[Senate Hearing 112-697]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 112-697

                                                        Senate Hearings

                                 Before the Committee on Appropriations

_______________________________________________________________________


                                            Commerce, Justice, Science,

                                                   and Related Agencies

                                                         Appropriations

                                                            Fiscal Year
                                                                   2013


                                         112th CONGRESS, SECOND SESSION 


                                                      H.R. 5326/S. 2323

DEPARTMENT OF COMMERCE

DEPARTMENT OF JUSTICE

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

NONDEPARTMENTAL WITNESSES


 Commerce, Justice, Science, and Related Agencies Appropriations, 2013 
                          (H.R. 5326/S. 2323)




                                                        S. Hrg. 112-697

 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                       FIRST deg.SECOND SESSION

                                   on

                           H.R. 5326/S. 2323

   AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE AND 
 JUSTICE, AND SCIENCE, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING 
               SEPTEMBER 30, 2013, AND FOR OTHER PURPOSES

                               __________

                         Department of Commerce
                         Department of Justice
             National Aeronautics and Space Administration
                       Nondepartmental Witnesses

                               __________

         Printed for the use of the Committee on Appropriations


   Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=senate&committee=appropriations

                               __________


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                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi, Ranking
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
DIANNE FEINSTEIN, California         SUSAN COLLINS, Maine
RICHARD J. DURBIN, Illinois          LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            LINDSEY GRAHAM, South Carolina
MARY L. LANDRIEU, Louisiana          MARK KIRK, Illinois
JACK REED, Rhode Island              DANIEL COATS, Indiana
FRANK R. LAUTENBERG, New Jersey      ROY BLUNT, Missouri
BEN NELSON, Nebraska                 JERRY MORAN, Kansas
MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
JON TESTER, Montana                  RON JOHNSON, Wisconsin
SHERROD BROWN, Ohio

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

    Subcommittee on Commerce, Justice, Science, and Related Agencies

                BARBARA A. MIKULSKI, Maryland, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas
PATRICK J. LEAHY, Vermont            RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 MITCH McCONNELL, Kentucky
DIANNE FEINSTEIN, California         LAMAR ALEXANDER, Tennessee
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
FRANK R. LAUTENBERG, New Jersey      RON JOHNSON, Wisconsin
BEN NELSON, Nebraska                 SUSAN COLLINS, Maine
MARK PRYOR, Arkansas                 LINDSEY GRAHAM, South Carolina
SHERROD BROWN, Ohio                  THAD COCHRAN, Mississippi (ex 
                                         officio)

                           Professional Staff

                            Gabrielle Batkin
                            Jessica M. Berry
                             Jeremy Weirich
                            Jean Toal Eisen
                         Art Cameron (Minority)
                        Allen Cutler (Minority)
                       Goodloe Sutton (Minority)

                         Administrative Support

                              Michael Bain
                         Katie Batte (Minority)


                            C O N T E N T S

                              ----------                              

                        Thursday, March 8, 2012

                                                                   Page

Department of Justice: Attorney General..........................     1

                        Thursday, March 15, 2012

Department of Justice: Federal Bureau of Investigation...........   111

                        Thursday, March 22, 2012

Department of Commerce: Office of the Secretary..................   143

                       Wednesday, March 28, 2012

National Aeronautics and Space Administration....................   205
Nondepartmental Witnesses................................. 247
Material Submitted Subsequent to the Hearing.................. 247 deg.


  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              


                        THURSDAY, MARCH 8, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Barbara Mikulski (chairman) 
presiding.
    Present: Senators Mikulski, Leahy, Feinstein, Lautenberg, 
Pryor, Brown, Hutchison, Shelby, Alexander, Murkowski, and 
Graham.

                         DEPARTMENT OF JUSTICE

                            Attorney General

STATEMENT OF HON. ERIC H. HOLDER, JR., ATTORNEY GENERAL


            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI


    Senator Mikulski. Good morning, everybody. The Commerce, 
Justice, Science, and Related Agencies Appropriations 
Subcommittee (CJS) will come to order. This morning, we welcome 
the Attorney General of the United States, and as is the usual 
and customary way, Senator Hutchison and I will make opening 
statements. We'll go to you, Mr. Attorney General, for yours, 
and you may summarize. With unanimous consent, all statements 
will be included in the record.
    Senator Shelby, our colleague and former ranking member on 
this subcommittee, has a banking hearing. With Senator 
Hutchison's concurrence, we'll go right to Senator Shelby for 
the first question.
    Senator Hutchison. Okay.
    Senator Mikulski. Does that sound okay?
    Senator Shelby. Thank you.
    Senator Mikulski. And then we will observe Senators in 
their order of arrival, and we expect robust participation. 
We're going to strictly adhere to the 5-minute rule.
    So, having laid the groundwork, I just want to say good 
morning and welcome to our first CJS subcommittee hearing, the 
Attorney General of the United States, in which we will hear 
his presentation on the Department of Justice (DOJ) budget.
    We have a very positive relationship with the Attorney 
General. He's brought to the Justice Department the experience 
of a career prosecutor. He's been dedicated to fighting violent 
crime and terrorism. He knows that he is pioneering work now, 
working with our administration, on how to deal with the new 
and emerging threat of cybersecurity, which is, how do we 
protect our citizens, and his views and recommendations on 
protecting our civil liberties.
    Well, Mr. Attorney General, before we get into the numbers 
and the money, I would just like to thank you, and in thanking 
you, I want to thank all the hardworking men and women who do 
work at DOJ. There are 116,000 employees who work there; 25,000 
are Federal agents, and people work at the Federal Bureau of 
Investigation (FBI), Drug Enforcement Administration (DEA), the 
U.S. Marshals Service (USMS), and the Bureau of Alcohol, 
Tobacco, Firearms and Explosives (ATF). We have 20,000 prison 
guards and correctional staff, and 10,000 prosecutors and 
investigators. They've had some amazing accomplishments, which 
I'll talk about when I get to my question period.
    But we want to thank them, because every day and every way, 
they stand sentry, either to do prevention and intervention, to 
make sure they are out on the street, doing traditional violent 
crime work, to really being all over the world, and then 
fighting issues related to white collar crime.
    As the chair of the CJS Subcommittee, I have three 
priorities when examining the budget: communities security, how 
does the budget support the mission of keeping our communities 
safe; national security, what resources are needed to keep 
America safe; and then, oversight and accountability. No 
boondoggles on the watch of this subcommittee. And I want to 
make sure the Justice Department has what it needs to do its 
mission.
    As I looked at the President's budget, I noted that there 
was only one new initiative, and that's the expansion of 
mortgage and financial fraud. That request is $611 million. It 
is a modest $5 million targeted increase, and we are going to 
want to hear more about that. Because we, in our own State of 
Maryland, have seen such a rising number of scams, and schemes, 
and predatory lending practices, and we need to know what you 
want to do with the money.
    We can't have a strong, economically vibrant community 
unless they're safe, whether it's in our neighborhoods, whether 
it's protecting small business on Main Street. So, I want to 
know how the budget will keep America safe at home on Main 
Street.
    The request for $2 billion for grants to State and local 
law enforcement, I wonder if it's sufficient. This is $32 
million less than the 2012, and we might have to consider, you 
know, reorganizing priorities. The State and local funding 
seems to have borne the brunt of budget cuts. Since 2010, 
grants have been cut by $1 billion in local funding. Now, part 
of this was the axe and acts of the Congress itself.
    Many of my colleagues don't realize that cuts have 
consequences in discretionary spending. So, we need to hear 
your view on what we can do. We know the Government 
Accountability Office (GAO) has recommended that you should 
conduct a review and eliminate unnecessary duplication. We 
support that.
    We also want to work in community security at the 
protecting of our children. One of the areas of bipartisan 
support is in the money to catch predators who use the Internet 
to stalk children, break up children's pornography rings, and 
track down and arrest these child molesters. We understand you 
are requesting $328 million, and we'll look forward to seeing 
how you will allocate that, and what to do.
    The Southwest Border--my colleague, Senator Hutchison, has 
worked assiduously in that area. I want to know that this is 
not only bipartisan support--we think it ought to be 
nonpartisan to support our border, and I'll let her raise those 
questions in there.
    In the area of cyberthreats, our Nation faces a growing and 
pervasive threat overseas, from hackers, cyberspies, and 
cyberterrorists. We need safe and resilient networks. We worry 
about online banking and commerce, the safety of our power 
grids, air traffic control systems, digitized records.
    Yesterday, with the administration, the Senate held a cyber 
exercise. The majority of the Senators were there to listen to 
an exercise on an attack on a major city's power grid. It was 
chilling. It was terrifying to know what happened there, and 
what we could do to protect it. So, we need to know about 
cyber.


                           PREPARED STATEMENT


    Finally, I want to know how the Justice Department is 
improving its accountability to taxpayers. You know, you've 
gotten a bad rap--some of them, about lavish banquets, cost 
overruns, the Inspector General doing its audits--and it 
should. So, we want to know how we stand sentry over the money 
we do spend.
    We have very specific questions, but with the number of 
people here, I'm shortening my statement.
    [The statement follows:]

           Prepared Statement of Senator Barbara A. Mikulski

    Good morning and welcome to our first Commerce, Justice, Science, 
and Related Agencies (CJS) Subcommittee hearing. We begin our 
examination of the President's fiscal year 2013 budget by welcoming 
Attorney General Eric H. Holder, Jr.
    Today, we'll discuss how the Justice Department's fiscal year 2013 
budget request strengthens national security and counter terrorism; 
protects the safety, security, and rights of U.S. citizens; and ensures 
taxpayer dollars are used wisely.
    We have a very positive relationship with Attorney General Holder. 
He has brought to the Justice Department the experience of a career 
prosecutor dedicated to protecting the American people from terrorism 
and violent crime. Welcome back, Attorney General Holder, and thank you 
for joining us today.
    I want to begin today's hearing by thanking all of the hardworking 
men and women of the Justice Department's 119,000 civil servants:
  --the 25,000 Federal agents of the Federal Bureau of investigation 
        (FBI);
  --Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF);
  --the Drug Enforcement Agency (DEA);
  --the U.S. Marshals Service (USMS)--and the people who support those 
        agents;
  --the 20,000 prison guards and correctional staff; and
  --the 10,000 prosecutors, investigators, and legal experts.
    They've had some amazing accomplishments during the last year. USMS 
arrested more than 12,000 fugitive sex offenders. DEA agents put more 
than 3,000 drug traffickers out of business. FBI dismantled 366 
criminal enterprises involved in white collar crimes. U.S. Attorneys 
collected $6.5 billion in criminal and civil penalties.
    They are the guardians of our justice system, but they are often 
overlooked and undervalued. I want them to know that the CJS 
Subcommittee knows and appreciates what they do every day.
    The President's fiscal year 2013 budget request for the Department 
of Justice (DOJ) totals $27.1 billion, which is $110 million less than 
the fiscal year 2012 level. The budget request also includes $368 
million in cuts to prior year funding for core Federal law enforcement 
functions and grants. This year's budget also relies more heavily than 
ever on payments into the Crime Victims Fund, which will finance 30 
percent of the Department's operating budget in fiscal year 2013. The 
request reflects the stringent reality of our times.
    As chairwoman of the CJS Subcommittee, I have three priorities when 
examining the budget for the Justice Department. The first is community 
security. How does the budget support the mission of keeping our 
communities safe? The second is national security. What resources are 
needed to keep America safe from terrorism? And finally, oversight and 
accountability. Are tax dollars being spent wisely?
    I want to make sure that the DOJ has what it needs to uphold the 
rule of law and to protect this country from predatory attacks.
    There is only one new initiative in the Department's budget request 
this year--an expansion of mortgage and financial fraud task forces. 
Our economy depends on the integrity of our financial markets. Our 
neighborhoods and communities have been rattled by mortgage fraud 
schemes and scams.
    The budget request includes $611 million to fight mortgage and 
financial fraud, including a modest $55 million targeted increase to 
hire new FBI agents, new attorneys, new specialized support staff, and 
new forensic accountants and in-house investigators. This will also be 
used to combat financial and mortgage fraud, going after the schemers 
and scammers who prey on hardworking families and destabilize 
neighborhoods.
    We can't have strong, economically vibrant communities unless they 
are safe. So I want to know how the budget request keeps Americans safe 
here at home. The request is $2 billion for grants to State and local 
law enforcement. This is $32 million less than fiscal year 2012.
    State and local funding has borne the brunt of budget cuts. Since 
2010, grants have been cut by $1.5 billion, or 43 percent. This is a 
time when we must be frugal. Tough choices have to be made. The CJS 
Subcommittee is committed to making sure our police are not walking a 
thin blue line. We need to know which grants are truly most effective 
and which programs we need to take a closer look at before reinvesting 
American taxpayers' dollars in them.
    A recent Government Accountability Office report recommended that 
the Attorney General should conduct an assessment to better understand 
which grant programs overlap with one another to prevent unnecessary 
duplication. I think that is an excellent recommendation, and I 
encourage the Attorney General to complete this analysis.
    I know how committed the Attorney General is to keeping children 
safe from abuse, sexual predators, and cyber stalkers. The budget 
request includes $328 million to catch predators who use the Internet 
to stalk children, break up child pornography and prostitution rings, 
and track down, arrest, and prosecute child molesters.
    The FBI and USMS have crucial roles. FBI's Innocent Images 
initiative targets sexual predators who use the Internet to distribute 
child pornography. USMS are charged with tracking down and arresting an 
estimated 100,000 unregistered sex offenders.
    The Adam Walsh Act called for 500 new Deputy U.S. Marshals to carry 
out this mission. But since 2010, we've been able to prevent furloughs 
and layoffs, but we've been in a holding pattern of 160 new Marshals. I 
want to make sure we're putting the right resources in the right places 
to protect children from these despicable predators.
    The Department's budget request includes more than $1.8 billion for 
Federal law enforcement efforts, including the DEA, ATF, FBI, and USMS, 
to dismantle drug cartels that smuggle illegal drugs, guns, and humans 
along the border, and terrorize citizens and neighborhoods with fear 
and intimidation.
    Drug trafficking-related homicides in Mexico continue climbing. 
There were a sickening 12,100 murders in Mexico last year, up 86 
percent since 2009. We are very concerned about spillover violence. I 
want to know if the funds requested are sufficient to shut down the 
flow of firearms into Mexico, and to stop drugs and violence from 
coming into the United States from Mexico.
    Our Nation faces a growing and pervasive threat overseas from 
hackers, cyber spies, and cyber terrorists. We need safe and resilient 
networks to protect our online banking and commerce, electrical and 
power grids, air traffic control systems, and digitalized records.
    At the Justice Department, more than 1,500 personnel are working to 
prevent a broad range of cyber threats, such as computer intrusions, 
Internet fraud, intellectual property theft, and online child 
pornography; and to identify the perpetrators.
    The FBI is tasked with the most urgent cyber security 
responsibilities. They are on the front lines collecting intelligence 
and investigating computer intrusions that threaten our critical 
technology infrastructure. We will hear more details about this next 
week, when FBI Director Robert S. Mueller, III testifies before this 
subcommittee. But I want to know what you see as the Justice 
Department's role as a key guardian of our Nation's cyber security.
    Finally, I want to know how the Justice Department is improving 
accountability of taxpayer dollars so that every $1 spent to secure our 
communities is $1 well-spent. The subcommittee has taken steps to 
prevent waste, fraud, and abuse; prohibit funds for lavish banquets; 
control cost overruns; and require the Inspector General to do random 
audits of grantees. I want to know what concrete steps you have taken 
to put these guidelines into practice and give teeth to make sure they 
are followed.
    Given all of the Justice Department's important roles and 
responsibilities, we must ensure that it has the resources it needs to 
protect the lives of 330 million Americans. But we also want to make 
sure the Justice Department is a good steward of taxpayer dollars and 
makes sure every $1 we spend to keep our Nation safe is $1 well spent.
    I thank Attorney General Holder for his leadership, and I look 
forward to continuing our work together making a safer, stronger 
America.

    Senator Mikulski. I'm going to turn now to Senator 
Hutchison, and then to you.

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Well, thank you, Madam Chairman, very 
much, not only for the deference on border security, where I 
live, but also on the way you run this subcommittee, which is 
for us to do what's right for America.
    Mr. Attorney General, I do want to address some of the 
areas of border security. First of all, State Criminal Alien 
Assistance Program (SCAAP) funding is something that continues 
to be shortchanged by your budgets, and SCAAP, of course, is 
the reimbursement for local counties that incarcerate illegal 
alien prisoners. And along the border, our counties are 
generally very poor and don't have those kinds of resources, 
and each year, you continue to not fund.
    We did put the money back in last year, $240 million, but I 
would hope that you would support increasing that, as we go 
through this process, because we must incarcerate these illegal 
alien criminals, who are mostly in the drug cartel and 
operations, so that this will not be borne by the counties on 
the border.
    In response to Operation Fast and Furious, language was 
included in last year's bill that would prohibit Federal law 
enforcement agencies from selling operable weapons to cartels. 
This request that you're giving us removes that language, 
saying it's unnecessary. Mr. Attorney General, we just want to 
make positively sure that what happened does not happen again, 
and I would hope that you would support our insertion of that 
language again.
    Last year, our Commerce, Justice, Science, and Related 
Agencies bill provided $10 million to expand the capacity at 
the overcrowded El Paso Intelligence Center (EPIC). And this is 
critical for our Southwest Border information sharing, and is 
the border's focal point to help stop the flow of narcotics, 
combat illegal immigration, and end human trafficking and 
firearms smuggling.
    It is imperative that EPIC and the DEA take full advantage 
of the resources available from DOJ agencies like the FBI, 
USMS, and ATF. And I hope that you can give us an update on the 
status of this funding and the project.
    There have been reports that cartels across the border are 
attempting to recruit college students to smuggle drugs into 
the country, and it says that minors are more appealing, 
because criminal penalties are lighter for them. One of the 
good parts of your budget request is $312 million for juvenile 
justice prevention programs. I will be interested in hearing if 
you are aware of these border threats to our youth, and if some 
of that money that you are requesting could be put on the 
border to try to make sure that we try to help our youth 
overcome the cartel overtures.
    The VALOR program, the Violence Against Law Enforcement and 
Ensuring Officer Resilience and Survivability, is one that I 
applaud your efforts to put in place. And unfortunately, the 
number of Federal, State, and local officers who died in the 
line of duty in America last year increased, from 153 to 173.
    The feedback from the training and research being conducted 
through VALOR is very positive, including the alert center at 
Texas State University, which was credited by the two officers 
who came into Fort Hood when Major Nidal Hasan started shooting 
unarmed military people. Both of those officers survived, even 
though Sergeant Munley was shot several times. But they both 
credited their swift response that day to the alert active 
shooter training program that they had received. So, that's 
something that's very good that I applaud in your budget.
    I want to state a concern that I have about the National 
Park Service pushing for construction, which is in progress, on 
an unmanned border crossing at the Big Bend National Park, in 
south Texas. This is not a DOJ decision, but it is going to 
affect some of the personnel, and I'm concerned that this is an 
area where illegal immigrants can walk across. The water is 
knee deep, and you can walk right across the river, and into 
Big Bend, and having an unmanned border crossing, I think, is 
insufficient. So, we're going to talk about that at some point 
to see if we can get FBI, DEA, ATF, Border Patrol, somebody to 
man a place like that, where it is so vulnerable.
    And last, but not least, Attorney General Holder, I'm going 
to ask you some questions about your public integrity unit. I'm 
going to give you full credit for dismissing the case against 
the late Senator Ted Stevens when you learned of the corruption 
within that division of your Department. I'm going to ask you 
questions, because the report will be public within days, and 
if there's anything that you should take as your major 
responsibility, it is that the public corruption unit and DOJ 
is fair and evenhanded, and, clearly, that was not the case in 
the prosecution of a great friend to many of us, and a great 
patriot for our country, who, unfortunately, was very badly 
abused by the DOJ.
    But, I will say, you did dismiss the case when you learned 
of the misbehavior, and I gave you credit on the Senate floor 
for doing that, and will again, but I do want to ask you about 
the report when we have time to ask questions.
    Thank you.
    Senator Mikulski. Mr. Attorney General.

                SUMMARY STATEMENT OF ERIC H. HOLDER, JR.

    Attorney General Holder. Thank you. Chairwoman Mikulski, 
Ranking Member Hutchison, other distinguished members of the 
subcommittee. I want to thank you very much for the opportunity 
to appear before you today and for your continued support of 
the Justice Department's critical work.
    I look forward to discussing the President's fiscal year 
2013 budget for the Department and how these investments would 
be used to build on what I think is our extraordinary record of 
success.
    The President's budget proposal demonstrates a clear 
commitment to advancing the Department's core missions and 
augmenting our ability to fulfill our most important 
obligation, and that is protecting the American people. Despite 
the significant fiscal constraints the Federal Government has 
faced in recent years, the 116,000 dedicated employees who 
serve in the Department offices around the world have made 
significant, and in many cases, historic progress in 
safeguarding our citizens from terrorism, from violent crime, 
from financial fraud, and from a range of threats that often 
disproportionately threaten the most vulnerable members of our 
society.
    We've also proven our commitment to acting as sound 
stewards of precious taxpayer dollars. As you can see in the 
most recent budget request, proposed spending increases have 
been exceeded by proposed cuts. In fact, as a result of 
numerous steps taken to streamline operations, almost $700 
million worth of savings have been developed and reinvested in 
critical mission areas. I believe that the Department is 
perhaps more efficient and more effective than ever before.
    Our recent achievements underscore this point, especially 
when you consider our national security efforts. By continuing 
to work collaboratively alongside U.S. and international 
partners, we have identified and disrupted numerous alleged 
terrorist plots, including one by two Iranian nationals to 
assassinate the Saudi Ambassador to the United States. We have 
thwarted multiple plots devised by homegrown extremists, and we 
have secured convictions and robust sentences against a number 
of dangerous terrorists.
    In October, the Department obtained a guilty plea from Umar 
Farouk Abdulmutallab for his role in the attempted bombing of 
an airplane on Christmas Day in 2009. Just last month, 
Abdulmutallab was sentenced to four life terms in prison. In 
November, we secured the conviction of Viktor Bout, a notorious 
arms dealer who sold millions of dollars in weapons for use in 
killing Americans. In December, Waad Ramadan Alwan pleaded 
guilty to 23 charges, including conspiracy to use a weapon of 
mass destruction against U.S. nationals abroad, attempting to 
provide material support to al Qaeda in Iraq, and conspiracy to 
transfer, possess, and export explosive devices against United 
States troops in Iraq.
    The list goes on and on. With the sustained and increased 
investments included in the President's budget for the 
comprehensive national cybersecurity initiative, the high-value 
detainee interrogation group, the joint terrorism task forces, 
the Render Safe program, and other key national security 
efforts, the Department will be able to strengthen our critical 
surveillance and intelligence gathering capabilities.
    It will also allow us to bring our fight against financial 
fraud to a new level. On Monday, as many of you know, President 
Obama issued a proclamation to mark the beginning of this 
year's Consumer Fraud Protection Week, and I'm proud to note 
that the Justice Department's Consumer Protection Branch has 
established a record of success in defending the interests of 
American consumers that is worth celebrating and will be 
expanded upon.
    In 2011 alone, our Consumer Protection Branch attained a 
95-percent conviction rate, recovered more than $900 million in 
criminal and civil fines, restitution, and penalties, and 
obtained sentences totaling more than 125 years of imprisonment 
against more than 30 individuals. This represents remarkable 
and unprecedented progress, but it really is only the 
beginning. In fact, since the start of the administration, the 
Justice Department has signaled an unwavering commitment to 
combating and preventing a wide range of financial and 
healthcare fraud crimes, and we've taken bold steps to address 
the causes and the consequences of the recent economic crisis.
    Through the efforts of the President's financial fraud 
enforcement task force, which was launched in 2009, and which 
I'm proud to chair, charges have been brought against numerous 
CEOs, CFOs, corporate owners, board members, presidents, 
general counsels, and other executives of Wall Street firms, 
hedge funds, and banks who have engaged in fraudulent activity.
    In recent months, we have obtained prison sentences of up 
to 60 years in a variety of fraud cases, including multi-
million-dollar Ponzi schemes, and the largest hedge fund 
insider trading case in U.S. history.
    Just this week, we secured a conviction against the former 
board of directors' chairman for an international bank for 
orchestrating a $7 billion investment fraud scheme. The task 
force has established two new working groups: the Consumer 
Protection Working Group, which will enhance civil and criminal 
enforcement of consumer fraud, and the Residential Mortgage-
Backed Securities (RMBS) Working Group, which bring Federal and 
State partners together to investigate and to prosecute abuses 
in our housing markets. Both will help to amplify existing 
efforts, and to foster cooperation and collaboration in the 
Department's response to these problems.
    Just a few weeks ago, a similar collaborative approach led 
the Departments of Justice and Housing and Urban Development, 
as well as other agencies, and 49 State attorneys general to 
achieve a landmark $25 billion settlement with the Nation's top 
five mortgage servicers, the largest joint Federal and State 
settlement in our Nation's history.
    Although this will not, on its own, cure all that ails our 
housing market, this agreement builds on the record fair 
lending settlement obtained by the Civil Rights Division's fair 
lending unit last year, and will provide substantial relief to 
homeowners. It also provides a blueprint for future 
collaboration across levels of government, State borders, and 
party lines.
    There is perhaps no better illustration of our recent 
progress than the Department's groundbreaking work to combat 
healthcare fraud. Over the last fiscal year alone, in 
cooperation with the Department of Health and Human Services, 
as well as other partners, by utilizing authorities provided 
under the False Claims Act and other essential statutes, we 
were able to recover nearly $4.1 billion in funds that were 
stolen or taken improperly from Federal healthcare programs. 
That is the highest amount ever recorded in a single year.
    Over the same period, we opened more than 1,100 new 
criminal healthcare fraud investigations, secured more than 700 
convictions, and initiated nearly 1,000 new civil healthcare 
fraud investigations. For every $1 that we have spent combating 
healthcare fraud, we have returned, on average, about $7 to the 
United States Treasury, the Medicare Trust Fund, and others.
    These numbers are stunning, but my colleagues and I 
recognize that we cannot be satisfied, and this is no time to 
become complacent. That's why in addition to helping us build 
on this record of success, the President's budget request also 
would bolster our fight against drug trafficking, international 
crime networks, gangs, and cyber criminals. It would increase 
our efforts to protect the law enforcement officers who keep us 
safe, and expand upon the work being done by our Civil Rights 
Division to guarantee that the rights of all Americans are 
protected in border areas, workplaces, housing markets, and 
voting booths.

                           PREPARED STATEMENT

    I am committed to building on these and our other many 
achievements, and I know that you understand that in this time 
of uncommon threats and complex challenges, we simply cannot 
afford to cut back on the amount and the quality of justice 
that we are obligated to deliver. The Department must remain 
vigilant in protecting this Nation and in enforcing the law, 
and these efforts must be appropriately and adequately funded.
    I look forward to continuing to work with the members of 
this subcommittee and your colleagues throughout the Congress 
to accomplish this, and I would be happy to answer any 
questions that you might have.
    Senator Mikulski. Thank you, Mr. Attorney General. And your 
full statement will be entered into the record.
    [The statement follows:]

               Prepared Statement of Eric H. Holder, Jr.

    Good morning Chairwoman Mikulski, Ranking Member Hutchison, and 
members of the subcommittee. Thank you for the opportunity to meet with 
you today to discuss the President's fiscal year 2013 budget for the 
Department of Justice (DOJ) and the Department's key priorities.
    I also appreciate the opportunity to tell you more about the good 
work that is being done by DOJ employees across the United States and 
overseas to protect all of our citizens from harm and to ensure equal 
protection under the law, in order to promote ``liberty and justice for 
all.''
    The President has emphasized his goal to stabilize the economy by 
creating new jobs and reducing our national debt through greater 
revenue generation and spending cuts. To assist in the economic 
recovery, we continue to ask even more from our talented DOJ personnel. 
This is as true in DOJ as it is in the rest of the Federal Government.
    The President has asked DOJ to do more with less, recognizing that 
many across the country are still suffering; I am committed to 
presenting the Congress with a serious and thoughtful budget, which 
clearly reflects this awareness, and allows us the resources to 
faithfully carry out DOJ's mission and fulfill our obligation to the 
American people.
    Upon careful examination of our mission and the range of the 
priorities I will present here we cannot simply ``cut back'' on the 
extent or quality of justice that we are obliged to deliver; we cannot 
cease to enforce the law. We cannot ignore an indictment, or choose at 
the end of the process not to imprison a criminal, if sentenced. We are 
responsible for enforcing the law, and these efforts must be funded.
    What we can and must do, however, is examine the way we do our 
work, and find better ways to continue to do it well. In response to my 
call for savings across DOJ, my staff developed almost $700 million 
worth of budget offsets, so that we can reinvest that money and protect 
DOJ's core mission and priorities. In presenting DOJ's fiscal year 2013 
budget, we have aligned the entire amount to pay for high-priority, 
mission-related needs. Specifically, we have proposed $228 million in 
program increases. Our overall discretionary budget authority is 
reduced from $27.2 billion in fiscal year 2012 to $27.1 billion in our 
fiscal year 2013 request.
    In this fiscal year 2013 budget, we have proposed changes in 
operational accounts, as well as leadership offices. We have used 
balances from prior years that were left on the books to offset this 
year's costs, and we tried to find less expensive ways to accomplish 
the same outcome.
    Each of our proposed reorganizations and realignments has been 
developed with one goal in mind, to save taxpayers money, while 
remaining dedicated to our mission to protect our citizens. I can 
assure you that none of our reorganizations or realignments will 
compromise this fundamental mission; personnel and resources will be 
shifted to achieve the same end, to remake DOJ in ways that make us 
more responsive to the American people whom we proudly serve.
    To be clear, then, we at DOJ recognize that we are accountable to 
the American people, to identify and eliminate areas of waste, fraud 
and duplication, and also to marshal limited resources for the greatest 
return on investment. I have carefully reviewed with my staff DOJ's 
fiscal year 2013 budget request, and have directed them to focus 
resources on programs that have a measurable impact and demonstrate 
success in keeping our citizens safe.
    In his fiscal year 2013 budget, President Obama proposes that the 
Congress fund the work of DOJ in the amount of $27.1 billion. In this 
hearing, I would like to focus on DOJ's work in six critical areas, 
namely,
  --To sustain our Nation's security interests;
  --To uphold DOJ's traditional mission programs;
  --To combat financial, mortgage, and healthcare fraud;
  --To support our State, local, and tribal law enforcement partners;
  --To invest in Federal prisons and enhance detention capacity; and
  --To streamline programs and operations across DOJ.

                           NATIONAL SECURITY

    The fiscal year 2013 budget includes a total of $4 billion to 
sustain our first priority--DOJ's national security mission. As with 
our law enforcement mission, the Department continues to work to build 
strong ties with intelligence and security partners around the world, 
to protect the American people. At the same time, we are diligent in 
protecting U.S. technologies, goods, services, and national security 
interests from illegal tampering, malicious manipulation and 
acquisition by other countries, in order to maintain our Nation's 
competitive edge.
    The funding previously enacted, which the fiscal year 2013 budget 
maintains, for our national security programs ensures the continuation 
of critical investments made to improve intelligence coordination; 
expands information sharing efforts with trusted counterparts; secures 
our cyber infrastructure; widens investigations of drug trafficking 
organizations with ties to terrorist groups; and continues to extend 
anti-terrorism training to our law enforcement partners.
    In the past year, we were successful in several key national 
security investigations. In October, DOJ obtained the conviction 
against Umar Farouk Abdulmutallab for his role in the attempted bombing 
of an airplane full of holiday travelers on Christmas Day in 2009. He 
was sentenced to life in prison earlier this month. Working closely 
with our United States and international partners, we thwarted a plot 
by two Iranian nationals to assassinate the Saudi Ambassador to the 
United States, as well as numerous other suspected plots by homegrown 
violent extremists. We also secured the conviction of notorious arms 
dealer Viktor Bout for his efforts to sell millions of dollars of 
weapons for use in killing Americans. In May of last year, a grand jury 
indicted Waad Ramadan Alwan on 23 charges, including conspiracy to use 
a weapon of mass destruction against United States nationals abroad; 
attempting to provide material support to al Qaeda in Iraq; and 
conspiracy to transfer, possess, and export explosive devices against 
United States troops in Iraq. In December, Alwan pleaded guilty to all 
23 charges.
    In the fiscal year 2013 budget, DOJ seeks to maintain critical 
counterterrorism and counterintelligence programs, and sustain 
significant, recent increases related to intelligence gathering and 
surveillance capabilities; detecting and deterring cyber intrusions and 
fully supporting cybersecurity through the Comprehensive National 
Cybersecurity Initiative. We also look to maintain our investments 
supporting the High Value Detainee Interrogation Group; the Joint 
Terrorism Task Forces; and the Render Safe Program.

                      TRADITIONAL MISSION PROGRAMS

    In the fiscal year 2013 budget, DOJ seeks increases of $31.8 
million in support of programs in DOJ's traditional core mission of 
combating violent crime, cybercrime, crimes against children, and 
criminal trafficking in persons; and enforcing the Nation's civil 
rights and environmental laws.

Criminal Law
    In combating organized crime, I announced in January 2011 the 
single largest operation against the mafia ever undertaken by the 
Federal Bureau of Investigation (FBI), the result of unprecedented 
cooperation among Federal, State, local, and foreign law enforcement 
personnel. The operation resulted in the arrest of more than 100 
suspected mobsters--all without a hitch. In July, we announced the 
results of Project Delirium, a Drug Enforcement Administration (DEA) 
operation targeting La Familia Michoacana (Mee-shoa-CA-na), a violent 
drug cartel and supplier of most of the methamphetamines smuggled into 
the United States. Working with other Federal, State, local, and 
foreign law enforcement partners, including the Bureau of Alcohol, 
Tobacco, Firearms and Explosives (ATF), DEA oversaw more than 1,900 
arrests and the seizure of more than $63 million in U.S. currency; more 
than 2,700 pounds of methamphetamine; more than 2,700 kilograms of 
cocaine; 900 pounds of heroin; nearly 15,000 pounds of marijuana; and 
$3.8 million in other assets. An ATF investigation targeting a gang in 
Philadelphia known as the Young Hit Men or Harlem Gang resulted in an 
89-count superseding indictment charging 23 members with an array of 
Federal violations, including multiple firearms violations. The trial 
of these gang members is scheduled for May. And finally, in 2011, the 
U.S. Marshals Service (USMS) captured nearly 125,000 fugitives, 
including 7 from their ``Fifteen Most Wanted'' list in 2011. This was 
the fourth consecutive year that the USMS captured more than 100,000 
fugitives. These are only highlights, but, as you can see, it's been a 
busy year for DOJ.
    Investigating cyber crime and protecting our Nation's critical 
network infrastructure is another of DOJ's top priorities. Successful 
cyber attacks can have devastating effects on our national security, 
infrastructure, and economy; and hackers have been relentless in their 
efforts to attack U.S. Government agency Web sites, including ours. In 
combating these efforts, we continue to build and strengthen our 
capabilities to counter and prevent these attacks. Here again, DOJ 
works on a global scale to achieve success, in cooperation with our law 
enforcement partners abroad. FBI estimates that Americans lose hundreds 
of millions of dollars to cyber criminals based in Eastern Europe 
alone. Working closely with the FBI Cyber Division and with our legal 
attache personnel in Bucharest, our Romanian counterparts have arrested 
more than 300 cyber criminals in the last 3 years. Our efforts to build 
relationships with foreign counterparts continue to produce real 
dividends. FBI, the DOJ Office of International Affairs, and the 
Southern District of New York cooperated closely with the Israeli 
National Police and the Israeli Ministry of Justice. Together, we took 
down two boiler rooms in Israel that had targeted elderly persons in 
the United States in a lottery telemarketing scam, and had swindled 
them out of more than $10 million of their hard-earned savings. Thanks 
to this cooperation, 24 members of the ring were arrested in Israel and 
the United States; and 19 of the 21 have been extradited to the United 
States. Most pleaded guilty, and have been sentenced.
    In fiscal year 2013, DOJ is requesting an increase of $15.2 million 
within the Justice Information Sharing Technology program to transform, 
strengthen, and protect DOJ internal networks. This will counter newly 
emerging cyber security threats, including insider threats, provide 
advanced intrusion detection and response capabilities, and implement 
cost-efficient scalable enterprise architecture.
    The fiscal year 2013 budget also includes $3 million in new 
investments to combat transnational criminal organizations, and a total 
of nearly $2 billion to maintain the security of our Nation's Southwest 
Border. The budget also increases funding for international 
investigation and deterrence of intellectual property crime by $5 
million, which brings our investment to nearly $40 million annually to 
combat online piracy and otherwise protect our Nation's intellectual 
capital and maintain our competitive edge in developing American ideas 
and technologies to better compete in the global marketplace.
    DOJ's budget request also supports our continuing work to prevent, 
investigate, and prosecute child exploitation crimes. Sadly, our 
caseload in this area continues to increase. Our budget request will 
fund ongoing efforts to investigate and prosecute offenders such as 
those who participated in the so-called Dreamboard, an international, 
members-only, online bulletin board that was dedicated to the sexual 
abuse of children. Just as Dreamboard's members operated across 
international boundaries in committing their crimes, so too did law 
enforcement personnel work across boundaries to take down this 
nefarious ring. To date, 72 Dreamboard members have been indicted; 53 
have been arrested in the United States and abroad.
    DOJ has successfully investigated and prosecuted public corruption, 
not only in the several high-profile cases that made the news, but 
across the United States. The American electorate trusts that their 
public servants will obey the law; they expect DOJ to bring to full 
justice those who abuse that trust.

Civil Rights
    A fundamental highlight of DOJ's budget request for traditional 
mission programs is $5 million in new resources for the Civil Rights 
Division to prevent and combat human trafficking; hate crimes; and 
misconduct by law enforcement and public officials. These issues 
warrant our greater investment and vigilance as we advocate for every 
American--without exception. Safeguarding the civil rights of every 
American is at the heart of what we do, and represents our core 
mission. In this good work, DOJ continues to achieve success and helps 
our Nation to create ``a more perfect union''.
    In seeking redress for the host of inequities uncovered by the 
mortgage morass, DOJ has fought especially hard to protect the civil 
rights of Americans. Recently, I announced that DOJ had reached a $335 
million settlement with a lender to resolve allegations of lending 
discrimination against African-American and Hispanic borrowers who 
qualified for mortgage loans, but were charged higher interest fees or 
were steered into sub-prime loans, solely because of their race and/or 
national origin. More than 200,000 Americans will be entitled to 
compensation. We have also acted to protect the civil rights of our 
servicemembers who have been targeted by these unconscionable, 
predatory lending practices. In May 2011, we announced settlements with 
two lenders to resolve allegations that they had wrongfully foreclosed 
upon active-duty servicemembers without first obtaining court orders, 
in clear violation of the Service Members Civil Relief Act. The 
settlements provided more than $22 million in compensation to our men 
and women in uniform who were forced to worry about their families and 
losing their homes through unlawful foreclosures, while also having to 
endure the horrors of war. We fought hard for them because we believe 
that, as Americans, we are much better than that, and that our fellow 
citizens, who place their lives on the line for all of us, deserve far 
better than that.
    Our other civil rights priorities in fiscal year 2013 include a 
greater focus upon combating human trafficking; in uncovering and 
prosecuting hate crimes that target Americans for who they are and what 
they believe; in upholding and enforcing the constitutional right of 
every eligible American to participate in our Nation's political 
process and vote freely; and fully implementing provisions of the Civil 
Rights for Institutionalized Persons Act.

Environment and Natural Resources
    Since 2011, a team of our agents and prosecutors continues to lead 
the Deepwater Horizon Task Force, which has investigated the conduct of 
those involved in the tragic explosion and oil spill that claimed the 
lives of 11 people; despoiled the coastal waters of the Gulf of Mexico; 
killed scores of wildlife; and damaged the vibrant economy of a 
beautiful region, which our citizens have struggled mightily to 
restore.

Financial, Mortgage, and Health Fraud
    In our fiscal year 2013 budget, DOJ seeks an increase of $55 
million, for a total investment of more than $700 million, to 
investigate and prosecute financial and mortgage crimes that have 
sorely hurt the American people and damaged their trust in the 
financial markets they expect to engage in fair play. The abuses by 
many in the financial sector have had a devastating effect on the U.S. 
economy, and have contributed significantly to the economic suffering 
of so many Americans. It is essential that DOJ address these abuses 
forcefully, to hold fully accountable those who are responsible for 
these abuses and ensure that they are not repeated. In this budget, we 
propose an increase in specialized staffing and technologies to combat 
and root out fraud in the area of securities and commodities; 
investment scams; mortgage foreclosure schemes; and increasingly, in 
healthcare fraud.
    The program increase of $55 million would provide funding for 
additional FBI special agents, criminal prosecutors, civil litigators, 
in-house investigators, forensic accountants, and paralegals to hone 
DOJ's capacity to investigate and prosecute the full spectrum of 
financial fraud. Bringing aboard specialized and dedicated personnel, 
especially investigators and forensic accountants, is key to our 
successful detection and prosecution of complex financial schemes, and 
helps us to stay well ahead of the criminals who devise them. Of the 
$55 million program increase, $37.4 million is to increase criminal 
enforcement efforts and $17.6 million would increase civil enforcement 
efforts. Our total request also includes $9.8 million for technology 
tools and automated litigation support.
    We have already been actively engaged in these efforts. Since 
fiscal year 2010, the Financial Fraud Enforcement Task Force has 
spurred investigation and prosecution of financial fraud that has been 
uncovered by the 2008 financial crisis and economic recovery efforts. 
The task force has charged and sentenced a great number of defendants 
involved in securities fraud, investment fraud, Ponzi schemes, and 
other financial fraud. In October 2011, the managing member of Galleon 
Management LLC was sentenced to 11 years in prison, based on DOJ's 
investigation of the largest hedge fund insider trading scheme in 
history. We also continue to aggressively prosecute those who commit 
mortgage fraud. Mortgage fraud victims include distressed homeowners 
preyed upon by fraudsters posing as foreclosure rescue experts; the 
elderly who are victimized in Home Equity Conversion Mortgage or 
``reverse mortgage'' schemes; U.S. servicemembers; and entire 
neighborhoods blighted by blocks of abandoned homes. In fiscal year 
2011, the U.S. Attorneys' offices filed 513 cases against 947 
defendants, an increase of 92 percent in just 2 years.
    Earlier this month, I joined Housing and Urban Development 
Secretary Shaun Donovan and the Attorneys General of Colorado, Indiana, 
North Carolina, Illinois, and Iowa to announce the unprecedented 
agreement reached by the Federal Government and State attorneys general 
with the Nation's five largest mortgage servicers to address mortgage 
loan servicing and foreclosure abuses. This agreement--the largest 
joint Federal-State settlement ever obtained--provides substantial 
financial relief to homeowners and establishes significant, new 
homeowner protections. It holds mortgage servicers accountable for 
abusive practices and requires them to commit more than $20 billion 
toward financial relief for consumers. As a result, struggling 
homeowners throughout the country will benefit from reduced principal 
amounts and the refinancing of their loans. The agreement also requires 
substantial changes in how servicers do business, which will help to 
ensure the abuses of the past are not repeated.
    Moreover, on January 27, I announced the formation of the 
Residential Mortgage-Backed Securities Working Group, supported by 
current manpower and funds, to leverage State and local resources in a 
nationwide effort to investigate and prosecute crimes in the 
residential mortgage-backed securities market. DOJ will join the 
Securities and Exchange Commission and the New York State Attorney 
General under authority of the Financial Fraud Enforcement Task Force 
in leading the working group, which will be staffed by at least 55 DOJ 
agents, analysts, investigators, and attorneys from around the United 
States.
    Finally, DOJ remains fully engaged with the Department of Health 
and Human Services (HHS) to prevent and combat healthcare fraud. 
Earlier this month, HHS Secretary Kathleen Sebelius and I reported the 
success of our joint efforts, having recovered nearly $4.1 billion for 
U.S. taxpayers in fiscal year 2011. The 3-year average return on 
investment for healthcare fraud funding in fiscal year 2011 was more 
than $7 for every $1 invested--the highest ever for this program.
    In fiscal year 2013, we plan to redouble our efforts and ask the 
Congress for $294.5 million through the HHS budget for healthcare fraud 
funding to support DOJ initiatives to combat civil and criminal 
healthcare fraud. Increased funding will permit DOJ to expand Medicare 
Fraud Strike Force operations and to more effectively target locations 
where healthcare fraud activities are rampant. We also propose 
additional support to bolster civil enforcement efforts, including 
False Claims Act matters, to investigate and prosecute fraud by medical 
and pharmaceutical providers.

                STATE, LOCAL, AND TRIBAL LAW ENFORCEMENT

    In our fiscal year 2013 budget, DOJ seeks a total of $2 billion to 
assist State, local, and tribal law enforcement personnel, especially 
in combating violent crime and violence against women and all other 
victims of crime, and in supporting victim programs.
    DOJ's budget request is strong on law enforcement; it's strong on 
solid program research and development; it's strong on juvenile 
justice; and it's strong on innovation. In presenting this budget 
request, we've taken a long, hard look at what has worked best in these 
areas, in order to extend these best practices across the broad range 
of our work.
    The key to DOJ's success in protecting the American people 
continues to be in developing effective partnerships with law 
enforcement counterparts throughout the United States and abroad to 
leverage a more focused and effective law enforcement response. To put 
this in perspective, there are 65,000 U.S. Federal agents dedicated to 
criminal investigations; by comparison, there are 700,000 State and 
local law enforcement officers in the United States, not to mention 
scores of others who work for agencies from other nations. Crime is 
increasingly transnational and global in scope, and criminals respect 
no boundaries. We owe it to the American people to work closely with 
our partners--at home and abroad--to prevent these criminals from 
harming our citizens, and to ensure that those who do so are brought to 
justice.
    Here at home, one of our most important partnering programs is the 
Community Oriented Policing Service (COPS) grant program. These grants 
assist State and local police in hiring officers for targeted patrol 
and other proven strategies to reduce and prevent crime. From fiscal 
year 2009 through fiscal year 2011, the COPS office funded more than 
7,100 positions. More than 5,000 of these positions have been filled so 
far; nearly 4,000 of them as new hires. The budget requests an 
additional $91 million for the COPS hiring program in fiscal year 2013, 
for a total of $257.1 million. Of this amount, $15 million will be 
dedicated to community policing development initiatives and $15 million 
will be directed to tribal jurisdictions.
    It is worth noting that COPS will be giving preference in any 
fiscal year 2012 hiring grant award to communities that hire post-9/11 
veterans of our armed forces. Put simply, this is the right thing to 
do, and I assure you that this policy will continue in grants funded by 
the fiscal year 2013 appropriation.
    To give you an idea of the impact that COPS funding has had within 
local communities, let me tell you about Fresno, California. Given 
budgetary constraints, the Fresno Police Department had lost 100 sworn 
police officer positions and 265 civilian positions over a 3-year 
period. COPS funding added 41 front-line officers who helped Fresno 
reduce violent crime by targeted removal of dangerous criminals from 
the community's streets. The results are impressive. In 2011, Fresno 
experienced decreases in violent crimes across the board and had its 
lowest murder rate in a decade. Without COPS funding, the Fresno Police 
Department would have been forced to disband its violent crime impact 
team and redeploy officers into patrol, and merely react to crime. 
Instead, COPS funding helped the people of Fresno become more active in 
safeguarding their community.
    In this area, too, DOJ seeks funding for grant programs proven to 
be effective in preventing crime. Increased funding is requested for 
the Byrne Criminal Justice Innovation Program; for residential 
substance abuse treatment; for Second Chance Act implementation; for 
Part B Juvenile Justice Formula Grants; and for a new, evidence-based 
juvenile justice competitive demonstration grant program.
    The Adam Walsh Act significantly enhances DOJ's ability to respond 
to crimes against children and vulnerable adults, and to prevent sex 
offenders who have been released back into the community from 
victimizing others. The fiscal year 2013 budget also includes $20 
million for States and local jurisdictions, and an additional $1 
million to develop the National Sex Offender Public Web site.
    Finally, a significant outlay under the fiscal year 2013 budget 
includes increased funding to squarely address domestic violence and 
child abuse in rural areas through support of projects specifically 
designed to prevent these crimes in rural jurisdictions. A significant 
portion of these funds will be dedicated to implementing public safety 
programs in Indian country, to assist tribal law enforcement partners 
in reducing the disproportionately high levels of violent crime there.

