.
    There is a notion that when poor people steal they go to 
jail and when rich people steal sometimes they get invited to 
Senate or House congressional Committee hearings, like the 
former Governor of New Jersey. And I don't have any idea 
whether or not that constitutes a crime, but it sure looks like 
it does. And you have the statistics. I don't challenge them.
    I would just encourage you to let the public know that 
there are prosecutions and convictions and sentences being 
meted out with respect to the financial fraud. Because the 
notion that poor people go to jail and rich people don't is 
ultimately going to destroy our judicial system.
    So I will give you a chance to comment. I know you say 
there are prosecutions going on. I believe you when you say 
that. I would just ask maybe for your press shop to get the 
word out or U.S. Attorney's office, who always have very active 
press shops, to get the word out so the public sees that there 
are consequences for this.
    Mr. Mueller. I think you make a valid point there. With 
each prosecution, successful prosecution, there will be an 
article in the paper, but we can do a better job of pushing 
together the full portrait of what we have done across the 
country and the sentences we are achieving in the white-collar 
arena, and that is a good suggestion we will follow up with.
    Mr. Gowdy. Thank you, Director.
    The other suggestion that I would have--and, again, I 
preface again I think you have had a remarkable career, and it 
just seems like we always focus on the two or three things 
where there can be improvement instead of the 98 that you do a 
great job on.
    Some of my constituents--and I know NSLs are not part of 
the Patriot Act, but, nonetheless, they get blended together 
sometimes--and some of my constituents have asked me, is there 
any way we can see how often NSLs are used or how often or how 
pervasive in certain parts of the country? I just think, again, 
the more information we can give to folks to kind of demystify 
this notion that the Bureau was walking through people's homes 
at night--I mean, I never knew a Bureau agent to do that, but I 
wish we were more aggressive in allaying the fears that people 
have that we are striking the balance too much in favor of 
government intervention and not enough in favor of privacy.
    Mr. Mueller. Well, we do file reports with Congress. I 
would have to check and see which parts are public in terms of 
what we do with regard to the FISA Act and the FISA statute as 
well as national security letters. But the fact of the matter 
is, there are very few--we have very few agents around the 
country. People think that we are far more prevalent, I think, 
than we actually are. And if you look around to your right and 
your left and you see is there somebody who has been anything 
other than helped by the FBI, then I want that brought to my 
attention.
    But the fact of the matter is we have been successful in 
addressing over the years organized criminals, terrorists, and 
that is what we do, and we hope the public recognizes that and 
in the absence of any other activity such as you describe would 
understand that their FBI agent is their neighbor, their 
friend, their supporter, and a defender of the community.
    Mr. Gowdy. Thank you, Director.
    Mr. Smith. Thank you, Mr. Gowdy.
    Director Mueller, thank you for being here today. Our 
hearing has been concluded, and we appreciate your testimony. 
Several Members have asked to follow up with you, and I am sure 
that that will be able to be accomplished as well, and we will 
continue to be in touch. Again, thank you for your service.
    Mr. Mueller. Thank you.
    Mr. Smith. Without objection, all Members will have 5 
legislative days to submit additional written questions for the 
witness or additional materials for the record, and the hearing 
is adjourned.
    [Whereupon, at 12:18 p.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary
    I join the Chairman in welcoming FBI Director Mueller to the 
Committee today.
    Over the years, I have not supported every action taken by the FBI. 
But during his tenure, I have learned that Director Mueller is a true 
patriot--a man firmly committed to the rule of law and the 
constitution. In his many appearances before this Committee and in our 
meetings, I have been impressed with his openness and his frankness.
    That is why I was proud to support the extension of Director 
Mueller's term for another two years. The nation needs, now as much as 
at any time in our history, an FBI that is capable of a multifaceted 
mission--both solving crimes and preventing them--and that capability 
has been proven under the Director's leadership.
    The Director's extended term also means that we will have more 
opportunities to invite him here before the Judiciary Committee--and, 
on matters of substance, I look forward to hearing Director Mueller's 
views on several critical issues:
    Criminal Justice: Any discussion of law enforcement in this nation 
requires us to ask serious questions about our criminal justice system. 
Even Supreme Court Justice Anthony Kennedy, through his work with the 
American Bar Association, has challenged us as lawyers and lawmakers to 
address these issues.
    Why are more than 2 million people in state or federal prison? Why 
is more than 60% of that population made up of persons of color? Why 
are recidivism rates so high? Do mandatory minimum sentences serve any 
purpose other than limiting judicial discretion where justice might be 
better served with leniency?
    A series of articles in the Washington Post last month raises 
another set of questions. The Justice Department began its review of 
flawed forensic work at FBI laboratories nearly twenty years ago. Why 
have dozens of wrongly incarcerated persons not yet been notified of 
the exculpatory findings of that review? Why were FBI experts pressured 
to give improper testimony in court, ``asserting the remote odds of a 
false match or invoking bogus statistics in the absence of data?'' Why 
was the Justice Department's review of this matter conducted in secret, 
without publishing its findings and without the participation of the 
defense bar?
    The FBI is seen as the nation's preeminent law enforcement agency. 
We would expect that the FBI would not only be at the forefront of 
investigating criminals, but also at the forefront of efforts to make 
our system as a whole more just and fair. The Director has always been 
fair-minded, and I wonder what his thoughts are on these matters.
    Relationship with the Muslim Community:  Late last year, we learned 
that many of the materials used to train FBI agents contained wildly 
inaccurate information--painting the American Muslim community as 
violent, and perpetuating other dangerous and harmful stereotypes.
    There is no place for such misinformation in official training 
materials. Gross insensitivity aside, these flatly inaccurate 
portrayals distract federal agents from real threats, and serve to 
isolate American Muslims when we ought to be building trust with that 
community.
    I understand that the FBI has undertaken a review of its training 
materials and excised the errors from its database. I also understand 
that the FBI has issued guidance to its agents that requires 
supervisors to play a more active role in vetting instructors. I look 
forward to hearing from the Director about this review, and about the 
steps he has taken to prevent further damage to the relationship 
between the federal government and the American Muslim community.
    Mortgage fraud: Home foreclosures and delinquencies have surged in 
recent years--as have schemes to defraud distressed homeowners. One 
common type of fraud now involves scammers claiming that they can 
negotiate a loan modification with the bank, demanding large fees up 
front, and failing to deliver any service to the homeowner.
    We ought to be doing more to keep people in their homes. Part of 
that mission is catching the crooks who would prey on homeowners at 
their most vulnerable moments. I hope the Director can share with us 
the efforts of the FBI to stop these crimes.
    Budget: I would also like to know where the Director stands on 
proposals to cut the FBI's budget. Under the proposal passed by the 
majority, we would lose at least 4,500 federal agents at the Department 
of Justice by 2014, and prosecute 160,000 fewer criminal cases over the 
next decade.
    These losses would appear to have a devastating impact on the FBI's 
mission, and in particular on the FBI's ability to conduct 
counterterrorism investigations. I would like the Director to elaborate 
on the effects of this proposal.
    I look forward to today's testimony on this and other issues.

                              ATTACHMENTS


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 Post-Hearing Questions submitted to the Honorable Robert S. Mueller, 
            III, Director, Federal Bureau of Investigation*
---------------------------------------------------------------------------
    *December 18, 2012--At the time of printing, the Committee was 
aware that the FBI's responses were pending with the Department of 
Justice. The Committee's repeated attempts to retrieve this information 
were unsuccessful.


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