                         PRISONS AND DETENTION

    In DOJ's fiscal year 2013 budget, we are seeking $8.6 billion to 
ensure that prisoners and detainees are held in secure Federal 
facilities and to improve Federal prisoner re-entry.
    Last year, DOJ made strategic investments to enhance the Nation's 
security and make communities safer. There are more than 2 million 
people incarcerated in the United States; estimates project the Federal 
inmate population in the United States to increase by 6,500, in 
addition to the estimated 5,000 inmates who will be processed in fiscal 
year 2012. The fiscal year 2012 enacted appropriation included partial 
funding for activation of new prisons in Alabama and New Hampshire. In 
the fiscal year 2013 budget, DOJ requests funding to fully activate 
these facilities and initiate two others, in Mississippi and West 
Virginia. In all, DOJ plans to add 2,500 prison beds and 1,000 new, 
low-security contract confinement beds in fiscal year 2013. DOJ will 
also direct increased funding to hire additional corrections workers 
and cover increased costs to transfer, accommodate, and secure the 
larger prisoner population.
    While opening the secure facilities we need to confine criminals, 
DOJ's budget request also addresses the parallel need to free up prison 
space and reduce long-term detention and incarceration costs. This 
budget recognizes the need to work with you in the Congress to make 
simple changes to the calculation of good conduct time, and to explore 
ways to further reduce recidivism. These proposals provide proven 
incentives for good behavior among certain eligible, nonviolent 
inmates, and their participation in programs designed to keep them from 
returning to prison, and will have a direct impact in relieving 
overcrowding in Federal prisons. Beyond the steps proposed in this 
budget, the Federal Government has an opportunity to build on the work 
of States like Texas and Indiana to modernize criminal sentencing, 
ensuring that violent and career criminals remain behind bars and off 
the streets, while strengthening programs to help eligible, nonviolent 
offenders to safely and productively re-enter their communities.
    The programs we propose to fund aim to reduce recidivism by 
expanding participation in these re-entry programs. DOJ's fiscal year 
2013 budget request includes expansion of the Bureau of Prison's 
residential drug abuse program, which supports Second Chance 
objectives. This expansion will enable greater use of the sentencing 
credits available to eligible, nonviolent inmates who complete drug 
treatment programs. Thus, as this program contributes to reducing 
crime, it will also result in fewer taxpayer resources directed at 
incarcerating inmates.

                        SAVINGS AND EFFICIENCIES

    DOJ's fiscal year 2013 budget presents a highly streamlined array 
of programs, which will help us to achieve our mission more efficiently 
while protecting the American people more effectively.
    DOJ proposes almost $700 million in efficiencies, offsets, and 
rescissions. We at DOJ recognize that we must do our part to help our 
Nation maintain its sound fiscal footing. In our fiscal year 2013 
budget request, we seek to balance fiscal responsibility demanded by 
the American people with DOJ's national security and law enforcement 
mission to prevent, prosecute, and bring to justice all who would do us 
harm.
    In leading this effort, I directed DOJ staff to identify areas 
where we would achieve significant savings for the American taxpayers 
by implementing changes in the way we execute our mission. These 
changes include improving the way we target funding, seeking support 
for programs that work; redirecting funding from the Department level 
to component agencies to reduce overhead and increase operational 
efficiency; and consolidating offices and redirecting or reducing 
personnel and resources.
    In all, we identified $646.6 million in administrative 
efficiencies, nongrant program reductions, and rescissions of prior-
year balances, which will reduce our bottom line without impairing our 
mission or capabilities.
    In submitting DOJ's fiscal year 2013 budget request, I emphasize 
that we continue to hold the line on expenses, seek to eliminate waste, 
and promote efficiencies. In this request, we propose to reorganize DOJ 
by consolidating offices. In doing so, we will become a leaner, more 
agile, and more responsive organization. Our goal is to enhance our 
service to the American people, without sacrificing the essential 
mission. Instead, we intend to realign our staff and resources to meet 
the greatest needs.
    In proposing these realignments, we add our efforts to the 
President's Campaign to Cut Waste. In July 2010, I launched DOJ's 
Advisory Council for Savings and Efficiencies, or the SAVE Council, to 
focus these efforts within DOJ. In just the last 2 years, the SAVE 
Council has helped DOJ realize nearly $60 million in savings and cost 
avoidance.
    The fiscal year 2013 budget includes savings expected from merging 
detention functions currently performed by the Office of the Federal 
Detention Trustee into USMS, merging core functions of the National 
Drug Intelligence Center into DEA, and transfer management of the Law 
Enforcement Wireless Communication program to FBI, returning funding 
and the concomitant responsibility for radio operations and maintenance 
to DOJ's law enforcement components.
    Additional savings and efficiencies were identified in the areas of 
information technology, space requirements, overhead, administration, 
and operations. For example, the IT offset represents savings that will 
be developed through greater inter-component collaboration in IT 
contracting; funds will be redirected to support DOJ's cyber security 
and IT transformation efforts and other high-priority initiatives.

                               CONCLUSION

    In conclusion, I am keenly aware that the President and I have 
asked DOJ's dedicated employees to do much more with fewer resources 
during this period of economic recovery. That they have done so with 
continued dedication to our mission to protect the American people is 
truly exemplary and inspiring.
    I appreciate this opportunity to tell you about our good work at 
the Department of Justice, to thank you for your support to date, and 
to ask you to fund the important work that lies ahead.
    At this time, I would be pleased to take your questions.

    Senator Mikulski. As a matter of senatorial courtesy, we're 
going to turn to Senator Shelby, who has a Banking Committee 
hearing that he must join, then I'll pick up, followed by 
Senator Hutchison. We will recognize the members in order of 
arrival, and we'll follow the 5-minute rule.
    Senator Shelby.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you. Thank you, Madam Chairman. Good 
morning, Mr. Attorney General.
    Attorney General Holder. Good morning.

 TERRORIST EXPLOSIVE DEVICE ANALYTICAL CENTER AND NATIONAL CENTER FOR 
                      EXPLOSIVES TRAINING RESEARCH

    Senator Shelby. Two key DOJ facilities will soon be 
operating on Redstone Arsenal: The FBI's Terrorist Explosive 
Device Analytical Center (TEDAC), and the ATF's National Center 
for Explosives Training Research (NCETR). These two national 
assets will help law enforcement officials deal with the 
growing threat posed by terrorists and criminal use of powerful 
explosives.
    You and I have discussed these facilities previously, and I 
believe you agreed then with me that the missions of NCETR and 
TEDAC are distinct, but complementary, and that it made sense 
to colocate them at Redstone, where there's a lot of property, 
a lot of land.
    For the benefit of the subcommittee, Mr. Attorney General, 
can you describe how DOJ will utilize NCETR and TEDAC?
    Attorney General Holder. TEDAC, run chiefly by the FBI, 
deals with the examination of improvised explosive devices 
(IEDs), that we see coming out of Afghanistan and other places. 
NCETR, by contrast, run by the ATF, deals with other, more 
common explosive devices.
    Senator Shelby. More prevalent maybe?
    Attorney General Holder. More prevalent explosive devices 
that we see. I think that you're right, they have fundamentally 
different responsibilities, but they complement one another, 
and the location of them in that place makes a great deal of 
sense.
    Senator Shelby. Could you describe the value of colocating 
these facilities on a large Federal arsenal, with lots of range 
of space?
    Attorney General Holder. Yes. I think there's a great deal 
of cross-pollination, the ability to talk to one another. 
Although the purposes are distinct, there are going to 
certainly be scientific things, breakthroughs, perhaps, that 
you can exchange information about by having people who are 
relatively close by. Having the two agencies that are primarily 
responsible for explosives determination and prevention close 
by each other, even though they have distinct roles that have 
been pretty well delineated--it is good to have them there and 
talking to one another.
    Senator Shelby. Also, you're aware that the community 
there, near Redstone, Huntsville, has the highest per capita 
Ph.D. communities in science and engineering.
    Attorney General Holder. There are a lot of smart people 
there. That's true.
    Senator Shelby. You plan to utilize that then.
    Attorney General Holder. Yes. We'll use smart people 
wherever we can find them. There are a lot there. That is fair.

         ACTIVATION OF ALICEVILLE FEDERAL CORRECTIONS INSTITUTE

    Senator Shelby. Well, I want to go to another question. 
People make mistakes and pay for it, I guess.
    Attorney General Holder, the Justice Department is seeking 
funds this year to activate a new women's prison in Aliceville, 
Alabama. This prison was designated as a female-only facility, 
based on input from your Department, and it cost nearly $250 
million when it was finished. Does the Department plan to 
activate this soon? I know you've got a lot in it. The Bureau 
of Prisons (BOP) said that was one of their top priorities.
    Attorney General Holder. We want to activate it. It was 
specially designed to deal with the unique needs that female 
prisoners have. We need to expand our capacity to handle female 
prisoners in the Federal system. Given the fact that the 
facility was specially configured for female prisoners, it 
would be our hope to activate it as quickly as we can, and for 
the use for which it was designated.
    Senator Shelby. Well, you've got a lot in it, and it's 
finished. And I'd hope you would do that soon, because to 
activate it, it costs hardly anything, compared to what it cost 
to build.
    Attorney General Holder. No. I don't disagree with that. 
The need is clearly there for the expanding female population, 
unfortunately, that we see in the Federal prison system.
    Senator Shelby. It would be a priority for you?
    Attorney General Holder. Yes.
    Senator Shelby. In that area.
    Attorney General Holder. We want to bring online as many of 
these facilities we can, and this is one that, as I understand 
it, is extremely close, where we're just about ready to open 
it.
    Senator Shelby. Good. Madam Chairman, thank you very much 
for taking me out of order, and I appreciate it very much.
    Senator Mikulski. Mr. Attorney General, I have two 
questions. I had many, but we'll submit them for the record.

                         FEDERAL PRISON FUNDING

    First of all, Federal prisons. As I look at the 
Department's budget, almost one-third of the Justice Department 
money is going into Federal prisons. That amount is now at $6 
billion, and it is rapidly approaching almost what the FBI 
budget is, which is $8 billion.
    Now, my question is: What's going on with Federal prisons? 
First of all, we want the bad guys and gals off the street. So 
we want you to prosecute and incarcerate, particularly where 
there are people who constitute a danger to our country or to 
our communities. I don't know if we can sustain this growth, 
and then I'm concerned about once we put them in, it's a 
revolving door, and we keep expanding their prisons with the 
same people. They keep coming back.
    Could you elaborate on your Department's needs? Are there 
any recommendations you'd have to begin to contain the prison 
population? Are we federalizing too many crimes? Is recidivism 
the problem? Again, safe streets--but this is really an ever-
increasing part of our appropriations.
    Attorney General Holder. There are a whole variety of 
reasons why we see the prison population expanding. We now have 
about 215,000 people in the Federal system. That number goes up 
every year, and it is for that reason that we consistently come 
back to this subcommittee asking for additional funds for BOP.
    There are a variety of reasons why you see people coming 
into the system. We are good partners with our State and local 
counterparts, and we try to help them, to the extent that we 
can. And so, some cases violate both Federal and State law, and 
if they are very serious criminals, we bring them to the 
Federal system if there are evidentiary rules or more harsh 
sentences that we can give to them.
    I think the point that you hit on, that we really need to 
focus on, is how can we rehabilitate people so that we cut down 
on recidivism rates? One of the things that we have talked 
about is the Second Chance Act, coming up with ways in which we 
make available to people re-entry possibilities, so that they 
have the chance of not being recidivists, coming up with 
educational, vocational, drug treatment programs while we have 
them in prison.
    We've actually seen pretty good success being made by some 
State systems that has been shared with me by the Pew Research 
Foundation. I think we can learn a lot from them in that 
regard.
    Senator Mikulski. Well, Mr. Attorney General, we would 
really look forward to specific recommendations. We want our 
local and our Federal law enforcement to prosecute and get bad 
people off the street, whether they're terrorists or whether 
they're terrorizing a neighborhood, like some of the drug 
dealers in some of my own communities in Maryland.
    At the same time, we don't want our Federal prisons to be 
an incubator for more crime, where the lessons that they learn 
when they go to prison is not to commit crimes again, but how 
to be better crooks. We want our prisons to teach them how to 
be better citizens, and then to come back to a community 
support system where they don't fall back into the behavior 
that got them.
    So, I'm concerned that our Federal prisons are such that we 
need to really look and evaluate, and learn some of these 
lessons. So, we want to work with you. I know you feel that 
way. You're very experienced in street crime, which takes me to 
the other point.

               COMMUNITY ORIENTED POLICING SERVICE GRANTS

    Ultimately, you've done this fantastic job of fighting 
terrorism, keeping America safe. It's been stunning what our 
national security services have accomplished, both military and 
civilian. Again, I'll come back to streets and neighborhoods. 
You know, we have communities that face crime every single day. 
And we talk to our local law enforcement, our local 
prosecutors' offices, and so on. They feel they're under the 
gun. They need Byrne grants, they need Cops on the Beat, and so 
on.
    Do you feel that this is sufficient funding? In fiscal year 
2010, we had $3.7 billion that went into State and local 
grants. Due to acts of the Congress and so on, now, we're down 
to $2 billion. Yet, everywhere I go in Maryland, from our local 
police commissioners to local district attorneys, or States' 
attorneys, as they're called in my State, people say we need 
those Justice Department grants. They give us better 
technology. They give us tools to deal with violence against 
women. They express gratitude for the lethal index. They need 
you. They love having you as a partner.
    Do we have enough money in the right places to do the job 
to protect our communities?
    Attorney General Holder. We have in the budget request 
$2.04 billion for State and local assistance programs; $1.4 
billion for Office of Justice Programs (OJP); about $290 
million for COPS; and $412 million for the Office on Violence 
Against Women (OVW).
    This is the level that's about equal to the level we 
requested last year. It is lower than numbers that you had 
said. But, I think that given the budget realities that we 
face, the amount that we have requested is strong on law 
enforcement. It's strong for science. It's strong for victims.
    Would I like to have more money? Yes, but the budget 
realities that we confront, and the need to stay within a 
budget in the executive branch have gotten us to this point. I 
think that through the provision of this money, through the 
technical assistance that we can also provide to our State and 
local partners, we can do the job.
    I met with the National Association of Attorneys General 
just this week, and I think the partnership that we have is an 
unprecedented one. I think that the combination of that 
partnership, the sensitivity that we have to their needs, and 
the $2 billion that we are seeking here will allow us to be 
good partners.
    Senator Mikulski. Well, we have many questions. So, I'm 
going to turn to Senator Hutchison.
    What I would find very helpful is two things. One, if you 
look at your Byrne grants, Cops on the Beat, and so on, what 
was the amount of money requested by State and local people to 
apply for those grants, and what could you fund?
    Attorney General Holder. Yes. I mean the request--oh. 
Sorry.
    Senator Mikulski. No. My time's up. So I'd like that for 
the record.
    [The information follows:]

   Funds Requested by State and Local Organizations for Byrne Grants

               COMMUNITY ORIENTED POLICING SERVICE OFFICE

    In 2011, the Community Oriented Policing Service (COPS) office made 
238 awards to fund 1,021 law enforcement officer positions, totaling 
$243,398,709. The total amount requested was $2,067,924,397 from 2,712 
law enforcement agencies.

                       OFFICE OF JUSTICE PROGRAMS

    Because individual Byrne Justice Assistance Grant (JAG) program 
awards are determined and limited by a specific, statutorily driven 
crime and population formula, States, local governments, and tribes 
cannot request more than the total amount available in any fiscal year. 
Because of this, it is not possible to determine what the unmet need 
was in fiscal year 2011 under the JAG program. In fiscal year 2011, 
there were a total of 56 States and territories and 1,348 local 
jurisdictions eligible for JAG funds, with a total of $365.9 million 
available in prescribed amounts. Of the local governments eligible for 
a direct JAG award, all but 127 applied for their funding allocation. 
Of the 127 that did not apply for their eligible funding, 120 of these 
jurisdictions would have received an award of between $10,000 and 
$25,000. As a result of these failures to apply, $1,949,103 in Byrne 
JAG funding was not awarded in fiscal year 2011.
    However, in fiscal year 2011, Office of Justice Programs' (OJP) 
Bureau of Justice Assistance (BJA) released 63 funding solicitations 
and received 4,295 funding applications requesting a total of 
$3,793,937,608 in Federal funding from BJA. BJA had sufficient 
appropriations to meet 19.32 percent of this requested total, funding 
51.66 percent of all applications submitted. These figures do not 
include unmet demand from programs such as the State Criminal Alien 
Apprehension Program and the Bulletproof Vest Partnership, which had 
additional unmet funding requests.

                        DUPLICATION OF SERVICES

    Improving the effectiveness and efficiency of Federal programs is a 
critical priority of the administration and the Department. The 
Department is committed to continuing efforts to prevent unnecessary 
duplication, streamline through approaches such as the consolidation of 
grant programs, and identify effective programs using evidence-based 
methods.
    Department of Justice (DOJ) grantmaking agencies closely 
collaborate on the development and implementation of grant programs to 
avoid the types of potential problems cited by the Government 
Accountability Office (GAO). Managers from OJP and its bureaus, COPS 
office, and the Office of Violence Against Women (OVW) often meet to 
coordinate programs and objectives. The following selected examples are 
illustrative of the Department's commitment to work collaboratively 
among its own components as well as Federal Government-wide to improve 
government performance and effectively target the public safety needs 
of our communities.
  --In January 2011, I convened the first meeting of the Federal 
        Interagency Reentry Council. The council is addressing short-
        term and long-term goals on prisoner re-entry through enhanced 
        communication, coordination, and collaboration across Federal 
        agencies. OJP is leading a parallel staff-level effort, which 
        includes 35 people from 17 different Federal agencies--
        including the Departments of Health and Human Services (HHS), 
        Housing and Urban Development (HUD), Labor, Education (ED), 
        Veterans Affairs, Agriculture, and the Social Security 
        Administration, and others.
  --OJP is also spearheading the National Forum on Youth Violence 
        Prevention, which is an effort launched--at the direction of 
        the White House--by DOJ and ED, to directly and locally address 
        the needs of communities that continue to experience high 
        levels of youth violence. Using comprehensive technical 
        assistance, the Forum enables Federal agencies to serve as 
        catalysts for broad-based positive change at the local level in 
        a very efficient, cost-effective manner.
  --All of DOJ's components and leaders are working together to provide 
        the most efficient and timely information to tribal 
        communities. As cited in the GAO report, beginning in fiscal 
        year 2010, the Department created the Coordinated Tribal 
        Assistance Solicitation (CTAS), which consolidates most of the 
        Department's tribal government-specific criminal justice 
        assistance programs administered by OJP, OVW, and COPS under 
        one solicitation. Through CTAS, tribes can apply for funding 
        for many of their criminal justice needs with one application.
    --The Tribal Law and Order Act enacted in July, 2010, contained 
            amendments to multiple laws with an impact across DOJ 
            activities in Indian country, including a number of OJP 
            programs. The CTAS collaborative experience readied us for 
            statutorily mandated coordination required for law 
            enforcement, training, increased grants authority, and 
            crime data analysis and reporting.
    --We are also partnering with other Federal agencies to conduct 
            inventories of Federal resources, develop interagency 
            memorandums of agreement, and long-term comprehensive plans 
            to improve our performance, eliminate duplication, and 
            identify gaps to better serve tribal governments and their 
            communities, in consultation with tribes.
  --The Defending Childhood Initiative is being coordinated across OJP, 
        COPS, OVW, the U.S. Attorneys offices, as well as other 
        components within the Department and the Federal Government.
    The Neighborhood Revitalization Initiative--which is a White House-
led interagency collaboration--is executing place-based strategies to 
engage and support local communities in developing and obtaining the 
tools they need to revitalize their own neighborhoods of concentrated 
poverty.
    The Federal Government already directs significant resources to 
these neighborhoods, but we can always look for additional ways to 
continue to support them. Better alignment of Federal programs will 
help local leaders to use Federal funds more effectively, making our 
taxpayer dollars go further.
    Additionally, the Department is working as a whole to coordinate 
and improve our grants management efforts. There is a DOJ-wide Grants 
Management Challenges Workgroup, comprised of grants officials from 
COPS office, OJP, and OVW, that meets to share information and develop 
consistent practices and procedures in a wide variety of grant 
administration and management areas. In fiscal year 2011, the working 
group successfully implemented the DOJ-wide high-risk grantee 
designation program and a DOJ-wide, on-line financial training tool for 
DOJ grantees.
    Through our Byrne Criminal Justice Innovation program, OJP and the 
Department will strengthen partnerships with HUD, ED, HHS, and the 
Department of the Treasury in distressed neighborhoods to implement 
effective strategies to address persistently high violent crime, gang 
activity, and illegal drugs.
    As mentioned, the Department is equally committed to consolidating 
grant programs as appropriate. The fiscal year 2013 budget re-proposes 
a consolidation that was also included in the fiscal year 2012 budget 
but not adopted, the consolidation (Problem Solving Justice) and 
expansion of funding for Drug Courts and the Mentally Ill Offender Act 
Program. The fiscal year 2013 budget also proposes the creation of a 7-
percent tribal grant set aside to address the needs of Indian country, 
rather than several separate programs.
    As resources have become tighter, we are working smarter by 
promoting evidence-based approaches and developing and spreading 
knowledge about what works and what causes crime and delinquency. 
Evidence-based knowledge is critical to help policymakers at the 
Federal, States, and local levels know what to fund, but perhaps more 
importantly right now, what not to fund. For example, OJP has developed 
tools such as CrimeSolutions.gov and the Diagnostic Center, which help 
jurisdictions focus on evidence-based ``smart on crime'' approaches to 
maximize resources and improve public safety results.

    Senator Mikulski. The second thing is: The GAO report 
raises issues related to duplication of services, and I'd like 
to have your reaction to the GAO report on how we can 
streamline, get more efficiencies. I think you're already on 
that road.
    But let me turn to Senator Hutchison.

                              STEVENS CASE

    Senator Hutchison. Thank you, Madam Chairman. Mr. Attorney 
General, we will have questions for the record, but I wanted to 
pursue this public integrity unit's misconduct against Senator 
Stevens.
    After you moved to dismiss the case, the court appointed 
counsel to investigate the botched prosecution of Senator 
Stevens, and found that the prosecutors engaged in systematic 
concealment of evidence, but they were not guilty of criminal 
contempt. And according to the summary that was put out in the 
public, the full report coming later, the court said, ``Despite 
findings of widespread, and at times, intentional misconduct, 
the special counsel, Mr. Schuelke, recommended against contempt 
charges, because prosecutors did not disobey a clear and 
equivocal order by the judge, as required under law.''
    Now, Judge Sullivan said, ``Upon review of the docket and 
proceedings in the Stevens case, Mr. Schuelke concludes no such 
order existed in this case. Rather, the court accepted the 
repeated representations of the subject prosecutors that they 
were familiar with their discovery obligations, were complying 
with those obligations, and were proceeding in good faith.''
    My question to you is: Does it concern you that the only 
reason these prosecutors escaped criminal charges is that the 
judge in the Stevens case didn't file an order specifically 
telling the prosecutors that they should follow the law?
    Attorney General Holder. We have to take into account a 
variety of things. When I was made aware of the issues that led 
to the inquiry that Judge Sullivan ordered, I made sure I 
ordered that the case be dismissed.
    Senator Hutchison. Dismissed.
    Attorney General Holder. I also ordered that an Office of 
Professional Responsibility (OPR) report be done as an internal 
DOJ report, which has now been completed. It is now in its 
final stages of being worked through.
    Senator Hutchison. Will it be made public, Mr. Attorney 
General?
    Attorney General Holder. I'm hoping that we can. There are 
privacy interests that we have to deal with, but my hope is to 
get that report, or as much of the report, made public as we 
possibly can. It is an exhaustive study. It is hundreds of 
pages long. I think the people at OPR have done a good job, and 
there are recommendations with regard to sanctions that ought 
to be made. I'm hoping that we will make that available.
    Senator Hutchison. I'm going to request that you do.
    Attorney General Holder. Okay. I'm not really at liberty to 
discuss the report that Mr. Schuelke did. We've gotten a 
limited number of those reports in the Justice Department, 10 
or 15 of them, and we're under orders by the judge not to 
discuss those. I've had a chance to review, certainly, the 
summary and portions of it, and some of the findings that are 
made there are disturbing. They were disturbing when I made the 
decision to dismiss the case.
    We have done a lot since that time to come up with ways in 
which we try to prevent those kinds of mistakes from happening 
again. We have an extensive training program. We have hired 
somebody who is responsible as a coordinator to make sure that 
discovery is handled properly in criminal cases and civil cases 
that the Justice Department is involved in, so we don't fall 
back into those same kinds of errors. I have spoken to members 
of the judiciary. All to make sure that what happened in the 
case involving Senator Stevens is not replicated. I would urge 
everybody to understand that this Justice Department, this 
Attorney General, when we made that determination that mistakes 
occurred, took the extraordinary step of dismissing that case.
    Senator Hutchison. Which I give you full credit for.

                      PROSECUTORS IN STEVENS CASE

    Now, let me ask you: Four of the six prosecutors, according 
to reports, who were investigated, opposed releasing the 
report, and their names have been redacted. I want to ask you 
if any of these prosecutors are still in the Justice Department 
system.
    Attorney General Holder. I have to check that, just to make 
sure, but I believe all of the prosecutors who were involved in 
that case are still in the Department. I believe that's true. 
I'm not totally sure of that.
    Senator Hutchison. Does that trouble you, that there would 
be findings of misconduct in such a sensitive area that you 
would not let them go outside of our justice system?
    Attorney General Holder. It depends on the nature of the 
misconduct, what it is that they did, the mistakes that were 
made. I think one has to look at the Schuelke report that is 
about to be released, combined with the OPR report and the 
recommendations for sanctions that are contained in that OPR 
report, to look at what exactly should happen to these people. 
Was the incident an isolated one? How serious was it? What is 
the nature of their contribution?
    Senator Hutchison. Are you going to do that, Mr. Attorney 
General? Are you going to make a decision regarding people who 
have clearly exhibited that they do not have the integrity to 
prosecute in this sensitive area? Will you tell the 
subcommittee what your actions are when you have made that 
determination?
    Attorney General Holder. I don't think there was any 
Privacy Act interest that prevents us from sharing with this 
subcommittee what actions we have ultimately decided to take 
against those people who are found to have been culpable.
    Senator Hutchison. Well, I ask that you report that to the 
subcommittee. Thank you, Madam Chairman.
    Senator Mikulski. Senator Brown.

                   STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Madam Chair, and thank you, 
Attorney General Holder, for your service.

          RESIDENTIAL MORTGAGE-BACKED SECURITIES WORKING GROUP

    You established the new RMBS Working Group. Thank you for 
that. I want to talk a moment about that. But, last week, Phil 
Angelides, from Senator Feinstein's State, former chair of the 
Financial Crisis Inquiry Commission, observed that the number 
of lawyers, some 55 lawyers, investigators, and other staff of 
the working group I just mentioned, that is far fewer than the 
100 law enforcement professionals dedicated to the Dallas bank 
fraud task force during the savings and loan era.
    Mr. Angelides also suggested the Congress should extend the 
statute of limitations for financial institutions fraud from 5 
years to 10 years, as the Congress did in 1989, when it passed 
the Federal Institutions Reform Recovery Enforcement Act after 
the savings and loan crisis. And you, of course, are aware of 
the public sentiment of anxiety, frustration, outrage--pick 
your noun--toward the fact that so few people have been 
prosecuted.
    Talk to me about the working group, the dollars you're 
dedicating of the $55 million increase you're asking for. Is it 
going to go into the RMBS Working Group? And comment, if you 
would, on Mr. Angelides' recommendation that the statute of 
limitations, similarly 20 years ago on a, if not a similar 
scandal, surely a scandal, when it was lengthened to 10 years 
by the Congress then, if that's something we should do.
    Attorney General Holder. I would say, first off, that this 
whole mortgage fraud scandal that we are dealing with is 
something that we have taken extremely seriously. We brought 
charges against about 2,100 people last year, all over the 
course of the last few years, in connection with the mortgage 
problem. You mentioned there are 55 Federal personnel to go to 
the RMBS task force--that's the Federal component. One of the 
things that I think is unique about that is that we're working 
with our State and local partners, and, in particular, State 
attorneys general. So, the number of people who will be 
ultimately devoted to that task force will be substantially 
greater than that.
    I suspect we will also be adding people from various U.S. 
Attorneys' offices around the country. I think we're looking at 
four or five that will be intimately involved in this, so that 
number will ultimately go up. We're going to have adequate 
resources, in terms of the numbers of people, to do the job 
that we need to do with regard to the RMBS Working Group.
    With regard to the extension of the statute of limitations, 
that is something that I'd be more than glad to discuss with 
the members of this subcommittee after I've had a chance to 
speak with the prosecutors on the ground, to see if, in fact, 
that is something that we need. We want to use all the tools 
that we have, and also consider any possibilities that we might 
want to acquire, so that we can hold accountable the people and 
institutions who really had a devastating impact on our 
Nation's economy, and continue to have a lingering effect on 
our Nation's economy and, in particular, the housing market, 
which drags down the recovery.
    Senator Brown. Okay. Thank you for that. And we will be 
following up with your office on the wisdom, hearing from your 
prosecutors that might be in the middle of initiating these 
cases or in the middle of these cases, about the importance of 
that extra 5 years of the statute of limitations.

                 OIL AND GAS PRICE FRAUD WORKING GROUP

    Let me talk for a moment about gas prices. You know, oil 
prices are more than $100 per barrel. The Department of Energy 
and the Commodity Futures Trading Commission have told us 
inventories of oil are sufficient. Domestic production is up. 
We hear that. The number of rigs has grown. The consumption is 
down. All reasons that gas prices should not be going up, 
understanding that the turmoil in the Middle East and the 
discussion of Iran.
    Some analysts have estimated speculation may be adding 50 
cents to the price per gallon of gas. It's my understanding 
over the last year, DOJ organized the Oil and Gas Price Fraud 
Working Group to determine the role speculators and potential 
price manipulation are having on the price of gasoline.
    What have you found? What are your next steps? What can we 
expect?
    Attorney General Holder. That working group continues to be 
in effect. In fact, they're having a call today to discuss the 
situation in which we find ourselves with regard to these 
rising gas prices. That working group, itself, will be meeting 
before the end of this week. The work of that group has been 
ongoing and looking to see if there are inappropriate 
manipulations of the market.
    The Federal Trade Commission (FTC) is also working in this 
area. I don't want to speak for them, but I understand they're 
working on a report of some sort that we should be seeing 
relatively soon. That is, again, the FTC working independently 
of us. But within the Department, that Oil and Gas Price Fraud 
Working Group has been active, and as I said, has a call today 
and a meeting that will happen, I think, by tomorrow.
    Senator Brown. Okay. I would like to request that after the 
phone call, and after the meeting today or tomorrow, that task 
force brief me and other members of the subcommittee who have 
expressed interest.
    Attorney General Holder. All right. To the extent we can, 
we will certainly do that.
    Senator Brown. Thank you.
    Senator Mikulski. All right. Mr. Attorney General, we 
really would like to see that. This is very, very, very 
important.
    We would now like to turn to Senator Murkowski.

                  STATEMENT OF SENATOR LISA MURKOWSKI

    Senator Murkowski. Thank you, Madam Chairman, and Mr. 
Attorney General. Welcome this morning.

                              STEVENS CASE

    I want to follow onto Senator Hutchison's questions 
regarding the prosecution of Senator Ted Stevens. I think so 
many of us were absolutely shocked. I was horrified, as a 
friend, and as an Alaskan, to read Judge Sullivan's comments 
that this ill-gotten verdict not only resulted in the loss of 
Senator Stevens losing his seat, but in his words, tipped the 
balance of power in the U.S. Senate. Pretty powerful, in terms 
of what DOJ did to a great man.
    I appreciate, and I recognize, and I thank you for your 
actions in dismissing that case, and in your decision to not 
attempt to retry, and I join Senator Hutchison with that. But, 
there are questions that still remain. You know that. I have a 
long series of them, and what I would like to do is submit them 
to you today, and ask that you respond to them prior to the 
release of the report, which is due to come out next Wednesday, 
the 15th of March. So, I would appreciate your attention to 
that.

            ATTORNEY'S FEES FOR PROSECUTORS IN STEVENS CASE

    I have a question regarding what is happening now with the 
release of this report. The USA Today reported that DOJ has 
spent $1.8 million in defending prosecutors from allegations 
that they broke the law in the Stevens prosecution. And Senator 
Grassley was one who mentioned that it seems like this is an 
unseemingly high amount of money being spent by the taxpayers 
to defend what appears to be egregious misconduct. And, again, 
Senator Hutchison has noted the words that Judge Sullivan used 
in his order, saying that the report demonstrated significant 
widespread, and at times, intentional misconduct by the 
prosecutors.
    Now, I understand that the $1.8 million went for attorney's 
fees to defend the actions of the Justice Department 
prosecutors who were under investigation for contempt by the 
counsel appointed by Judge Sullivan. The report of that 
counsel, again, is due to be released on the 15th. In addition 
to spending taxpayer money to defend your attorneys, did the 
taxpayers also pay for the attorneys to argue that the contents 
of this report should not be publicly released? You have stated 
that this is a matter that has risen to a level of public 
attention. So, if you can answer that question for me, and also 
whether the Justice Department supports the merits of the 
appeal that has been raised by Mr. Edward Sullivan, who is one 
of the prosecutors who has asked the U.S. Court of Appeals for 
an emergency stay to prevent the release of this report next 
week.
    So, the question is whether you support the merits of that 
appeal, and, again, whether or not the taxpayers are on the 
hook to pay for his attorneys to argue that this report should 
be kept from the public.
    Attorney General Holder. I don't think we take any position 
with regard to what he has said about his desire to keep the 
report sealed. The Justice Department has indicated that we do 
not object to the release of the report. I think that given the 
issues that we found there, the magnitude of the case, and, 
frankly, the magnitude of the errors that led me to decide to 
dismiss the case, that there is a legitimate public interest in 
knowing as much as we can about what happened, why it happened, 
what steps the Justice Department has taken in connection with 
these findings of misconduct.
    Senator Murkowski. So is the Justice Department paying for 
his attorneys' fees in this matter, to keep this from being 
made public?
    Attorney General Holder. I don't know about him, 
specifically, but I do know that as a result of the charges 
that were brought against them, the determination was made that 
there would be a conflict of interest for the Justice 
Department to defend them, which would be typically how we 
would do it, and they were, therefore, allowed to get outside 
counsel. Under the regulations, the Justice Department then 
pays for those legal representations, which has happened in a 
variety of cases, a variety of circumstances, former attorneys 
general and lawyers who have been reimbursed by the Government. 
I'm hoping I won't have to do that, but other attorneys general 
have done that.
    Senator Murkowski. So, even now that the independent 
counsel that Judge Sullivan had appointed, even though that 
counsel has found that members of the Stevens prosecution had 
engaged in significant, widespread and, at times, intentional, 
and again, intentional misconduct, does the Government have any 
recourse to recover the funds that have been paid for their 
attorneys' fees, when they have engaged in intentional 
misconduct?
    Now, you mentioned in your comments to Senator Hutchison 
that after the OPR report, that there may be sanctions that we 
will see, but is there recourse? Are you pursuing any recourse? 
It seems to me that in an instance like this, where it has been 
made clear that the conduct was intentional, that it was 
substantial, and it was widespread, that we should not be 
defending and paying for the attorneys' fees to again allow 
these individuals to conduct such acts, and then to learn that 
they're still within DOJ doesn't give me much confidence.
    Attorney General Holder. Certainly, one of the things that 
happens is that because the Justice Department can't represent 
these people, and they have their own views of what happened, 
they want to be able to explain, with counsel, defend 
themselves. That is why the expenditure of money actually 
occurred. That is why they are allowed to get outside counsel. 
As I said, that has happened, not frequently, but it certainly 
happened in the past, and we acted with regard to them as we 
have done in the past with regard to the retention of outside 
counsel.
    Senator Murkowski. I would think that $1.8 million to go to 
defend these attorneys, who have engaged in intentional 
misconduct, is just stunning to me. I'd like to think that 
there could be some recourse.
    Madam Chairman, I'm well over my time. I thank you for your 
indulgence.
    Senator Mikulski. It was important that you had the 
opportunity to completely pursue your line of questioning. The 
situation that has been presented by you and Senator Hutchison, 
reminding the subcommittee, is deeply troubling. We must have 
public integrity. We also must have an independent judiciary. 
We have to have, regardless of which party is in the White 
House, a Justice Department that we believe in, and that the 
American people believe in. So, I know the Attorney General 
will be responsive, and then we'll take it from there.
    Senator Murkowski. Madam Chairman, I just want to thank you 
for those comments, and agree wholeheartedly. And I do think 
the Attorney General took a major first step, when he dismissed 
the case. That was huge. But, now we must followup, so that 
there is no question that the people who did this, and the 
report will show whatever it shows, that they're not able to 
prosecute ever again. Ever.
    Senator Mikulski. Thank you.
    Senator Murkowski. Thank you.
    Senator Mikulski. Senator Pryor.

                    STATEMENT OF SENATOR MARK PRYOR

    Senator Pryor. Thank you, Madam Chair, and Attorney 
General, welcome to the subcommittee. Thank you for being here.

                          PRISON OVERCROWDING

    I want to add my voice to something that was said earlier 
about prison overcrowding. And I could go through the facts and 
figures on that, but you know those better than any of us do. 
It is just a real concern.
    One of the prisons that's on the short list is actually in 
Arkansas, and back in fiscal year 2010, it was scheduled to be 
funded in fiscal year 2014. Well, now, it keeps getting pushed 
back. Now, it's fiscal year 2018. So, it's an example of us not 
being able to fund some of the real needs that we have. I know 
I'm not alone in that. So, I want to voice my concern there.

                             SEQUESTRATION

    Let me ask about sequestration. I don't believe anyone's 
had a chance to ask about sequestration. And I'm curious about 
what the Justice Department perceives will happen to DOJ 
funding if sequestration does, in fact, take place, and what 
steps you're taking to address that.
    Attorney General Holder. I certainly hope that's something 
that we don't have to face. As I look at it, we'd be looking at 
an across-the-board cut of about 7.8 percent, which would mean 
a cut of about $2.1 billion. No Justice component would be 
exempt from those cuts. And from an operational perspective, we 
would have to cut personnel funding and nonpersonnel funding.
    We are estimating that we'd have to furlough all position 
types, including agents, Federal agents, FBI agents, DEA 
agents, ATF agents, and attorneys, who try cases, investigate 
cases, for an average of about 25 days. We would have to lose 
permanently a pretty substantial number of jobs. This across-
the-board cut would have a devastating impact on the Justice 
Department's ability to protect the American people, to do 
investigations. It would be something that would just simply be 
devastating. My hope would be that the Congress will find a way 
to avoid this sequestration, which, just from my own parochial 
interests, which I think actually are the Nation's as well, to 
really avoid the very negative consequences that could have a 
permanent impact on our well-being.
    Senator Pryor. And so, you've mentioned these furloughs, 
but I assume, also, you'd have to suspend the funding of many 
of your programs that help local and State law enforcement 
agencies.
    Attorney General Holder. That's an excellent point. The 
consequences are not restricted to simply what happens to the 
Justice Department here in Washington and in our field offices. 
Our ability to be good State and local partners would certainly 
be impacted by the reduced amounts of money that we'd be able 
to share with our State and local partners, in terms of grants, 
Cops on the Beat. It would be a devastating thing for this to 
happen.

                      THE JOHN R. JUSTICE PROGRAM

    Senator Pryor. And let me ask about personnel in a little 
different context. The John R. Justice Program has about 1,600 
prosecutors and about 1,200 public defenders in the last fiscal 
year that received assistance under that program, to help them 
pay off their student loans, et cetera. But, this budget, as I 
understand it, does not have funding for that program this 
year. So, my concern there would be that we want the best and 
the brightest out there trying cases on both sides. Again, this 
is public defenders and prosecutors. And in our criminal 
justice system, it's critical that we have good representation 
on both sides. And I'm afraid that we're going to lose a lot of 
talent if we don't have a program like this. Do you share that 
concern, and what steps you think we can take to keep the best 
and the brightest coming on board?
    Attorney General Holder. I do share that concern. We want 
the best and the brightest to come and take what are low-paying 
jobs on the prosecution side, on the defense side. These kids 
come out of law school with enormous amounts of debt. And I 
don't want them to make career choices based on how they're 
going to repay those loans, as opposed to following their 
passions, and taking their great skills to become members of 
the Justice Department, State and local prosecutors offices, or 
on the other side, to be good defense attorneys. And that is 
one of the things that I'm concerned about.
    We have a tough budget, and you're right, the money is not 
there, to the extent that it was in the past. To the extent 
that we can work on ways in which we come up with creative 
things to do to make sure that those career decisions, 
especially those first job career decisions, by people coming 
out of law school, are not a function of their financial 
concerns, but really is a function of how they want to help 
build a better society.
    Senator Pryor. Thank you.

                             CYBERSECURITY

    And Madam Chair, I don't really have time to ask another 
question, but I would like to just make an observation. The 
chair of the subcommittee here yesterday took a leadership role 
in a cybersecurity exercise in a classified setting, and we 
appreciate her leadership in getting all of us to go and 
participate. It was very informative, very interesting. And I 
know that DOJ has been very involved in what's going on with 
Federal Government cybersecurity issues, and all the task 
forces and everything you're working on. But, I also hope that 
you will not neglect the private sector, as well as the State 
and local governments, because they have a role to play in this 
as well.
    Attorney General Holder. That's exactly right. This is not 
something that the Federal Government can handle by itself. 
This is a national security issue, certainly, but it's also an 
infrastructure issue which involves our State and local 
partners. Then one looks at just the amount of theft that 
occurs, intellectual property theft, in particular, so that the 
private sector has to be involved as well.
    We have to come up with mechanisms, means by which all of 
those various components talk to one another, if we ultimately 
want to be successful in what I think is the most pressing 
thing that we're going to be facing in the coming years.
    Senator Pryor. Thank you. Thank you.
    Senator Mikulski. Thank you, Mr. Attorney General. I want 
to go back to the excellent question Senator Pryor raised about 
the impact of sequester. Could we have that answer in more 
detail, in writing, so that everybody would have a chance to 
study it, and go over it in programs and so we can really grasp 
the full consequences?
    Attorney General Holder. Yes.
    [The information follows:]

                        Impact of Sequestration

    The Department of Justice's (DOJ) supports the fiscal year 2013 
President's budget request, which would avoid a sequestration, if 
enacted as proposed. Therefore, I am not describing the impact of a 
potential sequester, which the administration is committed to avoiding. 
However, I can describe the impact of an across-the-board cut of 7.8 
percent, or more than $2.1 billion, to DOJ's budget authority. To 
implement this cut, DOJ would have to cut both personnel and 
operational funding. Personnel cuts would require DOJ to implement a 
hard hiring freeze, which would mean losing 4,800 positions, and 
furloughing all DOJ employees for 25 days. These personnel cuts, along 
with significant operational cuts, would mean reductions in the 
apprehension of violent fugitives, fewer Federal Bureau of 
Investigation (FBI) national security investigations, fewer affirmative 
litigation efforts, and more crowded prisons. For context, a 7.8-
percent cut would mean that the Bureau of Prisons would be cut by $510 
million, FBI by $730 million, the Drug Enforcement Administration by 
$175 million, the U.S. Marshals Service by $90 million, and the U.S. 
attorneys office by $150 million.

    Senator Mikulski. I'd now like to turn to Senator Graham.

                  STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Madam Chairman. I'd like to add 
my voice to what you just echoed, and Senator Pryor, that 
sequestration, as it's set up, would devastate DOJ, our ability 
to defend ourselves, and destroy the military, and surely we 
can find a better way to do it than that. So, I think you're 
dead on. This is just an ill-conceived idea of cutting money 
blindly, in my view.
    Now, you were in South Carolina couple days ago, is that 
right, Mr. Attorney General?
    Attorney General Holder. It was yesterday.
    Senator Graham. Yesterday. Well, we're glad to have you. 
Hope you spent money while you were there.
    Mr. Holder. I did.

                        NATIONAL ADVOCACY CENTER

    Senator Graham. But, the National Advocacy Center (NAC), in 
Columbia, that you visited, what would you tell the 
subcommittee about the NAC, in terms of being a value to the 
Nation?
    Attorney General Holder. It is an invaluable resource for 
us.
    Senator Graham. Did you all hear that?
    Okay. I'm sorry. Go ahead.
    Attorney General Holder. No. I mean it is. It is an 
invaluable resource for the training that goes on in the 
Justice Department. It is one that I think could actually be 
expanded. I'm concerned that we're not interacting with our 
State and local partners to the extent that we once did in 
doing training with them. We're trying to bring into the NAC 
people from the defense side as well. It's where people learn 
to be good trial lawyers, learn a variety of skills, learn 
their ethical obligations. It's an invaluable resource.
    Senator Graham. Well, we appreciate your visit, and it will 
be a place where, you know, cybersecurity is probably the issue 
of the 21st century, and whether it's a crime, an act of war, 
it depends, I guess, who's involved, but a lot of local law 
enforcement folks probably have no idea how to handle this, and 
it would be a good way to kind of educate the country as a 
whole. And the collaboration between the University of South 
Carolina and the NAC, I appreciate.
    And I want the subcommittee to know that we took about 200 
or 300 DOJ jobs out of Washington, because after 9/11, we were 
worried about having every part of our Government in one city. 
And we moved those folks down to South Carolina, in Columbia, 
and you leased a building from the university. It saved about 
$35 million. So, I just want to applaud you for trying to be 
creative to decentralize DOJ, so that in case we're ever 
attacked here, we don't lose all of our national assets, and it 
was a way to save money.
    Attorney General Holder. And we also have that relationship 
with the university about the rule-of-law component as well. 
And I think that's been a good synergy.
    Senator Graham. To my colleagues, and I've been to 
Afghanistan and Iraq, like many of you, and we're trying to 
develop a rule-of-law program in Iraq, Afghanistan, Africa--you 
name it. Without some basic rule of law, no country can 
develop. And all the lessons we've learned the hard way, from 
making mistakes, but finally getting it right in many ways, 
we're trying to create a center at the University of South 
Carolina, where those who have been overseas can share their 
thoughts about what worked, what didn't. You could train before 
you went. DOJ, Department of Agriculture, and the Department of 
Defense, this is a team.
    This war requires a team concept. And we're trying to reach 
out to the Islamic world and create partnerships with lawyers, 
and attorneys general, and judges in the Islamic world, so we 
can understand them better, and they can understand us. And I'm 
excited about it, and I appreciate your support.

                  REVAMPING THE FEDERAL CRIMINAL CODE

    Now, Justice Scalia came out yesterday, or the day before, 
talking about, he thought it would be wise if we looked at our 
Federal criminal code, particularly in the drug area, to see if 
we could reform it. And I think he's right. I think we've 
Federalized way too many crimes, creating work for our 
judiciary that could probably be handled better at the State 
level. What do you think about the idea of revamping the 
Federal criminal code, and looking at maybe undoing some of the 
over-Federalization?
    Attorney General Holder. When I came into office, I set in 
place a number of working groups to look at that issue. Are we 
bringing the right people into the Federal system? Are the 
sentences that we have for the crimes that are Federal ones 
appropriate?
    Senator Graham. Like crack cocaine. We finally fixed that, 
but that was just sort of an indefensible sentencing disparity.
    Attorney General Holder. Right. I think the bipartisan 
effort that resulted in the lowering of that ratio from 100 to 
about 16 to 1 was something that was long overdue, and was a 
great example. People don't focus on it, but it was an example 
of Republicans and Democrats getting together and doing the 
right thing, not only for the system, but it was something that 
I think was morally right as well.

                          RECESS APPOINTMENTS

    Senator Graham. And an area where we may disagree, we'll 
talk about the law of war later, we don't have time here, but 
the recess appointments made by President Obama a while back to 
the National Labor Relations Board, is there a situation 
similar to that in the history of the Senate, or by a previous 
President, of appointing someone to a Federal agency under 
those circumstances, that you're aware of?
    Attorney General Holder. If you look at the 23-page report 
by the Office of Legal Counsel (OLC), they go through a variety 
of precedents. They look at the laws that exist, tradition, and 
the conclusion that they reached was that given the length of 
the recess, 20 days, or so, that the appointments were, in 
fact, appropriate. This is obviously something that the courts 
are going to ultimately decide, but I think that the OLC 
opinion was accurately described.
    Senator Graham. I think Senator Alexander will have a 
discussion with you about that, but I take a different view. 
But, I'll let him discuss that with you.

                          MILITARY COMMISSIONS

    And finally, just to note, I think, maybe it was last week, 
we had a plea bargain with a military commission detainee who 
was one of the Khalid Sheikh Mohammed close confidantes. And I 
know Mark Martins is the chief prosecutor, and you've got a 
good defense team down there. I do support Article III courts 
for terrorism trials, when appropriate. But, I just want to 
acknowledge your support for military commissions in 
appropriate circumstances, and with your help, I think we've 
got these things up and running, and I look forward to more 
action coming out of Guantanamo Bay to get some of these people 
through the legal system. So, thank you for that support. And 
to all those at Guantanamo Bay doing your job, you're doing the 
country a great service, particularly the defense counsels.
    Attorney General Holder. I think that's right. I think that 
people should understand that the revised commissions that 
exist, as I said in my speech at Northwestern, have many of the 
elements of due process that we consider vital to the American 
system. I think we have great defense lawyers down there.
    The military system doesn't get the credit that it deserves 
for the fair way in which it deals with people, and under the 
direction of Mark Martins, who's a person I've known for some 
time, I think we'll be proud of the work they do.
    Senator Mikulski. Thank you very much, Mr. Attorney 
General.
    We're now going to turn to Senator Feinstein. Before 
Senator Pryor leaves, I thank you and others for mentioning the 
cyber exercise yesterday, and all who participated. Next week, 
we're going to hear from the FBI, and we're going to do an open 
hearing, and then we're going to do a classified hearing. This 
will be an opportunity to ask many of your cyber questions and 
go into the level of detail I think the subcommittee would 
like. So, thank you.
    Senator Feinstein.

                 STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Thanks very much, Madam Chairman, and 
welcome, General.
    I want to associate myself with the comments of Senator 
Murkowski and Senator Hutchison. To me, the tragedy is that 
Senator Ted Stevens died before he knew this was a faulty 
prosecution. And that, to me, elevates this to a new height. 
And so, I think this investigation is really important. And I 
think that actions have to be taken. And I just wanted to 
express that.

                            OIL SPECULATION

    I wanted to followup on Senator Brown's comment. It's my 
understanding that there's more oil available in the United 
States than demand calls for. And as a matter of fact, surplus 
is being sold outside. This, I think, would bring to special 
attention the issue of speculation. And I hope the study that 
you're doing is going to take a good look at the financial 
marketplace, with regard to its ability to impact price in this 
way.
    Attorney General Holder. The Oil and Gas Price Fraud 
Working Group that we formed last year as part of the 
President's Financial Fraud Enforcement Taskforce has been 
meeting. It just happens that they are having a call today, and 
a meeting, I think either tomorrow or on Monday. The full 
committee will be getting together to look at the issues that 
you've raised and the issues that Senator Pryor raised.
    Senator Feinstein. Good. Thank you.

                 FOREIGN INTELLIGENCE SURVEILLANCE ACT

    As you know, title 7 of the Foreign Intelligence 
Surveillance Act (FISA) expires at the end of the year. This 
allows for electronic surveillance of targets outside the 
United States. Senator Mikulski and I both serve on the Senate 
Intelligence Committee, and we've done extensive oversight of 
the Government's use of these surveillance authorities, and 
look forward to working with you to make sure Congress can 
reauthorize title 7 well before the end of 2012. We need to 
maintain the collection of critical foreign intelligence and 
provide certainty to intelligence professionals in that regard.
    For members of this subcommittee that don't follow this 
issue closely, could you explain the need to reauthorize title 
7 of FISA and the efforts taken to protect the civil liberties 
and privacy of Americans, as this title is carried out.
    Attorney General Holder. The surveillance authorities that 
are in the FISA Amendments Act are absolutely critical to our 
national security. On a day-to-day basis, I authorize FISAs, 
the head of the National Security Division does, sometimes the 
Deputy Attorney General. It is a critical tool that we have in 
keeping the American people safe. The administration strongly 
supports the reauthorization, and as you indicated, hopes that 
it occurs well before the end of the year, so that the 
certainty that is needed by the men and women who are in our 
intelligence community will have some degree of assuredness 
that those tools will remain there, and that our fight against 
those who would do harm to the United States can continue.

                           NATIONAL SECURITY

    Senator Feinstein. Thank you. I also want to thank you for 
your enormous help and the help of FBI with respect to national 
security. FBI now has thousands of agents and analysts located 
around the United States, essentially doing intelligence work. 
So, that transition has been effectively made.
    Director Mueller, at a worldwide threat hearing, indicated 
to us that in the past year there have been 20 arrests in the 
United States of people in this country planning or 
participating in attempted terrorist attacks. And as you 
mentioned in your recent testimony, Umar Farouk Abdulmutallab 
was recently sentenced to life in prison.
    Now, I also want to say that even though its specific 
activities are classified, in your written testimony, you 
mention the High-Value Detainee Interrogation Group, or the 
HIG, as we call it. I can say that we've seen the excellent 
intelligence the HIG is producing. And earlier this week, also, 
four principle members of hacking groups, Anonymous and 
LulzSec, were charged with computer hacking, and a fifth member 
pled guilty.

                       NATIONAL SECURITY FUNDING

    Now, to my question. It's two-fold. I think we have to 
begin to look for redundancy and duplication of effort. We now 
have a counterterrorism center. We now have Homeland Security 
with intelligence, and we also now have FBI. And so I hope you 
will take a look at that, because the dollars are precious, and 
we're already experiencing cuts in the intelligence budget.
    So, here's my question. What are, in the national security 
area, your budget reductions? What will that mean for 
counterterrorism, and are there any gaps in our efforts?
    Attorney General Holder. We have adequate amounts of money 
contained in the budget that we have requested. If you look at 
the amount of money that has gone to FBI in the national 
security sphere, since 2001 we've had about a 300-percent 
increase for the Justice Department. For FBI, it might have 
been about 400 percent. So, it's a very substantial increase 
over the course of the last 10 years or so. Even with the flat 
budget that we essentially have for the Justice Department and 
its components, including FBI, we have adequate amounts of 
money to keep the American people safe.
    I will tell you that to the extent that I feel that it is 
not the case, my voice will be heard. We have no greater 
responsibility than keeping the American people safe.
    Senator Feinstein. Good. Thank you very much. Thank you, 
Madam Chairman.
    Senator Mikulski. Senator Feinstein, we look forward to 
working with you on that part of it.
    Senator Alexander.

                  STATEMENT OF SENATOR LAMAR ALEXANDER

    Senator Alexander. Thanks, Madam Chairman, and General 
Holder, welcome. It's good to see you. I was thinking about a 
conversation we had during your confirmation about Griffin 
Bell, for whom you worked, and I know you admired him, and I 
certainly admired him. I was a law clerk on a court when he was 
judge. And one of the things he used to say and which I've 
heard you say, I think, too, is that the attorney general is 
the lawyer for the United States, not just the lawyer for the 
President.

                          RECESS APPOINTMENTS

    So, in following up with Senator Graham's comment on the 
so-called recess appointments, I wanted to ask you a question. 
As the lawyer for the United States, if the President calls you 
up and said, ``General Holder, I notice that the Senate's gone 
into recess for lunch. I've got a Supreme Court nominee I want 
to appoint. Can we put him on the court without their advice 
and consent?'' what would your answer be?
    Attorney General Holder. Going to lunch? That would not be 
a sufficient recess.
    Senator Alexander. Well, what if he said they're going to 
recess for lunch and for dinner, and they won't be back until 
tomorrow? Would that be a sufficient recess?
    Attorney General Holder. What we're getting at, if you look 
at that OLC opinion, they would----
    Senator Alexander. I'm asking your opinion, Mr. Attorney 
General.
    Attorney General Holder. Well, I associate myself with that 
OLC opinion.
    Senator Alexander. Does that mean you agree with it?
    Attorney General Holder. With the OLC opinion?
    Senator Alexander. Yes.
    Attorney General Holder. Yes.
    Senator Alexander. You do agree with it.
    Attorney General Holder. Yes.
    Senator Alexander. Then that means that the President, not 
the Senate, can decide when it's in session for purposes of 
advice and consent.
    Attorney General Holder. Well, one has to look at the 
reality, the totality of the circumstances, in determining 
whether or not the Senate is actually in session, as that term 
has historically been used, and the determination made by OLC 
was that given the----
    Senator Alexander. Well, if we look at that, Mr. President, 
was your deputy solicitor wrong when he told the Supreme Court 
in a letter 2 years ago that the Senate may act to foreclose 
recess appointments by declining to recess for more than 2 or 3 
days at a time? And was Senator Reid wrong in 2007 when he 
really devised the plan for pro forma 3-day sessions, because 
he said he heard that President Bush was about to make recess 
appointments. And Senator Reid said on November 16, 2007, 
``With the Thanksgiving break looming, the administration has 
informed me they want to make several recess appointments. As a 
result, I'm keeping the Senate in pro forma to prevent recess 
appointments until we get back on track.'' And the next year he 
said, ``We don't need to vote on recess. We'll just be in pro 
forma session. We'll tell the House to do the same thing.'' 
President Bush didn't like it, but he respected it.
    So, are you saying that the President, not the Senate, can 
decide when it's in session for purposes of a recess 
appointment?
    Attorney General Holder. What we have to do and what we 
have done in this OLC opinion is look at history, look at 
precedent, look at the law, use some common sense when it comes 
to the approach of whether or not the Senate is actually in 
session.
    Senator Alexander. Well, was Senator Reid wrong?
    Attorney General Holder. The determination that we made 
here was that with regard to that 20 days in which those pro 
forma sessions were occurring, that those were, in fact----
    Senator Alexander. But the Senate had decided it was in a 
3-day session, according to the Reid formula. So, was Reid 
wrong about that?
    Attorney General Holder. I'd have to look at exactly what 
occurred during that 3-day period, but given the facts that 
were presented to OLC in this instance, I think the 
determination that they made was correct.
    Senator Alexander. So, I don't see why the President 
couldn't look at the Senate and say, ``I'm going to send up a 
Supreme Court justice, and I'm going to skip advice and 
consent.'' I'm astonished by this, really. And I would think 
Democratic as well as Republican Senators would honor the Reid 
formula that President Bush honored. The Senate did the very 
same thing in January, and the President, nevertheless, made 
four appointments during the time when constitutionally he 
shouldn't have, according to all the precedent that I've seen.
    Attorney General Holder. The only thing I'd correct is that 
the determination was not made by the President. The 
determination was made by OLC, we then shared that opinion with 
the President, and the President made the decision as to what 
he wanted to do.
    Senator Alexander. He made the decision not to respect the 
Senate's decision about when it's in session or when it's not, 
which, to me, is a blatant lack of regard for the 
constitutional checks and balances, and something that we ought 
to avoid.

                          METHAMPHETAMINE LABS

    May I ask quickly a question? Last year, the Department 
found money to support the work against methamphetamine, and I 
compliment the Department for that. I know it's getting 
increasingly harder. In our State, we had the highest number of 
meth lab seizures in the Nation. The money's running down. The 
State's increasing its funding. Will the Department again be 
able to try to help States that are working on this, as you 
were able to do last year?
    Attorney General Holder. We are certainly going to try to, 
as best we can. I know one of the things that we have seen with 
regard to the cleanup of meth sites is that there have been a 
number of these container activities. I think this is right, 
that Tennessee is actually a leader in that effort.
    Senator Alexander. Yes.
    Attorney General Holder. There have been a number of States 
that have come up with things, and instead of it costing, I 
don't know, $3,000, $4,000, $5,000 to do that, it actually 
comes down to $200 or $300. The experience that we have seen 
there is something that we have to extrapolate and use in other 
parts of the country as well.
    Senator Alexander. Thank you, General Holder. Thank you, 
Madam Chairman.
    Senator Mikulski. Senator Lautenberg.
    Senator Lautenberg. No. I think----
    Senator Mikulski. Oh. I'm sorry. Wait. Wait. It's a little 
rock-and-roll in here today. First of all, Senator Leahy, the 
chair of the Judiciary Committee, excuse me, and then Senator 
Lautenberg.

                 STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Madam Chair.

                           RECESS APPOINTMENT

    Attorney General Holder, good to have you here. If I could 
just follow-up a little bit on what my good friend from 
Tennessee, Senator Alexander, said on the recess appointments. 
There is an easy way out of all of this. It requires a little 
cooperation on both sides. And I suggested this in the 
Judiciary Committee, that the President resubmit the 
nominations, and the Republicans agree to have an up or down 
vote, say, within 1 week or 2 weeks. The President did this, 
because even though everyone knew there were more than 50 
votes, which is normally what it takes to confirm somebody, 
available, my friends on the other side of the aisle were 
blocking having a vote.
    I understand the President's frustration, but I think the 
easy way out of this is simply if the Republican leadership 
would agree to an up or down vote, say, within 1 week or 2 
weeks, whatever amount of time needed for it to be, and 
resubmit them and have the up or down vote. That takes care of 
all the problem. I just would suggest that as an easy way out. 
It's not as much fun on the talk shows, but it helps the 
Government.

                       GRANT PROGRAM DUPLICATION

    Mr. Attorney General, your Department administers many 
crucial grant programs that help victims and law enforcement, 
including ones that I've been very heavily involved with, the 
Violence Against Women Act programs. And as you know, Senator 
Crapo and I have a reauthorization bill on the COPS grants and 
the bulletproof vest partnership program. GAO has said there's 
duplications and inefficiencies in some of the grant programs.
    Will your Department work to make sure if there are any 
duplications that they be removed? Because these are good 
programs, but there's only so much money to go around.
    Attorney General Holder. That's exactly the problem that we 
have. There's limited amounts of money to go around, and we 
have to make sure that there's not duplication. Managers from 
OJP, from COPS, OVW regularly meet to coordinate their 
programs, their activities. I think that one thing that people 
should not assume is that because, for example, you see the 
word ``victim'' in a number of the things that we do in the 
Department, that necessarily means that we're duplicating 
efforts there. They have very distinct responsibilities. We are 
working to make sure that the money that we have is being used 
in an efficient and appropriate way.

                           BULLETPROOF VESTS

    Senator Leahy. One of the things I'm very proud of for my 
time here in the Senate is a bill that I wrote with then-
Senator Ben Nighthorse Campbell on bulletproof vests, so much 
so, that I walked down the street in Denver, Colorado, 1 year 
or so ago, a police officer came up, asked if I am who I am. 
And I said, ``Yes, I am Senator Leahy.'' He just tapped his 
chest and said, ``Thank you.''
    But, we've been told by GAO that there's some funds that 
have not been obligated on the bulletproof vest partnership 
grant program. Law enforcement--especially in the smaller 
communities, where they do not have the budget to buy the 
bulletproof vests, which are $500, $600--need these funds. Can 
you check to make sure these funds are obligated as quickly as 
possible?
    Attorney General Holder. Yes. To the extent that funds were 
not drawn down, we are taking steps to allow jurisdictions to 
use that unused funding, and have the time period with which 
they could drawdown extended, so that we can get these 
bulletproof vests out to these officers.
    Senator Leahy. And I would reiterate what I had told you 
when we chatted earlier this week, when I was in Vermont, about 
your speech earlier this week in guiding drones and targeting 
of U.S. citizens, I still want to see the OLC memorandum, and I 
would urge you to keep working on that. I realize it's a matter 
of some debate within the administration.
    Attorney General Holder. That would be true.
    Senator Leahy. And please keep my staff and me updated on 
the progress of the review of the NYPD surveillance of Muslim 
Americans.
    Attorney General Holder. We will.

                     SAME-SEX IMMIGRATION PETITIONS

    Senator Leahy. And last, I wrote to you and the Secretary 
of Homeland Security, Janet Napolitano, to encourage you to 
hold marriage-based immigration petitions for same-sex spouses 
in abeyance, in light of the administration's decision to no 
longer defend the constitutionality of the Defense of Marriage 
Act. I heard it may be granting individual cases. I hope you 
will reconsider the administration's position.
    We have a case I've written to you about, Frances Herbert 
and Takako Uedo, who are married in Vermont lawfully. We have a 
number of States where same sex marriages are legal, but then 
they run up against the immigration problem. So, please review 
that.
    Attorney General Holder. Okay. I will look at that case, 
and we'll get back to you, Senator.
    Senator Leahy. Thank you. Thank you, Madam Chair.
    Senator Mikulski. Those were excellent points, Senator 
Leahy, and thank you very much.
    Senator Lautenberg.

                STATEMENT OF SENATOR FRANK R. LAUTENBERG

    Senator Lautenberg. Thanks very much, Madam Chairman, and 
welcome, Attorney General Holder. The job doesn't seem to be 
getting easier, and I'm not blaming you. I'm just sympathizing 
in some ways.
    Attorney General Holder. It's a good observation.

                             VIOLENT CRIME

    Senator Lautenberg. Not so much that I won't ask for more, 
because we're doing with less, and we see it in my State of New 
Jersey, 246 gun murders in 2010; 12 percent more than the 
previous year. We've had layoffs galore from cities that can't 
afford to maintain their police force structure. So, when I 
look at the things that we're doing, I worry about what it is 
that we can do from your Department and from others. What can 
we do to help these communities? State budget cuts have caused 
Newark, Camden, and other cities in New Jersey to cut their 
police forces at alarming rates; one-third of the police force 
in Camden, more than 100 terminations of police officers in 
Newark.
    In December, I wrote asking if you could provide Federal 
resources to assist our ailing cities, and I am pleased, Mr. 
Attorney General, to see an increase in the budget for COPS 
grants. Is DOJ planning other steps that we can use to help 
protect New Jerseyans from violent crime?
    Attorney General Holder. We're certainly making sure that 
in terms of COPS grants we do the best that we can there. We 
have a substantial amount of money in the budget. I spoke to 
the mayor of Camden. I was at a reception and I saw her. We 
have certainly, with regard to Camden, in 2011 made available 
monies to hire 14 officers, $3.79 million; 2010, 19 officers, 
$4.2 million. We'll be looking at that kind of unique situation 
again this year. We certainly are putting into New Jersey, and 
in other places, task forces, so that the DEA, the ATF, the FBI 
are helping to the extent that we can, as well.
    There are a variety of ways in which the Federal Government 
can help, given the economic situation that many cities around 
the country are facing. We want to be good partners in that 
way. Camden is a place that deserves special attention, given 
the unique problem that we see there.
    Senator Lautenberg. Can I ask your view on whether or not 
you think we're doing enough between your Department, the FBI, 
our State and local police people? Are we doing enough, based 
on what we see with the statistics? Do you think that we're 
doing enough to say honestly that we're protecting our people 
appropriately?
    Attorney General Holder. We have crime rates that are at 
historic lows, 40- and 50-year lows, and yet, I'm still 
troubled by the number of police officers, for instance, who 
have been killed in the line of duty in the last 2 years, where 
we've seen a 16-, 20-percent increase there. That is something 
that we have to work on.
    I'm concerned about the fact that although the numbers of 
murders are down, 67 percent of them occur by people who are 
using firearms. That's an issue that we have to deal with. Too 
many of the wrong people have access to guns, and they use them 
in inappropriate ways. The targets of many of those people are 
law enforcement officers, who are sworn to protect us, and we 
have to do everything that we can to try to protect them.

                        HIGH-CAPACITY AMMUNITION

    Senator Lautenberg. Well, the wrong people or wrong laws? 
The man who shot Congresswoman Giffords last year used a gun 
with a high-capacity ammunition clip to kill 6 people, wound 
13. It was only when he fired all 31 rounds in his clip that 
people were able to subdue him. And these high-capacity 
magazines were banned by the Congress until 2004. Last year, 
you said that you thought that reinstating this ban should be 
examined. What's the result of that examination?
    Attorney General Holder. We're still in the process of 
working our way through that. I think there are measures that 
we need to take. We need to be reasonable, understanding that 
there is a second amendment right with regard to firearms, but 
even the dissent in the Heller case indicated that reasonable 
restrictions can be placed on the use of weapons. What this 
administration has tried to do is to come up with ways in which 
we are respecters of the second amendment, and yet come up with 
reasonable, appropriate firearms laws that will ultimately 
protect the American people.
    Senator Lautenberg. Madam Chairman, your indulgence for one 
more question, please.

                NEW YORK POLICE DEPARTMENT SURVEILLANCE

    Over the past several years, the NYPD has been engaged in 
surveillance of New Jersey's communities and universities 
searching for those who might be accused of terror; Governor 
Christie and Newark Mayor Cory Booker both were apparently 
unaware of this large-scale investigation. How can the law 
enforcement agencies spy on another State's residents without 
notifying the authorities, the Governor, the mayor even knowing 
about it?
    Attorney General Holder. I don't know. We are in the 
process of reviewing the letters that have come in expressing 
concerns about those matters. There are various components 
within the Justice Department that are actively looking at 
these matters. I talked to Governor Christie. Actually, I saw 
him at a reception a couple days or so ago, and he expressed to 
me the concerns that he had. He has now publicly expressed his 
concerns, as only he can. I think, at least what I've read 
publicly, again, just what I've read in the newspapers, is 
disturbing, and these are things that are under review at the 
Justice Department.
    Senator Lautenberg. Thank you, General Holder. Thank you, 
Madam Chairman. I assume the record will be kept open.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Mikulski. The record will be kept open for 
questions, and we then ask the Department to respond within 30 
days. Senators may submit additional questions. We ask the 
Department to respond within 30 days.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

           Questions Submitted by Senator Barbara A. Mikulski

    Question. The Department's request for State and local grants is $2 
billion. This is down from roughly $3.7 billion funded for grants in 
fiscal year 2010.
    What is the total amount of money applied for in these competitive 
grant programs versus the amount actually awarded to States and 
localities?
    Answer. In fiscal year 2011, Office of Justice Programs (OJP) 
received a total request of more than $7.1 billion in discretionary 
applications; OJP awarded more than $850 million in discretionary 
funding.
    In fiscal year 2011, the Office on Violence Against Women (OVW) OVW 
had applications totaling $1,150,510,742; OVW awarded $457,900,491 in 
grants. OVW's yearly budget requests seek funding to support four core 
priorities of OVW:
  --preventing violence against women;
  --addressing sexual assault;
  --extending our programming to underserved communities; and
  --restoring and protecting economic security to victims of violence.
    For fiscal year 2012, $412,500,000 was appropriated to OVW to 
further the Department's efforts to improve the Nation's response to 
domestic violence, dating violence, sexual assault, and stalking. The 
fiscal year 2013 overall request for the OVW totals $412,500,000, 
making the fiscal year 2013 total resource request for OVW equal to the 
fiscal year 2012 enacted appropriation.
    In fiscal year 2011, the Office of Community Oriented Policing 
Services (COPS) received applications totaling $2,067,924,397. COPS 
awarded more than $313 million in grants funding. The COPS office 
received $243,439,595 for the COPS Hiring Program in appropriated funds 
for fiscal year 2011 and awarded $243,398,709. All agencies were asked 
to cap their request at no more than 5 percent of their current actual 
sworn force strength, up to a maximum of 50 officers. However, in order 
to provide funding assistance to the largest number of eligible 
agencies, the COPS office decided to further reduce the cap from a 
maximum of 50 officers to 25 officers. Had this methodology not been 
adopted as part of the hiring program solicitation, the total amount 
that would have been requested would have been $5,354,837,329. For 
fiscal year 2012, $166,000,000 was appropriated for the COPS Hiring 
Program. The COPS office will make 2012 hiring awards later this 
summer. The fiscal year 2013 budget request includes $257,087,000 for 
the COPS Hiring Program.

                   DUPLICATION IN GOVERNMENT PROGRAMS

    Question. The Government Accountability Office (GAO) recently 
released an updated version of its 2011 report on duplicative 
Government programs, ``Opportunities to Reduce Potential Duplication in 
Government Programs, Save Tax Dollars, and Enhance Revenue'', as well 
as a new 2012 version of the report. In 2011 and 2012, GAO counted 
Department of Justice (DOJ) programs among those that are potentially 
duplicative.
    Has the Attorney General conducted an assessment to better 
understand which State and local grant programs overlap with one 
another to prevent unnecessary duplication, as the GAO report 
recommended?
    Answer. Improving the effectiveness and efficiency of Federal 
programs is a critical priority of the administration and the 
Department. The Department is committed to continuing efforts to 
prevent unnecessary duplication, identifying overlaps in programs, and 
streamlining where it would ensure more effective grant assistance. The 
Department will initiate an assessment to better understand the extent 
to which Department grant programs may overlap and identify ways to 
mitigate the risks for unnecessary duplication. This assessment will be 
conducted by OJP's Office of Audit, Assessment, and Management.
    Question. Has Department staff reviewed the report and conducted 
the analysis of grants recommended by GAO?
    Answer. The Department appreciates the work of GAO and has 
carefully considered the findings and recommendations presented in 
GAO's report. The Department agrees that preventing unnecessary 
duplication in Government programs is a critical priority. The 
Department's grant agencies have significantly improved collaboration 
and information-sharing to mitigate the risk of duplicative Federal 
spending. The DOJ grantmaking agencies closely collaborate on the 
development and implementation of grant programs and share information 
with each other to improve coordination prior to making awards. The 
Department components will continue to coordinate with one another to 
ensure sound stewardship and management of its grants.
    Question. What independent steps have the Justice Department 
taken--prior to the release of the GAO report--to identify potentially 
duplicative grant programs?
    Answer. DOJ grantmaking agencies closely collaborate on the 
development and implementation of grant programs to avoid the types of 
potential problems cited by GAO. Managers from OJP and its bureaus, 
COPS, and OVW meet regularly to coordinate their programs and 
objectives, and they pay particular attention to those areas where they 
have complementary joint programs. Additionally, the executive branch 
annual budget process provides a multi-level review of all component 
budgets and requires programs to be modified or deleted if overlap or 
duplication is identified. It is important to note, however, that 
overlapping activities do not necessarily signify duplication. For 
example, the following selected examples demonstrate the Department's 
commitment to work collaboratively among its own components as well as 
Federal Governmentwide to improve performance and effectively target 
the public safety needs of our communities.
  --In January 2011, the first meeting of the Federal Interagency 
        Reentry Council convened. The council addressed short-term and 
        long-term goals on prisoner re-entry through enhanced 
        communication, coordination, and collaboration across Federal 
        agencies.
    --OJP is leading a parallel staff level effort, which includes 35 
            people from 17 different Federal agencies including the 
            Departments of Health and Human Services (HHS), Housing and 
            Urban Development (HUD), Labor (DOL), Education (ED), 
            Veterans Affairs, Agriculture, and the Social Security 
            Administration, and others.
  --OJP is also spearheading the National Forum on Youth Violence 
        Prevention, which is an effort launched, at the direction of 
        the White House, by DOJ and ED, to directly and locally address 
        the needs of communities that continue to experience high 
        levels of youth violence. Using comprehensive technical 
        assistance, the Forum enables Federal agencies to serve as a 
        catalyst for broad-based positive change at the local level in 
        a very efficient, cost-effective manner.
  --For the first time, all of DOJ's components and leaders are working 
        together to provide the most efficient and timely information 
        to tribal communities. As cited in the GAO report, beginning in 
        fiscal year 2010, the Department created the Coordinated Tribal 
        Assistance Solicitation (CTAS), which coordinates the 
        applications of most of the Department's tribal government-
        specific criminal justice assistance programs administered by 
        OJP, OVW, and COPS under one solicitation. Through CTAS, tribes 
        can apply for funding for many of their criminal justice needs 
        with one application.
  --The Tribal Law and Order Act enacted in July 2010, contained 
        amendments to multiple laws with an impact across DOJ 
        activities in Indian country, including a number of OJP 
        programs. The CTAS collaborative experience readied us for 
        statutorily mandated coordination required for law enforcement, 
        training, increased grants authority, and crime data analysis 
        and reporting.
    --We are partnering with other Federal agencies to conduct 
            inventories of Federal resources, develop interagency 
            memorandums of agreement, and long-term comprehensive plans 
            to improve our performance, eliminate duplication, and 
            identify gaps to better serve tribal governments and their 
            communities, in consultation with tribes.
  --DOJ is an active participant in the Senior Policy Operating Group 
        (SPOG), which coordinates Federal strategies and programs to 
        combat human trafficking. National Institute of Justice and the 
        State Department co-chair the SPOG Committee on Data and 
        Research.
  --The Attorney General's Defending Childhood Initiative is being 
        coordinated across OJP, COPS, OVW, the U.S. Attorneys offices, 
        as well as other components within the Department and the 
        Federal Government.
  --The Neighborhood Revitalization Initiative, which is a White House-
        led interagency collaboration, is executing place-based 
        strategies to engage and support local communities in 
        developing and obtaining the tools they need to revitalize 
        their own neighborhoods of concentrated poverty.
    --The Federal Government already directs significant resources to 
            these neighborhoods, but we can always look for additional 
            ways to continue to support them. Better alignment of 
            Federal programs will help local leaders to use Federal 
            funds more effectively, making our taxpayer dollars go 
            further.
  --Through our Byrne Criminal Justice Innovation program, OJP and the 
        Department will strengthen partnerships with HUD, ED, HHS and 
        the Treasury in distressed neighborhoods to implement effective 
        strategies to address persistently high violent crime, gang 
        activity, and illegal drugs.
  --The COPS office is heavily invested in the White House initiative, 
        Strong Cities Strong Communities, where it provides technical 
        assistance to the Chester, Pennsylvania police department on 
        issues such as crime analysis, faith-based partners, and 
        community-based government problem-solving.
  --To further advance national discussion regarding these important 
        topics, the COPS office and OJP's Bureau of Justice Assistance 
        have convened an Officer Safety and Wellness Group that brings 
        together law enforcement leaders, criminal justice 
        practitioners, Federal agencies, professional organizations, 
        and academics to share perspectives on improving officer safety 
        and wellness.
    Additionally, the Department is working as a whole to coordinate 
and improve our grants management efforts. The Associate Attorney 
General's Office leads the DOJ-wide Grants Management Challenges 
Workgroup. The Workgroup is comprised of grants officials from COPS, 
OJP, and OVW, to share information and develop consistent practices and 
procedures in a wide variety of grant administration and management 
areas. In fiscal year 2011, the working group successfully implemented 
the DOJ-wide high-risk grantee designation program and a DOJ-wide, 
online financial training tool for DOJ grantees.
    Question. Have you met with any roadblocks in the Department's 
attempts to eliminate or consolidate potentially duplicative programs?
    Answer. The Department is committed to continuing efforts to 
consolidate grant programs as appropriate and use ``evidence-based'' 
approaches to identify programs that work, as well as those that do 
not. An example of this effort is the fiscal year 2013 President's 
budget proposal for the consolidation and expansion of funding for Drug 
Courts and the Mentally Ill Offender Act Program. A similar proposal 
also was included in the fiscal year 2012 President's budget, but not 
adopted.
    In fiscal year 2012, the Congress supported the Department's budget 
proposal to merge several youth-oriented programs under OVW into one 
single program.
    We are working smarter by promoting evidence-based approaches and 
developing and spreading knowledge about what works and what causes 
crime and delinquency because of limited resources. Evidence-based 
knowledge is critical to help policy-makers at the Federal, State, and 
local levels know what to fund, what not to fund. For example, OJP has 
developed tools such as CrimeSolutions.gov and the Diagnostic Center, 
which help jurisdictions focus on evidence-based ``smart on crime'' 
approaches to maximize resources and improve public safety results.
    Question. Does the Department think that the programs listed in the 
report are duplicative? Why or why not? What grant programs do the 
Department view as duplicative?
    Answer. In its comments to the GAO on the report, the Department 
expressed significant concerns with GAO's methodology and identified 
flaws in its analysis. This flawed methodology resulted in a 
substantial overstatement of the number of programs that might 
potentially be operating in the same policy area. GAO categorized 253 
solicitations into broad justice areas to identify ``evidence of 
overlap'' in justice areas. This approach is oversimplified and 
imprecise, resulting in a large number of solicitations in each broad 
category. Narrowing the justice areas would have provided for a more 
informative analysis of where DOJ funding is being applied. For 
example, the ``technology and forensics'' category is extraordinarily 
and unnecessarily expansive. Refining this justice area--such as 
information sharing standards development, criminal intelligence 
sharing, DNA backlog reduction, equipment and materials testing--would 
have been more informative, accurate, and less misleading.
    Additionally, the GAO report identified 56 solicitations providing 
victim assistance, citing these as overlapping. While some might look 
at DOJ and see overlapping programs related to crime victims, what we 
actually have are programs directed at providing direct assistance and 
counseling to victims and their families; programs directed at training 
community law enforcement entities to better address the needs of 
victims; academic and forensic programs directed at research on victim 
issues; and statistical collections providing national data on the 
incidence of victimization and the consequences to crime victims.
    GAO did not identify actual duplication; rather it cited examples 
of potential duplication. DOJ examined the award information of these 
grants and found no instance of grantees receiving funding to carry out 
the same activities. Although GAO acknowledges DOJ's review, the 
examples remain in the report to support its ``findings.'' One example 
cited in the report as potential duplication involves the Office of 
Juvenile Justice and Delinquency Prevention and COPS grants to the 
Georgia Bureau of Investigation. DOJ determined that each of three 
grants is being used to target different issues:
  --child prostitution and potential sexual slavery issues in Georgia;
  --Internet crimes against children; and
  --identification of sex offenders.
    A second example reports that one applicant received funding under 
two awards from OVC and OVW to support child victim services through 
its child advocacy center. DOJ reviewed these grants, to the Tuilpe 
Tribes of Washington, and determined that the tribe sought multiple 
funding sources because one source did not adequately cover the costs 
to establish the center and then carry out its activities in subsequent 
years.
    Further, the Department was concerned with the lack of 
understanding that GAO showed related to the Department's 
``leveraging'' and sustainability funding strategy. GAO concluded that 
DOJ's granting agencies have awarded multiple grants to the same 
communities for the same or similar purposes. Although GAO 
acknowledges, ``there may be times when Justice's decision to fund 
grantees in this manner may be warranted'', the content and tone of the 
report wrongly infers that recipients receiving related grant funding 
from more than one agency is wasteful or unnecessary. Due to limited 
funding, DOJ encourages grantees to use multiple funding streams in a 
complementary manner to support local needs and implement comprehensive 
programs. DOJ and other agencies encourage this as a ``leveraging'' and 
sustainability strategy.
    Question. What steps are the Department and the administration 
taking--both independently and together--to eliminate duplication, 
abuse, and waste in the Department's grantmaking process in response to 
the GAO report?
    Answer. The Department has been proactive in identifying and 
addressing unnecessary duplication. During the program design and the 
annual budget formulation process, the Department carries out the 
following actions to avoid duplication and overlap:
  --Components regularly collaborate during the budget formulation 
        process.
  --DOJ's Justice Management Division Budget Division and senior 
        officials review all component budgets prior to their 
        submission to the Office of Management and Budget and require 
        programs to be modified or deleted if overlap or duplication 
        exists.
    In addition, there are systems and tools in place that can be used 
to ascertain if duplication of awarded funds exists. Such as:
  --All three DOJ major grantmaking components (OJP, COPS, and OVW) use 
        the same accounting system and OJP and OVW both use the Grants 
        Management System (GMS). All GMS users can access detailed 
        program information.
  --OJP's Office of the Chief Financial Officer conducts financial 
        monitoring of grants of all three DOJ grantmaking components 
        (OJP, COPS, and OVW) and identifies potential areas of overlap 
        between programs and related funding.
  --DOJ grantee audits (both single audits and Office of Inspector 
        General grant audits) represent an independent examination of 
        funding at the grantee level. Single audits, which are 
        mandatory for grant recipients who expend more than $500,000 in 
        Federal funds during a fiscal year, provide the auditors with 
        an opportunity to examine funding and related expenditures for 
        all grant programs.
    As it relates to existing program areas that cross components:
  --OJP, COPS, and OVW regularly collaborate with other DOJ components 
        in areas where programs overlap to ensure that efforts are 
        efficient and effective. For example, the Attorney General has 
        convened the Federal Interagency Reentry Council in which 18 
        Federal agencies participate.
  --DOJ coordinates intra-agency working groups to develop and improve 
        programs and reduce the possibility of duplication and overlap. 
        For example, CTAS involves DOJ, OJP, COPS, and OVW in 
        development of a single solicitation for all DOJ grants for 
        tribal governments.
 --OJP also leads interagency coordination groups to strategically 
        utilize each component's strengths and minimize duplication. 
        For example, OJP leads the National Forum on Youth Violence 
        Prevention with strong participation from COPS, OVW, and other 
        Federal agencies such as DOL, HUD, and ED.
    For grants management activities, DOJ grant components participate 
in the Grants Management Challenges Working group as previously 
described in another section.
    The Department has tackled the challenges of grants management 
aggressively, establishing policies, procedures, and internal controls 
to ensure sound stewardship, strong programmatic and financial 
management, and effective monitoring and oversight of its grants and 
grant programs. These policies and internal control framework position 
the Department to carry out statutory mandates and requirements and to 
detect and prevent potential waste, fraud, and abuse of the billions of 
taxpayer dollars the Department awards in grants each fiscal year.
    The Department is dedicated to continuously improving its oversight 
and monitoring of grantees and grant programs. The Department reduces 
risks for fraud and abuse by identifying high-risk and at-risk grantees 
and ensuring compensating controls are implemented. The DOJ high-risk 
grantee program requires appropriate controls to be in place to ensure 
that grantees with outstanding noncompliance issues implement timely 
corrective actions to address the issues; a grantee's risk status is 
addressed during the grant award process; enhanced oversight and 
monitoring is provided to the grantee. The Department ensures grantees 
have access to financial and grant fraud training. The OJP Office of 
the Chief Financial Officer provides training to grantee participants 
through its Regional Financial Management Training Seminars. These 
seminars cover critical topics such as subrecipient monitoring, cost 
principles for allowable and unallowable costs, reporting requirements, 
grant fraud, waste, and abuse, audit requirements, and prohibition of 
excess cash on hand. In December 2011, DOJ launched an on-line 
financial management training tool for all DOJ grantees and grant 
management staff.
    The Department's Office of Inspector General works closely with the 
grant components to provide training on detecting and preventing grant 
fraud to its grantees and staff. For example, since fiscal year 2009, 
more than 600 OJP employees have participated in grant fraud training.

                      FEDERAL PROGRAMS FACING CUTS

    Question. Under the terms of the Budget Control Act of 2011 (Public 
Law 112-25), funding for virtually all Federal programs will face an 
across-the-board cut in January 2013 if the Congress fails to reduce 
the national debt by $1.2 trillion. According to CBO estimates, this 
would result in a cut of roughly 8 percent to programs across DOJ.
    How would these cuts affect the Department?
    Answer. Under the terms of the Budget Control Act of 2011 (Public 
Law 112-25), virtually all Federal programs will face an across-the-
board cut in January 2013 if the Congress fails to enact legislation 
that would reduce the national debt by an additional $1.2 trillion. 
According to CBO estimates, such an across-the-board cut would result 
in a reduction of at least 7.8 percent to programs across DOJ. A 7.8-
percent reduction equates to a loss in funding of approximately $2.1 
billion.
    Question. Please provide a list of expected workforce furloughs, 
cuts to grant programs, and other reductions at DOJ if sequestration is 
implemented.
    Answer. The Department supports the fiscal year 2013 President's 
budget request, which would avoid a sequestration, if enacted as 
proposed. However, the impact of an across-the-board cut of 7.8 percent 
would mean a reduction of approximately $2.1 billion to the 
Department's budget authority. To implement this cut, the Department 
would have to cut both personnel and operational funding. While the 
specific implementation of a 7.8-percent across-the-board cut cannot 
yet be determined, such a cut to DOJ's budget could result in the loss 
of more than 15,000 personnel, including furloughing all DOJ employees 
for 25 days. These personnel cuts, along with significant operational 
cuts, would mean reductions in the apprehension of violent fugitives, 
fewer Federal Bureau of Investigation (FBI) national security 
investigations, fewer affirmative litigation efforts, and more crowded 
prisons. For context, a 7.8-percent cut would mean 5,400 fewer Federal 
agents and nearly 1,250 fewer attorneys available to investigate and 
prosecute violent criminals, perpetrators of fraud, fugitives from 
justice, transnational criminal organizations, and cartels and 
terrorists. In addition, the Bureau of Prisons would have 2,500 fewer 
correctional officers to operate prison facilities in a manner 
consistent with officer and inmate safety and the Department's grant 
programs would be reduced by $110 million compromising relationships 
with State and local law enforcement organizations and programs 
critical to advancing public safety.
    Question. How would these cuts affect the Department's ability to 
carry out its mission?
    Answer. An across-the-board cut of 7.8 percent would jeopardize the 
Department's ability to fulfill its missions to prevent terrorism, 
enforce Federal law, and ensure the fair administration of justice.
    While the specific implementation of a 7.8-percent across-the-board 
cut cannot yet be determined, such a cut to DOJ's budget could mean:
  --49,654 fewer immigration matters completed by immigration judges;
  --5,430 fewer matters opened by the National Security Division;
  --7,713 fewer cases filed by U.S. Attorneys;
  --9,705 fewer investigations conducted by the FBI;
  --$335 million more revenue in the pockets of drug trafficking 
        organizations;
  --79 fewer local police hires;
  --300 fewer Foreign Intelligence Surveillance Act applications filed 
        by the National Security Division;
  --$1.6 million decrease in restitutions, recoveries, and fines 
        related to FBI white collar crime investigations; and
  --6,495 fewer bulletproof vests for State and local law enforcement 
        personnel.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

    OFFICE OF LEGAL COUNSEL MEMORANDUM--COUNTERTERRORISM OPERATIONS

    Question. Earlier this week, you gave a speech outlining some of 
the legal rationale for the use of lethal force against American 
citizens overseas in terrorism cases. In your speech, you stated that 
``the executive branch regularly informs the appropriate Members of 
Congress about our counterterrorism activities, including the legal 
framework, and would of course follow the same practice where lethal 
force is used against United States citizens.'' While your speech was a 
welcome step toward more transparency about the legal rationale for 
these actions, it is no substitute for an independent review by the 
Congress of the actual legal opinion underpinning such actions. As 
Chairman of the Judiciary Committee, I have made repeated requests for 
the legal opinions upon which the administration has relied in taking 
such extraordinary actions against American citizens.
    Can you tell me when you will be sending me a copy of the Office of 
Legal Counsel (OLC) memorandum authorizing the use of lethal force 
against American citizens in counterterrorism operations, including the 
operation that killed Anwar al-Awlaki?
    Answer. OLC regularly publishes opinions that the office determines 
are appropriate for publication. The opinion in question is currently 
covered by executive privilege and therefore will not be released 
beyond the Department. Moreover, the Department does not comment on any 
specific case or individual. However, as noted before, the conduct and 
management of national security operations are core functions of the 
executive branch, as courts have recognized throughout our history. In 
order to ensure proper oversight, and in keeping with the law and our 
constitutional system of checks and balances, the executive branch 
regularly informs the appropriate Members of Congress about our 
counterterrorism activities, including the legal framework, and would 
of course follow the same practice where lethal force is used against 
United States citizens.

          NEW YORK CITY POLICE DEPARTMENT SURVEILLANCE PROGRAM

    Question. In recent months, we have heard troubling information 
about the surveillance operations of New York City Police Department 
(NYPD)--particularly targeting the Muslim-American community. According 
to press accounts, the NYPD has been compiling databases of information 
concerning Muslim Americans residing throughout the northeast, and has 
used informants called ``rakers'' and ``mosque crawlers'' to infiltrate 
mosques and Muslim student groups. There have also been reports of CIA 
involvement in NYPD's surveillance program. Last week, you told a House 
Appropriations subcommittee that the Department of Justice (DOJ) was 
reviewing complaints it had received concerning the NYPD's surveillance 
program, in order to determine what actions should be taken by DOJ.
    I would request that you keep me and my staff updated as to the 
progress of this review. Can you tell me the current status of the 
Department's review into these allegations of civil rights violations 
by the NYPD?
    Answer. At this time, the Civil Rights Division is continuing its 
review into allegations of civil rights violations by the NYPD 
Surveillance Program. The Attorney General has authority to bring 
litigation to address patterns or practices by law enforcement agencies 
that deprive persons of rights, privileges, or immunities secured or 
protected by the Constitution or laws of the United States (42 U.S.C. 
14141). This authority has been delegated to the Civil Rights Division 
of DOJ and the Division often works with the local U.S. Attorney's 
office. Each allegation of misconduct is reviewed and in a portion of 
cases, a formal investigation or another response is authorized. 
Investigations typically involve site visits, hundreds of interviews, 
and the review of tens of thousands of pages of documents. In addition 
to Division attorneys and investigators, the Division engages experts, 
typically well-respected law enforcement executives, to assist in the 
investigation. There is no way for us to provide a general timeframe 
for a preliminary inquiry or a formal investigation. Timelines for 
inquiries and investigations are controlled by the facts found.
    Question. As the Department conducts its review of these 
complaints, I also ask that you evaluate the extent of coordination 
between the NYPD and the Federal Bureau of Investigation (FBI). I am 
particularly interested in whether data obtained through NYPD 
surveillance methods is shared with and used by FBI in accordance with 
DOJ guidelines. Will you do that?
    Answer. FBI and NYPD work together on the Joint Terrorism Task 
Force, share investigative information, and exchange queries for 
operational and tactical de-confliction purposes in accordance with DOJ 
and FBI policies. However, FBI does not receive NYPD surveillance 
information.

                     SAME-SEX IMMIGRATION PETITIONS

    Question. On April 6, 2011, I wrote to you and the Secretary of 
Homeland Security, Janet Napolitano, to encourage you to hold marriage-
based immigration petitions for same-sex spouses in abeyance in light 
of the administration's decision to no longer defend the 
constitutionality of the Defense Against Marriage Act (DOMA). The 
response I received on May 17, 2011, suggested that discretion may be 
granted in individual cases, but that the agencies would not exercise 
discretion in a categorical manner. Subsequently, the Department of 
Homeland Security (DHS) denied the spousal-based petition of a Vermont 
couple, Frances Herbert and Takako Ueda who are lawfully married under 
Vermont statute. Particularly in States such as Vermont, where same-sex 
marriages are legally recognized, we believe that DHS has the legal 
authority to hold such cases in abeyance, and to exercise prosecutorial 
discretion for those in removal proceedings. I ask that you reconsider 
the administration position articulated in the May 17, 2011 letter. 
Will you do so?
    Answer. While we cannot comment on the specific example cited, DOJ 
and DHS are continuing to follow the President's direction to enforce 
DOMA. Both DHS, through U.S. Citizenship and Immigration Services and 
Immigration and Customs Enforcement (ICE), and DOJ, through the 
Executive Office for Immigration Review, have discretion to make 
individual case determinations, and have used that discretion in a 
number of recent cases. The agencies have not, however, granted any 
form of blanket relief to the entire category of cases affected by 
DOMA. As ICE Director Morton described in a June 17, 2011 memorandum, 
``Providing Guidance on the Exercise of Prosecutorial Discretion 
Consistent With the Department's Civil Immigration Priorities'', ICE's 
current enforcement priorities are aliens who pose a clear risk to 
national security or to public safety and those with an egregious 
record of immigration violations.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

                           PAN AM 103 BOMBING

    Question. Only one person has ever been convicted in connection 
with the Pan Am 103 bombing, and that person has since been released 
from prison. On February 28, 2012, Secretary Clinton testified that the 
United States ongoing investigation into the bombing is primarily a 
Department of Justice (DOJ) responsibility. What progress has been made 
on the investigation of the Pan Am 103 bombing?
    Answer. We remain committed to pursuing justice on behalf of the 
victims of this terrorist attack that took the lives of 189 Americans 
and many others.
    We continue to seek more information, as well as access to those 
who might have been involved in the planning or execution of the 
bombing. We have made clear--and will continue to make clear--to the 
Government of Libya the great importance of this case to the United 
States and our determination to bring all of those responsible to 
justice.
    The investigation into the Pan Am 103 bombing remains open, and we 
will continue to follow any leads that could result in evidence to 
support a criminal prosecution.
    As this is an ongoing investigative matter, we cannot comment on 
specific investigative steps that are being taken.

                     ILLEGAL TRAFFICKING OF TOBACCO

    Question. Reports from the Government Accountability Office have 
identified an estimated tax loss of $5 billion a year due to the 
illegal trafficking of tobacco. The tremendous profits and low criminal 
penalties have attracted the involvement of organized criminal and 
terrorist groups. The Federal Bureau of Investigation (FBI) has primary 
jurisdiction on terrorism and organized crime, while the Bureau of 
Alcohol, Tobacco, Firearms and Explosives (ATF) holds primary 
jurisdiction on cigarette trafficking. How does DOJ ensure that the FBI 
and ATF work together to prevent illegal tobacco proceeds from 
financing organized crime and terrorists?
    Answer. DOJ's agencies have strong and effective working 
relationships with their DOJ partners as well as other Federal, State, 
and local agencies and a history of highly successful joint 
investigations. Supervisors in the field regularly review 
investigations on a case-by-case basis and involve other agencies as 
appropriate. For example, recently the ATF and the FBI worked together 
on ``Operation Secondhand Smoke'', an undercover investigation into a 
nationwide network of retailers, wholesalers, distributors, importers, 
and manufacturers who were avoiding cigarette taxes to make millions of 
dollars in profits.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison

DEPARTMENT OF JUSTICE'S PREVENTING VIOLENCE AGAINST LAW ENFORCEMENT AND 
   ENSURING OFFICER RESILIENCE AND SURVIVABILITY INITIATIVE TRAINING

    Question. Violence against law enforcement officers is at an all-
time high. According to National Law Enforcement Officers Memorial Fund 
statistics, Texas leads the Nation with most police officers killed the 
in the line of duty--1,594. Ensuring the safety of law enforcement is a 
top priority for all of us in this subcommittee's bill.
    During the Fort Hood shooting rampage in 2009, Department of the 
Army civilian Police Sergeants Kim Munley and Mark Todd were two of the 
first officers to arrive on the scene. Sergeant Munley was shot 
multiple times. Sergeant Todd was able to wound and incapacitate the 
shooter before he could shoot Sergeant Munley again. Both officers 
credited their swift and heroic actions to the active shooter training 
they received through the Advanced Law Enforcement Rapid Response 
Training (ALERRT) Center at Texas State University, which is a partner 
of the Department of Justice's (DOJ) Preventing Violence Against Law 
Enforcement and Ensuring Officer Resilience and Survivability (VALOR) 
Initiative. Their heroic actions show how a small investment in 
training can have an impact on the safety of our Nation's law 
enforcement officers.
    Can you tell us about the successes of the VALOR Initiative and 
DOJ's plans to expand this training?
    Answer. More than 3,100 law enforcement professionals have received 
the VALOR Initiative training, in 17 sessions across the country. We 
have heard from sheriffs and police chiefs that this curriculum has 
been successfully used in the field. Therefore, we plan to continue 
promoting, refining, and expanding its availability along with the 
VALOR Initiative officer toolkit. There have been 8,100 toolkits placed 
in the field and the Web site has received 2.5 million hits.
    The feedback from the training has been positive from the field. 
Some of the feedback includes:

    ``It was truly some of the best training I've attended in 12 years 
as a peace officer here in Georgia. I truly hope and urge you to bring 
this training back to Georgia for more officers to attend, I would 
definitely push this training for as many as my colleagues as I could 
through the chain of command.''----Cartersville, Georgia
    ``This training was excellent, and every officer needs to take it. 
It's an eye-opening experience! Excellent training!''----Arlington, 
Texas
    ``Most relevant training ever to help prepare and heighten 
awareness.''----Arlington, Texas
    ``I was involved in an incident where the training in pre-attack 
indicators really helped prevent a violent struggle with a suspect.''--
--San Diego, California
    ``The training has helped me with being more vigilant and looking 
for pre-incident indicators of violent attacks and armed persons. Cops 
become complacent as time goes on. This type of training helps rid the 
complacency and reopens the eyes of a patrol cop.''----San Diego, 
California

    Texas State University and its ALERRT active shooter training has 
been, and is, an extremely important component of the VALOR Initiative 
training.
    In fiscal year 2011, the Institute for Intergovernmental Research 
(IIR) received an award as the Bureau of Justice Assistance's (BJA) 
VALOR Initiative grantee. IIR, through its internal awarding processes, 
provided a sub-award of $200,000 to Texas State University for the 
delivery of 11 ALERRT Active Shooter hands-on training sessions. In 
fiscal year 2012, IIR will receive its second supplemental award for 
the VALOR Initiative. IIR has discussed with BJA how it intends to use 
the fiscal year 2012 funding, including awarding a second subcontract 
to Texas State University for an anticipated additional $200,000 to 
continue delivery of ALERRT trainings across the country. BJA has 
discussed and is in agreement with the overall proposed work plan. IIR 
follows its internal subcontracting guidelines as well as Office of 
Justice Programs' (OJP) guidelines with regard to the expenditure of 
Federal funds and subcontracting.
    Question. Is the Department able to keep up with the requests for 
this training?
    Answer. Given existing resource constraints, it is a challenge to 
satisfy the high demand of requests for this training. However, BJA is 
working closely with our grantees to ensure that we are maximizing 
attendees at each event. To better meet the demand, we are requesting 
$5 million in fiscal year 2013, an increase of $3 million more than the 
fiscal year 2012 enacted level of $2 million.
    Question. Last year there were 31 cases of violence against U.S. 
Marshal Task Forces. Seven of these instances resulted in fatalities of 
Deputy U.S. Marshals or State and local officers working on the task 
forces.
    Is there any type of training being conducted with our Federal law 
enforcement agencies? (Bureau of Alcohol, Tobacco, Firearms and 
Explosives [ATF] and U.S. Marshals Services [USMS] conduct training)
    Answer. DOJ, through BJA, reached out to Federal law enforcement 
agencies as the VALOR Initiative was being developed. Specifically, 
leadership levels of USMS have been briefed on the VALOR Initiative, 
and coordination and joint efforts, including exchanges of curricula to 
ensure consistent messaging, are in progress. A team from USMS was 
invited to and participated in the first VALOR Intiative class held in 
Tampa, Florida. BJA recently met with USMS staff to further develop 
coordination and information sharing between both the BJA and the USMS 
trainings. Leadership of ATF was also briefed on the VALOR Initiative, 
and collaborative discussions are planned. Staff from the Federal 
Bureau of Investigation (FBI) was significantly involved in the 
development of the VALOR Initiative, in particular, the research that 
supports the program. Coordination with Department of Homeland Security 
(DHS) law enforcement agencies is also expected. BJA has also 
coordinated VALOR Initiative trainings through U.S. Attorney's offices, 
pursuant to the Attorney General's direction that the U.S. Attorneys be 
engaged in assessing and responding to the officer safety issues in 
their districts.
    Question. Is there any type of coordination with DOJ and our 
Federal law enforcement agencies to ensure that best safety practices 
are being shared?
    Answer. BJA has made specific outreach to Federal law enforcement 
agencies to create best safety practices. BJA's VALOR Initiative 
representatives will attend the current USMS training. USMS 
representatives will attend a VALOR Initiative training to ensure that 
best safety practices are shared. Additionally, leadership of the ATF 
was also briefed on the VALOR Initiative and further discussions are 
planned.
    DOJ law enforcement components participate in DOJ-wide working 
groups related to agent safety issues, such as body armor standards and 
requirements. DOJ law enforcement components also compare, collaborate, 
and share training techniques and methodologies, both formally and 
informally.
    The ATF, Drug Enforcement Administration (DEA), and USMS purchase 
software licenses for three of the same online courses. Through cross-
component discussion and collaboration, these courses have been 
established as important elements of safety training for agents of all 
three components.
    Components utilize co-located training facilities at Quantico and 
Federal Law Enforcement Training Center (FLETC) and agents train using 
driving and firearms ranges as well as simulators. FBI has traveled to 
other law enforcement component training sites to establish liaison 
contacts and share best practices.
    Furthermore, BJA and Community Oriented Policing Services (COPS) 
have established the National Officer Safety and Wellness Group. This 
group brings together law enforcement thought leaders, criminal justice 
practitioners, and colleagues to share their knowledge and perspectives 
on improving officer safety and wellness. The group's mission is to 
contribute to the improvement of officer safety and wellness in the 
United States by convening a forum for thoughtful, proactive discussion 
and debate around relevant programs and policies within the law 
enforcement field. Information and insight gained and shared will help 
enhance programs, policies, and initiatives related to officer safety 
and wellness.

              NATIONAL ACADEMY OF SCIENCES FORENSICS STUDY

    Question. Prior to becoming ranking member, this subcommittee 
commissioned the National Academy of Science (NAS) Forensics Study. The 
intent was to show where DOJ lacked in supporting crime labs and how it 
could provide more support to the forensics community. Unfortunately, 
it evolved from a narrowly focused nonbinding study into a more far-
reaching study than what the Congress intended.
    While the NAS study did produce some positive results, there are 
questionable and unrealistic ones, such as creating an independent 
bureaucracy responsible for oversight of forensics, excluding DOJ from 
oversight.
    Some special interest groups have even used a few of the individual 
bad cases in the NAS study to attack the credibility of all crime labs 
and law enforcement, resulting in impulsive and knee-jerk legislative 
proposals.
    I would also note that some of these same organizations were also 
at the forefront of support for the Webb Crime Commission, which is an 
example of another ``non-binding'' study to go bad and result in 
overreaching and unnecessary legislative proposals.
    Does the Department have a position on the NAS forensics study?
    Answer. DOJ believes the report from the National Research Council, 
``Strengthening Forensic Science in the United States: A Path 
Forward'', is a helpful addition to the public discourse on the state 
of the forensic science community. The report recommends many useful 
steps to strengthen the community and enables it to continue to 
contribute to an effective criminal justice system. The report did 
conclude, ``that forensic science, as a whole, produces valuable 
evidence contributing to the successful prosecution and conviction of 
criminals, as well as to the exoneration of the innocent.'' However, 
the report does not, and was never intended to:
  --comprehensively assess the forensic science disciplines;
  --undermine the use of forensic science in the courtroom;
  --offer any judgments on any cases currently in the judicial system; 
        or
  --recommend any rule or law changes in the area of evidentiary 
        admissibility.
    Question. Does DOJ support creating an independent agency 
responsible for having jurisdiction over forensics?
    Answer. The Department concurs with the need for a concerted 
national investment to advance forensic science and its utility, which 
underlies all recommendations cited in the NAS report. However, the 
Department does not believe that a new forensics agency is necessarily 
needed to serve the interests of the criminal justice community at the 
Federal, State, and local levels.

  DISCREPANCIES BETWEEN DEPARTMENT OF JUSTICE AND PRESIDENT'S REQUESTS

    Question. Attorney General Holder, there are a number of 
discrepancies between your fiscal year 2013 budget request and the 
President's fiscal year 2013 budget request in the Office of Management 
and Budget's (OMB) appendix. This can only mean that OMB littered DOJ's 
request with programs and funding proposals up until the last minute 
before releasing the budget.
    This is evidence of part of the budget process that is not 
transparent and should be made public. OMB and the White House are able 
to adjust program funding levels and direct agencies through 
``passback'' communications that they refuse to publicly disclose, 
hiding behind the veil of ``executive privilege''.
    The White House and OMB insert unrequested programs into an 
agency's budget request, forcing the agency to cut their own priorities 
to make room for it. A perfect example of this is the White House 
inserting $600 million for COPS Hiring into DOJ's budget last year. We 
know you did not request that funding level and it forced you to cut 
other programs to make room for it.
    OMB has authored numerous memos promoting transparency. Since 
agencies are already required to postcongressional communications 
online, I hope that the chairwoman and my other colleagues will work 
with me in helping OMB close the circle of transparency by requiring 
all Federal agencies to post their OMB passback communications online.
    During these tough fiscal times, taxpayers, the media and watchdog 
groups deserve to have full transparency and understand how the White 
House and OMB influence the budget process and sometimes override what 
agencies request.
    Would you be supportive of being transparent and all OMB budget-
related communications being available for the taxpayers to see?
    Answer. While DOJ supports transparency, the process involved in 
the formulation of the President's budget request requires unimpeded, 
back-and-forth dialog within the executive branch. These discussions 
are considered ``pre-decisional'' and allow the frank and open 
consultation and discussion that is necessary to reach the most cost-
effective and efficient resourcing decisions for the American taxpayer. 
These internal confidential discussions are not intended to shield 
dialog, but rather allow the consideration of a wide range of possible 
options and alternatives. This is based on section 22 of the OMB 
Circular No. A-11 (2011) ``Communications with the Congress and the 
Public and Clearance Requirements''. The executive branch's internal 
deliberations regarding the various issues and options that were 
considered in the process leading to the President's decisions, we 
believe, should remain a matter of internal record. This deliberative 
process is intended to promote free discussion between agencies and the 
President and is supported by the doctrine of the separation of powers. 
It also ensures policy consistency between the President's budget and 
budget-related materials given to the Congress.
    Question. What are the discrepancies between the DOJ request and 
the President's budget in the appendix?
    Answer. There are several small discrepancies between the 
Department's budget materials, including the fiscal year 2013 budget 
and performance summary and the individual congressional 
justifications, and the President's budget appendix; these 
discrepancies have been footnoted where appropriate in the DOJ's budget 
materials.
    The cancellation language proposed for USMS, FBI, DEA, and ATF 
included in DOJ's budget materials differs from the language included 
in the budget appendix regarding the types of balances proposed for 
cancellation. DOJ's budget materials reflect the correct language.
    The language included in DOJ's budget materials for OJP, State and 
Local Law Enforcement Assistance, differs slightly from the language 
included in the Budget Appendix regarding funding levels for certain 
programs (i.e., National Criminal History Improvement Program, National 
Instant Criminal Background Check System Improvement Act Grants, and 
Prison Rape Prevention and Response). The Department's budget materials 
reflect the correct language.
    The number of full-time equivalent (FTE) reported in the DOJ budget 
summary varies slightly from the numbers reported in the President's 
budget appendix due to a difference in the methodology used to 
calculate the base FTE levels.
    While the DOJ chapter of the President's budget states that a task 
force offset is proposed in fiscal year 2013, DOJ is just now 
finalizing its review of task force operations and an offset is instead 
anticipated for fiscal year 2014.
    Question. What do you attribute these discrepancies to?
    Answer. The majority of these discrepancies can be attributed to 
timing constraints during production of these separate documents, as it 
is the intent of both the language proposed in the Budget Appendix and 
the language proposed in the Department's budget materials to 
accurately report the same information.
    The difference in FTE between the DOJ congressional budget 
submission and the President's Budget Appendix can be attributed to a 
difference in the methodology used to calculate the base FTE levels. 
The DOJ congressional budget submission used the authorized FTE level 
to calculate the base for the enacted FTE in fiscal year 2011 and 
fiscal year 2012 and the request in fiscal year 2013. The President's 
Budget Appendix used the actual fiscal year 2011 FTE level as a 
baseline for developing the fiscal year 2012 and fiscal year 2013 FTE 
levels, as opposed to using the authorized FTE levels. This leads to a 
slight discrepancy in the reported FTE level, as footnoted in the 
Department's budget and performance summary.

                         DANGER PAY FOR MEXICO

    Question. DOJ has given the subcommittee its word that it would be 
advocating danger pay for USMS and ATF. What is the status of DOJ's 
negotiations on this? Why is OMB opposed to supporting law enforcement 
in Mexico receiving danger pay?
    Answer. DOJ is continuing to monitor the issue of differential 
rates of pay for DOJ agents and employees working in danger posts. We 
are actively engaged in discussions with the Department of State, which 
has jurisdiction over danger post determinations. The Department of 
State is acutely aware of our concern and has assured us that it is 
closely monitoring the situation in Mexico and will add additional 
danger posts as necessary.

                   DEPARTMENT OF JUSTICE TASK FORCES

    Question. Task forces play a major role in the DEA, USMS, FBI, and 
ATF missions. I support the consolidation of duplicative efforts, but I 
am concerned that there may be confusion on the part of the 
administration in past proposals to consolidate task forces.
    Specifically, the USMS Fugitive Task Forces come to mind. USMS have 
made three times the arrests of all other Federal law enforcement 
agencies combined.
    Can you tell us about the uniqueness of USMS's fugitive task forces 
and other task forces?
    Answer. USMS plays a unique role in implementing DOJ's violent 
crime reduction strategy as USMS is the Federal Government's primary 
agency for conducting fugitive investigations, and it apprehends more 
Federal fugitives than all other law enforcement agencies combined. 
USMS has also been named the lead DOJ component to investigate and 
prosecute crimes involving the noncompliance of sex offenders. While 
USMS is responsible for investigating and apprehending individuals 
wanted for escaping from Federal prison and for Federal parole and 
probation violations, it has a long and distinguished history of 
providing assistance and expertise to other Federal, State, and local 
law enforcement agencies in support of fugitive investigations. This 
support is coordinated though the USMS's Domestic Investigations and 
Sex Offender Investigations Branches, 75 district-based task forces, 
and 7 regional fugitive task forces, supplemented by three foreign 
field offices and a wide range of technical surveillance and criminal 
intelligence capabilities. USMS also participates on Organized Crime 
Drug Enforcement Task Forces (OCDETF); the OCDETF program has reported 
that its operations are substantially more effective when supported by 
USMS.
    The 75 district fugitive task forces operate areas not covered by 
the regional fugitive task forces. The seven regional fugitive task 
forces operate in the National Capital region, gulf coast region, Great 
Lakes region, New York-New Jersey region, Pacific-Southwest region, 
Southeastern U.S. region, and Florida. The combined regional fugitive 
task force has proven to be a vital tool in ensuring the safety of 
communities by arresting violent fugitives who prey on society.
    USMS's task forces combine the efforts of Federal, State, and local 
law enforcement agencies to locate and arrest the most dangerous 
fugitives. All USMS task forces are designed and managed to ensure the 
highest levels of cooperation, coordination, and deconfliction among 
participating agencies. While some of this coordination is informal in 
nature, in other cases, task forces use formal national and local 
information sharing and deconfliction systems to coordinate 
investigations and protect officer safety.
    USMS locates and apprehends Federal, State, and local fugitives 
both within and outside the United States. The warrants include but are 
not limited to:
  --homicide;
  --rape;
  --aggravated assault; and
  --robbery; or
  --if there was an arrest or conviction in the fugitive's record for 
        any of these offenses; or
  --for any sex offense as defined in the Adam Walsh Child Protection 
        and Safety Act.
    In fiscal year 2011, USMS task forces:
  --arrested 36,268 Federal fugitives;
  --arrested 86,449 State and local fugitives;
  --cleared 39,398 Federal warrants;
  --cleared 113,287 State and local warrants;
  --arrested 3,867 homicide suspects;
  --arrested 5,005 gang members;
  --arrested 12,144 sex offenders;
  --arrested 299 fugitives in Mexico; and
  --the seven regional fugitive task forces made 41,654 arrests and 
        cleared 52,078 warrants.
    DOJ's other primary task forces include DEA's regional task forces, 
ATF's violent crime impact teams, and FBI's Safe Streets task forces. 
As these task forces act as the primary investigative and operational 
arm for their respective agencies, they each leverage unique expertise 
in fulfilling their missions. For example, DEA's regional task forces 
have unparalleled knowledge and experience related to identifying, 
investigating, and ultimately dismantling drug trafficking 
organizations, which DEA brings to bear in cases throughout the 
country.
    Question. Are there any task forces that you feel may be considered 
for consolidation or elimination?
    Answer. The fiscal year 2013 President's budget does not contain 
plans to consolidate or eliminate additional task forces. Currently, 
DOJ is finalizing its comprehensive assessment of task force 
performance in coordination with ATF, DEA, FBI, USMS, the National 
Institute of Justice and the Executive Office for U.S. Attorneys. The 
review will also take into account the extent to which there is overlap 
or duplication between DOJ-led task forces and those led by other 
departments and agencies or State, local, or tribal led task forces. 
This assessment will review all violent crime, drug, gang, and fugitive 
task forces to determine their effectiveness and will culminate in 
recommendations to maximize performance and reduce duplication and 
overlap. The Department anticipates that the assessment will result in 
the elimination or consolidation of some task force operations.

           FAST AND FURIOUS LANGUAGE REMOVED FROM THE REQUEST

    Question. As I mentioned in my opening statement regarding Fast and 
Furious, language was included on the floor in last year's bill that 
would prohibit Federal law enforcement agencies from selling operable 
weapons to cartels. The fiscal year 2013 request removes that language 
saying it's unnecessary. The amendment passed 99-0.
    This budget proposes to eliminate a provision that prohibits 
facilitating the transfer of operable firearms to agents of drug 
cartels unless those firearms are continuously monitored. The budget 
request's justification for removing this language only says this ``is 
not necessary.'' That's hard to explain to the families of the Federal 
agents killed by those weapons.
    Can you elaborate on why the administration doesn't think it's 
necessary?
    Answer. In the fiscal year 2013 President's budget, consistent with 
past practice of removing prohibitive language that limits executive 
branch discretion, we proposed not to continue the Fast and Furious 
provision, which was enacted in fiscal year 2012 with the intention of 
preventing future ``gun walking'' operations. The Fast and Furious 
provision does not need to be continued because, as stated on several 
occasions, the Department does not intend to engage in any such 
operations in the future.
    Question. Doesn't the fact that it happened in the past suggest 
that legislation to block it in the future may well be necessary?
    Answer. The Attorney General has stated on several occasions that 
the Department has no intention of engaging in such operations in the 
future. Indeed, appropriate steps have been implemented to ensure that 
this type of operation does not occur again. However, given the 
sensitive nature of this issue, and in recognition of congressional 
intent to ensure appropriate oversight, DOJ would not object to this 
language being reinstated in the fiscal year 2013 bill.

             CARTELS RECRUITING COLLEGE STUDENTS AND MINORS

    Question. There have been reports that cartels are attempting to 
recruit college students to smuggle drugs into the country, and college 
campuses could serve as an easy recruiting ground. It's understandable 
how young students could be enticed by large sums of cash. The reports 
say that minors are more appealing because criminal penalties are 
lighter for them. One of the bright spots in your budget request is 
$312 million for Juvenile Justice Prevention programs. It's imperative 
that we educate our children and students on the potential dangers of 
being involved in cartels.
    Are you aware of these threats to college students and Southwest 
Border youth?
    Answer. DOJ has become aware of the threats posed by drug cartels 
to both college students and students in elementary and high schools 
along the Southwest border through those who attend and conduct AMBER 
Alert Southern Border Initiative trainings.
    Question. Are any Juvenile Justice Prevention dollars being focused 
toward education and awareness programs for the Southwest Border youth 
to understand the dangers of cartels and the drug trade?
    Answer. The Office of Juvenile Justice and Delinquency Prevention 
(OJJDP) has not focused Juvenile Justice Prevention dollars toward 
education and awareness programs for the Southwest Border youth. 
However, OJJDP's AMBER Alert Training and Technical Assistance program 
has developed a partnership with the Boys & Girls Clubs of America, a 
national nonprofit organization which provides expansion and 
development of sustainable Boys & Girls Clubs within tribal communities 
and other communities across the Nation. While OJP does not fund Boys & 
Girls Clubs activities directly through the AMBER Alert Training and TA 
program, we have awarded funding to a training and technical assistance 
provider that has a formal, established partnership with Boys & Girls 
Clubs of America. Through that partnership, Boys & Girls Clubs have 
been the conduit for information about gang and drug resistance 
education to youth who participate in Boys & Girls Clubs activities, 
and this may include education and awareness about the dangers of 
cartels and the drug trade for youth along the Southwest Border.
    OJJDP also has supported Boys and Girls Clubs. Boys & Girls Clubs 
provide a variety of prevention programs and activities for youth that 
help them develop character, education, social, and leadership skills. 
In addition, the Boys & Girls Clubs provide the Delinquency and Gang 
Prevention/Intervention Initiative. This community-based initiative 
targets young people ages 6 to 18 that are at high risk for involvement 
or are already involved with delinquency and gangs. These youth and 
teens are directed to positive alternatives and learn about violence 
prevention.
    OJJDP supports gang prevention education in schools. The Gang 
Resistance Education and Training (G.R.E.A.T.) Program, funded under 
title V, is a school-based, law enforcement officer-instructed, 
classroom curriculum administered by OJP's BJA and OJJDP. The delivery 
and support of the G.R.E.A.T. Program is coordinated through the four 
Regional Training Centers, the National Policy Board (NPB), a National 
Training Team and two Federal agency partners:
  --FLETC;
  --DHS; and
  --ATF.
    The goal of the G.R.E.A.T. Program is to help youth develop 
positive life skills that will help them avoid gang involvement and 
violent behavior. G.R.E.A.T. uses a communitywide approach to combat 
the risk factors associated with youth involvement in gang-related 
behaviors. The curricula was developed through the collaborative 
efforts of experienced law enforcement officers and specialists in 
criminology, sociology, psychology, education, health, and curriculum 
design and are designed to reinforce each other. The lessons included 
in each curriculum are interactive and designed to allow students to 
practice positive behaviors that will remain with them during the 
remainder of their developmental years. There are 495 law enforcement 
agencies in California, New Mexico, Arizona, and Texas that are 
teaching G.R.E.A.T and 151 of those agencies are within 150 miles of 
the border of Mexico.

                                BIG BEND

    Question. Attorney General Holder, as I mentioned in the statement, 
I'm concerned about opening an unmanned border crossing in Big Bend 
National Park. The negative and unknown variables seem to outweigh the 
few and minimal benefits. Not to mention that during these tough fiscal 
times, these funds could be used more wisely elsewhere. It seems to me 
that if terrorists were to smuggle weapons across the border, they 
would do so in place that have easily accessible roads with the fewest 
amount of border officials.
    Although it's not under DOJ's jurisdiction, an incident involving 
criminal activity after the fact very well would be. What is DOJ's 
position on an unmanned border crossing in this area or any other area?
    Answer. DOJ does not administer day-to-day activities regarding 
U.S. border patrol and defers to DHS in making determinations regarding 
the installation of border crossings. However, DOJ law enforcement 
components collaborate daily with Federal, State, and local law 
enforcement via field offices located throughout the country, including 
the Southwest Border, to combat crime and deter, detect, and disrupt 
any national security threats to the United States. DOJ stands ready to 
work with DHS to address any security concerns regarding border 
crossings or any other issue involving national security.

                           SWB COMMUNICATIONS

    Question. Big Bend Telephone Company (BBTC) is applying to the 
Federal Communication Commission (FCC) for a waiver from new rules that 
would lower the amount of Universal Service Fund (USF) subsidies that 
BBTC receives. BBTC is located in far West Texas, serves an area the 
size of Massachusetts, and covers 25 percent of the United States-
Mexico border. Without a waiver, we believe that BBTC may go out of 
business, with no other companies likely to serve the region because 
the area is so rugged and sparsely populated. Because BBTC provides 
network transport for the cell phone providers in the area, if BBTC 
goes dark, so too do the cell phones. Furthermore, BBTC provides 
critical communications service to numerous DHS facilities along and 
near the border (including two ports of entry) and to many State and 
local law enforcement agencies in the area. Without a waiver, these 
facilities would be at risk of losing their critical phone and 
broadband capabilities.
    If a waiver is not granted by the FCC to BBTC, and if BBTC goes out 
of business and thus its customers lose service, what would the impact 
be on national security and public safety if Federal, State, and local 
law enforcement agencies in the Trans-Pecos region lost its voice and 
broadband Internet capabilities? Without such critical communications, 
would these agencies be able to maintain their effectiveness in 
patrolling and securing nearly 500 mountainous miles of the border? 
More specifically, how would this impact the safety of Texas 
communities in the border region? What impact would this have on any 
DOJ entities or communications?
    Answer. Should BTTC go out of business, DOJ would work closely with 
stakeholders, including DHS, to ensure that any negative impacts on 
public safety and national security are appropriately addressed.

                          SENATOR STEVENS CASE

    Question. Attorney General Holder, first, I want to compliment you 
for dismissing the case, and cooperating with the investigation of 
misconduct and mishandling of evidence in the Government's case against 
former Senator Ted Stevens.
    After your request that the case be dismissed in April 2009, U.S. 
District Judge Emmett G. Sullivan appointed a team to investigate and 
report on the misconduct. Henry F. Schuelke III, who was appointed by 
Judge Sullivan to investigate the case, concluded in a 500-page report 
DOJ hid evidence that would have helped the Alaska Republican prove his 
innocence. Most notably, it was called a ``systematic concealment'' of 
evidence that could have helped Senator Stevens defend himself.
    Despite findings of widespread and intentional misconduct, Schuelke 
recommended against contempt charges because prosecutors did not 
disobey a ``clear and equivocal'' order by the judge, as required under 
law--which I question.
    Four of the six prosecutors who were investigated for their role in 
the case opposed releasing the report and their names were redacted.
    Since Judge Sullivan has ordered that the investigative report in 
the disgraceful prosecution of Senator Stevens be made public, can you 
promise this subcommittee that the report by Justice's Office of 
Professional Responsibility (OPR) will also be made public?
    Answer. As DOJ's disciplinary review process has not yet been 
completed, and due to limitations on public disclosure contained in the 
Privacy Act, DOJ is unable to release the relevant OPR report at this 
time. As I have stated previously, the Department will release as much 
as we can of the OPR report and DOJ findings, at the appropriate time 
and in a manner consistent with law and due process.
    Question. Are any of the prosecutors who engaged in ``systematic 
concealment'' of evidence in the Stevens case still in prosecutorial 
roles?
    Answer. Mr. Schuelke's report examined the conduct of a number of 
current and former DOJ attorneys and found evidence of willful 
nondisclosure of Brady and Giglio materials involving two of those 
attorneys, Assistant United States Attorneys (AUSAs) Joseph Bottini and 
James Goeke. Mr. Bottini is an AUSA in District of Alaska and handles 
criminal prosecutions. Mr. Goeke is an AUSA in the Eastern District of 
Washington and likewise handles criminal prosecutions.
    Question. Are any of their legal bills also being paid by the 
taxpayers? If so, please explain how much and the legal justification.
    Answer. It is DOJ's long-standing policy to provide representation 
to Federal employees for conduct performed within the scope of their 
employment. The purpose for providing representation is to protect the 
interests of the Government by assuring adequate representation with 
respect to legal issues in which the United States has a concern and by 
freeing its employees from the fear that proper and vigorous 
performance of their duties may result in substantial personal legal 
expenses. This may be so even where the employee has erred or where, 
regardless of the lawfulness of the conduct, there is concern that 
failure to provide representation may result in the establishment of a 
legal principle that compromises the Government's ability to perform 
its functions in a proper and lawful manner in the future. Moreover, 
where there are disputed facts regarding the conduct giving rise to the 
claim--or where the facts are under investigation--the employee is 
afforded the benefit of the doubt to the extent it is reasonable to do 
so. In all cases, the decision of whether or not to provide 
representation is based upon the currently available information.
    Consistent with this long-standing practice, 28 CFR 50.15 and 
50.16, and Civil Division Directive 2120A, DOJ received representation 
requests from six individuals with respect to two matters. At the time 
representation was needed for the matters referenced below, the facts 
that it took the Special Counsel several years to gather were not 
available. In accordance with the usual processes available to Federal 
executive, legislative, and judicial branch employees, DOJ determined 
at that time that the prosecutors were acting within the scope of their 
employment and representation was in the interest of the United States. 
Private counsel was authorized because direct DOJ representation was 
not appropriate.
    DOJ utilized standard retention agreements that the Department 
commonly uses in its representation of other Federal employees. Those 
retention agreements imposed caps on the number of hours of work for 
which, absent unusual circumstances, counsel would be reimbursed. Those 
agreements also set hourly rates that are based on the attorney's 
experience and are well below--and in some cases less than 50 percent 
of--the rates that DOJ uses when determining rates to pay prevailing 
parties against it in Washington, DC, under the Equal Access to Justice 
Act. With respect to the six individuals for whom representation was 
authorized, to date DOJ has spent $282,982.51 in connection with the 
contempt order entered by U.S. District Judge Emmet G. Sullivan on 
February 8, 2009, in United States v. Stevens, No. 08-cr-0231 (D.D.C.), 
and $1,633,298.29 in connection with the subsequent investigation by 
Special Counsel Henry F. Schuelke III, who was appointed by Judge 
Sullivan on April 9, 2009, and who ultimately produced a 500-page 
report regarding the investigation.
    Question. Does it concern you that the only reason these 
prosecutors escaped criminal charges is that the judge in the Stevens 
case did not file an order telling the prosecutors to follow the law?
    Answer. Yes. DOJ expects its prosecutors to fully comply with their 
discovery obligations in every case regardless of the existence of a 
court order directing such compliance. As a result, when the nature of 
the undisclosed information was brought to my attention in 2009, I 
authorized DOJ to move to vacate Senator Stevens' conviction and to 
dismiss the indictment.
    DOJ takes its discovery obligations seriously as evidenced by the 
policies and training requirements that have been implemented since the 
dismissal of the Stevens case. While DOJ continues to review the 
Schuelke report, and all of the facts and circumstances surrounding the 
discovery violations that occurred in the Stevens prosecution, DOJ 
prosecutors are expected to comply with their discovery obligations 
regardless of the existence of a court order.
    Question. What are the names of these individuals? Please list what 
positions and where these individuals have worked since this came to 
light--to present.
    Answer. The publicly filed version of the report identifies all of 
the subjects in the report. As noted, Mr. Schuelke found evidence that 
2 of the 6 subjects willfully withheld discoverable evidence. DOJ 
understands this series of questions to pertain only to those two 
individuals. AUSA Joseph Bottini has continued to prosecute cases in 
the District of Alaska since the Stevens trial. After the Stevens 
trial, AUSA Goeke continued as an AUSA in the District of Alaska until 
May 2009, when he assumed the same position in the Eastern District of 
Washington.
    Question. Please list the cases that these individuals have 
participated in and the results. For example, one participated in the 
Alabama Bingo case which resulted in acquittals. Another involved the 
National Security Agency. Please list each case, the outcome, the 
individuals' names, and what their roles in the cases are.
    Answer. We do not think it would be appropriate or useful to list 
every case on which each attorney has worked. We can tell you that 
since the Stevens trial, AUSA Joseph Bottini has handled a varied 
criminal caseload, and there have been no findings of prosecutorial 
misconduct in any of the cases that he has prosecuted. Similarly, AUSA 
Goeke has continued to handle a routine criminal caseload, and there 
have been no findings of prosecutorial misconduct in any cases that Mr. 
Goeke has prosecuted since the Stevens trial. If you can identify a 
specific need for additional information, we will be happy to consider 
it.
    Question. Will any investigation occur if the pending OPR 
recommends further action?
    Answer. No further investigation will occur, but OPR findings are 
part and parcel of the Federal disciplinary process. Whenever OPR 
reaches findings of misconduct involving current DOJ employees, 
imposition of any disciplinary action as a result of those findings 
must comport with the requirements of Federal law. Federal law requires 
generally that employees receive at least 30 days' notice of any 
proposed disciplinary action and that they have an opportunity to 
respond both orally and in writing to the proposed action. After 
considering the response, the designated deciding official would 
determine whether the evidence supports the misconduct charge or 
charges in the proposal and, if so, whether the recommended discipline 
is appropriate. If a deciding official determines to suspend the 
employee for more than 14 days, the employee can appeal that suspension 
to the Merit Systems Protection Board. If the employee is suspended for 
14 days or less, then the employee can file a grievance of the 
suspension with the agency. If the disciplinary process results in the 
affirmation of OPR's findings of misconduct, then OPR would ordinarily 
refer the matter to the appropriate State bar disciplinary authorities 
for any action they deem appropriate.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander

                      METHAMPHETAMINE IN TENNESSEE

    Question. Tennessee had the second-highest number of 
methamphetamine lab seizures in the country in 2011 (1,687 labs), 
second only to Missouri. In 2010, Tennessee had the highest number of 
methamphetamine lab seizures in the Nation with 2,082 seizures. The 
average cost to clean up a methamphetamine lab is $2,300, and these 
costs are putting tremendous strain on State and local law enforcement.
    Last November, the Department of Justice (DOJ) helped Tennessee and 
other States by providing $12.5 million to address methamphetamine lab 
cleanup costs. However, this funding will run out in October 2012 
according to the statewide Tennessee Methamphetamine Task Force. 
Without cleanup funds, there is a real incentive to avoid seizing these 
labs.
    Given that this is one of the most urgent drug problems, especially 
in rural communities with limited resources, DOJ should find a way to 
help address this problem. In this year's budget will DOJ continue to 
support methamphetamine lab cleanup efforts in Tennessee?
    Answer. DOJ's budget includes $12.5 million in funding to continue 
to support methamphetamine lab cleanups in Tennessee and other States. 
Funding will be prioritized for States, like Tennessee, that have 
established container programs because these container programs allows 
DOJ and its State and local partners to complete cleanups in a more 
cost-effective manner.
    In fiscal year 2013, the Office of Community Oriented Policing 
Services (COPS) requests $12.5 million to provide assistance to help 
stem clandestine methamphetamine manufacturing and its consequences, 
including the cleanup of clandestine laboratories. As in previous 
years, DOJ assumes that these funds will provide for meth lab cleanup 
activities.
    Question. What is DOJ doing to help State and local law enforcement 
deal with mobile methamphetamine labs, which account for a growing 
number of lab seizures?
    Answer. Over the past several years, Drug Enforcement 
Administration (DEA) has developed a container-based cleanup program. 
Under this program, DEA trains and certifies law enforcement officers 
to remove gross contaminates from labs (including mobile labs) and 
dumpsites; secure and package the waste pursuant to State and Federal 
laws and regulations; and transport the waste to a centrally located, 
secure container for storage. In States participating in the container 
program, hazardous waste contractors travel periodically to a central 
location to remove meth lab contaminates from across the State. In 
noncontainer States, hazardous waste contractors must travel to each 
individual lab or dumpsite to secure, package, and remove meth lab 
contaminates.
    DEA will be supporting cleanups in container and noncontainer 
States in fiscal year 2012 through its various hazardous waste 
contracts. Currently, eight States have operational container programs 
(Alabama, Arkansas, Illinois, Indiana, Kentucky, Nebraska, Oklahoma, 
and Tennessee), and DEA is working with five other States (Michigan, 
Mississippi, North Carolina, Ohio, and Virginia) to implement the 
container program during fiscal year 2012. DEA expects these additional 
five States to have operational container programs in fiscal year 2013. 
Thus far, the program has resulted in significant cost savings per lab 
in States that have the containers deployed; a contractor cleanup 
averages $2,230 while a container cleanup averages $320.
    As container programs are more cost efficient and more States have 
operational container programs in fiscal year 2013, $12.5 million in 
funding, requested in the fiscal year 2013 President's budget in the 
COPS appropriation, will continue to be sufficient in fiscal year 2013. 
DEA has also contacted an additional eight States for potential 
container program expansion. For those States without container 
programs, DEA assesses whether or not the program is a cost-effective 
option. If the state has only limited cleanups, the upfront equipment 
and training costs can exceed potential container program savings. In 
these cases, DEA will provide cleanup services through its hazardous 
waste contractors.

             JUSTICE DEPARTMENT ENFORCEMENT AND WIND FARMS

    Question. In 2009, Exxon admitted to killing approximately 85 
protected birds, including waterfowl, hawks, and owls. The company paid 
a $600,000 fine and was required to implement an environmental 
compliance plan.
    The U.S. Fish and Wildlife Service (FWS) has referred similar cases 
to the Department involving wind farms. I am concerned that wind farms 
are not being treated the same as oil and gas companies with respect to 
enforcement of the Migratory Bird Treaty Act (MBTA).
    What concerns me the most is that the Justice Department's lack of 
enforcement betrays a willingness to prosecute certain disfavored 
groups while giving others a pass. This kind of selective prosecution 
contradicts the Department's promise of ``equal justice under law''.
    Since it is a criminal violation to kill birds protected by the 
MBTA and we know that wind mills kills hundreds of thousands of birds 
each year, including protected bald eagles, why hasn't DOJ taken 
action? Will DOJ step up enforcement for wind producers in the same way 
it has oil and gas companies?
    Answer. FWS's Office of Law Enforcement (OLE) has primary 
responsibility for investigating potential criminal violations of MBTA, 
and refers appropriate matters to DOJ for prosecution. FWS's OLE has 
stated publicly that, in the context of industrial takings of migratory 
birds, it focuses its resources on investigating and prosecuting those 
who take migratory birds without identifying and implementing 
reasonable and effective measures to avoid the take.
    In the context of the electric and oil and gas industries, 
reasonable and effective measures to avoid the taking of migratory 
birds have long been identified, and referrals have been made and legal 
action has been taken when companies knowingly fail to use such 
measures for avoiding bird mortality. Guidance on preventing bird 
deaths in the wind energy context has been more recent. However, some 
reasonable and effective measures for avoiding taking in this industry 
have been identified. The Department of the Interior released interim 
guidelines in 2003, and in March 2012, released final Land-Based Wind 
Energy Guidelines designed to help wind energy project developers avoid 
and minimize impacts of land-based wind projects on wildlife and their 
habitat.
    DOJ reviews each referral from OLE carefully, and determines 
whether to initiate a prosecution based on the principles set forth in 
DOJ's Principles of Federal Prosecution. DOJ is committed to the fair 
and evenhanded administration of the MBTA and other criminal wildlife 
protection laws.

           NATIONAL FORENSIC ACADEMY--UNIVERSITY OF TENNESSEE

    Question. The National Forensic Academy (NFA), which is located at 
the University of Tennessee in Knoxville, has been providing hands on 
forensic training since 2001 at one of the Nation's only training 
centers where officers and investigators can practice forensic 
techniques in the classroom and in the field.
    NFA works closely with the Bureau of Justice Assistance (BJA) and 
the National Institute of Justice (NIJ) to provide training courses to 
Federal, State, and local law enforcement and crime scene 
investigators, and this cooperation needs to continue.
    In 2009, the National Academy of Sciences released a comprehensive 
report on the needs of the forensic sciences community and concluded 
that we are not doing enough to support forensics. The report 
recommended new training and certification initiatives, among others.
    At a time when we are trying to control Federal spending, doesn't 
it make sense to support programs with a proven track record, like 
those at NFA, instead of creating new Federal training programs to 
support our forensic training needs?
    Answer. NIJ is not creating any new Federal training programs to 
support the forensic science community. Providing high-quality 
educational opportunities for forensic science practitioners continues 
to be a critical goal to maintain high-quality forensic services. In 
order to increase the number of forensic science training opportunities 
available to the forensic science, law enforcement, medical, and legal 
communities, NIJ invested approximately $12 million in fiscal year 2010 
and $5 million in fiscal year 2011.
    In 2011, NIJ's Forensic Science Training and Delivery Program 
released a solicitation that sought proposals in two major areas: 
``Delivery of Training'' and ``Targeted Research on Forensic Science 
Training Programs.''
    One goal of the solicitation was to increase the number of no-cost 
educational opportunities for public crime laboratory personnel and 
practitioners in forensic science disciplines and provide forensic 
science training to other relevant criminal justice partners and 
professionals involved in treating victims of sexual assault. NIJ 
sought to fund grant awards for the delivery of courses leveraging 
existing forensic science training curricula or courses developed under 
a previous NIJ award. Forensic disciplines supported by the program 
include, DNA, pattern evidence (e.g., fingerprints and firearms), trace 
evidence, digital evidence, and medicolegal death investigation.
    The solicitation conveyed the importance of cost-effectively 
leveraging existing curricula. For example, the 2011 training 
solicitation delineated that proposals should not include costs 
associated with further curricula development or modification.
    The University of Tennessee's NFA received one award for $450,000 
for ``Specialized Crime Scene Investigator Training in Forensic Digital 
Photography and Crime Scene Mapping'' in fiscal year 2011 (2011-DN-BX-
K567. NIJ has competitively funded numerous trainings geared toward 
crime scene investigators, forensic scientists, prosecutors, defense 
attorneys, law enforcement officers, and judges. Additionally, the 
University of Tennessee's NFA, with grant funding from BJA, has 
produced successful and popular training courses for many years. The 
University of Tennessee's Law Enforcement Innovation Center and its 
instructors do an excellent job training crime scene investigators 
during an intensive 10-week in house course.
    NIJ will not be offering a targeted solicitation for training in 
fiscal year 2012 in order to evaluate the various training programs, 
and it will conduct a gap analysis of critical needs. We hope to 
initiate this evaluation during fiscal year 2012 to determine how best 
to proceed with training in the future. However, there are still 
various training opportunities available through the ongoing training 
grants from past years. Moreover, there are various Federal grants that 
may be used for the purpose of training individuals at State and local 
agencies, such as the DNA Backlog Reduction and Coverdell Forensic 
Science Improvement programs. For example, Paul Coverdell funds may be 
used to bring in a trainer to provide specialized training in-house or 
funds may be used to attend trainings/meetings related to improving the 
timeliness and quality of forensic and/or medical examiner services.
    In the fiscal year 2011 proposal from the State of Tennessee, one 
of the goals of the Office of the Acting State Chief Medical Examiner 
(OCME) is to educate county medical examiners, medical investigators, 
and/or regional forensic center nonphysician employees who serve as 
death investigators in basic death scene investigation techniques. 
Priority would go to individuals without any formal training in death 
investigation. While each grand division of Tennessee is included, this 
grant focuses on the smallest offices in the eastern division, because 
of a recognized need for very basic training in those regions. The OCME 
intends to send seven participants from across the State to either the 
winter or spring session of the Medicolegal Death Investigation Course 
in St. Louis, Missouri.

                           BUREAU OF PRISONS

    Question. The Federal Bureau of Prisons (BOP) is estimated to be 
operating at 43 percent more than rated capacity by the end of fiscal 
year 2013, and overcrowding at high- and medium-security facilities is 
projected to be 52 percent and 63 percent, respectively. DOJ's fiscal 
year 2013 budget submission states:

    ``In light of overcrowding and stresses on prison staffing, BOP's 
ability to safely manage the increasing Federal inmate population is 
one of the Department's top 10 management and performance challenges 
identified by the Office of the Inspector General in the DOJ 
[Performance and Accountability Report].''

    Additionally, the Inspector General Performance and Accountability 
Report states:

    ``In sum, the Department continues to face difficult challenges in 
providing adequate prison and detention space for the increasing 
prisoner and detainee populations and in maintaining the safety and 
security of prisons.''

    I recognize the fiscal year 2013 budget submission includes funding 
for an additional 3,496 beds (2,496 beds in Federal facilities and 
1,000 new beds in contract facilities). However, BOP is projecting its 
population will grow by 6,500 inmates during that time, which means 
crowding will only get worse.
    What additional resources are needed to provide the beds required 
to meet capacity?
    Answer. Continuing increases in the inmate population pose ongoing 
challenges for BOP. The administration has taken several actions to 
control Federal prison crowding including expanding capacity and 
supporting legislation that will control prison population growth.
    The fiscal year 2013 budget requests $81.4 million in program 
enhancements to acquire 1,000 private contract beds and to begin 
activating two institutions, the United States Penitentiary at Yazoo 
City, Mississippi and the Federal Correctional Institution at Hazelton, 
West Virginia. These new contract beds and the two prisons will 
increase BOP's capacity by 3,496 beds once fully activated. (Exhibit O, 
Status of Construction, in the fiscal year 2013 President's budget 
request for buildings and facilities gives additional information on 
pending construction projects.)
    In addition, the administration supports two prisoner re-entry 
provisions included in the Second Chance Reauthorization Act of 2011 
(S. 1231), which was voted favorably out of the Judiciary Committee but 
has not yet been scheduled for Senate floor action. The bill contains 
provisions to increase inmate good conduct time by 7 days per year and 
to provide a 60-day per year incentive for participation in recidivism-
reducing programs. If enacted, these legislative proposals will help 
control the long-term prison population growth and result in an 
estimated cost avoidance of $41 million; the President's budget assumes 
enactment of these proposals and the corresponding savings.
    Question. Is contract confinement a cost-effective solution for 
housing low to minimum security offenders? Given current costs at 
contractor and BOP facilities, is contract confinement a cost-effective 
way to deal with overcrowding issues?
    Answer. Contract confinement can be cost-effective when used for 
housing low-security male criminal aliens. These inmates are 
particularly well-suited for contract confinement because their 
typically short sentence lengths and alien status generally preclude 
them from participating in sentence and recidivism reducing programs. 
Adding low-security private contract beds increases total system 
capacity and helps control overcrowding in low-security BOP facilities. 
At the end of fiscal year 2011, low-security overcrowding was 39 
percent, which equates to about 80 percent of low-security inmates 
being triple bunked, and in some cases regularly being housed in 
television rooms, open bays, program space, etc.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski

     INDEMNIFICATION OF LEGAL FEES INCURRED BY STEVENS PROSECUTORS

    Question. How much money was in fact spent defending the 
prosecutors, what the money was spent defending the prosecutors from, 
and why did the Justice Department spent the money?
    Answer. It is the Department of Justice's (DOJ) long-standing 
policy to provide representation to Federal employees for conduct 
performed within the scope of their employment. The purpose for 
providing representation is to protect the interests of the Government 
by assuring adequate representation with respect to legal issues in 
which the United States has a concern and by freeing its employees from 
the fear that proper and vigorous performance of their duties may 
result in substantial personal legal expenses. This may be so even 
where the employee has erred or where, regardless of the lawfulness of 
the conduct, there is concern that failure to provide representation 
may result in the establishment of a legal principle that compromises 
the Government's ability to perform its functions in a proper and 
lawful manner in the future. Moreover, where there are disputed facts 
regarding the conduct giving rise to the claim--or where the facts are 
under investigation--the employee is afforded the benefit of the doubt 
to the extent it is reasonable to do so. In all cases, the decision of 
whether or not to provide representation is based upon the currently 
available information. Those facts revealed that in the referenced 
matters the prosecutors were acting within the scope of their 
employment and representation was in the interest of the United States. 
Private counsel was authorized because direct Department representation 
was not appropriate.
    DOJ authorized representation of six individuals with respect to 
two matters and used standard retention agreements that the Department 
commonly uses in its representation of other Federal employees. Those 
retention agreements imposed caps on the number of hours of work for 
which, absent unusual circumstances, counsel would be reimbursed. Those 
agreements also set hourly rates that are based on the attorney's 
experience and are well below--and in some cases less than 50 percent 
of--the rates that DOJ uses when determining rates to pay prevailing 
parties against it in Washington, DC, under the Equal Access to Justice 
Act. With respect to the six individuals for whom representation was 
authorized, to date DOJ has spent $282,982.51 in connection with the 
contempt order entered by U.S. District Judge Emmet G. Sullivan on 
February 8, 2009, in United States v. Stevens, No. 08-cr-0231 (D.D.C.), 
and $1,633,298.29 in connection with the subsequent investigation by 
Special Counsel Henry F. Schuelke III, who was appointed by Judge 
Sullivan on April 9, 2009.
    Question. Did DOJ enter into any agreement with the prosecutors or 
their counsel prior to expending these funds? If so, please provide 
copies of all such agreements.
    Answer. DOJ did not enter into any agreement with the prosecutors. 
In accordance with our usual practice, we sent our standard retention 
letter to the private counsel retained to represent the prosecutors and 
received back DOJ's standard retention agreement signed by private 
counsel. As noted above, the retention agreements imposed caps on the 
number of hours of work for which, absent unusual circumstances, 
counsel would be reimbursed. The agreements also set hourly rates that 
are based on the attorney's experience and are well below--and in some 
cases less than 50 percent of--the rates that the Department uses when 
determining rates to pay prevailing parties against it in Washington, 
DC, under the Equal Access to Justice Act. Copies of the retention 
letters and executed agreements are attached. (see Attachment 1)
                             Attachment #1
                                    Civil Division,
                                U.S. Department of Justice,
                              Washington, DC 20530, April 21, 2009.

Kenneth L. Wainstein,
O'Melveny & Myers, 1625 Eye St., NW, Washington, DC 20006.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Wainstein: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Joseph Bottini 
in connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Mr. Bottini 
by attorneys employed by the Department of Justice is inappropriate. 
Mr. Bottini has requested that the Department agree to reimburse you 
for his representation in this matter. Pursuant to 28 C.F.R. 
Sec. 50.16(c)(1), your reimbursement will be subject to the applicable 
statutes, regulations, and the terms and conditions set forth in the 
enclosed addendum, which is incorporated into and made a part of this 
agreement.
    You and Mr. Bottini should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Bottini in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    The Department of Justice is continuing to experience delays in its 
mail delivery, as mail addressed to the Department continues to be 
forwarded to out-of-State facilities for irradiation. Therefore, please 
e-mail the signature page of the retention agreement to the attention 
of Ms. Lago at [email protected] In addition, please e-mail your 
invoices to [email protected], or you may mail them 
to Ms. Lago's attention at P.O. Box 7146, Washington, DC 20044. 
Reimbursement of allowable fees and expenses will become available on 
the Civil Division's receipt of the signed addendum.
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Joseph Bottini, in connection with a Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Kenneth L. Wainstein

     Date: April 23, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                               Washington, DC 20530, June 16, 2009.
Matthew I. Menchel,
Kobre & Kim, 800 Third Avenue, New York, NY 10022.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Menchel: The Department of Justice has concluded that it 
reasonably appears at this time that representation of James Goeke in 
connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Mr. Goeke by 
attorneys employed by the Department of Justice is inappropriate. Mr. 
Goeke has requested that the Department agree to reimburse you for his 
representation in this matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), 
your reimbursement will be subject to the applicable statutes, 
regulations, and the terms and conditions set forth in the enclosed 
addendum, which is incorporated into and made a part of this agreement.
    You and Mr. Goeke should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Goeke in connection with this matter. 
Although the Department of Justice has assumed responsibility for 
remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
James Goeke, in connection with a Special Counsel. investigation in 
United States v. Stevens, 08-cr-0231 (D.D.C.) will be in accordance 
with the applicable statutes, regulations, and the foregoing terms and 
conditions. This written instrument, together with the applicable 
statutes and regulations, represents the entire agreement between the 
Department of Justice and the undersigned, any past or future oral 
agreements notwithstanding.

     Signature: Matthew L. Menchel

     Date: September 18, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                                Washington, DC 20530, May 19, 2009.
Robert D. Luskin, Esq.,
Patton Boggs, 2550 M St., NW, Washington, DC 20037.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Luskin: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Nicholas Marsh 
in connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Mr. Marsh by 
attorneys employed by the Department of Justice is inappropriate. Mr. 
Marsh has requested that the Department agree to reimburse you for his 
representation in this matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), 
your reimbursement will be subject to the applicable statutes, 
regulations, and the terms and conditions set forth in the enclosed 
addendum, which is incorporated into and made a part of this agreement.
    You and Mr. Marsh should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Marsh in connection with this matter. 
Although the Department of Justice has assumed responsibility for 
remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Nicholas Marsh in connection with a Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Robert D. Luskin

     Date: May 26, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                              Washington, DC 20530, April 21, 2009.
Chuck Rosenberg, Esq.,
Hogan & Hanson LLP, 555 Thirteenth Street, NW, Washington, DC 20004.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Rosenberg: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Brenda Morris in 
connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Ms. Morris 
by attorneys employed by the Department of Justice is inappropriate. 
Ms. Morris has requested that the Department agree to reimburse you for 
her representation in this matter. Pursuant to 28 C.F.R. 
Sec. 50.16(c)(1), your reimbursement will be subject to the applicable 
statutes, regulations, and the terms and conditions set forth in the 
enclosed addendum, which is incorporated into and made a part of this 
agreement.
    You and Ms. Morris should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Ms. Morris in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing her to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Brenda Morris in connection with Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Chuck Rosenberg

     Date: April 30, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                              Washington, DC 20530, April 22, 2009.
Brian M. Heberlig,
Steptoe & Johnson, 1330 Connecticut Ave., NW, Washington, DC 20036.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Heberlig: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Edward Sullivan 
in connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Mr. Sullivan 
by attorneys employed by the Department of Justice is inappropriate. 
Mr. Sullivan has requested that the Department agree to reimburse you 
for his representation in this matter. Pursuant to 28 C.F.R. 
Sec. 50.16(c)(1), your reimbursement will be subject to the applicable 
statutes, regulations, and the terms and conditions set forth in the 
enclosed addendum, which is incorporated into and made a part of this 
agreement.
    You and Mr. Sullivan should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Sullivan in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Edward Sullivan in connection with Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Brian M. Heberlig

     Date: April 24, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                              Washington, DC 20530, April 21, 2009.
William W. Taylor III,
Zuckerman Spaeder, 1800 M Street, NW, Suite 1000, Washington, DC 20036-
        5807.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Taylor: The Department of Justice has concluded that it 
reasonably appears at this time that representation of William Welch in 
connection with a Special Counsel criminal contempt investigation in 
the above-referenced action is in the interest of the United States. It 
also appears at this time, however, that representation of Mr. Welch by 
attorneys employed by the Department of Justice is inappropriate. Mr. 
Welch has requested that the Department agree to reimburse you for his 
representation in this matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), 
your reimbursement will be subject to the applicable statutes, 
regulations, and the terms and conditions set forth in the enclosed 
addendum, which is incorporated into and made a part of this agreement,
    You and Mr. Welch should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Welch in connection with this matter. 
Although the Department of Justice has assumed responsibility for 
remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
William Welch in connection with Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: William W. Taylor III

     Date: May 8, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                           Washington, DC 20530, February 27, 2009.
Chuck Rosenberg, Esq.,
Hogan & Hartson LLP, 555 Thirteenth Street, NW, Washington, DC 20004.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Rosenberg: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Brenda Morris in 
connection with a contempt proceeding in the above-referenced action is 
in the interest of the United States, It also appears at this time, 
however, that representation of Ms. Morris by attorneys employed by the 
Department of Justice is inappropriate. Ms. Morris has requested that 
the Department agree to reimburse you for her representation in this 
matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), your reimbursement will 
be subject to the applicable statutes, regulations, and the terms and 
conditions set forth in the enclosed addendum, which is incorporated 
into and made a part of this agreement.
    You and Ms. Morris should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Ms. Morris in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing her to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Brenda Morris in connection with Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Chuck Rosenberg

     Date: March 3, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                           Washington, DC 20530, February 18, 2009.
Howard M. Shapiro, Esq.,
Wilmer Hale, 1875 Pennsylvania Ave., NW, Washington, DC 20006.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Shapiro: The Department of Justice has concluded that it 
reasonably appears at this time that representation of Patty Merkamp 
Stemler in connection with a contempt proceeding in the above-
referenced action is in the interest of the United States. It also 
appears at this time, however, that representation of Ms. Stemler by 
attorneys employed by the Department of Justice is inappropriate. Ms. 
Stemler has requested that the Department agree to reimburse you for 
her representation in this matter. Pursuant to 28 C.F.R. 
Sec. 50.16(c)(1), your reimbursement will be subject to the applicable 
statutes, regulations, and the terms and conditions set forth in the 
enclosed addendum, which is incorporated into and made a part of this 
agreement.
    You and Ms. Stemler should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Ms. Stemler in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing her to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
Patty Merkamp Stemler in connection with Special Counsel criminal 
contempt investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) 
will be in accordance with the applicable statutes, regulations, and 
the foregoing terms and conditions. This written instrument, together 
with the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Howard M. Shapiro

     Date: February 19, 2009

     Tax Identification Number: __________
                                 ______
                                 
                                    Civil Division,
                                U.S. Department of Justice,
                           Washington, DC 20530, February 18, 2009.
Mark H. Lynch, Esq.,
Covington & Burling, 1201 Pennsylvania Ave., NW, Washington, DC 20004.

RE: Special Counsel Criminal Contempt Investigation Arising from United 
        States v. Stevens, 08-cr-0231 (D.D.C.)

    Dear Mr. Lynch: The Department of Justice has concluded that it 
reasonably appears at this time that representation of William Welch in 
connection with a contempt proceeding in the above-referenced action is 
in the interest of the United States. It also appears at this time, 
however, that representation of Mr. Welch by attorneys employed by the 
Department of Justice is inappropriate. Mr. Welch has requested that 
the Department agree to reimburse you for his representation in this 
matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), your reimbursement will 
be subject to the applicable statutes, regulations, and the terms and 
conditions set forth in the enclosed addendum, which is incorporated 
into and made a part of this agreement.
    You and Mr. Welch should be aware that, by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary liability 
that might be imposed against Mr. Welch in connection with this matter. 
Although the Department of Justice has assumed responsibility for 
remunerating you in the course of representing him to the extent 
specified in the addendum, your responsibility, of course, is solely to 
your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact Attorney 
Advisor Virginia G. Lago at (202) 616-4328.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum, along with your firm's tax identification 
number, to the following address:
      Virginia G. Lago, Esq.
      Torts Branch, Civil Division
      U.S. Department of Justice
      P.O. Box 7146
      Washington, DC, 20044
    In addition, enclosed you will find a copy of the ACH VENDOR Direct 
Deposit Form. Please fill out the blank areas on the form and fax the 
completed form to:
      Accounts Maintenance Unit
      Attn: Gina McLaughlin
      FAX: (202) 616-2207
    The Debt Collection Improvement Act of 1996 requires that most 
payments by the Federal Government, including vendor payments, be made 
by electronic funds transfer. If you have any questions regarding the 
delivery of remittance information, please contact the financial 
institution where your account is held. If you have any questions 
regarding completion of this form, please contact Ms. McLaughlin at 
(202) 616-8103.
    Thank you for your assistance in this matter.
            Very truly yours,
                                         Timothy P. Garren,
                                            Director, Torts Branch.

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
William Welch in connection with Special Counsel criminal contempt 
investigation in United States v. Stevens, 08-cr-0231 (D.D.C.) will be 
in accordance with the applicable statutes, regulations, and the 
foregoing terms and conditions. This written instrument, together with 
the applicable statutes and regulations, represents the entire 
agreement between the Department of Justice and the undersigned, any 
past or future oral agreements notwithstanding.

     Signature: Mark H. Lynch

     Date: February 24, 2009

     Tax Identification Number: __________

    Question. Did the Justice Department have any role in the selection 
of private counsel retained to represent its prosecutors? If so, how 
was this role exercised?
    Answer. The Department of Justice, upon determining that private 
counsel should be provided, informs the employees to contact private 
counsel of their choosing. If an employee is having difficulty in doing 
so, the Department will attempt to assist the employee in finding 
counsel. Once the employee selects counsel, the terms of retention as 
outlined in our standard retention letter and agreement are explained 
and, if private counsel agrees to the terms regarding reimbursement, he 
or she signs and returns the retention agreement to the Civil Division.
    Question. What cost controls, if any, were imposed on the private 
counsel retained to represent the Department prosecutors?
    Answer. Cost controls are specified in the retention agreement and 
Civil Division Directive 2120A (see Attachment 2). The retention 
agreement used by the Department requires the submission of detailed 
monthly bills, provides for GAO audit of the private attorney time 
sheets, places a maximum limit on the attorney's billable hours per 
month (however the agreement also provides that we will consider paying 
more if the press of litigation clearly necessitates the expenditure of 
more time), limits the maximum hourly fee that may be charged, and 
limits the services for which the private attorney will be compensated 
to those directly associated with the litigation. As noted above, the 
hourly rates are set based on the attorney's experience and are well 
below--and in some cases less than 50 percent of--the rates that the 
Department uses when determining rates to pay prevailing parties 
against it in Washington, DC, under the Equal Access to Justice Act.

                             Attachment #2

 [U.S. Department of Justice, Civil Division, Administrative Directive 
                               CIV 2120A]

                Retention and Payment of Private Counsel
                                                        May 1, 2002
Subject: Retention and Payment of Private Counsel

1. PURPOSE.
    This directive sets forth the procedures for entering into 
agreements to retain private counsel to represent Federal employees at 
Federal expense and the procedures for paying private counsel fees and 
expenses.

2. SCOPE.
    The provisions of this directive apply to all branches, staffs, and 
offices within the Civil Division.

3. DEFINITIONS.
    a. A Private Counsel is a private attorney with whom the Department 
of Justice has entered into an agreement regarding compensation for the 
representation of a person, persons, or an entity being sued, 
prosecuted, or subpoenaed for acts performed in the service of the 
United States where the Department has determined that such 
representation is in the interest of the United States. The Department 
may enter into such compensation agreements with private counsel in any 
instance described in 28 C.F.R. Sec. 50.15. Under the authority of 28 
U.S.C. Sec. 517, the Department may also enter into such agreements 
with private counsel for the representation of a person, persons, or 
entity in circumstances similar to those described in 28 C.F.R. 
Sec. 50.15.
    b. The Assigned Attorney, or the ``Department attorney assigned,'' 
refers to the Civil Division attorney having assigned responsibility 
for the case and not to the Assistant United States Attorney who may be 
handling the case in the local district.
    c. An ``Employee,'' for the purposes of this directive, is a 
present or former employee of the United States or any other person or 
entity to whom or to which the Civil Division extends representation 
under the authority of 28 U.S.C. Sec. 517.

4. AUTHORITY.
    28 C.F.R. Sec. 50.16(b) gives the Assistant Attorney General of the 
Civil Division the responsibility for establishing procedures for the 
retention of private counsel, including the setting of fee schedules. 
28 C.F.R. Sec. 50.16(a) makes the retention of private counsel subject 
to the availability of funds.

5. POLICY.
    a. Department attorneys responsible for cases involving the 
retention of private counsel will determine from the Civil Division's 
Office of Planning, Budget, and Evaluation if funding is available for 
estimated private counsel costs PRIOR to submitting the formal request 
for authorization to enter into a private counsel retention agreement.
    b. Once the Assistant Attorney General authorizes a private counsel 
representation agreement in accordance with 28 C.F.R. Sec. Sec. 50.15 
and 50.16, the Department of Justice will, SUBJECT TO THE AVAILABILITY 
OF APPROPRIATIONS, pay a private attorney, or other members of the 
attorney's firm, for those legal services reasonably necessary in the 
defense of a current or former Federal employee in civil, 
congressional, or criminal proceedings. The Department will not pay for 
services that it determines are not directly related to the defense of 
issues such matters present. Additionally, the Department will not pay 
for services, even if they are directly related to the defense of those 
issues, if the Department determines that the services are not in the 
best interests of the United States. The Department will not pay for 
services that advance only the interest of the employee.

6. RESPONSIBILITIES.
    a. The Assistant Attorney General, Civil Division, authorizes the 
representation of private counsel and determines what steps the 
Division will take when representation is warranted but funds are not 
available for it. The Assistant Attorney General may delegate these 
responsibilities to another appropriate Division official (a designee).
    b. The Deputy Assistant Attorney General for the Torts Branch 
reviews and authorizes requests for additional private counsel hours 
and unusual private counsel expenses in cases that are the 
responsibility of other litigating divisions within the Department. He 
or she also decides whether the Department will reimburse an employee 
for previously incurred private counsel expenses.
    c. Directors of the Civil Division's branches, offices, and staffs 
(hereinafter ``Directors'') send decision memoranda to the Assistant 
Attorney General (or designee) requesting authority to enter into 
retention agreements with private counsel and forward Memoranda for the 
File authorizing such agreements. They may sign letters presenting 
retention agreements to private counsel when the Assistant Attorney 
General has authorized retention of private counsel. They also review 
and decide routine private counsel billing disputes and requests for 
additional private counsel hours and costs after the assigned case 
reviewer has informed the private counsel of the Department's 
disallowance of a fee or expense. Directors refer such disputes to the 
appropriate Deputy Assistant Attorney General to review and decide the 
issues when the nature or expense of the case suggests the need to do 
so.
    d. Reviewers for cases involving retained private counsel examine 
bills received from those counsel and certify them for payment, after 
review by the assigned attorney. Where the reviewer determines that the 
Department cannot pay for certain items as submitted, the reviewer 
informs the private counsel in writing of the Department's 
determination and of the private counsel's right to seek a 
redetermination from the appropriate Director.
    e. Attorneys assigned to cases involving requests for private 
counsel estimate the costs of private counsel, inquire about the 
availability of funds for private counsel costs, prepare requests to 
enter into private counsel retention agreements, secure the actual 
agreement with private counsel, request the obligation of funds, 
suggest the deobligation of funds, submit all related documentation for 
processing, and review and certify private counsel bills for payment.
    f. The Office of Planning, Budget, and Evaluation (OPBE), Civil 
Division, determines the availability of funds for private counsel, 
obligates and deobligates funds for the payment of private counsel, 
reviews bills for payment from private counsel, and arranges for the 
payment of private counsel from the U.S. Treasury.

7. PROCEDURES.
    a. Obtaining Authorization For Private Counsel Retention 
Agreements.
      (1) Determining the Availability of Funds. Unless the retention 
        of private counsel is clearly unwarranted under 28 C.F.R. 
        Sec. 50.16, attorneys responsible for cases in which the 
        possibility of representation arises must DETERMINE THE 
        AVAILABILITY OF FUNDS for any potential private counsel 
        retention agreement BEFORE SEEKING APPROVAL to enter into any 
        such agreement.
        (a) The attorney must estimate the cost of a private counsel 
            for the fiscal year based on the kind of services needed, 
            the schedule of fees, and the approximate number of hours 
            to be worked.
        (b) The attorney should send a memorandum to the Director of 
            OPBE inquiring about the availability of funds for the 
            estimated private counsel costs.
        (c) OPBE will determine whether sufficient funds are available 
            to enter into a retention agreement and will notify the 
            attorney accordingly in writing. If funds are available, 
            OPBE will commit to the case the amount estimated for the 
            current fiscal year and will simultaneously reduce funding 
            availability by the amount of the estimate. OPBE will 
            obligate funds following the execution of a retention 
            agreement (see section 7.c.). OPBE will establish monthly 
            reports tracking availability, commitments, obligations, 
            and payments by Branch.
      (2) Requesting Authorization for Private Counsel Retention 
        Agreements.
        (a) After the attorney determines the availability of funds 
            from OPBE, the attorney's Director will send a memorandum 
            to the Assistant Attorney General (or designee) to obtain a 
            decision on the retention of private counsel for the case. 
            The memorandum will recommend whether to retain private 
            counsel; will recommend, if appropriate, the private 
            counsel to be retained; and will forward the supporting 
            documentation necessary for the Assistant Attorney General 
            (or designee) to make a decision. THE MEMORANDUM MUST 
            TRANSMIT:
                  1. a written verification from OPBE that the Civil 
                Division either has or does not have sufficient funds 
                to pay for the estimated private counsel costs. In 
                emergency situations, the memorandum may report an oral 
                verification from OPBE, with the written verification 
                for the record submitted later.
                  2. a Memorandum for the File, for the signature of 
                the Assistant Attorney General (or designee), that will 
                authorize the retention of private counsel and will 
                approve the attorney to be retained (see Exhibit 1 for 
                sample Memorandum for the File).
        (b) The Assistant Attorney General (or designee) will consider 
            the availability of funds in determining whether to 
            authorize private counsel pursuant to 28 C.F.R. Sec. 50.16. 
            When private counsel representation is warranted and 
            sufficient funds are not available, the Assistant Attorney 
            General (or designee) may direct the Division to seek 
            additional funding from the Justice Management Division. 
            After signing the Memorandum for the File authorizing the 
            proposed retention of private counsel, the Assistant 
            Attorney General (or designee) will forward it to the 
            originating Director, who will return it to the originating 
            attorney.
    b. Establishing Private Counsel Retention Agreements. Where the 
Assistant Attorney General (or designee) approves the retention of 
private counsel, the private counsel must sign a formal retention 
agreement that sets forth the terms and conditions of the 
representation. This written agreement will describe the legal fees and 
expenses that the government agrees to pay and the format and frequency 
of the bills that the private counsel will submit for payment.
    Once the attorney receives the signed Memorandum for the File 
authorizing the retention of private counsel, the attorney will prepare 
the formal retention agreement, with a transmitting letter for the 
signature of the attorney's Director. After the Director signs the 
forwarding letter, the attorney will send these documents to the 
private counsel for signature. Exhibit 2 is a sample forwarding letter 
with the formal retention agreement.

    THE PRIVATE COUNSEL MUST SIGN AND RETURN THE AGREEMENT TO THE 
DEPARTMENT ATTORNEY ASSIGNED TO THE CASE BEFORE THE GOVERNMENT CAN PAY 
FOR ANY SERVICES.
    c. Establishing an Obligation for Retained Private Counsel. Once 
the assigned attorney receives the signed agreement from the private 
counsel, the attorney will prepare and send a memorandum to OPBE 
requesting the establishment of a financial obligation for the 
estimated costs of the private counsel (see the sample memorandum in 
Exhibit 3). In this memorandum, the attorney will estimate the total 
cost of the legal fees and expenses under the agreement. If the 
attorney anticipates that the case will require the private counsel's 
services longer than the current fiscal year, the memorandum should 
provide an estimate for each fiscal year. The attorney must attach to 
this memorandum:
      (1) a copy of the Memorandum for the File authorizing the 
        retention of private counsel;
      (2) the signed retention agreement and forwarding letter; and
      (3) OPBE's original written certification of the availability of 
        funds for the agreement. After receiving the memorandum 
        requesting an obligation with these supporting documents, OPBE 
        will obligate funds for the payment of private counsel costs.
    d. Deobligating Funds. The assigned attorney will closely monitor 
the progress of the case and will promptly notify OPBE when the case 
concludes or when the need for private counsel ends. Thereupon, OPBE 
and the attorney will assess the total and expected payments, and, if 
surplus funds remain obligated for the case, OPBE will deobligate those 
funds so that they will be available for other requests for private 
counsel representation.
    e. Payment of Private Counsel Bills.
      (1) The retained private counsel must seek Department approval 
        for any additional hours of service or any unusual expenditures 
        not specifically allowed in the retention agreement BEFORE 
        undertaking such services or incurring such expenses. The 
        private counsel will make written request for authorization to 
        the Department attorney assigned to the case. The assigned 
        attorney, in consultation with the assigned case reviewer, will 
        convey the Department's decision by letter to the retained 
        private counsel.
      In cases that are the responsibility of other litigating 
        divisions of the Department, the Deputy Assistant Attorney 
        General for the Torts Branch will review and authorize requests 
        for additional hours or unusual costs.
      (2) Private counsel will submit bills on a monthly basis to the 
        Director of OPBE for processing and payment.
      (3) OPBE will route the bill to appropriate individuals for 
        review prior to payment. OPBE will attach a cover sheet to the 
        bill with delineated spaces or blocks for each individual in 
        the review process and a schedule for processing the bill at 
        each stage of review. Each reviewer will enter the results of 
        his or her review and will endorse the appropriate space on the 
        cover sheet.
      (4) OPBE will examine each bill to ensure its consistency with 
        the financial conditions of the retention agreement (billable 
        hours, legal fees, expenses, etc.) and the accuracy of the 
        mathematical calculations. OPBE will not examine the necessity 
        or reasonableness of any service. OPBE will certify the 
        correctness of the bill for the items within the scope of its 
        review or will note any discrepancies it discovers.
      (5) OPBE will forward the bills, with the above certification or 
        notation of discrepancies, to the assigned attorney for review 
        and certification for payment. OPBE will not forward those 
        billing items that the retained private counsel has indicated 
        might compromise litigation tactics if disclosed to assigned 
        Department attorneys, pursuant to paragraph 5 of the addendum 
        to the retention agreement. In these instances, the Director 
        responsible for the case will identify uninvolved Department 
        attorneys who will independently review those sensitive 
        portions of the bill directly for OPBE.
      On receiving the bill, the attorney will review and then certify, 
        if appropriate, the necessity and reasonableness of the 
        services indicated and will forward the bill to the assigned 
        case reviewer for his or her certification. The assigned case 
        reviewer will then sign the bill, if appropriate, and return it 
        to OPBE for payment.
      (6) Once the appropriate parties have properly reviewed and 
        certified the bill as payable, OPBE will submit it for payment 
        to the U.S. Treasury, through the Justice Management Division.
      (7) Should this review process uncover any discrepancies or 
        nonreimbursable items, the assigned attorney will prepare a 
        letter for the signature of the assigned case reviewer to 
        inform the private counsel of the items not payable as 
        presented and to explain the reasons. The letter should ask the 
        private counsel to submit either a revised bill or an 
        explanation of any item for which information is insufficient 
        to determine if the item is payable. The assigned case reviewer 
        will forward a copy of the signed letter with the disputed bill 
        to OPBE.
      Should the private counsel contest the disallowance of any items 
        that the Department will not pay, the private counsel may 
        submit a request for reconsideration to the appropriate 
        Director, who will decide the matter for the Department and 
        will inform the private counsel of the decision by letter.
      (8) THE PROMPT PAYMENT ACT REQUIRES THE PAYMENT OF PRIVATE 
        COUNSEL BILLS WITHIN 30 DAYS OF RECEIPT AND THE NOTIFICATION OF 
        ANY DEFECTS IN BILLS WITHIN 7 DAYS OF RECEIPT IN THE CIVIL 
        DIVISION. FAILURE TO ADHERE TO THESE TIME REQUIREMENTS MAY 
        RESULT IN THE ASSESSMENT OF INTEREST PENALTIES. To avoid the 
        possible assessment of interest penalties, OPBE will complete 
        its initial review of private counsel bills and will forward 
        them to the assigned attorney within 3 days of their receipt. 
        Within 3 days of receiving the bill from OPBE, the assigned 
        attorney will ensure the complete certification of the bill for 
        payment and will return it to OPBE or will ensure the posting 
        of a letter to the private counsel concerning defects in the 
        bill.
    f. Payment for Previously Incurred Private Counsel Expenses.
      (1) Preparation and Routing of Request. In the event that an 
        employee seeks reimbursement for private counsel expenses 
        incurred in a matter that has already concluded or in which the 
        direct representation by Department of Justice attorneys has 
        become available, the employee or the employee's private 
        attorney may submit a request to the General Counsel of the 
        employee's agency. The employing agency shall forward the 
        request to the Director of the appropriate branch, office, or 
        staff of the Civil Division. The Director will assign the 
        matter to a trial attorney.
      (2) Content of the Request. The request for reimbursement for 
        past representation must include a complete statement of the 
        fees and expenses for which the employee is seeking 
        reimbursement. This statement should follow the format 
        described in the sample reimbursement agreement (see Exhibit 
        2). The request should also include an explanation from both 
        the employee and the employing agency of the reason or reasons 
        why direct representation by the Department of Justice was not 
        sought or was not available.
      (3) Assessment of the Statement of Fees and Expenses. The 
        assigned attorney will forward the statement of fees and 
        expenses to OPBE for a review of computational accuracy and for 
        consistency with the financial terms and conditions of the 
        normal representation agreement. After that review, OPBE will 
        return the bill to the assigned attorney with an explanation of 
        any computational errors and non-conforming items. OPBE will 
        also certify whether funds are available to pay the bill, after 
        allowances for computational errors (no allowance being made 
        for non-conforming items). On receipt of OPBE's assessment, the 
        assigned attorney will review the statement of fees and 
        expenses, including any non-conforming items, and will certify 
        them for payment if they are reasonable in light of all the 
        circumstances. In no case will the Department approve an hourly 
        rate in excess of the rate then applicable for an attorney of 
        the experience level of the billing private counsel.
      (4) Preparation of Recommendation for Approval. The assigned 
        attorney will then prepare a memorandum for the signature of 
        his or her Director requesting that the Deputy Assistant 
        Attorney General for the Torts Branch approve the payment of 
        the private counsel. A request for approval must include:
        (a) the employee's request and the agency's views;
        (b) OPBE's confirmation that appropriated funds are available 
            to pay the bill;
        (c) a recommendation as to the amount the Department should 
            pay; and
        (d) a Memorandum for the File to record the Deputy Assistant 
            Attorney General's decision (see Exhibit 4).
        A retention agreement is not necessary.
      (5) Instituting the Decision. The Deputy Assistant Attorney 
        General will indicate his or her decision on the Memorandum for 
        the File, sign it, and forward it with the requesting 
        memorandum to the Director, who will send them to the assigned 
        attorney. If the decision is favorable, the assigned attorney 
        will send a copy of the Memorandum for the File and the 
        statement of fees and expenses to OPBE, which will then 
        obligate the funds and process the statement for payment. 
        Finally, the assigned attorney will prepare a letter to the 
        employee and the employing agency announcing the Department's 
        decision and indicating, if appropriate, that the Department is 
        now processing the bill for payment.

8. DOCUMENTATION.
    Documents associated with the retention and payment of private 
counsel often reflect the substance of communications between employees 
and their Justice Department counsel. Accordingly, they are entitled to 
the protection of the attorney-client privilege (see 28 C.F.R. 
Sec. 50.15[a][3]). This includes documents related to the authorization 
of private counsel and the payment of their bills.
    The Civil Division will afford special handling to these documents 
in accordance with the instructions contained in the Assistant Attorney 
General's memorandum of July 26, 1983, titled ``Maintenance of 
Attorney-Client Information.'' The Civil Division will treat these 
documents as a part of the official litigation case file for the 
particular matter, but will hold them in special file sections separate 
and apart from the remainder of the official case file. These special 
file sections will contain a cover sheet over the documents that 
proclaims: ``This file contains privileged attorney-client information. 
Access is limited to assigned trial attorneys and their supervisors.'' 
A similar message must appear on the outside of the file section folder 
near the identifying DJ number. Civil Division employees will take 
great care to prevent the unauthorized disclosure of the information in 
these documents, generally treating them as ``Limited Official Use'' 
information (see Civil Division Directive CIV-2620).
    When the case closes, the assigned attorney will promptly retire 
the remainder of the case file, but the Civil Division branch, office, 
or staff will retain the privileged file sections until the Department 
of Justice and the National Archives determine their ultimate 
disposition. A note will go into the official file indicating that the 
Division has retained a privileged portion of the file, and a copy of 
the signed closure form will go into the retained privileged file 
sections.

9. RATES PAID TO PRIVATE COUNSEL.
    OPBE will review rates paid to private counsel at least every 3 
years to ensure that rates are sufficiently competitive to attract 
qualified attorneys. Determinations to change rates will be based on 
market conditions and funding availability.

10. ADDITIONAL INFORMATION.
    Additional information on this subject it available from the 
Director, OPBE (307-0034).

                                    Robert D. McCallum, Jr.
                         Assistant Attorney General Civil Division.

                               EXHIBIT 1
                          MEMORANDUM FOR FILE

Re: Request(s) For Representation By Private Counsel Of [insert name of 
        employee(s)] in [insert case caption]

    The request(s) for representation by private counsel at Department 
of Justice expense in the above referenced matter is hereby granted, 
subject to the terms, conditions and limitation of 28 C.F.R. 
Sec. Sec. 50.15. 50.16 and Civil Division Directive 2120A.

DATE: ___________
                                           ________________
     Assistant Attorney General
     (or designee)
     CIVIL DIVISION

                               EXHIBIT 2
                SAMPLE PRIVATE COUNSEL RETENTION LETTER

[Insert Name of attorney or firm]
[Insert address]

Re: [Insert case name]

Dear [Name]:

    The Department of Justice has concluded that it reasonably appears 
at this time that representation of [insert employee's name] is in the 
interest of the United States. It also appears at this time, however, 
that representation of [insert employee's name] by attorneys employed 
by the Department of Justice is inappropriate. [Employee] has requested 
that the Department agree to reimburse you for [his or her] defense in 
the above referenced matter. Pursuant to 28 C.F.R. Sec. 50.16(c)(1), 
your reimbursement will be subject to the applicable statutes, 
regulations, and the terms and conditions set forth in the enclosed 
addendum, which is incorporated into and made a part of this agreement.
    You and [employee] should be aware that by entering into this 
agreement, the Department of Justice in no way assumes responsibility 
on the part of the United States Government for any monetary damages 
that may be imposed against [him or her] in connection with this 
matter. Although the Department of Justice has assumed responsibility 
for remunerating you in the course of representing [employee] to the 
extent specified in the addendum, your responsibility, of course, is 
solely to your client.
    Should you have any questions concerning the terms of this 
agreement, including the enclosed addendum, please contact [Department 
attorney assigned to the case] at __- ___.
    If you find the provisions of the agreement acceptable, please 
return the signed addendum to [name of assigned attorney] at the 
following address:
    [Name of assigned attorney]
    [Name of branch, office, or staff]
    Civil Division
    U.S. Department of Justice
    Washington, D.C. 20530
    Reimbursement of allowable fees and expenses will become effective 
on the Civil Division's receipt of the signed addendum.
            Very truly yours,

                                           ________________
     Director
     [Branch, office, or staff]
     Civil Division
Enclosure

 CONDITIONS OF PRIVATE COUNSEL RETENTION BY THE DEPARTMENT OF JUSTICE 
       FOR REPRESENTATION OF CURRENT AND FORMER FEDERAL EMPLOYEES

    The following items and conditions shall apply to the retention of 
a private attorney's legal services by the Department of Justice to 
represent current and former Federal employees in civil, congressional, 
or criminal proceedings.

1. NATURE OF RETENTION
    Subject to the availability of funds, the Department of Justice 
agrees to pay an attorney, or other members of his or her firm, for 
those legal services reasonably necessitated by the defense of a 
current or former Federal employee (hereinafter ``client'') in civil, 
congressional, or criminal proceedings.
    The Department will not honor bills for services that the 
Department determines were not directly related to the defense of 
issues presented by such matters. Examples of services for which the 
Department will not pay include, but are not limited to:
    a. administrative claims, civil actions, or any indemnification 
proceedings against the United States on behalf of the client for any 
adverse monetary judgment, whether before or after the entry of such an 
adverse judgment;
    b. cross claims against co-defendants or counterclaims against 
plaintiff, unless the Department of Justice determines in advance of 
its filing that a counterclaim is essential to the defense of the 
employee and the employee agrees that any recovery on the counterclaim 
will be paid to the United States as a reimbursement for the costs of 
the defense of the employee;
    c. requests made under the Freedom of Information or Privacy Acts 
or civil suits against the United States under the Freedom of 
Information or Privacy Acts, or on any other basis, to secure documents 
for use in the defense of the client;
    d. any legal work that advances only the individual interests of 
the employee; and
    e. certain administrative expenses noted in paragraph number 4 
below.
    The retained attorney is free to undertake such actions as set 
forth above, but must negotiate any charges with the client and may not 
pass those charges on to the Department of Justice.
    THE ABOVE LIST IS NOT EXHAUSTIVE. The Department of Justice will 
not reimburse services deemed reasonably necessary to the defense of an 
employee if they are not in the interests of the United States.
    To avoid confusion over whether the retained attorney may bill the 
Department for a particular service under this retention agreement, the 
retained attorney should consult the Justice Department attorney 
assigned to the case, mentioned in the accompanying letter before 
undertaking the service.

2. BILLABLE HOURS
    The Department of Justice agrees to pay the retained attorney for 
any amount of time not exceeding 120 billable hours per month for 
services performed in the defense of the client. The retained attorney 
may use the services of any number of attorneys, paralegals, or legal 
assistants in his or her firm so long as the aggregate number of 
billable hours in any given month does not exceed 120 hours. The client 
is free, however, to retain the attorney, or members of the firm, to 
perform work in excess of 120 hours per month so long as the firm does 
not bill the excess charge to the Department of Justice.
    The Department will consider paying for services in excess of 120 
hours in any given month if the press of litigation (e.g., trial 
preparation) clearly necessitates the expenditure of more time. The 
retained attorney must make requests for additional compensation to the 
Department in writing in advance of such expenditures.

3. LEGAL FEES
    The Department agrees to pay the retained attorney up to $200.00 
per lawyer hour, plus expenses as described in paragraph 4 below. The 
charge for any services should not exceed the retained attorney's 
ordinary and customary charge for such services. This fee is based on 
the consideration that the retained attorney has been practicing law in 
excess of 5 years.
    In the event the retained attorney uses the services of other 
lawyers in his or her firm, or the services of a paralegal or legal 
assistant, the Department agrees to pay the following fees.
    a. Lawyer with more than 5 years practicing experience: $200.00 per 
lawyer hour
    b. Lawyer with 3-5 years of practicing experience: $160.00 per 
lawyer hour
    c. Lawyer with 0-3 years of practicing experience: $133.00 per 
lawyer hour
    d. Paralegal or legal assistant (or equivalent): $78.00 per hour.
    The Department of Justice periodically reviews the hourly rates 
paid to attorneys retained to defend Federal employees under 28 C.F.R. 
Sec. 50.16. If, during the period of this agreement, the Department 
revises the schedule of hourly rates payable in such cases, the 
Department will pay revised rates for services rendered after the 
effective date of the revision in rates.

4. EXPENSES
    While the Department will pay normal overhead expenses actually 
incurred (e.g., postage, telephone tolls, travel, transcripts), the 
retained attorney must itemize these charges. The Department will not 
accept for payment a bill that shows only a standard fee or percentage 
as ``overhead''. The retained attorney must describe, justify, and 
clear IN ADVANCE unusual or exceptionally high expenses.
    In addition, the retained attorney must describe, justify, and 
clear in advance any consultations with or retention of experts or 
expert witnesses.
    The retained attorney must secure advance approval to use computer-
assisted research that involves charges in excess of $500.00 in a given 
month.
    The retained attorney must separately justify and obtain advance 
approval for services such as printing, graphic reproduction, or 
preparation of demonstrative evidence or explanatory exhibits.
    The retained attorney must itemize and justify in-house copying 
costs exceeding $150.00 in a given month. The Department will pay up to 
a per page copying cost of $.15 per page.
    The retained attorney must itemize and justify facsimile 
transmission costs exceeding $150.00 in a given month.
    The Department will pay expenses such as secretarial overtime or 
the purchase of books only in exceptional situations. The retained 
attorney must obtain advance approval for such expenditures.
    Travel expenses may not include first class service or deluxe 
accommodations. The retained attorney may not bill time spent in travel 
unless it is used to accomplish tasks related to the litigation. The 
retained attorney must specifically identify such tasks.
    The Department will not pay for meal charges not related to out-of-
town travel. The Department will not provide compensation for client or 
other entertainment. The Department will not pay expenses for meals 
incidental to overtime.
    The Department will not pay for expenses that can normally be 
absorbed as clerical overhead, such as time spent in preparing legal 
bills and filing papers with the Court. The retained attorney must 
separately list and justify messenger services.
    The retained attorney must enumerate the expenses incurred for 
hiring local counsel by rate, hour, and kind of service. These hours 
must fall within the 120-hour monthly maximum. The hourly rates paid to 
local counsel may not exceed the rates listed in paragraph 3 above.

5. FORMAT OF BILLS
    The retained attorney must submit bills on a monthly basis, stating 
the date of each service performed; the name of the attorney or legal 
assistant performing the service; a description of the service; and the 
time in tenths, sixths, or quarters of an hour, required to perform the 
service. Because of the limitation on reimbursable hours, a bill must 
include all services rendered in a given month. The Department will not 
consider subsequent bills for services rendered in a month for which it 
has already received a bill.
    In describing the nature of the service performed, the itemization 
must reflect each litigation activity for which reimbursement is 
claimed.
    The retained attorney must attach copies of airline tickets, hotel 
bills, and bills for deposition and hearing transcripts to the billing 
statement.
    The retained attorney must itemize local mileage costs (e.g., 
purpose of travel and number of miles). The Department will pay the 
standard government cost per mile rate for the use of privately owned 
vehicles.
    Before the Department of Justice will pay a bill, Department 
attorneys with substantive knowledge of the litigation will review it. 
If the retained attorney believes that the detail of the legal bill 
would compromise litigation tactics if disclosed to Department 
attorneys assigned to the case, the retained attorney should list those 
particular billing items on a separate sheet of paper with an 
indication of the specific concern. Department attorneys uninvolved 
with this case will independently review the separated, sensitive 
portion of the bill solely to determine if payment is appropriate under 
applicable standards. The individuals reviewing the bills will not 
discuss these items with the Department of Justice attorneys having 
responsibility for the case, nor will those responsible attorneys 
review the items in question.
    After Department attorneys complete the review of a bill, the 
Department will notify the billing counsel if the Department deems any 
item or items nonreimbursable or if any item or items require further 
explanation. When further information or explanation is needed, the 
Department will hold the entire bill until the retained attorney 
responds. Only after the Department receives and reviews the response 
will the Department certify the bill in whole or in part for payment. 
For that reason, the retained attorney must respond promptly.
    Should the Department determine that any items are not reimbursable 
under this agreement, the billing counsel may request further review of 
the Department's determination. The retained attorney shall make such a 
written request to the appropriate Branch director at the address 
indicated in the forwarding letter. The billing counsel must submit 
such requests for further review within 30 days, unless additional time 
is specifically requested and approved. Thereafter, the Department will 
not reconsider its determination.

6. BILLING ADDRESS
    The retained attorney should submit all bills to:
    Director, Office of Planning, Budget and Evaluation
    Civil Division
    United States Department of Justice
    Washington, D.C. 20530
    Attn: Room 9042, L Street Building

7. PROMPT PAYMENT
    The Prompt Payment Act is applicable to payments under this 
agreement and requires the payment of interest on overdue payments. 
Determinations of interest due will be made in accordance with 
provisions of the Prompt Payment Act and Office of Management and 
Budget Circular A-125.

8. GAO REVIEW
    Periodically, the Department of Justice may ask the retained 
attorney to submit copies of time sheets to the General Accounting 
Office (GAO) for purposes of auditing the accuracy of corresponding 
monthly bills, copies of which the Department will forward directly to 
GAO.

9. TERMINATION
    The Department of Justice reserves the right to terminate its 
retention agreement with the retained attorney at any time for reasons 
set forth in 28 C.F.R. Sec. 50.16.
                               acceptance
    I agree that my retention by the Department of Justice to represent 
_____ in connection with _____ will be in accordance with the 
applicable statutes, regulations, and the foregoing terms and 
conditions. This written instrument, together with the applicable 
statutes and regulations, represents the entire agreement between the 
Department of Justice and the undersigned, any past or future oral 
agreements notwithstanding.

     Signature: ________________

     Date: _________________

     Tax Identification Number: __________

                               EXHIBIT 3

MEMORANDUM

TO: Supervisor, Accounts Maintenance Staff
  Office of Planning, Budget, and Evaluation
 Civil Division

FROM: [Name of Director]
 [Name of Branch, Office, Staff] Civil Division

SUBJECT: Request to Establish Private Counsel Obligation

    A decision was made to reimburse private counsel for representation 
of a Federal employee in connection with [insert case caption].
    It is estimated that [insert dollar amount] is needed for 
reimbursement in fiscal year [insert year]. Please establish the 
following obligation at this time.

Law Firm FY XX
[Name of private counsel] [insert dollar amount]
    (on behalf of [insert employee(s) name])
[Address of private counsel firm]

    The firm's tax identification number is: [insert tax identification 
number]
    If you have any questions, please contact [insert name] of my 
office at [insert telephone number].

Attachments
                               EXHIBIT 4
                          MEMORANDUM FOR FILE

Re: Request For Authorization To Reimburse [insert name of attorney] 
        For The Representation of [insert name of employee] in [insert 
        case caption]

    [Insert name of employee(s)] has requested that the Department of 
Justice bear the cost of representation in this case. It appears that 
representation of [insert name of employee(s)] would have been in the 
interest of the United States and that failure to make a timely request 
for representation is not attributable to any fault on the part of 
[insert name of employee(s)]. Reimbursement of [insert attorney's name] 
in the amount of $______ is hereby authorized.

DATE: ___________
                                           ________________
     Deputy Assistant Attorney General
     Civil Division

    Question. Would you agree with Senator Grassley's characterization 
that ``this is an unseemly high amount of money being spent by the 
taxpayers to defend what appears to be egregious misconduct?'' If you 
disagree, please explain the reason for your disagreement.
    Answer. We respectfully disagree for two reasons. First, only 
reasonable and necessary fees were reimbursed. The amount expended was 
for the legal services for six different prosecutors and for two 
separate but related matters:
  --a contempt proceeding convened by the district judge; and
  --a court-ordered several-years-long investigation, both stemming 
        from a high-profile criminal prosecution which proceeded to 
        trial.
    The breadth of this undertaking is evidenced by the Special 
Prosecutor's investigative report, which exceeded 500 pages. Second, as 
noted in our previous response, employees are given a reasonable 
benefit of the doubt on disputed factual matters and representation is 
provided while the facts are being fully developed. This practice is 
designed to protect the Federal workforce and to ensure that the 
interests of the Government with respect to the legal issues in which 
the United States has a concern are adequately defended.
    Question. On November 21, 2011, Judge Sullivan issued an order 
indicating that the report of his investigative counsel had been 
submitted and seeking the views of certain stakeholders, including the 
prosecutors, on whether the report should be made public. Did DOJ pay 
the legal expenses or associated costs of any of the prosecutors with 
respect to the issues raised in Judge Sullivan's November 21, 2011 
order and if so, what public interest justified the expenditure of 
these funds and how much money was paid?
    Answer. Judge Sullivan's November 21, 2011, order asked DOJ, 
Senator Stevens' attorneys, and the attorneys for the individual 
prosecutors to submit comments and state their positions on its 
release. The proceedings were conducted under seal and the Civil 
Division did not have access to any of the sealed submissions. While 
DOJ's position was unsealed on January 9, 2012, the positions of the 
individuals were not revealed until March 15, 2012, when the Special 
Prosecutor's report was released and Judge Sullivan's February 8, 2012, 
order was made public.
    Pursuant to DOJ's previous determination that representation in 
connection with the investigation by Special Counsel Henry F. Schuelke 
III was in the Government's interest, and prior to the unsealing of the 
prosecutors' submissions on March 15, 2012, DOJ paid certain invoices 
for work that was conducted in connection with the prosecutors' court-
invited comments on Special Counsel Schuelke's report.
    Invoices were submitted by attorneys for Brenda Morris on December 
15, 2011, January 24, 2012, and February 16, 2012, and payment was 
approved on January 6, 2012, February 10, 2012, and March 2, 2012, 
respectively.
    Invoices were submitted by attorneys for James Goeke, on December 
23, 2011, and January 31, 2012, and payment was approved on January 6, 
2012, and February 8, 2012, respectively.
    Invoices were submitted by attorneys for Joseph Bottini on December 
13, 2011, and January 18, 2012, and payment was approved on December 
20, 2011, and February 3, 2012, respectively.
    Invoices were submitted by attorneys for Edward Sullivan, on 
December 15, 2011, January 12, 2012 and February 14, 2012, and payment 
was approved on December 20, 2011, January 20, 2012 and February 24, 
2012, respectively.
    The foregoing payments total approximately $106,000. The time 
billed was used to review and analyze the Special Prosecutor's 500-
plus-page investigative report, formulate the client's position, and 
file a response in accordance with the court's order.
    In light of the Government's decision not to object to the release 
of the report, DOJ has not paid invoices that were received after the 
prosecutors' positions were unsealed on March 15, 2012, and that relate 
to efforts to prevent the release of the report. The Civil Division has 
received, but have not yet processed, an invoice submitted on February 
29, 2012, from attorneys for James Goeke (who opposed release of the 
Special Counsel report). We also received, but have not yet processed, 
three invoices submitted on February 24, 2012, from attorneys for 
William Welch (who did not oppose release of the Special Counsel 
report).
    Question. On February 8, 2012, Judge Sullivan issued an order 
requiring that the investigative report and certain related documents 
in the proceedings be released to the public on March 15, 2012. One of 
DOJ's prosecutors, an Edward Sullivan, filed a motion in the District 
Court to stay that order and when his request was denied filed an 
emergency appeal to the D.C. Circuit to stay the release of the report. 
Does DOJ intend to pay the attorneys fees incurred by Mr. Sullivan in 
requesting the stay or the attorneys fees and/or associated costs he 
incurs in connection with his appeal? If so, what public interest 
justifies the expenditure of these funds?
    Answer. DOJ has received, but not yet processed an invoice related 
to Mr. Sullivan's request for a stay and his emergency appeal. This 
invoice will be reviewed and processed in accordance with the terms of 
our standard retention agreement. As noted in a previous response, that 
agreement, among other things, limits the services for which the 
private attorney will be compensated to those directly associated with 
the litigation. And our practice is to require counsel to seek 
authorization from the Civil Division to take an appeal from an adverse 
ruling stemming from the litigation in which we have authorized 
reimbursement. In this case, we have no record that counsel for Mr. 
Sullivan contacted the Civil Division for authorization to pursue an 
appeal. In addition, the retention agreement provides that DOJ will not 
reimburse services even if deemed reasonably necessary to the defense 
of the employee if it appears those services are not in the interest of 
the United States. In light of the Government's decision not to object 
to the release of the report, the Civil Division has not paid invoices 
that were received after the prosecutors' positions were unsealed on 
March 15, 2012, and that relate to efforts to prevent the release of 
the report.
    Question. Does DOJ believe that the report of Judge Sullivan's 
investigative counsel and related documents should be released on March 
15 as Judge Sullivan has ordered? Does DOJ intend to oppose Mr. 
Sullivan's appeal to the D.C. Circuit?
    Answer. Per the January 6, 2012, submission by DOJ (unsealed on 
January 9, 2012), the Department did not object to the March 15, 2012, 
release of the Special Prosecutor's report. DOJ has not entered an 
appearance in connection with Mr. Sullivan's emergency appeal, but was 
listed by private counsel as an interested party on the docket.
    Question. If DOJ supports Mr. Sullivan's efforts to prevent public 
disclosure of the report and associated documents please state the 
public interest served by the Department's position?
    Answer. See previous response. DOJ did not support Mr. Sullivan's 
efforts to prevent public disclosure of the report and its associated 
documents. As I previously stated at the March 8, 2012 Senate 
appropriations hearing, DOJ does not object to the release of the 
Special Counsel's investigative report.
    Question. In his November 21, 2011 order Judge Emmet Sullivan' 
indicates that his investigative counsel has found that members of the 
Stevens prosecution team engaged in ``significant, widespread and at 
times intentional--misconduct.'' In light of this finding and other 
findings in the investigative report does the Government have any 
recourse to recover attorney's fees and costs expended in the defense 
of its prosecutors' conduct? If so does the Government intend to 
exercise its rights?
    Answer. Pursuant to long-standing policy, a Federal employee who 
has been provided representation either by DOJ or by private counsel is 
afforded the benefit of the doubt and his or her plausible version of 
the facts usually will be credited until a contrary factual 
determination is made by the employee's agency, a DOJ prosecuting 
component, or the appropriate professional responsibility office. 
Representation continues to be provided until DOJ decides to seek an 
indictment against the employee related to the conduct concerning which 
representation was undertaken or the Department determines that 
continued representation of the employee through private counsel is no 
longer in the interest of the United States (28 C.F.R. 50.16 (c)(2)(i) 
and (iv)).
    These rules apply whether the representation is provided by DOJ 
attorneys directly or through the Department's private counsel program. 
Just as there is no provision to recover services already rendered by 
DOJ attorneys directly pursuant to an earlier decision to provide such 
representation, there is no provision under the guidelines for 
recovering fees already expended.

                        PROSECUTORIAL MISCONDUCT

    Question. ``USA Today has reported that its 2010 investigation 
found that the department's internal investigations frequently take a 
long time and that prosecutors faced little risk of losing their jobs 
even when officials documented serious misconduct. Court records show 
that most of the attorneys named in the Stevens case continue to be 
assigned to their official duties.'' Is the USA Today writer's 
observation that prosecutors face little risk of losing their jobs even 
in the face of documented serious misconduct accurate? Please explain.
    Answer. We are aware of the 2010 USA Today investigation. In 
January 2011 we created the Professional Misconduct Review Unit (PMRU) 
to handle disciplinary actions for career attorneys at DOJ that arise 
from Office of Professional Responsibility (OPR) investigations. The 
PMRU is now responsible for reviewing all OPR findings of professional 
misconduct against Assistant U.S. Attorneys (AUSAs) and Criminal 
Division Attorneys. The PMRU also is responsible for imposing 
discipline in those matters in which it upholds OPR's misconduct 
findings. We created the PMRU following a comprehensive review of 
existing disciplinary procedures and processes with the aim of creating 
a more efficient and uniform system to provide consistent, fair, and 
timely resolution of these cases. We believe that the PMRU is 
fulfilling its mandate.
    DOJ is also forthcoming with information concerning OPR's 
performance. OPR provides the Attorney General with an annual report of 
its activities. These reports include statistical information on OPR's 
activities, significant policy changes and developments, and summaries 
of cases completed during the fiscal year. The reports are available to 
the public at http://www.justice.gov/opr/reports.htm. When making a 
finding of misconduct, OPR shares a draft report of its investigation 
with the subjects of the investigation prior to completing a final 
report. OPR's misconduct findings then are subject to review by the 
PMRU (for AUSAs and Criminal Division prosecutors) and the Office of 
the Deputy Attorney General prior to the implementation of discipline. 
Provided that OPR's findings of misconduct are upheld, discipline may 
range from a reprimand to removal from Federal service.
    Question. Has the OPR been tasked to investigation allegations of 
misconduct by members of the Stevens prosecution team? How long has 
this investigation been going on and when might the public expect that 
it be concluded? Once OPR's investigation is completed, who is 
responsible for implementing its findings? Will the findings be made 
public?
    Answer. OPR conducted a 2\1/2\ year investigation of the Stevens 
misconduct allegations. While OPR completed its 672-page investigative 
report on August 15, 2011, the entire disciplinary process involves 
various steps, and the process is not finished until all the necessary 
steps have been completed. OPR's misconduct findings are subject to 
review by the PMRU and the Office of the Deputy Attorney General prior 
to the implementation of discipline. No formal action is taken against 
a Department employee until the disciplinary process is final. Because 
DOJ's disciplinary process is not yet complete, and because of 
limitations on public disclosure contained in the Privacy Act, the 
Department is unable to release the OPR Report at this time. Such a 
release also would be contrary to the integrity of the Department's 
ongoing disciplinary process. As the Attorney General has stated 
previously, the Department plans to release publicly as much of the OPR 
report and the Department's findings as possible, at the appropriate 
time and consistent with law. This cannot happen until the disciplinary 
process is complete.
    Question. What potential consequences could members of the 
prosecution team found culpable of misconduct in the Stevens matter 
face?
    Answer. While we cannot discuss at this time OPR's specific 
findings in the Stevens case, when OPR's findings of misconduct are 
upheld by the PMRU (for AUSAs and Criminal Division attorneys) and the 
Office of the Deputy Attorney General, discipline may range from a 
reprimand to removal from Federal service. However, any suspension in 
excess of 14 days is appealable to the Merit Systems Protection Board. 
All disciplinary determinations must fully consider the 14 factors 
enunciated in Douglas v. Veterans Admin., 5 MSPR 313 (1981) that can 
mitigate or aggravate the level of discipline taken against an 
employee.
    Question. In his November 21, 2011 order, Judge Sullivan observes 
that his investigative counsel found misconduct on the part of members 
of the Stevens prosecution team--misconduct that was characterized as 
``at times willful and intentional.'' DOJ has had access to the report 
of Judge Sullivan's investigators since last November. Yet USA Today 
states that court records show that most of the attorneys named in the 
Stevens case continue to be assigned to criminal cases. As of March 8, 
2012, does DOJ know who was responsible for the willful and intentional 
misconduct referred to in Judge Sullivan's November order and has it 
nevertheless permitted that individual or those individuals to continue 
to work on criminal cases? Has DOJ acted on the findings of Judge 
Sullivan's investigative counsel? If not, please explain why not.
    Answer. In November 2011, Judge Sullivan released the report of his 
investigative counsel, Henry F. Schuelke, III, to certain DOJ 
individuals under a protective order for the purpose of assessing 
whether privacy and/or privilege issues affected the public release of 
the report. The designated individuals reviewed the document and 
responded accordingly that DOJ did not object to the release of the 
report. The report recently was publicly released. We are aware that 
the report is critical of Department attorneys, and we are addressing 
the matter through our disciplinary process. OPR, which cooperated 
fully with Mr. Schuelke's investigation, has conducted an independent 
review and has produced a detailed report concerning the misconduct 
allegations. This report is similar to Mr. Schuelke's in that it 
addresses the same misconduct issues; however, the OPR report makes 
specific findings and recommendations regarding each subject's conduct. 
Once our internal disciplinary review procedures are complete, and the 
subjects have been afforded an opportunity to comment on OPR's report 
and any disciplinary proposals, we will impose appropriate discipline 
in accordance with the 14 factors enunciated in Douglas v. Veterans 
Admin., 5 MSPR 313 (1981) that can mitigate or aggravate the level of 
discipline taken against an employee.

                   FEDERAL CRIMINAL DISCOVERY REFORM

    Question. Could you briefly explain what the Brady rule states and 
whether it is in your judgment it is necessary to the guarantee of a 
fair trial?
    Answer. The Brady rule requires the disclosure of exculpatory and 
impeachment evidence when such evidence is material to guilt or 
punishment. Brady, 373 U.S. 83, 87 (1963); Giglio v. United States, 405 
U.S. 150, 154 (1972). The Supreme Court indeed held in Brady that 
Government disclosure of material exculpatory and impeachment evidence 
is part of the constitutional guarantee to a fair trial. 373 U.S. at 
87; Giglio, 405 U.S. at 154. DOJ is committed to ensuring this 
constitutional guarantee is met in every Federal case.
    Question. Some would suggest that it is awkward for prosecutors to 
provide the defense with information that might undermine their hard 
work to gain a conviction. I believe that you would agree with me that 
the responsibility of a prosecutor is not to secure a conviction but to 
secure justice. Would you explain what DOJ is doing, particularly in 
light of the lessons learned from the Stevens case to ensure that Brady 
obligations are met?
    Answer. DOJ takes its discovery obligations very seriously. For 
that reason, after discovery violations were uncovered in the Stevens 
case, the Attorney General moved to set aside the guilty verdict 
against Senator Stevens and dismiss the indictment. Furthermore, the 
Attorney General took decisive and unprecedented action to improve the 
criminal discovery practices within the Department. The following 
steps, among others, have already been taken:
  --The Office of the Deputy Attorney General issued memoranda to all 
        Federal prosecutors providing overarching guidance on gathering 
        and reviewing discoverable information and making timely 
        disclosure to defendants; directing each U.S. Attorney's Office 
        to develop additional, more specific discovery policies; and 
        providing separate guidance on discovery of electronically 
        stored information (ESI).
  --DOJ developed a ground-breaking protocol concerning the discovery 
        of electronically stored information in criminal cases in 
        collaboration with representatives from the Federal public 
        defenders and counsel appointed under the Criminal Justice Act.
  --DOJ dramatically expanded its discovery training requirements for 
        all Federal prosecutors and institutionalized those 
        requirements through codification in the U.S. Attorneys' 
        Manual. All Federal prosecutors are now required to undertake 
        annual discovery training, so that roughly 6,000 Federal 
        prosecutors across the country receive the required training 
        annually on a wide variety of criminal discovery-related 
        topics.
  --DOJ holds ``New Prosecutor Boot Camp'' courses for newly hired 
        Federal prosecutors, which includes training on Brady, Giglio, 
        and ESI, among other topics.
  --DOJ has trained thousands of Federal law enforcement agents and 
        support staff in criminal disclosure policies and practices, 
        and produced criminal discovery training materials for our 
        victim witness coordinators.
    DOJ distributed to all Federal prosecutors nationwide a Discovery 
Blue Book that comprehensively covers the law, policy and practice of 
prosecutors' disclosure obligations, and made it available on the 
desktop of every Federal prosecutor and paralegal.
    Question. In spite of DOJ's efforts to educate its attorneys about 
Brady's requirements, many commentators have noted that Brady practices 
vary from office to office and even within offices. It has been 
suggested that the Brady obligation should be codified in the Federal 
Rules of Criminal Procedure. In fact, Judge Sullivan wrote to U.S. 
Court of Appeals Judge Richard Tallman, Chair of the Advisory Committee 
on the Federal Rules of Civil Procedure suggesting that this approach 
be taken. It has been reported that DOJ opposed these efforts in 2006 
and again in 2009 and the Advisory Committee chose not to pursue the 
issue in light of this opposition. Is this accurate and can you explain 
why this is the case?
    Answer. In 2006, DOJ opposed any effort to amend the Federal Rules 
of Criminal Procedure to codify or expand government disclosure 
obligations under Brady. In 2009, this administration was prepared to 
codify the Brady rule within the Federal Rules of Criminal Procedure. 
However, the administration opposed the expansion of criminal discovery 
under consideration, because we believed the expansion being considered 
by the Advisory Committee would have damaged the carefully constructed 
balance created by the courts for criminal discovery and would have 
ignored the need to protect the rights of victims, witnesses, law 
enforcement officers, and national security in criminal discovery 
practice.
    Question. In light of DOJ's lack of support for improving Brady 
practices through the Federal Rules, the National Association of 
Criminal Defense Lawyers has proposed a model Brady reform bill. I am 
preparing this bill for introduction in the Senate. Is it reasonable to 
expect that DOJ would oppose this proposal?
    Answer. We will oppose legislation that deviates from Supreme Court 
law, requires the disclosure of nonmaterial, legally irrelevant, and 
inadmissible information, or that does not properly account for and 
respect the interests of victims, witnesses, law enforcement officers, 
and national security.
    Question. Would DOJ be supportive of the Judiciary Committees 
conducting a hearing on the Brady reform bill I intend to introduce and 
Brady practices overall in the near future?
    Answer. We think any hearing on criminal discovery legislation 
should include witnesses who can speak to all the interests of justice, 
including the interests of defendants, victims, witnesses, law 
enforcement, and national security. A hearing on discovery legislation 
should also explore the practical realities of the legislation. We 
would have no objection to such a hearing.

                           BILL ALLEN MATTER

    Question. Is there anything you would like to say, in addition to 
what you told the subcommittee last year, which would explain why DOJ 
declined the recommendations of career prosecutors and professional law 
enforcement in this matter?
    Answer. The protection of children is of the highest priority for 
DOJ and we aggressively prosecute those who harm our Nation's children. 
As a result of DOJ's decision to expand Project Safe Childhood (PSC) in 
May 2011, the Department now coordinates closely with law enforcement 
at the Federal, tribal, State, and local levels to investigate and 
prosecute all Federal crimes involving the sexual exploitation of a 
minor, including those committed in Indian country and those that 
involve commercial sexual activity, whether or not they involve the 
Internet.
    Moreover, DOJ's track record of vigorously prosecuting those who 
sexually abuse minors speaks for itself:
  --In fiscal year 2011, DOJ obtained approximately 2,713 indictments, 
        against 2,929 defendants, for offenses involving the sexual 
        exploitation of a minor. This represents a 15-percent increase 
        in the number of indictments more than fiscal year 2007 (in 
        which 2,364 indictments were filed against 2,470 defendants). 
        Since the beginning of fiscal year 2007, more than 11,447 
        defendants have been convicted in Federal courts of an offense 
        related to the sexual exploitation of a minor. These crimes 
        have ranged from production of obscene visual depictions of 
        minors engaged in sexually explicit conduct; to receipt, 
        distribution, possession, and/or production of child 
        pornography; to the direct physical, sexual abuse of a minor.
  --Since fiscal year 2001, the caseload of the attorneys in the Child 
        Exploitation and Obscenity Section of the Criminal Division has 
        increased every year, and it has increased cumulatively by more 
        than 1,100 percent.
    As the Attorney General has previously testified regarding the 
investigation of Bill Allen, any decision that we make to prosecute or 
not prosecute a case is governed by the Principles of Federal 
Prosecution, and we look at a host of relevant factors including the 
strength of evidence; the state of the law; the age of the case; the 
reliability of witnesses and other evidence; whether we can adequately 
address anticipated pretrial motions and discovery demands; and whether 
we believe any conviction can be defended on appeal, among many other 
factors. Very simply, we make all decisions to prosecute or not 
prosecute--including that relating to Bill Allen--based solely on the 
law and the facts and nothing else.
    Question. At my request, OPR has undertaken a preliminary inquiry 
into this issue. Can you tell me the status of that inquiry and explain 
what steps are being taken to ensure that OPR arrives at an independent 
and objective conclusion on this politically sensitive issue?
    Answer. OPR's preliminary inquiry is ongoing. While OPR reports to 
the Attorney General, it operates independently, and the Attorney 
General's office exerts no influence over OPR's investigations or the 
content of its reports.
    Question. The Alaska Attorney General's Office and the Anchorage 
Police Department investigative team have asked to meet with OPR to 
discuss their case. I have asked OPR to send a team to Alaska to 
understand how the case against Mr. Allen was prepared. Is OPR team 
authorized to travel to Alaska to meet with those who did the hard work 
to build the sexual abuse case against Mr. Allen?
    Answer. OPR has the authority to take whatever steps it deems 
necessary in order to complete an inquiry or investigation.

    Senator Mikulski. Before I recess the subcommittee, I want 
to conclude the hearing the way I began. As I listened to the 
questions, the answers, we've looked at the budget in the short 
time that we have to review, I want to end the hearing the way 
I began, which is to thank the men and women who work at the 
Justice Department.
    I've been on this subcommittee a long time. It's been a 
great blessing and a great honor. And when I think about it, 
the scope and complexity of what our citizens and our country 
face, and what our Justice Department faces, it's an amazing 
job, from community safety, to national safety--just in the 
last decade, the expansion in the national security portfolio, 
and the transformation of agencies. FBI is not, you know, J. 
Edgar Hoover's FBI any more.
    So for everybody who works, everybody's out on the street, 
everybody tracking sexual predators, everybody who's doing 
their job, the prison guards, and all the wonderful support 
staff, the paralegals, the secretarial staff, the 
administrative staff, et cetera, we just want to say thank you.
    I think our country's safer, because of your work. And we 
have to look out for our civil service, because we need an 
independent judiciary. We need a Justice Department that 
functions with absolute integrity. But we, who fund the 
appropriations, need to know that if you're going to have a 
crackerjack civil service, we have to also support that 
crackerjack civil service. So, thank you, and God bless you, 
and God bless America.

                          SUBCOMMITTEE RECESS

    The subcommittee stands in recess until March 15, next 
Thursday, at 10 a.m. We will take the testimony of the Director 
of the FBI, in both an open hearing and then ultimately a 
classified hearing.
    The subcommittee is in recess.
    Attorney General Holder. Thank you, Madam Chair.
    [Whereupon, at 11:37 a.m., Thursday, March 8, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
March 15.]


  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              


                        THURSDAY, MARCH 15, 2012

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

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

STATEMENT OF ROBERT S. MUELLER, III, DIRECTOR

            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. Good morning, everybody. The Commerce, 
Justice, Science, and Related Agencies Subcommittee of the 
Senate Appropriations Committee will come to order.
    Today, we are taking the testimony of and engaging in a 
conversation with our Director of the Federal Bureau of 
Investigation (FBI), Robert S. Mueller, III.
    This will be a two-part hearing. One will be here in open 
and public session, and then, because of the sensitivity of 
issues and budget involved for the FBI's fight against the 
global war against terrorism, we will have a classified 
briefing. So upon the conclusion of this phase, we will recess 
and reconvene in a classified environment in the Capitol 
Visitors Center (CVC), and all members are welcome. This is 
where we can have an additional in-depth conversation.
    Today, the subcommittee will hear from the Director of the 
FBI. We're grateful for Director Mueller's service and his 
agreement to serve 2 more years to work with our President in 
order to keep our streets, communities, and country safe.
    We begin our examination of the FBI's fiscal year 2013 
budget request with this open hearing.
    As chairwoman of this subcommittee, when I look at the FBI 
budget, I have three priorities: national security, which is 
how the FBI is working to keep America safe; community 
security, how the FBI is working with local law enforcement to 
keep our families and our neighborhoods safe; and then also 
oversight and accountability, to ensure that we're spending 
taxpayers' dollars wisely and ensuring that we get value for 
our dollar.

                          PREPARED STATEMENTS

    I'm going to ask unanimous consent, in the interest of 
time, that my full statement be included in the record along 
with a statement that Senator Mark Pryor has asked to be 
included.
    [The statements follow:]

           Prepared Statement of Senator Barbara A. Mikulski

    Good morning and welcome.
    Today, the Commerce, Justice, Science, and related agencies 
Subcommittee (CJS) will hear from Federal Bureau of Investigation (FBI) 
Director Robert S. Mueller, III. We are grateful that Director Mueller 
agreed to serve for 2 more years.
    As Chairwoman, I have three priorities when examining the FBI's 
budget:
      National Security.--How is the FBI keeping America safe?
      Community Security.--How is the FBI keeping our families safe?
      Oversight and Accountability.--How is the FBI ensuring our tax 
        dollars are spent wisely?
    Today, we will learn more about how the FBI will use its funding to 
carry out its extraordinary responsibilities keeping 330 million 
Americans safe from terrorism and violent crime; dismantling organized 
crime and drug cartels; combating gang violence, and illegal drug and 
gun smuggling; and catching child sexual predators.
    Before we begin our hearing, I want to thank all of the hardworking 
FBI agents, analysts, and professional staff for their dedication and 
determination. Federal employees feel under siege and unappreciated. I 
want them to know that the CJS Subcommittee is on their side. We know 
what the FBI does every day to keep American safe, and we appreciate 
it.
    The President's budget request for the FBI is $8.2 billion. The 
request reflects the stringent budget reality. There are no new 
initiatives in the FBI's budget request this year. There is only one 
modest, targeted increase to enhance FBI's abilities to fight mortgage 
and financial fraud.
    In fact, FBI will be asked to do more with less in 2013. In order 
to afford to continue critical FBI efforts begun in previous years--
such as computer intrusions--the budget proposes $63 million in savings 
from lower-priority FBI programs. The FBI will also be required to give 
back $162 million in prior-year funding. FBI is also tasked with 
becoming the banker for all Federal law enforcement agencies on 
interoperable communications equipment purchases. I want to ensure that 
the FBI's budget maintains the FBI as our pre-eminent law enforcement 
agency.
    Additionally, if we don't avoid a sequester, FBI will be cut by 8 
to 10 percent across the board. We will want to hear from Director 
Mueller about the consequences of a cut like that and how it will 
impact the FBI's ability to carry out its mission.
    Our Nation faces a growing and pervasive threat overseas from 
hackers, cyber spies, and cyber terrorists. Cyber security may be the 
most critical component to our Nation's infrastructure. We need safe 
and resilient networks to protect our online banking and commerce, 
electrical and power grids, air traffic control systems and digitalized 
records. The budget request is $136 million for the FBI's cyber 
efforts, which is the same as the current level. I want to know if the 
request is sufficient for the FBI to carry out its role as a key 
guardian of our Nation's cyber security.
    After 9/11, the FBI was charged with a new national security 
mission to protect us from international terrorism. The FBI disrupts 
terrorist plots before they happen by identifying, tracking, and 
defeating terrorist cells in the United States. They dismantle weapons 
of mass destruction on U.S. soil. Today, counterterrorism and 
counterintelligence activities make up more than 40 percent of the 
FBI's budget. Just weeks ago, we saw the FBI's counterterrorism efforts 
up close when they arrested a man who was on a suicide mission plotting 
to blow up a bomb at the U.S. Capitol.
    I want to know if this budget request is enough to tackle all 
counterterrorism responsibilities, including weapons of mass 
destruction, cyber computer intrusions, foreign counterintelligence, 
and critical incident response.
    I also want to know how the FBI is protecting Americans from 
violent crime in their communities. The budget requests $2.7 billion 
for traditional crime fighting efforts here in the United States.
    The FBI targets sophisticated criminal organizations who prey on 
the vulnerable, including trafficking children for prostitution and 
schemers who scam families out of their homes. These organizations will 
do anything to make a profit. But I am concerned that this budget 
request is flat to fight violent crime and gangs.
    FBI's State and local law enforcement partners work with the FBI on 
task forces by fighting gangs and violent crime. State and local 
budgets are under stress and Federal help has been reduced. Crime-
fighting funding for State and local law enforcement has been cut by 
$1.5 billion or 43 percent since 2010.
    I am pleased that the budget request includes a modest increase to 
investigate the most complex financial crime cases, such as mortgage, 
corporate, and securities fraud. Mortgage fraud is the FBI's number one 
white collar crime problem. The FBI is investigating roughly 2,600 
mortgage fraud cases. This is down by 17 percent since 2010 peak of 
more than 3,100 cases. But the FBI expects its mortgage fraud caseload 
to remain high. Suspicious Activity Reports (SARs) are at the highest 
levels ever--93,000 last year.
    The budget requests $210 million to combat mortgage fraud. This is 
$15 million more than fiscal year 2012's enacted level. This funding 
will help hire 40 new special agents and four forensic accountants. It 
will establish two hybrid squads made up of agents, forensic 
accountants, and financial analysts to investigate complex financial 
schemes.
    Director Mueller, I know you are with me. We want to send a clear 
message to the predators. No more scamming or preying on hardworking 
Americans. If you break the law you will suffer the consequences.
    The President's budget request includes $109 million for the FBI to 
protect children, catch deviants who use the Internet to prey on 
children, and break up international sex trafficking and prostitution 
rings.
    The FBI plays an important role in enforcing the Adam Walsh Act. 
It's also responsible for monitoring and targeting Internet predators. 
It runs Innocent Images, a national initiative that in 2009 convicted 
more than 1,200 producers, distributors, and possessors of child 
pornography.
    The FBI's Innocence Lost initiative has rescued more than 1,100 
children from prostitution since 2003, including a victim who was just 
9 years old. Through this initiative, more than 500 pimps, madams, and 
their associates who exploit children through prostitution have been 
convicted. I want to hear from you if the budget request is sufficient 
to enhance child predator investigations, target predators before they 
strike and save children's lives.
    Finally, I want to say how proud I am of the men and women of the 
FBI who are on the job 24 hours a day, 7 days a week, fighting to keep 
America safe from terrorism and violent crimes.
    We must ensure that the FBI has the resources it needs to protect 
the lives of 330 million Americans. But we also want to make sure the 
FBI is a good steward of taxpayer dollars, making sure every $1 spent 
to keep our Nation safe is a $1 well spent.
    Thank you Director Mueller for your leadership. I look forward to 
continuing our productive relationship.
                                 ______
                                 
                Prepared Statement of Senator Mark Pryor

    First, I want to thank Chairman Senator Mikulski and Ranking Member 
Hutchison for their leadership and for conducting this important 
hearing to examine the President's fiscal year 2013 budget request for 
the Department of Justice (DOJ).
    I think that it is important that we work together with DOJ to 
provide our law enforcement organizations with the necessary funding to 
protect America and ensure the safety and security of its citizens. 
With that said, we all know that many tough decisions lie ahead as we 
strive to put our Nation's fiscal house in order, and I believe that no 
stone can remain unturned as we seek to do so. Effective oversight will 
be crucial in preventing and detecting cases of waste and abuse, and I 
am hopeful that the Attorney General and Inspector General will join us 
in seeking to increase efficiency within DOJ.
    As this subcommittee reviews the fiscal year 2013 budget request 
for DOJ, I look forward to working with the chairman and ranking member 
to ensure that taxpayer dollars are spent responsibly.
    Again, I thank Senators Mikulski and Hutchison for conducting this 
hearing. I look forward to Attorney General Holder's testimony and look 
forward to discussing the fiscal year 2013 budget request.

    Senator Mikulski. Having said that, my oral statement, to 
the point, is that we know that we ask the FBI to carry out 
extraordinary responsibilities, keeping 330 million Americans 
safe from terrorism and also violent crime; to continue their 
work to dismantle organized crime, which now has many new 
faces, many new locations, and many new techniques; and then 
the despicable drug cartels that continue to exist in our 
country and threaten our borders.
    We also ask the FBI to work to combat gang violence, 
illegal drug and gun smuggling, and at the same time to help us 
catch sexual predators.
    The President's budget request for the FBI is $8.2 billion. 
This request reflects the stringent budget reality in which we 
find ourselves. There are no new initiatives in the FBI's 
budget request this year, and only one modest, targeted 
increase, and that's the FBI's ability to fight mortgage fraud. 
In fact, the FBI will be asked to do more with less in 2013.
    In order to afford to continue the FBI's critical efforts, 
the budget proposes $63 million in savings from lower FBI 
programs, and the FBI will also have a give-back provision.
    The FBI is also tasked to become the banker for all law 
enforcement, helping with interoperable communication equipment 
purchases, not just for the FBI, but for the Drug Enforcement 
Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms 
and Explosives (ATF), and U.S. Marshals. We've counseled the 
FBI to really watch this very carefully because, as we looked 
at our cousins in the Department of Homeland Security (DHS) 
appropriation, interoperable communications has been one of the 
biggest boondoggles I saw. Everybody bought a gadget, everybody 
got a gizmo, and at the end of the day none of those gadgets 
and gizmos could talk to anybody.
    So we're counting on the FBI to work to get it straight, 
and at the same time we need to get an update on their work on 
the Sentinel Program, our virtual case management file. Also, 
we want to be sure we take a look at the sequester consequences 
and what would be the impact on the FBI if there was an 8-
percent cut, and we need to know how this will impact the FBI's 
ability to carry out its mission.
    In the area of national security, the FBI was charged with 
protecting us from international terrorism. We disrupt 
terrorist plots before they happen by identifying, tracking and 
defeating them, and then also working to dismantle weapons of 
mass destruction. This definitely is not J. Edgar Hoover's FBI 
anymore. Counterterrorism and counterintelligence make up a 
substantial part of the FBI budget. Just weeks ago, we saw the 
FBI's counterterrorism efforts up close when they arrested a 
man who wanted to blow up the U.S. Capitol.
    Our Nation also faces a new kind of threat. That threat 
occurs in cyberspace. So we have cyber spies, cyber terrorists, 
and organized crime involved with cyber. Cyber is the new area, 
and we look forward to getting ideas and a concrete budget from 
the FBI Director on how we can keep us safe in that area and 
how they work with other intelligence agencies.
    I also want to know how the FBI is protecting Americans 
from violent crime and also fraud in their communities. The FBI 
targets sophisticated criminal organizations who prey on the 
vulnerable: the child pornographer, the trafficking in children 
and prostitution, the schemes and scams and bilking people out 
of Medicare, or mortgage fraud, and I'm concerned that this 
budget is flat to fight violent crime and gangs.
    I know my very able and wonderful colleague, Senator 
Hutchison, is going to talk about the Southwest Border. She's 
jazzed about it, and so am I, because of the ongoing threat at 
our border. State and local budgets are under stress, and we 
want to hear how you are leading that.
    I'm going to conclude my remarks, though, by saying this 
budget is not about numbers and statistics; it's about people, 
making sure that Americans are not victimized by any bad person 
or anyone with a predatory intent toward them. But we couldn't 
do it without the people who work for FBI.
    So, Director, before I turn to Senator Hutchison, I just 
want to thank you, and I'm thanking you for not only your 
service, but I'd like to thank you on behalf of all of those 
wonderful people who work every single day for the FBI, those 
that are out there in the field offices working on joint task 
forces, those that are around the world in, at times, very 
rugged and very dangerous positions. I know that the FBI works 
every day to protect us, that the people who work hard there 
every day are duty driven and dedicated, and they are in many 
ways our boots on the ground in local communities and also 
working with our intelligence and military agencies around the 
world. This is why I want them to know I respect them for the 
work they do, and I will fight for them in terms of their pay, 
benefits and pensions.
    So if we're going to say thank you, we want to thank you 
not only with words but with deeds.
    Thank you, and I'll turn to Senator Kay Bailey Hutchison.

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Well, thank you very much, Director 
Mueller, for coming before our subcommittee. I'm happy to say 
that last year we thought it would be the last time that you 
appeared before our subcommittee, and I was very pleased that 
the President offered and you accepted an extension of your 
term, because I think what has happened at the FBI during your 
term is exponential. I think the changes that have taken place 
and the responsibilities that you've had have been more 
transformational than probably at any time since the beginning 
of the FBI.
    I do want to start my remarks just very briefly by 
recognizing also the chairwoman of this subcommittee, who will 
on Saturday become the longest-serving woman to serve in the 
Congress in the history of the United States Congress. We're 
going to make a big deal of that because we're really proud of 
this little pint-sized mighty-might who has outlasted them all.
    So, Mr. FBI Director, let me just state a couple of points. 
I think that Senator Mikulski has really outlined the big 
picture. There are a couple of areas of interest that I have, 
and concerns.
    Certainly, I think the Southwest Border has to be as much 
of a national security issue as any place that we have, and yet 
this request cuts the Southwest Border funding. I would 
question the priority of the administration in increasing the 
financial fraud enforcement and decreasing border security.
    So I'm going to say that I'll be looking carefully at that 
and hoping to restore at least the $5 million that was included 
to make it look like it was even funding. But really, that was 
just required to sustain the positions that had been added in 
the fiscal year 2010 border supplemental appropriations bill.
    So I'm hoping that we can add more where you think you need 
it the most, because that would be 13 border corruption task 
force members located in field offices across the border, as I 
understand it, and these are kind of the backbone of the FBI 
Southwest Border mission that provide intelligence and 
coordinate with the Southwest Intelligence Group (SWIG), El 
Paso Intelligence Center (EPIC), and the National Border Task 
Force. So I'm going to be looking at that very carefully.
    I'm also concerned and going to ask you about the $162 
million rescission and what exactly that is going to impact. If 
it is as it appears, that it would be the processing for 
fingerprinting and DNA on improvised explosive devices, that's 
an area where I think we could really link it to terrorists, 
and I wouldn't want to cut that unless you have other plans for 
using money to assure that is able to be done.
    So, and then the other area is cutting the contractors of 
counterintelligence programs, which would be informant 
validation, the Terrorist Screening Center, and the Foreign 
Terrorist Tracking Task Force. I will ask your opinion of 
those.
    And then the other area that I will ask you about is the 
FBI agents that were involved in the prosecution of the late 
Senator Ted Stevens. We had a disturbing hearing with Attorney 
General Holder last week in which we talked about the 
Department of Justice (DOJ) employees who apparently are still 
prosecuting at DOJ even after the report was released and the 
Attorney General himself dismissed the case against Senator 
Stevens because of misconduct on the part of the prosecutors. 
So I will want to know if there are people still at the FBI--I 
think there were just two agents that were accused of being 
involved in it. So I'd like to know your opinion of that, as 
well.
    So I thank you for all that you're doing in the other areas 
that Senator Mikulski mentioned, but especially knowing the 
role of the FBI now in international intelligence and law 
enforcement. So that expansion has been on your watch, and I 
appreciate that you have been able to handle it and work with 
the intelligence agencies so well. Thank you.
    Senator Mikulski. Director Mueller, please proceed.

              SUMMARY STATEMENT OF ROBERT S. MUELLER, III

    Mr. Mueller. Thank you, Madam Chairwoman. Let me also join 
the others on the subcommittee in congratulating you on your 
tenure, which is far longer than mine, I might add.
    Also, let me thank you for your comments with regard to the 
FBI personnel. I'm reminded of that because recently I had an 
opportunity to talk to a number of agents, analysts and others 
who all worked 24 hours a day over the holidays in the case 
that we recently took down in Tampa, which was indicative of 
the degree of sacrifice that you see from the personnel in the 
organization. So, my thanks for commenting on that.
    Let me start by saying that the FBI continues to face 
unprecedented and increasingly complex challenges. As you know 
and as you pointed out, we must identify and stop terrorists 
before they launch attacks against our citizens. We must 
protect our Government, our businesses, and our critical 
infrastructure from espionage and from the potentially 
devastating impact of cyber-based attacks.
    We must root out mortgage fraud, fight white-collar and 
organized crime, stop child predators, and protect civil 
rights; and we must uphold civil liberties and the rule of law 
while carrying out this broad mission.
    For fiscal year 2013, the FBI has requested a budget of 
$8.2 billion to fund more than 13,000 Special Agents, more than 
3,000 intelligence analysts, and more than 18,000 professional 
staff. This funding level will allow the FBI to maintain, just 
maintain our base operations, with a small increase, as you 
pointed out, for financial and mortgage fraud investigations.
    Let me summarize, if I might, the key national security and 
criminal threats that this funding will address. First, the 
terrorist threat. While Osama bin Laden and other key leaders 
have been removed, al Qaeda and its affiliates remain a top 
terrorist threat in the United States. Core al Qaeda, operating 
out of Pakistan, remains committed to high-profile attacks 
against the West, and meanwhile al Qaeda affiliates and 
adherents have attempted several attacks on the United States. 
Such attacks include the failed Christmas Day airline bombing 
in 2009, the attempted truck bombing of Times Square in May 
2010, and the attempted bombing of U.S.-bound cargo planes in 
October of the same year.
    We are also concerned about the threat from homegrown 
violent extremists. As you pointed out, Madam Chairwoman, last 
month the FBI arrested Amine El Khalifi, a 29-year-old Moroccan 
immigrant. Khalifi allegedly attempted to detonate a bomb in a 
suicide attack on the U.S. Capitol building. Over the past year 
we have seen similar attempts by homegrown extremists in 
Florida, Massachusetts, Texas, and Washington State. These 
cases exemplify the need to continue to enhance our 
intelligence capabilities and to get the right information to 
the right people before any harm is done.
    Turning to foreign intelligence: while foreign intelligence 
services continue their traditional efforts to obtain military 
and state secrets, they also seek technology and intellectual 
property from companies and universities. For example, last 
year a long-time Northrop Grumman engineer was sentenced to 32 
years in prison for selling secrets related to the B-2 stealth 
bomber to several nations, including China; and last fall, a 
former Dow Chemical scientist plead guilty to transferring 
stolen trade secrets to individuals in Europe and in China. 
These are just a few examples of the growing insider threat 
from employees who may use their access to commit economic 
espionage.
    Turning to the cyber threat: this will be an area of 
particular focus for the FBI in the coming years, as cyber 
crime cuts across all of our programs. Terrorists are 
increasingly cyber savvy, and like every other multinational 
organization, they are using the Internet to grow their 
business and to connect with like-minded individuals, and they 
are not hiding in the shadows of cyberspace.
    Al Qaeda in the Arabian Peninsula has produced a full-
color, English-language online magazine. Al Shabaab, an al 
Qaeda affiliate in Somalia, has its own Twitter account. 
Extremists are not just using the Internet for propaganda and 
recruitment. They are using cyberspace to conduct operations, 
and while, to date, terrorists have not used the Internet to 
launch a full-scale cyber attack, we cannot underestimate their 
intent. In one hacker recruiting video, a terrorist proclaims 
that cyber warfare will be the war of the future.
    And then you have State-sponsored computer hacking and 
economic espionage, which poses significant challenges as well. 
Just as traditional crime has migrated online, so too has 
espionage. Hostile foreign nations seek our intellectual 
property and our trade secrets for military and competitive 
advantage. The result of these developments is that we are 
losing data, we are losing money, we are losing ideas, and we 
are losing innovation. And as citizens individually, we are 
increasingly vulnerable to losing our private information.
    The FBI has, in the past several years, built a substantial 
expertise in order to try to stay ahead of these threats, both 
at home and abroad. We now have cyber squads in every one of 
our 56 field offices, with more than 1,000 specially trained 
agents, analysts, and forensic specialists. Borders and 
boundaries pose no obstacles for hackers, so the FBI uses our 
63 Legal Attache offices around the world to collaborate with 
our international partners. We also have Special Agents 
embedded in Romania, Estonia, Ukraine, and the Netherlands 
working to identify emerging trends and key players in the 
cyber arena.
    And here at home, the FBI leads the National Cyber 
Investigative Joint Task Force, which brings together 18 law 
enforcement, military, and intelligence agencies in order to 
stop current and prevent future attacks. The task force 
operates through threat focus cells, specialized groups of 
agents, officers and analysts that focus on particular threats, 
such as botnets.
    Together, we are making progress. Just last week, DOJ and 
FBI, along with our domestic and foreign partners, announced 
charges against six hackers who align themselves with a group 
known as Anonymous. According to the charges, they were 
responsible for a broad range of high-profile cyber intrusions 
targeting companies, the media, and law enforcement since 2008. 
This case was successful because we worked extensively with our 
overseas partners, and we used our traditional investigative 
and intelligence techniques in the cyber arena.
    We must continue to push forward and to enhance our 
collective capabilities to fight cyber crime. We do need 
tougher penalties for cyber criminals to make the cost of doing 
business more than they are willing to bear.
    Just as we did after September 11, we must continue to 
break down walls and share information to succeed in combating 
this cyber threat. And just as we do or did with terrorism, we 
must identify and stop cyber threats before they do harm. It is 
not enough to build our defenses and to investigate the harm 
after the fact.
    Now, let me spend a moment, if I might, to discuss a few of 
the most significant threats in the criminal arena. From 
foreclosure frauds to subprime scams, mortgage fraud remains a 
serious problem. In fiscal year 2011, the FBI had more than 
3,000 pending mortgage fraud investigations, more than four 
times the number of cases we had in 2005, and nearly 70 percent 
of these investigations include losses of more than $1 million. 
In this budget for fiscal year 2013, the FBI is requesting a 
program increase of $15 million and 44 new positions to further 
address the mortgage and financial fraud schemes at all levels.
    The focus on healthcare fraud is no less important. The 
Federal Government spends hundreds of billions of dollars every 
year to fund Medicare and other healthcare programs. Together 
with our partners at the Department of Health and Human 
Services, the FBI has more than 2,600 active healthcare fraud 
investigations. In fiscal year 2011, these efforts led to the 
recovery of more than $4 billion taxpayer dollars.
    Violent crimes and gang activities continue to exact a high 
toll on our communities. According to the National Gang 
Intelligence Center, there are more than 30,000 gangs with more 
than 1 million members active in the United States today. 
Through Safe Streets and Safe Trails Task Forces, the FBI 
identifies and targets the most serious gangs operating, and 
targets them as criminal enterprises.
    Turning to the Southwest Border, which I know is a concern 
to Senator Hutchison, the continued violence along the 
Southwest Border remains a significant threat, and we rely on 
our collaboration with SWIG, the Organized Crime and Drug 
Enforcement Task Force Fusion Center, and EPIC to track and 
disrupt this threat.
    With regard to crimes against children, we remain vigilant 
in our efforts to remove predators from our communities and to 
keep our children safe. We have ready response teams stationed 
across the country to respond quickly to child abductions, and 
through our Child Abduction Rapid Deployment teams, our 
Innocence Lost National Initiative, and our Innocent Images 
National Initiative, the FBI and its partners are continuing to 
make the Nation safer for our children.
    Last, turning to the budget, the FBI budget for fiscal year 
2013 seeks to maintain our current base resources and 
capabilities in a restrained fiscal environment. But these 
resources are critical for us to continue responding to the 
broad range of national security and criminal threats we face 
today.

                           PREPARED STATEMENT

    Chairwoman Mikulski, Ranking Member Hutchison, and members 
of the subcommittee, let me close by again thanking you for 
your leadership and support of the FBI, and most particularly 
the men and women of the FBI, in pursuit of its mission. Your 
investments in our workforce, our technology, and in our 
infrastructure have made a difference to the FBI every day, and 
the transformation of the FBI that has been undertaken over the 
last 10 years would not have been possible without the support 
of this subcommittee. My thanks, and I look forward to 
answering what questions you have.
    [The statement follows:]

              Prepared Statement of Robert S. Mueller, III

    Good morning Chairwoman Mikulski, Ranking Member Hutchison, and 
members of the subcommittee. On behalf of the more than 34,000 men and 
women of the Federal Bureau of Investigation (FBI), I would like to 
thank you for the years of support you have provided to the Bureau.
    The FBI remains focused on defending the United States against 
terrorism, foreign intelligence, and cyber threats; upholding and 
enforcing the criminal laws of the United States; protecting civil 
rights and civil liberties; and providing leadership and criminal 
justice services to Federal, State, municipal, and international 
agencies and partners. Our continued ability to carry out this complex 
and demanding mission reflects the support and oversight provided by 
this subcommittee.
    More than 10 years after the terrorist attacks of 9/11, the FBI 
continues to be a threat-focused, intelligence-driven organization that 
is guided by clear operational strategies. And we remain firmly 
committed to carrying out these strategies under guidelines established 
by the Attorney General that protect the civil liberties of those 
entrusting us with the authorities to carry out our mission.
    As our Nation's national security and criminal adversaries 
constantly adapt and evolve, so must the FBI be able to respond with 
new or revised strategies and operations to counter these threats. The 
FBI continues to shift to be more predictive, preventative, and 
actively engaged with the communities we serve. The FBI's evolution has 
been made possible by greater use of technology to gather, analyze, and 
share information on current and emerging threats; expansion of 
collaboration with new partners, both domestically and internationally; 
and investments in training, developing, and maximizing our workforce. 
The FBI continues to be successful in maintaining this momentum of 
transformation even during these challenging times.
    The FBI's fiscal year 2013 budget request totals $8.2 billion in 
direct budget authority, including 34,083 permanent positions (13,018 
Special Agents, 3,025 intelligence analysts, and 18,040 professional 
staff). This funding level continues increases provided to the FBI in 
the past, most recently in fiscal year 2012, allowing the FBI to 
maintain its forward progress, including targeting additional resources 
on investigating financial and mortgage fraud.
    Let me briefly summarize the key national security threats and 
crime problems that this funding supports.

                       NATIONAL SECURITY THREATS

    Terrorism.--The terrorist threat facing the United States remains 
complex and ever-changing. We are seeing more groups and individuals 
engaged in terrorism, a wider array of terrorist targets, greater 
cooperation among terrorist groups, and continued evolution and 
adaptation in tactics and communication.
    While Osama bin Laden and certain other key leaders have been 
removed, al Qaeda and its affiliates and adherents continue to 
represent the top terrorism threat to the United States abroad and at 
home. Core al Qaeda remains committed to high-profile attacks against 
the United States. Additionally, al Qaeda affiliates and surrogates, 
such as al Qaeda in the Arabian Peninsula (AQAP), represent significant 
threats to our Nation. These groups have attempted several attacks 
against the homeland and our citizens and interests abroad, including 
the failed Christmas Day airline bombing in 2009 and the attempted 
bombing of U.S.-bound cargo planes in October 2010.
    In addition to al Qaeda and its affiliates, the United States faces 
a terrorist threat from self-radicalized individuals. Self-radicalized 
extremists--often acting on their own--are among the most difficult to 
detect and stop. For example, just last month, the FBI arrested Amine 
El Khalifi, a 29-year-old Moroccan immigrant, for the suspected attempt 
to detonate a bomb in a suicide attack on the U.S. Capitol building. 
According to court documents, Khalifi believed he was conducting the 
terrorist attack on behalf of al Qaeda and had become radicalized even 
though he was not directly affiliated with any group. The Khalifi case 
exemplifies the need for FBI to continue to enhance our intelligence 
capabilities--to get critical information to the right people at the 
right time--before any harm is done.
    The basis from which acts of terrorism are committed--from 
organizations to affiliates/surrogates to self-radicalized 
individuals--continue to evolve and expand. Of particular note is al 
Qaeda's use of on-line chat rooms and Web sites to recruit and 
radicalize followers to commit acts of terrorism. And they are not 
hiding in the shadows of cyber space: al Qaeda in the Arabian Peninsula 
has produced a full-color, English-language online magazine. Terrorists 
are not only sharing ideas; they are soliciting information and 
inviting communication. Al Shabaab, the al Qaeda affiliate in Somalia, 
uses Twitter to taunt its enemies--in English--and encourage terrorist 
activity.
    To date, terrorists have not used the Internet to launch a full-
scale cyber attack, but we cannot underestimate their intent. 
Terrorists have shown interest in pursuing hacking skills. And they may 
seek to train their own recruits or hire outsiders, with an eye toward 
pursuing cyber attacks.
    These adaptations of the terrorist threat make FBI's 
counterterrorism mission that much more difficult and challenging.
    Foreign Intelligence.--While foreign intelligence services continue 
traditional efforts to target political and military intelligence, 
counterintelligence threats now include efforts to obtain technologies 
and trade secrets from corporations and universities. The loss of 
critical research and development data, intellectual property, and 
insider information poses a significant threat to national security.
    For example, last year, Noshir Gowadia was sentenced to 32 years in 
prison for selling secrets to foreign nations. For 18 years, Gowadia 
had worked as an engineer at Northrop Grumman, the defense contractor 
that built the B-2 stealth bomber. Gowadia, a naturalized United States 
citizen from India, decided to offer his knowledge of sensitive design 
aspects of the B-2 to anyone willing to pay for it. He sold highly 
classified information about the B-2's stealth technology to several 
nations, and made six trips to China to assist them in the development 
of stealth technology for their cruise missiles.
    Last fall, Kexue Huang, a former scientist for two of America's 
largest agriculture companies, pled guilty to charges that he sent 
trade secrets to his native China. While working at Dow AgriSciences 
and later at Cargill, Huang became a research leader in biotechnology 
and the development of organic pesticides. Although he had signed 
nondisclosure agreements, he transferred stolen trade secrets from both 
companies to persons in Germany and China. His criminal conduct cost 
Dow and Cargill millions of dollars.
    And just last month, five individuals and five companies were 
indicted in San Francisco with economic espionage and theft of trade 
secrets for their roles in a long-running effort to obtain United 
States trade secrets for the benefit of companies controlled by the 
government of the People's Republic of China (PRC). According to the 
indictment, the Chinese Government sought to obtain a proprietary 
chemical compound developed by DuPont to be produced in a Chinese 
factory.
    These cases illustrate the growing scope of the ``insider threat'' 
from employees who use their legitimate access to steal secrets for the 
benefit of another company or country. Through our relationships with 
businesses, academia, U.S. Government agencies, and with other 
components of the Department of Justice (DOJ), FBI, and its 
counterintelligence partners must continue our efforts to identify and 
protect sensitive American technology and projects of great importance 
to the United States Government.
    Cyber.--Cyber attacks and crimes are becoming more commonplace, 
more sophisticated, and more dangerous. The scope and targets of these 
attacks and crimes encompass the full range and scope of FBI's national 
security and criminal investigative missions. Our national security 
secrets are regularly targeted by foreign and domestic actors; our 
children are targeted by sexual predators and traffickers; our citizens 
are targeted for fraud and identity theft; our companies are targeted 
for insider information; and our universities and national laboratories 
are targeted for their research and development. Since 2002, the FBI 
has seen an 84 percent increase in the number of computer intrusions 
investigations opened. Hackers--whether state-sponsored, criminal 
enterprises, or individuals--constantly test and probe networks, 
computer software, and computers to identify and exploit 
vulnerabilities.
    Just as FBI has transformed its counterterrorism program to deal 
with an evolving and adapting threat, FBI is enhancing its cyber 
program and capabilities. To counter the cyber threat, FBI has cyber 
squads in each of our 56 field offices. FBI now has more than 1,000 
specially trained agents, analysts, and digital forensic examiners that 
run complex undercover operations and examine digital evidence. Along 
with 20 law enforcement and intelligence agency partners, FBI is the 
executive agent of the National Cyber Investigative Joint Task Force. 
The task force operates through Threat Focus Cells--smaller groups of 
agents, officers, and analysts from different agencies, focused on 
particular threats.
    In April of this year, the FBI brought down an international 
``botnet'' known as Coreflood. Botnets are networks of virus-infected 
computers controlled remotely by an attacker. To shut down Coreflood, 
FBI took control of five servers the hackers had used to infect some 2 
million computers with malware. In an unprecedented step, after 
obtaining court approval, we responded to the signals sent from the 
infected computers in the United States, and sent a command that 
stopped the malware, preventing harm to hundreds of thousands of users.
    Over the past year, the FBI and our partners have also pursued 
members of Anonymous, who are alleged to have coordinated and executed 
distributed denial of service attacks against various Internet 
companies. To date, 16 individuals have been arrested and charged in 
more than 10 States as part of this ongoing investigation. According to 
the indictment, the Anonymous group referred to the distributed denial 
of service attacks as ``Operation Avenge Assange'' and allegedly 
conducted the attacks in support of Wikileaks founder Julian Assange. 
The defendants are charged with various counts of conspiracy and 
intentional damage to a protected computer.
    U.S. law enforcement and intelligence communities, along with our 
international and private sector partners, are making progress. 
Technological advancements and the Internet's expansion continue to 
provide malicious cyber actors the opportunity to harm U.S. national 
security and the economy. Given the consequences of such attacks, FBI 
must be able to keep pace with this rapidly developing and diverse 
threat.

                            CRIMINAL THREATS

    Criminal organizations--domestic and international--and individual 
criminal activity also represent a significant threat to our security 
and safety in communities across the Nation. FBI focuses on many 
criminal threats, from white-collar crime and healthcare fraud to 
organized crime and gang violence to corruption and violence along the 
Southwest Border. Today, I would like to highlight a number of these 
criminal threats for the subcommittee.
    Financial and Mortgage Fraud.--From foreclosure frauds to subprime 
scams, mortgage fraud is a serious problem. FBI continues to develop 
new approaches and techniques for detecting, investigating, and 
combating mortgage-related fraud. Through the use of joint agency task 
forces and working groups, FBI and its partners work to pinpoint the 
most egregious offenders and identify emerging trends before they 
flourish. In fiscal year 2011, these efforts translated into roughly 
3,000 pending mortgage fraud investigations--compared to approximately 
700 investigations in fiscal year 2005. Nearly 70 percent of FBI's 
pending investigations involve losses of more than $1 million. The 
number of FBI Special Agents investigating mortgage fraud cases has 
increased from 120 in fiscal year 2007 to 332 Special Agents in fiscal 
year 2011. The multi-agency task force and working group model serves 
as a force-multiplier, providing an array of interagency resources and 
expertise to identify the source of the fraud, as well as finding the 
most effective way to prosecute each case, particularly in active 
markets where fraud is widespread.
    FBI and its law enforcement partners also continue to uncover major 
frauds, insider trading activity, and Ponzi schemes. At the end of 
fiscal year 2011, FBI had more than 2,500 active corporate and 
securities fraud investigations, representing a 47 percent increase 
since fiscal year 2008. Over the past 3 years, FBI has obtained 
approximately $23.5 billion in recoveries, fines, and restitutions in 
such programs, and during fiscal year 2011, FBI obtained 611 
convictions, an historic high. FBI is pursuing those who commit fraud 
at every level and is working to ensure that those who played a role in 
the recent financial crisis are brought to justice.
    For fiscal year 2013, FBI is requesting a program increase totaling 
$15 million and 44 positions (40 Special Agents and 4 Forensic 
Accountants) to further address financial and mortgage fraud at all 
levels of organizations--both senior executives and lower level 
employees. These resources will increase FBI's ability to combat 
corporate fraud, securities and commodities fraud, and mortgage fraud, 
and they will enable FBI to adapt as new fraud schemes emerge.
    Healthcare Fraud.--The focus on healthcare fraud is no less 
important. The Federal Government spends hundreds of billions of 
dollars every year to fund Medicare, Medicaid, and other Government 
healthcare programs. In 2011, FBI had approximately 2,700 active 
healthcare fraud investigations, up approximately 7 percent since 2009. 
Together with attorneys at DOJ and our partners at the Department of 
Health and Human Services, FBI is aggressively pursuing fraud and abuse 
within our Nation's healthcare system.
    The annual Health Care Fraud and Abuse Control program report 
showed that the Government's healthcare fraud prevention and 
enforcement efforts recovered nearly $4.1 billion in taxpayer dollars 
in fiscal year 2011. This is the highest annual amount ever recovered 
from individuals and companies who attempted to defraud taxpayers or 
who sought payments to which they were not entitled.
    Gangs and Violent Crime.--Violent crimes and gang activities exact 
a high toll on victimized individuals and communities. There are 
approximately 33,000 violent street gangs, motorcycle gangs, and prison 
gangs with about 1.4 million members who are criminally active in the 
United States today. A number of these gangs are sophisticated and well 
organized; many use violence to control neighborhoods and boost their 
illegal money-making activities, which include robbery, drug and gun 
trafficking, fraud, extortion, and prostitution rings. Gangs do not 
limit their illegal activities to single jurisdictions or communities. 
FBI is able to work across such lines and, therefore, brings particular 
value to the fight against violent crime in big cities and small towns 
across the Nation. Every day, FBI Special Agents work in partnership 
with State and local officers and deputies on joint task forces and 
individual investigations. The FBI also has a surge capacity that can 
be tapped into during major cases.
    FBI joint task forces--Violent Crime, Violent Gang Safe Streets, 
and Safe Trails Task Forces--focus on identifying and targeting major 
groups operating as criminal enterprises. Much of the FBI's criminal 
intelligence comes from our State, local, and tribal law enforcement 
partners, who know their communities inside and out. Joint task forces 
benefit from FBI surveillance assets and its sources track these gangs 
to identify emerging trends. Through these multi-subject and multi-
jurisdictional investigations, FBI concentrates its efforts on high-
level groups engaged in patterns of racketeering. This investigative 
model enables us to target senior gang leadership and to develop 
enterprise-based prosecutions.
    In addition, while the fiscal year 2013 budget proposes to 
eliminate the National Gang Intelligence Center (NGIC), this will not 
hinder the FBI's ability to perform the analytical work done there. FBI 
will continue to produce intelligence products and threat assessments, 
which are critical to reducing criminal gang activity in our 
communities. FBI will also continue to examine the threat posed to the 
United States by criminal gangs and will focus on sharing intelligence 
at the field level, where intelligence sharing and coordination between 
DOJ agencies and State and local partners already exist. For example, 
our Field Intelligence Groups regularly produce intelligence products 
covering criminal threats, including gangs. It is through these 
existing resources that we will continue to produce gang-related 
intelligence in the absence of NGIC. In fact, the responsibility for 
the production of that material will happen now at the field level 
where gangs operate in neighborhoods, districts, and communities. The 
field offices are the closest to the gang problem, have a unique 
understanding of the gang problem and are in the best position to share 
that intelligence.
    Violence Along the Southwest Border.--The escalating violence 
associated with drug trafficking in Mexico continues to be a 
significant issue. In addressing this crime problem, FBI relies on a 
multi-faceted approach for collecting and sharing intelligence--an 
approach made possible and enhanced through the Southwest Intelligence 
Group, the El Paso Intelligence Center, Organized Crime Drug 
Enforcement Task Force Fusion Center, and the Intelligence community. 
Guided by intelligence, FBI and its Federal law enforcement partners 
are working diligently, in coordination with the Government of Mexico, 
to counter violent crime and corruption that facilitates the flow of 
illicit drugs into the United States. FBI is also cooperating closely 
with the Government of Mexico in their efforts to break the power of 
the drug cartels inside the country.
    Most recently, the collective efforts of the FBI, Drug Enforcement 
Administration, and other United States and Mexican law enforcement 
partners resulted in the identification and indictment of 35 leaders, 
members, and associates of one of the most brutal gangs operating along 
the United States-Mexico border on charges of racketeering, murder, 
drug offenses, money laundering, and obstruction of justice. Of these 
35 subjects, 10 Mexican nationals were specifically charged with the 
March 2010 murders in Juarez, Mexico, of a United States consulate 
employee and her husband, along with the husband of another consulate 
employee.
    Organized Crime.--Ten years ago, the image of organized crime was 
of hierarchical organizations, or families, that exerted influence over 
criminal activities in neighborhoods, cities, or States. That image of 
organized crime has changed dramatically. Today, international criminal 
enterprises run multi-national, multi-billion-dollar schemes from start 
to finish. These criminal enterprises are flat, fluid networks and have 
global reach. While still engaged in many of the--traditional--
organized crime activities of loan-sharking, extortion, and murder, new 
criminal enterprises are targeting stock market fraud and manipulation, 
cyber-facilitated bank fraud and embezzlement, identify theft, 
trafficking of women and children, and other illegal activities. This 
transformation demands a concentrated effort by FBI and Federal, State, 
local, and international partners to prevent and combat transnational 
organized crime.
    For example, late last year, an investigation by FBI and its 
partners led to the indictment and arrest of more than 70 members and 
associates of an Armenian organized crime ring for their role in nearly 
$170 million in healthcare fraud. This case, which involved more than 
160 medical clinics, was the culmination of a national level, multi-
agency, intelligence-driven investigation. To date, it remains the 
largest Medicare fraud scheme ever committed by a single enterprise and 
criminally charged by DOJ.
    The FBI is expanding its focus to include West African and 
Southeast Asian organized crime groups. The FBI continues to share 
intelligence about criminal groups with our partners, and to combine 
resources and expertise to gain a full understanding of each group. To 
further these efforts, the FBI participates in the International 
Organized Crime Intelligence Operations Center. This center serves as 
the primary coordinating mechanism for the efforts of nine Federal law 
enforcement agencies in combating nondrug transnational organized crime 
networks.
    Crimes Against Children.--FBI remains vigilant in its efforts to 
remove predators from our communities and to keep our children safe. 
Ready response teams are stationed across the country to quickly 
respond to abductions. Investigators bring to this issue the full array 
of forensic tools such as DNA, trace evidence, impression evidence, and 
digital forensics. Through globalization, law enforcement also has the 
ability to quickly share information with partners throughout the world 
and our outreach programs play an integral role in prevention.
    FBI also has several programs in place to educate both parents and 
children about the dangers posed by violent predators and to recover 
missing and endangered children should they be taken. Through our Child 
Abduction Rapid Deployment teams, Innocence Lost National Initiative, 
Innocent Images National Initiative, Office of Victim Assistance, and 
numerous community outreach programs, the FBI and its partners are 
working to make our world a safer place for our children.

                                OFFSETS

    FBI's fiscal year 2013 budget request proposes offsets totaling 
approximately $63 million, including program reductions. Proposed 
offsets, which are expected to result in little if any impact on the 
missions and responsibilities of FBI, include:
  --elimination of the NGIC;
  --reduction of one training day and equipment provided for Federal, 
        State, and local bomb technicians and the Special Weapons and 
        Tactics and Hostage Rescue Team training;
  --reduction of contractor workforce funding supporting national 
        security programs;
  --reductions in funding for permanent change of station transfers, 
        which relocates staff to meet organizational needs and carry 
        out mission requirements; and
  --reducing funding for information technology, facilities, and other 
        administrative initiatives.
    We will work to sustain our efforts in these program areas and 
minimize the impact of these proposed reductions.

                               CONCLUSION

    Responding to this complex and ever-changing threat environment is 
not new to FBI; in fact, it is now the norm. The budget proposed for 
FBI for fiscal year 2013 seeks to maintain current capabilities and 
capacities achieved through increases provided in the past, as well as 
target additional resources to address financial and mortgage fraud. 
These resources are critical for FBI to be able to address existing and 
emerging national security and criminal threats. Chairwoman Mikulski, 
Ranking Member Hutchison, and members of the subcommittee, I would like 
to close by again thanking you for this opportunity to discuss FBI's 
priorities and detail FBI's fiscal year 2013 budget request. Madam 
Chairwoman, let me again acknowledge the leadership that you and this 
subcommittee have provided to FBI. The transformation FBI has achieved 
over the past 10 years would not have been possible without your 
support. Your investments in our workforce, our technology, and our 
infrastructure make a difference every day at FBI offices in the United 
States and around the world, and we thank you for that support.
    I look forward to any questions you may have.

    Senator Mikulski. Thank you very much, Director Mueller.
    To my colleagues who have arrived, we're going to have one 
round of questions here, recognizing people in their order of 
arrival. When we've completed that, we will recess and then 
move to a classified hearing with the Director, particularly on 
those sensitive matters, and we will do that in our classified 
center and recess to CVC-217.
    Director, I want to move right into my questions. First of 
all, in your testimony, you showed the breadth of the work of 
the FBI, from international terrorism to cyber threats, to 
really working with our cops on the beat, and dealing also with 
where there is need, there's greed, like mortgage and 
healthcare fraud.
    So let me get right to, I think--we need to have for the 
record the major categories for FBI, which is how much of your 
$8 billion--which is actually a modest request, held very 
tightly pretty much to last year's funding--how much goes into 
national security, and then how much goes into traditional 
crime fighting, and then also where do they cross, like in the 
area of cyber? Because I think many people don't realize that 
the FBI has such a substantial role in counterterrorism, 
counterintelligence.
    FBI has transformed since 9/11. Could you elaborate, on 
your $8 billion, what goes into those categories?
    Mr. Mueller. Under the budget, 60 percent, or approximately 
$5 billion, is scored to what I would call the national 
security programs. That would be Counterterrorism, 
Counterintelligence, Directorate of Intelligence, Weapons of 
Mass Destruction, and additional pieces of other programs. 
That's about 60 percent of our budget, $5 billion. But also 
scored are pieces of other programs. For instance, the cyber 
program is split between criminal and national security. Sixty 
percent of the cyber program is scored to national security and 
relates to intrusions, whereas the other 40 percent relates to 
programs such as Innocent Images, which addresses child 
pornography on the Internet, and intellectual property rights--
the intellectual property crimes that we also address.
    So, 40 percent of it is cyber crime. The other 60 percent 
of it is perceived and scored against the national security 
piece of the budget, and that relates to computer intrusions.
    Senator Mikulski. Well, let's then go to the threat of 
sequester. I'm concerned that the Congress doesn't have a sense 
of urgency about cyber, but I'm also concerned that the 
Congress does not have a sense of urgency about the threat of 
sequester.
    Given this $8.2 billion, when one looks at what all we 
spend on other security issues, this is really modest. When you 
think of the scope, depth, technical expertise, personal 
integrity required of the agents and all who work there, what 
would happen to the FBI if sequester were triggered?
    Mr. Mueller. We tried to estimate what would happen in the 
event of sequestration, and the preliminary figures show that 
we would face a cut of $650 to $800 million of the $8 billion 
appropriated in 2012. That would translate into a 25-workday 
furlough across the FBI, and a reduction of 3,500 work years 
for Special Agents, intelligence analysts, and professional 
staff.
    Given what I've described in terms of the threats, we would 
have to do some very substantial prioritization, and it would 
have a huge impact on our investigations, our intelligence 
collection, and most particularly and not to be underestimated, 
it would have a very large impact on the morale of the 
workforce.
    We would have to rotate the furloughs to lessen the impact. 
We would have to reprioritize. But it would set us back to 
where we were many years ago, and the impact of that 
sequestration would be felt for many years in the future.
    Senator Mikulski. I have a whole set of questions related 
to cyber which I will defer to our classified meeting.
    In terms of accountability, as you know, I want to ask a 
question about Sentinel, on where you are in achieving the 
programmatic goals and keeping it within a budgetary framework. 
As you know, we've been at the Sentinel program, which was 
initiated a long time ago, to provide FBI with essentially 
virtual case files--to make them more effective and more 
productive. In the old lingo of post-9/11, connect the dots. 
Could you tell us, are we really getting Sentinel connected 
while we're busy trying to figure out how to connect the dots?
    Mr. Mueller. As you are aware, the contract was entered 
into a number of years ago. We had phase 1; that was produced. 
Phase 2, from our perspective, was not adequate. So we 
restructured the contract to bring in-house much of the 
software development. We had anticipated that we would be 
through the tests last fall and ready to start Sentinel. We had 
tests of the software, as well as the infrastructure to support 
the software. The software worked well, but the infrastructure 
needed updating.
    So, since the fall, we have put in new servers and built up 
the infrastructure to be able to handle the software package 
that is in the last stages of being completed.
    There are three factors that go into Sentinel. First, I 
want a product that people can use, that will be embraced in 
the field, and that actually works and is helpful. Second is 
the budget, and staying under budget. And third was doing it in 
a timely fashion. I have had to sacrifice the timely fashion in 
order to make certain that the product that we put in the field 
will be embraced by the workforce and, second, to keep it under 
budget.
    We have built up the infrastructure as a result of the 
consequence of the test we put in in the fall. We are testing 
that, and the tests are positive. My expectation is that 
certainly by the end of this fiscal year, by the fall, that we 
will have completed this and Sentinel will be in the field, and 
it will be under or just at budget.
    Senator Mikulski. Well, keep us posted on this.
    I now want to turn to Senator Hutchison, then Senators 
Lautenberg, Graham, and Feinstein.
    Senator Hutchison. Okay. Madam Chairman, I'm going to let 
Senator Graham have my time, and I'll come back at the end 
because I'm going to stay anyway. I do have questions, but I'm 
going to defer to Senator Graham.
    Senator Mikulski. Senator Graham.
    Senator Graham. Thank you. This has been a very informative 
hearing.
    Is it fair to say that we do not have the legal 
infrastructure in place to deal with the cyber threats that we 
face, that the Congress needs to give you better legislative 
support?
    Mr. Mueller. Yes.
    Senator Graham. Is it fair to say that, of all the things 
that we should be concerned about, cyber attacks from foreign 
governments and terrorists is a growing threat by the day?
    Mr. Mueller. Yes.
    Senator Graham. Okay. Would you consider a cyber attack 
generated from the People's Liberation Army of China against 
our national security infrastructure, should that be considered 
a hostile act?
    Mr. Mueller. Well, you're in an area that's somewhat beyond 
my purview, but in the way you would describe it, absolutely, 
it would be a hostile act. Now, I don't know about the 
connotations that hostile act has for----
    Senator Graham. See, I don't know either, but I think we 
need to come to grips with that because you've got a law 
enforcement model----
    Mr. Mueller. Yes.
    Senator Graham [continuing]. Against cyber attacks where 
people engage in economic espionage. They may try to shut down 
a powerplant or the grid. When is it a crime, and when is it a 
national security hostile act done under the law of war? I 
think that's what we need to consider among ourselves, and I 
would argue that, let's say, these Web sites generated by al 
Qaeda, if an al Qaeda-backed organization tried to commit a 
cyber attack, would you consider that an attack on the United 
States?
    Mr. Mueller. Yes.
    Senator Graham. So if we captured somebody involved in a 
cyber attack that was affiliated with al Qaeda, they would be 
treated differently than a common criminal. Is that correct?
    Mr. Mueller. It depends on the circumstances. I see where 
you're going, and----
    Senator Graham. You could use one or two models.
    Mr. Mueller. You could, and if I may, what you point to is 
one of the difficulties in the cyber arena.
    Senator Graham. I agree with that.
    Mr. Mueller. Because at the point in time of an intrusion, 
you don't know whether it's going to be a country, a terrorist, 
or the 18-year-old kid down the block.
    Senator Graham. Right, and the best way to find that out, I 
believe, is to hold someone that you suspect of being involved 
in terrorism and gather the information in an orderly fashion, 
and I do believe the law enforcement model has deficiencies in 
that regard.
    The people at Guantanamo Bay, there are some people being 
held there for multiple years. Is that correct?
    Mr. Mueller. Yes.
    Senator Graham. Have FBI agents interviewed the population 
at Guantanamo Bay----
    Mr. Mueller. Yes.
    Senator Graham [continuing]. On a regular basis? Have we 
gathered good information over time from that population 
without using waterboarding?
    Mr. Mueller. Yes.
    Senator Graham. Don't you agree that the best way to 
interrogate someone is not to torture them but to use 
traditional military law enforcement techniques?
    Mr. Mueller. That's somewhat of a loaded question. I will 
say that----
    Senator Graham. You can say ``No.''
    Mr. Mueller. I will say that we follow our rules, and what 
we have had for years----
    Senator Graham. And yet you don't torture people in the 
FBI, do you?
    Mr. Mueller. Pardon?
    Senator Graham. You don't torture people, do you?
    Mr. Mueller. No. No, Sir.
    Senator Graham. And you get good information.
    Mr. Mueller. Yes.
    Senator Graham. I totally agree.
    So what I would suggest to the subcommittee is that, 
Senator Mikulski's questions about sequestration, if this is 
not a wake-up call for the Congress, what would be? You just 
heard the FBI Director, who I think is doing a marvelous job, 
and all his agents, tell us that if we do what we're planning 
to do, we're going to devastate one of the frontline agencies 
in the war on terror.
    Ten years ago, what was FBI's budget when it came to 
national security issues? What percentage of your budget?
    Mr. Mueller. I would say two-fifths of the budget back in 
fiscal year 2001 was national security, and I would say the 
principal percentage of that was addressed to espionage in the 
Counterintelligence Division.
    Senator Graham. So before 9/11, what percentage of your 
budget?
    Mr. Mueller. I would say approximately two-fifths.
    Senator Graham. Okay. So if your budget has gone up from 
two-fifths, it's now 60 percent dealing with national security 
issues, something's got to give. Has your budget gone up? How 
much has your budget gone up in the last 3 years?
    Mr. Mueller. Last 3 years I'd say maybe $1 billion. I'd 
have to check.
    Senator Graham. Okay. What percentage of increase is that?
    Mr. Mueller. I can tell you since fiscal year 2001. Our 
budget in fiscal year 2001, which I'm much more familiar with, 
was $3.1 billion. It is now $8 billion. So it has almost 
tripled over that period of time.
    Senator Graham. Okay. And these resources have been needed?
    Mr. Mueller. Yes.
    Senator Graham. Do you have enough money to do all the jobs 
that you have told us that you do? And if you don't, tell us, 
because----
    Mr. Mueller. Well, it is a prioritization. We have to 
prioritize. As you saw, the threats that we face are 
substantial.
    Senator Graham. Mr. Director, it's one thing to prioritize. 
Everybody does it at home and in their businesses. It's another 
thing to just have to do it on the cheap.
    Are we giving you enough money not only to prioritize but 
to fully and robustly deal with the threats the United States 
faces? And if you think you need more money, now is the time to 
tell us.
    Mr. Mueller. I would say that my concern in the immediate 
future is having sufficient funds to build up the capabilities 
to address cyber in the same way we had and were afforded the 
funds to address counterterrorism. And whether that's fiscal 
years 2013, 2014, or 2015, I think that is an issue that is 
going to require additional funds down the road.
    Senator Graham. Could you give us some estimate, privately 
or whatever is appropriate, about how to build up the cyber 
account? Because not only do we need new laws to deal with the 
cyber threat, we probably need to fund you more robustly.
    So, thank you.
    Senator Mikulski. Will you be able to come to our 
classified----
    Senator Graham. Yes, ma'am. If I can get back from my press 
conference about Medicare, I will be there. And if we can save 
money on Medicare, we'll give some of it to him.
    Senator Mikulski. Senator Graham, thank you very much, and 
we'll look forward to seeing you in the classified hearing. 
Your considerable expertise in Armed Services and, again, 
you're a Judge Advocate General officer, this exchange was very 
informative.
    I also want to comment, on this side, Senator Lamar 
Alexander is absent because of a family illness. He sends his 
regards and will have questions for the record. I wanted to 
note his absence was due to a very compelling family reason.
    Senator Lautenberg.

                STATEMENT OF SENATOR FRANK R. LAUTENBERG

    Senator Lautenberg. Thanks, Madam Chairman.
    And thanks, Director Mueller, for the wonderful work that 
FBI has done, the diligence and the competence that your people 
operate with, and hats off to you for your leadership there. 
It's quite incredible when we hear a review of what has 
happened budgetarily for these years.
    And I'm reminded that on 9/11, the loss of lives and the 
restructuring of our society took place in a way that is not 
yet fully understood. On D-Day at Normandy, on Pearl Harbor 
day, we didn't lose as many Americans as we did on 9/11. And 
what we find, the proliferation of guns--and I'm not doing a 
second amendment review here. We're talking about guns in the 
wrong hands. We're not talking about people who apply and go 
through the rigors of testing, as they do now.
    One of the questions that I'm really anxious to review is, 
we now understand that people from the New York Police 
Department (NYPD) were doing surveillance in the State of New 
Jersey, across the river into our sovereignty. Last week, the 
Special Agent in Charge (SAC) of the FBI Newark Office 
criticized the NYPD surveillance of New Jersey communities and 
universities saying, and I quote him, ``It makes our job much, 
much harder.''
    Mr. Director, how do you feel about that?
    Mr. Mueller. Let me start off by saying that we have a very 
good relationship with the NYPD, and the work that the NYPD has 
done since September 11 to protect New York and the surrounding 
communities is first rate, and there has not been a successful 
attack on New York, in large part attributable to the work 
that's done by the NYPD, along with the Joint Terrorism Task 
Force, which has been ongoing for many years in New York, as 
has the Joint Terrorism Task Forces in New Jersey and 
elsewhere.
    Often there are issues in how you go about doing your work 
that arise over a period of time that are considered bumps in 
the road in terms of your cooperation. My expectation is that 
whatever bumps in the road there have been in the past in terms 
of alerting people to actions that are taken will not take 
place in the future.
    But it should not interfere with the work that is being 
done, and done exceptionally well, with the Joint Terrorism 
Task Forces in New Jersey, as well as in New York.
    Senator Lautenberg. Yes, and I agree with that, Director. 
But the fact of the matter is that there ought to at least be 
some privilege given to the law enforcement structure in our 
State, and for them to be alerted. Why should there not be that 
information available? What about cross-currents and bumping 
into one another? And I'm not going to press you further on 
this.
    Mr. Mueller. Well, I'll tell you, everybody knows you often 
have jurisdictional issues between the FBI and State and local 
law enforcement, between sheriffs and police chiefs and the 
like. It is not unusual to have that. My belief is you sit 
down, you talk about it in private, you get it resolved, and 
you move on. That's what has happened over a period of time, 
whether it be New York or Philadelphia or Washington, DC or San 
Francisco or Los Angeles or what have you.
    So, as was pointed out by the SAC in his remarks, he has a 
good relationship with NYPD in New Jersey.
    Senator Lautenberg. That's true.
    I want to ask you a question about people on the terror 
watch list. They're able to legally purchase a gun or 
explosives. In addition, the gun show loophole allows anyone to 
walk into a gun show, purchase a gun, no questions asked. And 
when you look at the statistics of murders in our country 
compared to other advanced societies, our numbers dwarf 
anything that comes from other places--England, Germany, 
Australia, you name it--Canada.
    Isn't it time to close that terror gap and the gun show 
loophole?
    Mr. Mueller. As we've discussed before in each hearing that 
we've had, I defer to the Department of Justice in terms of 
particular legislation. But needless to say, anything that can 
keep the guns out of the hands of terrorists or criminals is 
something that is beneficial in terms of reducing the extent, I 
believe, of violence in our society.
    Senator Lautenberg. Madam Chairman, may I continue with one 
more question even though the gong may go off?
    Cruise lines are required to inform FBI about serious 
crimes, and the number of crimes is supposed to be made public. 
However, according to FBI data that I obtained, the number of 
crimes posted online is lower than that reported by the 
industry. We're planning to change the law to address this 
discrepancy.
    In the meantime, what steps can FBI take to publicly 
disclose the actual number of serious crimes on cruise ships? 
And I don't want to--I'm not interested in hurting the 
industry, but I'm also not willing to permit crimes to be 
developed and not give the public the true facts about what's 
taking place.
    Mr. Mueller. Well, I think you raise two issues. One is the 
extent of reporting and compliance with the law, which requires 
reporting. Certainly, we can educate the cruise line companies 
in terms of the necessity of doing that and assuring, to the 
extent possible, that they comply with the statute.
    Second, in terms of making those figures public, I will 
have to get back to you. I am not certain to what extent they 
are publicized, and if not, why they would not be publicized.
    [The information follows:]

Whether the Federal Bureau of Investigation Makes Public Data on Crimes 
                       Occurring on Cruise Ships

    The Federal Bureau of Investigation (FBI) complies with the 
reporting requirements of the Cruise Vessel Security and Safety Act of 
2010 (CVSSA), which is codified in chapter 35 of title 46, United 
States Code. Pursuant to the CVSSA, when certain serious criminal 
offenses are alleged to have been committed on board a covered vessel, 
the owner of the vessel must report the offense both to an Internet-
based portal and to FBI. FBI does not open investigations on all of the 
alleged incidents reported to it. Often these are sexual offenses in 
which late reporting has resulted in a loss of physical evidence or a 
contaminated crime scene. In other cases, the next port of call or 
other country exercising jurisdiction has delayed investigation or 
intervened in a way that affects FBI's ability to conduct a thorough 
investigation. Each quarter, FBI reports to the Secretary of the 
Department of Homeland Security the number of cases closed during the 
quarter that stemmed from the serious criminal offenses reported to us. 
This number does not include investigations that were never opened, 
investigations that remain open, or investigations of offenses other 
than those serious criminal offenses specified by the statute.

    Senator Lautenberg. Thank you, Madam Chairman.
    Senator Mikulski. Before I turn to Senator Feinstein, I 
just want to comment. You have a long history on defending 
people on cruise ships. Do you remember there were some 
terrible incidents many years ago?

                           PREPARED STATEMENT

    Senator Lautenberg. Absolutely.
    Senator Mikulski. And you are to be congratulated. We need 
to protect the people that sail on the seas from pirates or 
other despicable behavior, and we look forward to hearing more 
from you about that.
    [The statement follows:]

           Prepared Statement of Senator Frank R. Lautenberg

    Madam Chairman, it goes without saying that the attacks of 
September 11, 2001, changed all of us. We lost more Americans 
that day than at Pearl Harbor or on D-Day, including 746 New 
Jerseyans who died that day. In the years since 9-11, the 
Federal Bureau of Investigation (FBI) has been asked to do more 
to keep us safe, and the Bureau has risen to the challenge.
    But to truly ensure our safety, we need laws on the books 
that prevent dangerous criminals from accessing dangerous 
weapons. More Americans have died from gun murders here at home 
in the past decade than have died on the battlefields of Iraq 
and Afghanistan. In 2008, guns were used to murder around 
10,000 Americans. By comparison, in the same year, guns killed 
39 people in England and Wales, 35 in Australia, and 200 in 
Canada.
    Recently our remarkable colleague Congresswoman Gabby 
Giffords stepped down from the Congress to focus on her 
recovery from a horrific shooting in January 2011. On that 
tragic day in Tucson, a man emerged from a supermarket, shot 
Representative Giffords in the head at point blank range, and 
fired 31 rounds before running out of ammunition. His rampage 
ended only when he stopped to reload and brave bystanders 
tackled him to the ground. Nineteen people were shot, and six 
were killed. If the shooter had been forced to reload sooner, 
lives might have been saved. That's why I've introduced 
legislation to reinstate the Federal ban on high-capacity 
magazines like the one the shooter used.
    We must also do more to keep guns out of the hands of 
criminals and terror suspects. Next month will mark 13 years 
since the shootings at Columbine--and as we know, the killers 
obtained their firearms at gun shows. More than a decade later, 
anyone--including known terrorists, convicted criminals, and 
the mentally ill--can walk into a gun show and purchase a gun, 
no questions asked. And, under current law, known and suspected 
terrorists are free to purchase any firearm--including an 
assault weapon--from a licensed gun dealer. Data from the 
Government Accountability Office show that from February 2004 
through December 2010, firearms or explosives transactions 
involving individuals on the terrorist watch list were allowed 
to proceed 1,321 times. I have a bill that would close the gun 
show loophole by requiring all sellers at gun shows to do 
background checks, and another that would eliminate the terror 
gap by giving the Attorney General the authority to stop 
individuals on the terror watch list from buying firearms. 
Passing these common sense bills would reduce violent crime and 
protect those who are charged with protecting us.
    The FBI stopped several recent terror plots, providing 
public reminders of the Bureau's constant work to keep us safe. 
My State of New Jersey is home to the stretch some in law 
enforcement have identified as ``the most dangerous area in 
America'' for a terrorist attack. We must make sure that the 
FBI has the resources it needs, and is doing everything it can 
to protect this area. I look forward to hearing from Director 
Mueller about how we can support the FBI in this critical 
mission and how we can improve our gun laws to keep Americans 
safe.

    Senator Lautenberg. Thank you.
    Senator Mikulski. Senator Hutchison, who was going to be 
next, yields to you. And so then we'll go to Murkowski and 
Hutchison that way, okay?
    Senator Feinstein. Thank you very much.
    I wanted to take up where Senator Graham left off. There 
has been an effort emanating out of the Armed Services 
Committee to change the National Defense Authorization Act 
(NDAA) to essentially put this country's detention policy under 
the laws of war. Under the laws of war, an individual can be 
held without charge or trial until the end of hostilities--the 
point made that America is a battlefield--and I think that's 
the point that some have been trying to make.
    I'd like to ask your view of this. I'm strongly opposed to 
it. I also know what you said during the worldwide threat 
hearing, that the FBI has interrupted or arrested some 20 
terrorist plots in this country over the past year. You have 
the high-value interrogation group, which, you testified to the 
House Appropriations Committee, has done 14 interrogations, and 
I gather with some success.
    I would like to ask you to comment on whether you believe 
that permanently detaining Americans without trial or charge is 
appropriate.
    Mr. Mueller. I would have to start with the NDAA 
legislation that has recently been passed which addresses that 
particular issue. As I think you and others are aware, I had 
some concerns at the outset in two areas: the continuation of 
our authorities during detention initially in military custody 
here in the United States; and second, whether or not there 
could be clarity in terms of either the statute or the 
Presidential directives that would clarify the process in which 
a person is deemed to be not an American citizen, but a person 
who is an al Qaeda affiliate engaged in a terrorist plot, and 
to what extent would there be an immediate military detention.
    With both the statute as well as the President's 
directives, I'm comfortable that the capabilities of the 
Bureau, coupled with the capabilities of the Department of 
Defense (DOD), will be maintained in that rather unique 
situation where you have a foreigner, not a U.S. citizen, who 
undertakes a terrorist attack affiliated with al Qaeda in the 
United States.
    Looking at that discrete issue, I am comfortable that we 
have preserved what we needed to preserve our role in that 
process.
    Senator Feinstein. But----
    Mr. Mueller. The broader question that you have----
    Senator Feinstein. The broader question is that the law is 
very cloudy, and this is a problem. And the court has had some 
holdings that you cannot detain a person indefinitely 
regardless of whether they're a citizen or not in this country 
without charge or trial.
    Mr. Mueller. The Supreme Court has occasion to opine on 
various aspects of that. What I have wrestled with is 
particular pieces of legislation that would impact that process 
whereby a person is detained in the United States, whether they 
are a U.S. citizen or a non-U.S. citizen. Both the Department 
of Justice and the President determine whether or not a person 
is ultimately tried or you proceed against that person in an 
Article III court, in which we operate, or in a military 
tribunal, which has also been upheld by the Supreme Court.
    So with the NDAA legislation, I believe that the issues 
have been fleshed out to the extent that I'm comfortable with. 
But I really hesitate to comment on other issues which have 
either not been the subject of legislation or are unique to a 
particular circumstance where you really don't know the facts, 
and not knowing the facts, it's very hard to apply the law.
    Senator Feinstein. Right. I appreciate that, and I 
appreciate the need for executive flexibility, whether it's 
military or whether it's a Federal court.
    Having said that, Senator Mikulski and I both serve on the 
Intelligence Committee, and the Foreign Intelligence 
Surveillance Act (FISA), is up for reauthorization and must be 
reauthorized by the end of the year. Do you view that 
reauthorization as important? Do you view it as valuable? And, 
if so, why?
    Mr. Mueller. I would go beyond that and use the word 
``critical'', because the world in which we live today is what 
Tom Friedman talks about, a ``flat'' world. With technology, 
criminals, terrorists and cyber terrorists cut across borders, 
at will, in seconds. And it is absolutely essential that the 
intelligence community, whether it be domestic but most 
particularly foreign, has the flexibility and capability of 
obtaining communications by these individuals as quickly as 
possible in order to prevent attacks, whether those attacks in 
the future be a terrorist attack on the infrastructure, on the 
financial structure, or attacks by al Qaeda and the like in 
cyberspace. It's absolutely essential that we have those tools.
    Senator Feinstein. Would you say that FISA is a critical 
tool of counterterrorism in this country?
    Mr. Mueller. Yes. Yes, and also it will be a critical tool 
as well in the cyber arena.
    Senator Feinstein. Yes. Thank you very much.
    Thank you, Madam Chairman.
    Senator Mikulski. And, Senator Feinstein, I hope you can 
join us shortly in our classified session as well.
    Senator Murkowski.
    Senator Murkowski. Thank you, Madam Chairman.
    Welcome, Director.
    Mr. Mueller. Ma'am.
    Senator Murkowski. Nice to have you here.
    This morning, the investigative report that details the 
prosecutorial misconduct in the case against Senator Ted 
Stevens was released. It was, I guess, precipitated almost that 
the Brady violations came about, but it was not until 5 months 
after that trial was completed that we learned of these 
violations, and it came about because of the complaint that was 
filed by an FBI agent that alleged the prosecutorial and other 
law enforcement misconduct in that case. In my opinion, that 
was exceptionally good work by that FBI agent, and Judge 
Sullivan suggested that were it not for the complaint of that 
agent, that, in fact, we might not have learned of the 
misconduct.
    I'm joined this morning, or this afternoon, with many of my 
colleagues, including Senator Hutchison, in filing legislation 
that would address some of the laws that are in place that 
allowed for this horrid situation to move forward. But because 
this whole thing came about because of the acts of an FBI 
agent, I would certainly hope that individual has been 
recognized for his persistence, standing up for the 
Constitution. I think he did right, and I hope that recognition 
has been given by FBI.
    Mr. Mueller. Well, I'd have to get back to you on any 
particular recognition. The case is still under review by the 
Office of Professional Responsibility (OPR), both the Justice 
Department as well as our own OPR. But I will say that the 
agent who came forward and did that was doing so in the 
tradition of FBI. It is a legacy to adhere to the Constitution. 
When you see something wrong, you bring that to the attention 
of others. That is exactly what we teach in our new agents 
training as they come through, that there is no case that is 
more important than abiding by the Constitution, the applicable 
statutes, and the Attorney General guidelines.
    [The information follows:]

Provide Details on any Recognition That was Given to the Federal Bureau 
of Investigation Agent That Reported the Alleged Misconduct of Senator 
                           Ted Steven's Case

    The Special Agent who reported the alleged misconduct did not 
receive an incentive award in recognition of this activity.

    Senator Murkowski. Well, I appreciate that. You mentioned 
the report that is still underway. I've asked OPR to conduct 
this formal investigation, and I am hoping that the FBI will 
work with OPR as they look into some of the issues that were 
behind the Stevens matter.
    In particular, the FBI has worked very, very closely with 
the Anchorage Police Department in this case that involved Bill 
Allen, who was the key witness in the case against Senator 
Stevens, and Mr. Allen was--it was alleged that he had 
transported a young Alaska Native woman across State lines in 
violation of the Mann Act. It's been widely reported in the 
media that the case was recommended for Federal prosecution, 
but DOJ higher-ups scuttled that.
    The question that I would have to you is, to what extent 
was the FBI involved in that investigation, and did that 
investigation indicate any reason that the prosecution should 
not go forward? This has just really stunned people back in 
Alaska. They cannot understand why DOJ has dropped this, and 
I've attempted to get answers all the way up the chain and 
simply have not been able to get any.
    Do you know any reason that, based on that investigation, 
the prosecution should not have gone forward?
    Mr. Mueller. I do not, but that is something we'd have to 
get back to you on. I would assume that this is a part of the 
OPR investigation inasmuch as the allegation that came out of 
that series of events, and that particular allegation, would be 
addressed in that arena.
    I am not familiar with the court's report that was issued 
earlier today, and I do not know whether that became or was a 
subject of that particular investigation.
    Senator Murkowski. Well, and I would ask you, because this 
is a matter that has really gone far beyond what most could 
have even have imagined, that you not only look at the report 
that is issued today but also do some follow-up in terms of the 
FBI investigation and where we are with OPR.
    The concern that so many of us have is that the allegations 
against Mr. Allen are, unfortunately, not isolated in Alaska. 
We have had a great deal of concern about sex trafficking 
within the State with young Native women, and I look at what 
has happened with the Bill Allen case, and the Government's 
failure to prosecute Bill Allen sends an awful message, just an 
awful message to other predators that might be out there, that 
if you are a young woman, and particularly a young Native 
woman, you don't stand a chance when you have been victimized 
by a person of political influence and financial means.
    We worry about the situation of sex trafficking. And again, 
if an individual doesn't feel that there is any recourse out 
there, it makes the situation pretty tough. So this goes even 
beyond the Bill Allen investigation. I know that you've got 
good folks within FBI that are working these issues. I've met 
with them. I've talked with them. But again, I think this is 
something that needs further attention to detail, and if you 
can give me your assurance that you will look into that, I 
would certainly appreciate it.
    Mr. Mueller. Yes. Also, I will tell you that when the 
issues came out in terms of the Brady violations, we went back 
to our workforce to make certain that everybody understands the 
requirements under the Brady rules, and if exculpatory, to make 
certain that one learns from this, first.
    Second, when it comes to human trafficking in Alaska, as 
you point out, we have persons that are working hard on that 
with State and local law enforcement who believe it is a 
priority. Any young woman or, for that matter, young man's life 
that can be saved in terms of working with State and local law 
enforcement to address this, we certainly want to be a 
participant and driver of that.
    Senator Murkowski. I appreciate that. Thank you, Director.
    Thank you, Madam Chairman.
    Senator Mikulski. Senator Hutchison.
    Senator Hutchison. Thank you, Madam Chairman.
    Just to add one more question to Lisa's line, and I think 
she has taken the lead on this, and properly so, but I do 
commend the FBI agent who came forward who just couldn't sit 
back and let a person be accused, go through a trial, lose an 
election, all based on very bad misconduct on the part of the 
agencies that we look to for complete integrity, which would be 
DOJ, the prosecutors, and the FBI.
    There were others that were implicated with the FBI in some 
of the alleged misconduct. And my question to you is, what are 
you doing to deal with the allegations, which I assume will 
come out in a report or the OPR report, if the agents are found 
to still be in the FBI and have been actually, to your 
satisfaction, part of the scheme that was put together to 
convict Senator Stevens?
    Mr. Mueller. Well, at the outset, the Justice Department 
OPR led the investigation. We participated and contributed to 
that investigation. To the extent that individuals within FBI 
were implicated, we, along with DOJ, investigated that. There 
is at least one individual who is still going through the OPR 
process. Let me just put it that way. I can tell you that 
process is monitored.
    But, it goes through a process whereby the person has an 
opportunity to respond to the charges and the findings. That 
process is under way. At the end, when it's resolved, we'll 
take a look at it and determine what lessons need to be 
learned, what the appropriate punishment is for whatever 
wrongdoing was undertaken, and do as we do in every case where 
we find that a person has not adhered to what we expect in FBI.
    Senator Hutchison. I would just ask if you would share the 
final result of that investigation and your actions with this 
subcommittee.
    Mr. Mueller. I'd have to look into that, but I would expect 
that we would report to you on what we have done.
    Senator Hutchison. I would ask that you do so.
    Mr. Mueller. Yes.
    [The information follows:]

   Report on Federal Bureau of Investigation's Investigation of the 
            Alleged Misconduct of Senator Ted Stevens' Case

    Federal Bureau of Investigation's investigation of employee 
misconduct related to the investigation of Senator Ted Stevens is still 
pending.

    Senator Hutchison. I want to just go back to a couple of 
other points. Number one, on cyber security, there are 
different bills that have been put forward to deal with cyber 
security. I think everyone in both bodies, the House and the 
Senate, and both parties in the House and Senate, agree it is a 
critical need that we address cyber security.
    I think how we do it is the question and the differences in 
the bills. Many of us are concerned about an overlay by DHS, 
especially over the areas that have developed the expertise 
through the years, and the experience in cyber warfare, 
security of all kinds, and that would be DOD, the Central 
Intelligence Agency (CIA), FBI, the Defense Intelligence Agency 
(DIA), as well as the National Security Agency (NSA).
    So we're trying to work through what the best approach is 
for cyber security, and I think my position has been that we 
don't need a DHS overlay so much as we need the agencies that 
have the experience and the expertise to be able to make these 
decisions on how is the best way to assure our networks and our 
infrastructure are secure.
    In a general way, how would you--I don't want to put you on 
the spot because I guess it's hard for you to say in this 
environment with all of the different ideas and the different 
agencies involved. But is there a particular area that you 
think is essential for us to agree on as we move forward in 
trying to determine how we get to the goal of securing our 
infrastructure?
    Mr. Mueller. Let me start by maybe indicating how I 
perceive the allocation of responsibilities in the cyber arena. 
On the one hand, you have the protection of the infrastructure, 
and protection of the .gov and .com networks. That falls to 
DHS.
    On the other hand you have, as was brought out, not just 
the possibility but the actuality of foreign countries seeking 
to extract information, with the possibility down the road of 
undertaking cyber attacks. That falls generally with the 
intelligence community overseas, NSA, CIA, and the like.
    In the middle comes domestic intrusions and a determination 
of whether that domestic intrusion is from a criminal, an 
organized crime group, a nation state, or a teenage hacker. We 
have 56 field offices around the country. We have 56 cyber 
squads. The first indication of a substantial intrusion will 
quite probably come to us, and it is our responsibility to do 
the investigation to determine who is behind that computer, and 
to stop them.
    Too often, the discussion is how we protect against foreign 
countries, but part of that has to be disrupting these 
individuals and putting them behind bars.
    The legislation that is currently pending includes three 
areas that are important to us. One is, to the extent possible, 
ultimately having a required notification to the Bureau of an 
intrusion. I think there are 47 States that have this, but it's 
all over the lot in terms of who has to report and when they 
have to report. So, first is notification.
    Second is, to a certain extent, the fact that we are where 
we were in terms of sharing information prior to September 11 
amongst the agencies. When it comes to counterterrorism, 
there's very little that's not shared. And I would say it's 
also readily true in the cyber arena amongst the agencies, 
whether it be DHS, NSA, ourselves, DIA and the like.
    What's so important to this is what you point out, both the 
experience and the expertise in the private sector. This is 
where it's different from addressing terrorism, because the 
private sector has to play a substantial role. The private 
sector runs our critical infrastructures. How you execute that, 
whether through the statute or not, is really up to others. My 
concern is the sharing of information so that we can determine 
who is responsible for this and lock them up.
    Perhaps the third area is the necessity of building up the 
expertise in the Federal Government amongst all of the agents, 
as well as the outreach to the private side, not only building 
up the expertise, but also the outreach to private businesses 
so that we become partners in ways that we have not in the 
other criminal arenas.
    Senator Hutchison. Well, you have really highlighted an 
area that makes this whole intelligence, security, holding 
accused terrorists without charges being filed--we're not 
dealing with an enemy that is a nation state, like we have in 
the past. So if you picked up a person that was in the German 
army or in the intelligence arm of the German Government, you 
would know in World War II that you had to hold that person in 
the military sense.
    But when it is organizations like al Qaeda and others that 
have attacked our country, but yet they're not under the rules 
of war as we accept it, the Geneva Conventions don't affect 
them, it makes it very difficult to deal with any kind of 
intelligence areas when you're dealing with an enemy of our 
country but not a nation state. So that's something that we're 
all going to have to deal with in, I think, I hope a realistic 
way, because I'm with Senator Graham on this.
    I think we need Guantanamo Bay. I think we need the ability 
to hold people that are suspected terrorists that have 
associations with al Qaeda and other networks that deal with al 
Qaeda, and I don't want us to give up our capability to protect 
our country from another attack from one of these entities that 
may not even be an organization yet.
    So I know you're wrestling with it. We are, too. But I'm 
going to come down on the side of protecting our people with an 
asymmetric war that we have. That's what we're given to deal 
with, and we've got to do it in a way that protects America.
    Thank you.
    Senator Mikulski. Thank you very much, Director Mueller.
    Colleagues, as Director Mueller has said, 60 percent of 
FBI's request is in the area of national security. Many of 
these are really sensitive issues that FBI is engaged in, and 
we need to make sure we get our resources right while we're 
working on very complex policies.
    Therefore, this is why we will move to a closed session.

                     ADDITIONAL COMMITTEE QUESTIONS

    If there are no further questions, the Senate may submit 
additional questions for the record. We request FBI's response 
in the usual 30 days.
    [The following questions were not asked at the hearing, but 
were submitted to the FBI for response subsequent to the 
hearing:]

           Questions Submitted by Senator Barbara A. Mikulski

                      FEDERAL PROGRAMS FACING CUTS

    Question. Under the terms of the Budget Control Act of 2011 (Public 
Law 112-25), funding for virtually all Federal programs will face a 
possible across-the-board cut in January 2013 if the Congress fails to 
enact a plan before then to reduce the national debt by $1.2 trillion. 
According to Congressional Budget Office estimates, this would result 
in a cut of roughly 8 percent to programs across the Federal Bureau of 
Investigation (FBI).
    What impacts would these cuts have on the FBI? What is your 
strategic plan for the FBI to implement these cuts if Congress fails to 
enact an alternative plan? Please provide a list of expected workforce 
furloughs, consequences to public safety and national security 
programs, and other reductions at the FBI if sequestration is 
implemented.
    Answer. The administration is committed to avoiding a sequester; we 
urge the Congress to enact balanced deficit reduction legislation that 
avoids this type of sequestration so the vital missions of the FBI can 
continue.
    The effect of an across-the-board cut of 8.5 to 10 percent would 
mean budget cuts of approximately $650 to $800 million in fiscal year 
2013 (the FBI's fiscal year 2012 Appropriation was $8,036,991,000). 
These reductions would impact the FBI mission and result in cuts to 
investigative operations and infrastructure, a Bureau-wide furlough, 
and a lengthy hiring freeze. While the implementation of a $650 to $800 
million cut cannot yet be determined, cuts in this range would likely 
result in a 25-workday furlough, resulting in a decrease of 
approximately 3,500 Special Agent, Intelligence Analyst, and 
Professional Staff work years. In addition to the negative impact on 
employee morale and productivity, a hiring freeze and furlough of this 
length would likely disrupt national security and criminal 
investigations, intelligence collection and dissemination, and 
surveillance capabilities.
    The FBI would make every effort possible to minimize the negative 
impact to public safety; however, budget cuts of this magnitude would 
have a significant effect on FBI operations. These cuts would take 
agents off the streets, delay investigations, and disrupt intelligence 
collection. The FBI would continue to work with its Federal, State, and 
local law enforcement partners, but at a reduced capacity.
    As a component of the Department of Justice (DOJ), the FBI would 
participate in the Department-wide furlough, which will affect every 
program and employee. If these cuts are enacted, the FBI will issue 
furlough notices and immediately begin furloughing employees in order 
to achieve the necessary savings by the end of the fiscal year. The 
furloughs would be implemented on a rotating basis with each of the 
FBI's 36,000 employees being required to take roughly 25 days off. In 
addition, the FBI may be forced to freeze equipment purchases, restrict 
investigative travel, and cancel service contracts.

               FEDERAL BUREAU OF INVESTIGATION RESCISSION

    Question. In fiscal year 2013, the FBI requests an appropriation of 
$8.2 billion, an increase of $114 million, or 1.4 percent. However, the 
request also proposes to rescind $162 million from the FBI's existing 
funding in the Salaries and Expenses account, which leads to a net 
reduction for the FBI to fight terrorism at home and abroad.
    What specific FBI activities would be impacted by the proposed 
rescission? Will the rescission impact missions in which Congress has 
made considerable investments in recent years? If so, which missions? 
How would this impact national security?
    Answer. DOJ and FBI are evaluating the impacts of the rescission. 
We will work to minimize its impact and ensure that priority programs 
and projects are not affected.

                          CYBER SECURITY CUTS

    Question. The Internet is the new battleground for terrorists, and 
the new playground for predators. To combat these threats, cyber 
security cuts across all of the FBI's programs.
    Why the urgency in combating cyber threats?
    Answer. Al Qaeda and other terrorist groups use the Internet as a 
recruiting tool, a moneymaker, a training ground, and a means for 
conducting operations. Terrorists have not used the Internet to launch 
a full-scale cyber attack, but we cannot underestimate their intent. 
Additionally, certain foreign nations use the Internet to steal our 
intellectual property and trade secrets for military and competitive 
advantage. We have also started to see that previously isolated hackers 
are now joining forces to create criminal cyber syndicates that steal 
information for sale to the highest bidder.
    Question. What cyber imperatives does the FBI face on security? 
Policy? Funding?
    Answer. The FBI will continue to expand its capacity to lead 
national efforts to investigate cyber intrusions, identify hackers, and 
put them in jail. The FBI will continue to build on current 
capabilities by:
  --Ensuring all agents are able to operate in the cyber environment;
  --Creating a virtual structure that enables cyber agents from around 
        the country to work together on difficult cases;
  --Cultivating sources that can infiltrate cyber criminal networks; 
        and
  --Expanding the network of cyber task forces around the country.
    Encouraging the private sector to share information with the 
Government about cyber intrusions and data breaches in a timely manner 
would enhance the FBI's ability to conduct investigations, identify 
hackers, and put them in jail. Hackers will not stop until we hold them 
accountable.
    The cyber threat continues to expand in scope and complexity, which 
will drive future funding requirements. Our adversaries are becoming 
increasingly sophisticated with using technology as a means to exploit 
our vulnerabilities; consequently, data, information, and 
infrastructure remain at risk of being compromised. We must continue to 
keep pace with technological advances.
    Question. The fiscal year 2012 Appropriations Act gave the FBI more 
resources for cyber training, specifically for agents. Please provide 
an update on the FBI's cyber training and what plans are being 
implemented. Will the fiscal year 2013 budget affect this plan?
    Answer. The FBI has recently restructured its cyber training 
curriculum to increase the emphasis on cyber national security 
investigations. Special Agents working on cyber issues will be trained 
toward working the most sophisticated organized crime and national 
security matters and will be required to complete more technically 
rigorous training requirements.
    In addition, the FBI is implementing a new initiative dedicated to 
training a majority of the workforce on conducting investigations in an 
increasingly high-technology environment. This training is expected to 
educate more than 16,000 FBI employees. This new training initiative 
will provide the cyber skills needed to conduct complex 
counterterrorism, counterintelligence, criminal, and computer 
intrusions investigations. Using base resources, we plan to expand and 
deploy this training to all FBI investigators in fiscal year 2013.

                       TRADITIONAL CRIME FIGHTING

    Question. The FBI's $8.2 billion budget is split at roughly 60 
percent for national security and counterintelligence, and 40 percent 
for traditional crime fighting efforts.
    How much goes to national security, and what activities make up 
this category? How much goes to traditional crime fighting? What 
activities make up this category? What programs cut across the national 
security and counterintelligence budget, and into the traditional crime 
fighting budget? What complications does this create in terms of the 
budget?
    Answer. The FBI's budget is broadly organized into four ``decision 
units'' as follows:
  --Intelligence;
  --Counterterrorism/counterintelligence;
  --Criminal enterprises/Federal crimes; and
  --Criminal justice services.
    The first two decision units are scored to national security and 
total nearly $5 billion, roughly 60 percent of the FBI's fiscal year 
2013 budget. These decision units fund all of the FBI's National 
Security Branch (Counterterrorism, Counterintelligence, Weapons of Mass 
Destruction, and the Directorate of Intelligence) as well as portions 
of other programs, such as Cyber. Funding for these decision units also 
includes pro-rated portions of enterprise-wide services such as 
information technology, rent, etc. The FBI's Cyber programs are divided 
between two basic categories:
  --Computer intrusions; and
  --Cyber crime.
    The Computer Intrusions section includes national security 
intrusions and programs such as the National Cyber Investigative Joint 
Task Force, representing approximately 60 percent of the overall Cyber 
Division budget.
    The latter two decision units total more than $3 billion of the 
FBI's budget and are scored to traditional criminal activities. This 
includes all of the Criminal Investigative Division, which operates the 
Violent Crime, White Collar Crime, and Public Corruption programs among 
others; our Criminal Justice Services Division; and the FBI laboratory. 
Also included is the Cyber Crime portion of the Cyber Division. Funding 
for these decision units also include pro-rated portions of enterprise-
wide services, like information technology, rent, etc.
    There are several programs that cut across both national security 
and criminal decision units. Cyber, as mentioned above, and 
Surveillance, are two examples.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

    NEW YORK CITY POLICE DEPARTMENT SURVEILLANCE OF MUSLIM AMERICAN 
                               COMMUNITY

    Question. In recent months, we have heard troubling information 
about the surveillance operations of the New York City Police 
Department (NYPD)--particularly targeting the Muslim American 
community. According to press accounts, the NYPD has been compiling 
databases of information concerning Muslim Americans residing 
throughout the northeast, and has used informants called ``rakers'' and 
``mosque crawlers'' to infiltrate mosques and Muslim student groups. 
Last week, the Special Agent in Charge of the Federal Bureau of 
Investigation's (FBI) Newark Division criticized these tactics as 
damaging to relations between law enforcement and the Muslim community, 
and more importantly, damaging to the counterterrorism efforts of the 
FBI.
    Was the FBI aware of the surveillance tactics being used by the 
NYPD to target the Muslim American communities in New York, New Jersey, 
and other places in the northeast prior to press reports on the matter? 
If so, when did it become aware of those tactics?
    Answer. The FBI is generally aware that the NYPD engages in 
physical surveillance and a wide range of other investigative 
techniques in connection with its efforts to protect New York City from 
terrorist attacks. The FBI was not specifically aware of the conduct 
described in the press reports and does not know if those reports are 
accurate. The FBI has and will continue to work with the NYPD, as we do 
with many state and local police departments, consistent with our rules 
and regulations under the Attorney General Guidelines and the Domestic 
Investigations Operations Guide.
    Question. I know that FBI agents must adhere to the Attorney 
General Guidelines and the FBI's Domestic Investigations and Operations 
Guide (DIOG) when the FBI is conducting surveillance. But does the FBI 
obtain and use information collected by the NYPD through use of the 
NYPD's surveillance tactics? If so, is this done in compliance with the 
relevant Federal guidelines?
    Answer. The FBI shares and receives information collected by its 
partner agencies. In particular, the FBI and NYPD work together on the 
Joint Terrorism Task Force, share investigative information, and 
exchange queries for operational and tactical de-confliction purposes. 
Unless circumstances suggest otherwise, the FBI assumes that our 
partner agencies have collected this information in accordance with the 
United States Constitution and other applicable laws and regulations.

                REGIONAL COMPUTER FORENSICS LABORATORIES

    Question. I have been working with a variety of stakeholders, 
including the law enforcement community, to strengthen and improve the 
forensic sciences used in criminal cases. Last year, I introduced 
legislation that would, among other things, help support forensics 
laboratories.
    Director Mueller, I understand that the FBI is in the process of 
trying to set up regional computer forensic laboratories and that a 
site has not yet been determined for New England. Can you tell me the 
current status of those plans and what the timeframe is for choosing a 
site for a regional lab in New England?
    Answer. The FBI has established 16 full-service Regional Computer 
Forensic Laboratories (RCFLs) devoted to the examination of digital 
evidence across the country. However, none are currently established in 
New England. Although there are no current plans to establish 
additional RCFLs the FBI continues to work with our law enforcement 
partners in the New England area to leverage all existing resources, 
facilities, and equipment to support its partners with the examination 
of digital evidence.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

                     HIGH-CAPACITY AMMUNITION CLIP

    Question. When Congresswoman Gabrielle Giffords and 18 others were 
shot on January 8, 2011, outside of a supermarket in Tucson, Arizona, 
the shooter used a gun with a high-capacity ammunition clip to kill 6 
people and wound 13 others. It was only when the shooter had fired all 
31 rounds in his clip that people were able to tackle him. At last 
year's hearing, Director Mueller stated that everybody in law 
enforcement supports efforts to lessen the threat of criminals getting 
weapons that do substantial damage. Would a high-capacity magazine ban 
lessen that threat?
    Answer. The Federal Bureau of Investigation (FBI) supports law 
enforcement efforts aimed at preventing prohibited persons from 
obtaining firearms, including those capable of substantial damage.

                           MOST AT-RISK AREA

    Question. According to the FBI, New Jersey is home to the most at-
risk area for a terrorist attack in the United States. An attack on 
this area could have an impact on 12 million people who live nearby. 
Last year, you assured me that the FBI is doing everything it can to 
ensure that there is not an attack there. What specific items in this 
budget request will help the FBI protect this area?
    Answer. The FBI continues to dedicate critical investigative 
resources to New Jersey's high-risk areas. As of April 2012, the FBI 
has more than 350 Special Agents in the Newark field office. Further, 
the FBI and DHS are working diligently through their task forces, 
including the Joint Terrorism Task Force (JTTF), to ensure the area 
remains safe by identifying and disrupting any threats. The fiscal year 
2013 budget includes resources to continue supporting the JTTFs and the 
Special Agents currently assigned to the Newark field office.

                     ILLEGAL TRAFFICKING OF TOBACCO

    Question. Reports from the Government Accountability Office have 
identified an estimated tax loss of $5 billion a year due to the 
illegal trafficking of tobacco. The tremendous profits and low criminal 
penalties have attracted the involvement of organized criminal and 
terrorist groups. The FBI has primary jurisdiction on terrorism and 
organized crime, while the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives (ATF) holds primary jurisdiction on cigarette trafficking. 
What are you doing to ensure that the FBI and ATF work together to 
prevent illegal tobacco proceeds from financing organized crime and 
terrorists?
    Answer. The Department of Justice's (DOJ) agencies have strong and 
effective working relationships with their DOJ partners as well as 
other Federal, State, and local agencies and a history of highly 
successful joint investigations. Supervisors in the field regularly 
review investigations on a case-by-case basis and involve other 
agencies as appropriate. For example, recently the ATF and the FBI 
worked together on ``Operation Secondhand Smoke'', an undercover 
investigation into a nationwide network of retailers, wholesalers, 
distributors, importers, and manufacturers who were avoiding cigarette 
taxes to make millions of dollars in profits.

                          SUBCOMMITTEE RECESS

    Senator Mikulski. This subcommittee will temporarily recess 
and reconvene in a closed session in room 217 in the CVC.
    Before I close this public part, I would like the Director 
to know, as we said to the Attorney General, when the issue is 
related to public integrity, and on the issues related to the 
Stevens matter, this is a bipartisan set of requests, because 
we feel that both our Justice Department--those involved in 
enforcing the law, if we're going to pursue public integrity 
issues, which we must and should, then those who are pursuing 
it have to have the highest public integrity themselves.
    We know FBI has that standard. You've insisted on that 
standard, and we thank you. But just note that it's not just 
from them because they're Republican and Stevens was on this 
subcommittee. It's larger than that.
    So we look forward to working with you, and we look forward 
to meeting in the other room where we can go into the national 
security budget in more detail.
    The subcommittee is temporarily recessed until we 
reconvene.
    Next week we'll have a hearing for the testimony of 
Secretary Bryson of Commerce.
    [Whereupon, at 11:18 a.m., Thursday, March 15, the 
subcommittee was recessed, to reconvene in closed session.]


  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              


                        THURSDAY, MARCH 22, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Barbara A. Mikulski (chairman) 
presiding.
    Present: Senators Mikulski, Inouye, Feinstein, Pryor, 
Brown, Hutchison, Murkowski, and Cochran.

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. JOHN BRYSON, SECRETARY

            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. The Subcommittee on Commerce, Justice, 
Science, and Related Agencies comes together, and today we will 
be taking the testimony of the Secretary of Commerce, John 
Bryson. We expect robust attendance at this hearing, and we 
note that the ranking member of the full Appropriations 
Committee, Senator Cochran, is here. And we also will be having 
votes at 12:30 p.m., so we hope to be able to move this in an 
expeditious way.
    We're meeting today to examine the Commerce Department's 
fiscal year 2013 budget, and we welcome Secretary Bryson. This 
is his first testimony before the subcommittee since becoming 
Secretary in October 2011. He brings valuable skills to his 
position, strong experience in the private sector, and he's 
been a strong voice for American manufacturers. We love the 
slogan, ``Build it here. Sell it everywhere.'' He knows 
firsthand what American business is facing in today's 
challenging economy. We look forward to hearing from him about 
the agency's budget and priorities.
    The Commerce Department is the major economic engine for 
America. The President's request totals $11 billion for the 
Department. This includes $3 billion in patent and trademark 
fees. Today, I want to examine just a few areas of this robust 
agency. Number one, the protection of not only American ideals, 
but America's ideas. It is in the area of intellectual property 
and the United States Patent and Trademark Office that we have 
a keen interest. We believe that if you invent it, we should be 
able to help you protect it. We are concerned about the 
backlog, the expeditious processing of patent claims, and then 
as a member of both this subcommittee and the Intelligence 
Committee, I am obsessed with cyber espionage. And that will be 
another theme that I will ask in my questions, which is the 
role of the Commerce Department in not only the cyber economy, 
but how to make sure we're protecting ourselves against the 
threats in this area, and the important function of the 
National Institute of Standards and Technology (NIST).
    We also are looking at how to protect our citizens, and 
this goes to whether it's protecting our coast from hurricanes, 
tornadoes, and others, and we're tremendously interested in 
what is happening to the National Oceanic and Atmospheric 
Administration (NOAA), and also particularly to NOAA's weather 
service.
    Then, we have to also look out for the taxpayer. The 
inspector general, over the history of this subcommittee, has 
identified persistent problems that need strong oversight. This 
isn't a blip, but there is a persistent problem in NOAA 
satellite procurement, and Census; we're not going to have 
another techno boondoggle like we had last time. And then, of 
course, the issue of the patent backlog.
    I believe the Department of Commerce needs to be cyber-
obsessed, creating ways to protect its own .gov systems and 
protecting those that use our .gov, particularly, again, in the 
area of cyber espionage.
    NIST is doing a fantastic job, and I know it's been capped 
by the President in this area, as well as playing the leading 
role now in saying manufacturing is alive in America, and we're 
going to make sure it's not only alive, but it thrives. So, 
we're going to ask for more details in that area and on 
intellectual property.
    We are concerned about NOAA's satellites, and ships, and 
planes, and that we need to be fit for duty. We owe it to the 
men and women who operate this equipment, and to the scientists 
and forecasters to make sure we are working with them. We're 
concerned that when it comes to NOAA's ships and NOAA's planes, 
they're kind of a little late at the switch to notice what the 
problems are, ending up in tremendous cost.
    We owe it to our people who work at NOAA that they have the 
best equipment and the best support from their government, so 
that they can be out there providing, whether it's for 
mariners, people who live in coastal communities, and so on. 
We're so proud of what they do. I know, as a Maryland Senator, 
we can't live without NOAA and its weather warnings, but when 
you talk with the Senators from Missouri, and now the way the 
tornado warnings have gone, to a Senator from Hawaii, to 
another Senator from Alaska, the tsunami warnings, and others--
so we do need to hear from you.
    The inspector general has identified several major issues, 
particularly controlling the cost of the 2020 census. Once 
more, we're seeing that the census cost has doubled. We can't 
go there again. And I'm just saying that. We really can't go 
there again. And we'll come back to what I'm going to be asking 
from you.
    I've identified some of the problems at NOAA. We're back to 
the Joint Polar Satellite System (JPSS), and to make sure that 
the satellite program is not out of control.

                           PREPARED STATEMENT

    I'm going to ask unanimous consent that my full statement 
be included in the record.
    [The statement follows:]

           Prepared Statement of Senator Barbara A. Mikulski

    Today, we're meeting to examine the Department of Commerce's fiscal 
year 2013 budget request. We welcome Commerce Secretary John Bryson for 
joining us today for his first testimony before the subcommittee since 
becoming Commerce Secretary in October 2011. Secretary Bryson brings 
valuable skills to his position. He has been a strong voice for 
American manufacturer, saying we need to ``Build it here, sell it 
everywhere.'' He knows firsthand what American businesses are facing in 
today's challenging economy. We look forward to hearing from him about 
his budget and his priorities.
    The Commerce Department is the major economic engine for America. 
The President's request totals $11 billion for the Department, 
including $3 billion in patent and trademark fees.
    Today, I want to examine how these funds will do three things:
  --Protect American ideas by safeguarding our intellectual property 
        with patents and trademarks and enforcement of our trade laws;
  --Protect our citizens by forecasting and warning about severe 
        weather; and
  --Protect taxpayer dollars.
    By that, I mean the Secretary of Commerce is the chief spokesperson 
for American business, but the Secretary is also the chief manager of 
major management challenges at the Department. Persistent problems need 
strong oversight. Issues that the Inspector General has identified 
include:
  --National Oceanic and Atmospheric Administration's (NOAA) satellite 
        procurement;
  --the next Census; and
  --the patent backlog and the stealing of our ideas.
    When it comes to protecting our ideas, the Department of Commerce 
needs to be cyber-obsessed--creating ways to protect its own ``.gov'' 
systems while working with the private sector to better protect 
``.com''. The National Institute of Standards and Technology (NIST), 
Commerce's outstanding science and research agency, is helping the 
private sector find new ways to solve today's cyber security problems. 
NIST's budget request of $860 million includes $60 million for cyber 
activities. I want to know how these funds will be used to protect 
online consumers and the private sector from cyber-attacks.
    But NIST is not the only agency standing sentry over America's 
intellectual property. The United States Patent and Trademark Office 
(USPTO) protects American ideas and inventions, which are the heart of 
economic prosperity and jobs. The USPTO has made progress in reducing 
the patent backlog, but more than 657,000 patents are waiting for 
approval and it takes 2\1/2\ years to grant a patent. I also want to 
make sure that USPTO's networks are secure American inventors are 
filing applications electronically. We must make sure the filing 
process is secure.
    When it comes to protecting people, every member of this 
subcommittee is pro-weather and pro-science. NOAA's satellites, ships, 
and planes need to be fit for duty. We owe it to the men and women who 
operate this equipment and to the scientists and forecasters who depend 
on the data to do their jobs. And most importantly, we owe it to our 
communities: to the coastal States that depend on accurate hurricane 
forecasts and to the interior States that depend on timely tornado 
warnings. I know the President's Government reform plan calls for 
moving NOAA to the Department of the Interior, but in the meantime, I 
want to know what you are doing now to keep people and communities 
safe.
    The Inspector General has identified several major issues 
persistent management problems for the Department. Serious issues 
continue to challenge the Department, particularly planning and 
management of the next Census and NOAA weather satellite procurement.
    Controlling costs for the 2020 Census is a top oversight concern 
for both the Inspector General and the Government Accountability 
Office. Cost overruns become a major problem during the 2010 Census, 
and already today we see estimates for the 2020 Census ranging from $22 
to $30 billion. That's more than double 2010 Census costs. I want to 
know what is being done to reduce costs now.
    When Secretary Bryson agreed to be the chief spokesman for 
America's businesses, he also knew that 60 percent of the Department's 
budget is for NOAA, which includes fisheries management, coastal 
resource protection, and operations of the National Weather Service. An 
area that I remain very troubled by is NOAA's acquisition of new 
weather satellites. The budget request for NOAA's new polar 
satellites--called Joint Polar Satellite Systems (JPSS)--is nearly $1 
billion. JPSS's life-cycle cost--the costs of development and 
operations--have increased yet again from $11.9 to $12.9 billion. This 
new total cost estimate shows that despite strong warnings from the 
subcommittee, JPSS is going in the wrong direction. Cost growth is 
hurting NOAA's core ocean and weather operations. This leads me to 
question if NOAA should remain responsible for procuring these 
satellites.
    In conclusion, I want to thank all the men and women of the 
Commerce Department. They are the trade experts, statisticians, patent 
and trademark examiners, scientists, engineers, and weather forecasters 
who work hard every day to promote American businesses, protect 
American ideas and resources and keep our economy moving forward.

    Senator Mikulski. And Senator Hutchison, I know Senator 
Inouye and Senator Cochran have joined us. May we defer to 
them, and then come back to you, and in turn, to our Secretary?
    Senator Hutchison. I'd be happy to. I'll be here for the 
duration.
    Senator Mikulski. I know that there are several hearings 
going on.
    Senator Hutchison. Yes.
    Senator Mikulski. Senator Inouye, did you want to make a 
statement?

                 STATEMENT OF SENATOR DANIEL K. INOUYE

    Senator Inouye. Madam Chair, thank you very much for this 
opportunity to say a few words about the President's fiscal 
year 2013 budget relating to the Commerce Department. But, 
before I begin, Madam Chair, I'd like to join the multitude of 
admirers and colleagues in congratulating you on becoming the 
longest-serving woman in our congressional history. I can't 
quite believe it, but----
    Senator Mikulski. I can't believe it either.
    Senator Inouye. You look too young and cute.
    Senator Mikulski. That, I can believe.
    Senator Inouye. But I've been around a little while, and I 
want to thank you for the great work you've done here.
    Madam Chair, I want to say a few words, but before I 
proceed I'd like to commend and thank the Secretary for the 
work he has been doing, and on behalf of my constituents, I 
thank you for your hands-on service to our people.
    I have just one concern, and that concern has been 
expressed by my chair: NOAA. So if I may, Madam Chair, I'd like 
to submit my statement and make sure that it's part of the 
record.
    Senator Mikulski. Absolutely, Senator. With unanimous 
consent, your statement is included in the record.

                           PREPARED STATEMENT

    Senator Mikulski. And then I know you and your staff have 
important questions, that they, too, will be submitted to the 
record, and we'll ask the Secretary to respond within 30 days.
    [The statement follows:]

             Prepared Statement of Senator Daniel K. Inouye

    Madam Chairwoman, thank you for the opportunity to say a few words 
with regard to the President's request for the Department of Commerce's 
budget for fiscal year 2013. Before I begin, however, let me also join 
my colleagues and others in congratulating you on making history as the 
longest-serving woman in congressional history. I have been around for 
a few years myself and deeply appreciate the honor and dignity that you 
have brought to both the House and the Senate through your dedicated 
service.
    Mr. Secretary, welcome and thank you for joining us. I have been 
reviewing the President's proposed budget and want to applaud you and 
the President for working to find ways to support our small businesses 
and decrease our trade deficit even in these perilous budget times. I 
know this is no easy task. However, this is not why I wanted to come to 
this hearing today. Rather, I wanted to come in order to make a special 
point about the agency which comprises more than 60 percent of your 
Department's discretionary budget and yet seems to merit less attention 
from year to year. I refer of course to the National Oceanic and 
Atmospheric Administration (NOAA) which, under the President's budget 
would receive a little more than $5.1 billion in fiscal year 2013. To 
be sure, this is an increase, but as we all know this increase is 
dedicated almost entirely to needed satellite programs while core 
agency functions and programs are elsewhere consolidated and cut. In my 
view, these cuts appear to have been made in a somewhat haphazard 
fashion with what seems to be a highly unfortunate emphasis on programs 
that have previously been quite clearly highlighted as congressional 
priorities. I might suggest that explicitly targeting such programs is 
not a constructive way to begin a dialog over what I consider to be an 
agency crucial to our Government's function, our Nation's economic well 
being, and our safety and security. To begin the annual budget 
conversation in such a way inevitably sets up a cycle where the 
Congress and the administration focus on more parochial interests to 
the detriment of any serious thinking that might be required about 
refocusing agency missions and priorities in a shrinking budget 
environment.
    You note in your written testimony that the cuts to NOAA were made 
so that the agency could focus on its ``most essential initiatives'' 
and that reductions were made to programs that were found to be 
redundant and ``of lower value''. This then is the rubric by which we 
must judge such actions as the proposed 20 percent cut to the National 
Tsunami Warning Network and Hazard Mitigation Program. Less than a year 
after one of the most devastating tsunami's the world has ever seen, 
the Department of Commerce decided that NOAA's tsunami warning program 
was, according to standards outlined in your testimony, nonessential, 
redundant, and of low priority. Given that my State suffered 
significant damage, though thankfully no loss of life, from the 
Japanese tsunami, this seems like an incorrect assessment to me. It 
also gives me pause as to the other proposed cuts to NOAA and I hope 
that we may continue to have a dialog as to your reasoning.
    I would like to add one last point with regards to the 
administration's proposal for reorganizing the business and trade 
functions of the executive branch. I sincerely congratulate you and the 
President on your willingness and desire to think creatively about how 
we may make Federal activities more efficient while at the same time 
enhancing the vital services that foster American enterprise. The 
proposal to reorganize and consolidate the business and trade functions 
of the Federal Government into a single Department has some value in 
terms of efficiency, economy, and effectiveness. However, there are 
still many issues yet to be worked out and some questions yet to be 
answered.
    I am especially concerned with the lack of details regarding the 
proposed fate of NOAA.
    I understand that there is a notional idea to move it the 
Department of the Interior with a promise that details will be worked 
out later. I also understand that the likelihood of any of this 
occurring in the near term is small. Nevertheless, I strongly suggest 
to you that, as with the budget, it is always better to start these 
conversations sooner. In this case there is no need to wait for the 
Congress to act on the President's request for reorganization 
authority. I and my staff would enthusiastically welcome a conversation 
with the administration about ways that we may strengthen NOAA while 
increasing Government efficiency.

    Senator Inouye. Thank you very much.
    Senator Mikulski. Senator Cochran, our ranking member, also 
a coastal Senator.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Madam Chair, thank you very much. Thank 
you for your leadership of this subcommittee, and in the 
Senate, as a whole, we appreciate your friendship over the 
years.
    Mr. Secretary, welcome. We're pleased to have you here 
before us today to discuss the budget request for the 
administration and these areas under your jurisdiction.
    One of the disturbing things, and I noticed right away, is 
the lack of emphasis on the Gulf of Mexico. And I don't know of 
anything that's happened in our country in terms of water 
resources, ecological interests, and importance than the 
problems in the Gulf of Mexico, and to see NOAA sitting back 
and waiting for others, I guess, to identify the priorities--we 
need leadership at this time more than ever. And I will be 
curious to know what your recommendations and observations are 
about that issue.
    But beyond that, we're glad to have the opportunity to 
review the budget request of the administration, and we're 
hoping to work in a positive and constructive way to harness 
the resources that are needed to deal with the challenges we 
face under your jurisdiction, in spite of the disappointment 
that the budget presents to us at the outset.
    Senator Mikulski. Thank you, Senator Cochran. And your 
questions, too, will be in the record.
    Senator Mikulski. Senator Hutchison.

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Well, thank you, Madam Chairman, and I 
will echo what Senator Inouye said, and say that you've had a 
fabulous week. And I'm so happy that Women's History Month, 
which you couldn't have predicted 30-some years ago, would 
happen on your anniversary. But it's a wonderful thing that we 
are celebrating your service as the longest-serving woman in 
the history of our the Congress and our country. So, I loved 
being a part of all your festivities, and it probably won't be 
matched for a long time. In fact, you may break your own 
record.
    Senator Mikulski. Thank you.
    Senator Hutchison. Let me say that I think you're hearing 
what the concerns are already. NOAA is a big one. Gulf of 
Mexico. I mean just last week, we had tornadoes, and horrendous 
weather that kept our Republican Minority leader, Senator 
McConnell, from being able to be here on Tuesday, because he 
was not able to get out of DFW airport for about 8 hours. And 
it's just always there.
    The Gulf of Mexico is the site of so many of our 
hurricanes, and tornadoes, and horrible weather, and yet, we 
see failures in NOAA. We see the satellite system, which 
doesn't function right. It's a big part of your budget. But, 
the people who are concerned with the wet side of Commerce, 
with fisheries and ocean monitoring, are also very concerned. 
So, I will want to know what you're doing to address these 
issues, and what you would do with the increase in spending in 
that area.
    The reorganizing that has been announced to possibly put 
NOAA in the Department of the Interior, I would like to know 
your opinion about that, if it goes better there, and what can 
we see that would be an improvement if it did move, or if not, 
why not. And the computer hacking is another issue that really 
has come to the forefront, and protecting the Department's 
information technology infrastructure certainly has to be a 
priority. And I guess in the hacking that happened this year, 
you're still, I'm told, trying to sort out if any information 
about the companies that are in your system had compromised 
information.
    The National Network for Manufacturing Innovation is part 
of the budget. Certainly, we are focused on manufacturing, and 
innovation and manufacturing should be a priority, and I want 
to hear more about that. And just the last thing I would 
mention is the International Trade Administration (ITA). The 
President made an Executive order that I think was premature, 
because we haven't had a chance to see what a new ITA would do 
that the U.S. Trade Representative (USTR) isn't already doing, 
or should be doing, and do we need another reformed agency to 
do the work on unfair trade practices, when we do have a setup, 
I think, at the USTR office.
    So, I'd like to, you know, pursue these things, and get 
your answers, and I guess after we have our opening statements, 
we'll get a chance to hear what your priorities are.
    Thank you.
    Senator Mikulski. Mr. Secretary.
    Secretary Bryson. Well, thank you.
    Senator Mikulski. Thank you, I think. We've got a lot of 
challenges.

                    SUMMARY STATEMENT OF JOHN BRYSON

    Secretary Bryson. Chairwoman Mikulski, Ranking Member 
Hutchison, and members of the subcommittee, I am pleased to 
offer a written statement for the record, and to discuss 
President Obama's 2013 budget request for the Commerce 
Department.
    I feel the need and really want to join the others in 
saying that it is a special honor today to testify before the 
longest-serving female Member in the history of the Congress, 
and maybe as a father of four daughters, I would say I deeply 
admire your service to the people of Maryland and our Nation 
since being elected to the Congress in 1976. So, I join all the 
others in saying thank you, and congratulations Chairman 
Mikulski on making history once again.
    So, in my first 5 months as Secretary, I've seen many 
examples of how the Commerce Department supports American 
business. Just last Friday, I visited Pavilion Furniture. That 
is a very small manufacturer in Miami who we are helping to 
start exporting both to the Caribbean and to Asia. The owner, 
Mike Buzzella, said, ``The introductions that the Commerce 
Department just made for us in Panama and the Pacific Rim are 
helping to find new ways to grow in a global economy.''
    This budget, the budget we have before you now, reflects 
the commitment to helping businesses like Mike's continue to 
drive competitiveness, innovation, and job creation. It 
includes $8 billion in discretionary funding and $2.3 billion 
in mandatory funding. Throughout the budget, we have made smart 
and tough choices that cut costs, while building only on 
programs that truly do work. Key priorities are in areas where 
we see growth and promise, such as advanced manufacturing, 
exporting, and attracting foreign direct investment.
    For example, the budget includes $135 million for R&D in 
areas like advanced materials and advanced manufacturing 
processes. These are critical areas where the United States 
must stay competitive.
    We will also continue to support the foundational building 
blocks of our economy, such as research and science, 
environmental sustainability, and the public safety. For 
example, NOAA's budget includes $1.85 billion for satellites, 
which provide 93 percent of the input to our Nation's weather 
prediction models. This directly impacts the daily flow of 
commerce and the ability of businesses and communities to 
prepare for disaster.
    Also, we have invested in stock assessments, because our 
fishermen and our fisheries are culturally and economically 
important to our country and to our competitiveness.
    At the same time, we are committed to serving as 
responsible stewards of taxpayer dollars. We propose 
eliminating 18 programs, reducing funding for many others, and 
achieving administrative savings. Altogether, this will save 
taxpayers more than $400 million.

                           PREPARED STATEMENT

    Let me just close by saying that as a CEO for nearly 2 
decades, I strongly believe that any organization is most 
effective when it operates with a common vision. Our 12 bureaus 
are committed to functioning as what we call ``One Commerce''. 
Collectively and collaboratively, we will continue to empower 
American businesses to drive our economy and to build on the 
nearly 4 million jobs that have been created over just the past 
2 years.
    Thank you all for your continued support of the Commerce 
Department. I look forward to your comments, and I'm pleased to 
answer any questions.
    [The statement follows:]

                   Prepared Statement of John Bryson

                              INTRODUCTION

    Chairman Mikulski, Ranking Member Hutchison, and distinguished 
members of the subcommittee, I am pleased to join you today to talk 
about President Obama's budget request for the Department of Commerce 
for fiscal year 2013. While this is my first testimony before you, I 
want to start by thanking you for the subcommittee's members' deep 
appreciation of the talented women and men who work at the Department 
of Commerce, and for your support of our relentless focus on helping 
American companies be more innovative at home and competitive around 
the world.
    I must say, it is humbling that my first time testifying in the 
Senate as the Secretary of Commerce is before the longest-serving 
female Member in the history of the United States Congress. As the 
father of four daughters, I thank you. As the newest member of the 
Cabinet, I humbly recognize what an impressive feat this is and deeply 
admire your many years of service. Since being elected to Congress in 
1976, you have always been an admirable representative of the great 
State of Maryland and our country. Thank you and congratulations on 
making history once again, Chairwoman Mikulski.
    In today's challenging budget climate, the Commerce Department is 
committed to responsible stewardship of taxpayer dollars. We've done 
this by making smart and tough choices to cut costs, while ensuring 
that we build only on programs that truly work. Thus, the fiscal year 
2013 budget request for Commerce is fiscally responsible while 
promoting entrepreneurship, innovation fueled by investments in 
science, global competitiveness, and research and development. 
President Obama's fiscal year 2013 budget for Commerce includes $8 
billion in discretionary funding, which is a 5-percent increase from 
the fiscal year 2012 enacted level. The budget also requests $2.3 
billion in mandatory funding for new programs.
    This budget invests in efforts to help businesses build their 
products here and sell their products and services everywhere, putting 
Americans back to work. To do so, we are requesting funding 
specifically to promote high-priority activities to support advanced 
manufacturing, exports and foreign direct investment. With these 
investments, we will build a 21st century infrastructure; encourage the 
sustainability of our environment; strengthen science and information; 
and support national security and public safety. To make that possible, 
this budget request balances the investments and priorities outlined 
here with difficult choices--including eliminating 18 programs, 
resulting in more than $50 million in savings; reducing other programs 
by an additional $336 million; and achieving $176 million in 
administrative savings.
    As a CEO for nearly two decades, I learned that a company is most 
effective at delivering services when it operates with one vision and 
the entire workforce, from the boardroom to the shop floor, are focused 
on a clearly defined collective goal. I believe the same thing at the 
Commerce Department. We are the strongest advocates for American 
businesses when we are more than the sum of our parts--when we are 
``One Commerce''.
    The common thread through all of our work across the bureaus is 
helping American businesses create jobs. This is as true for National 
Oceanic and Atmospheric Administration (NOAA) as it is for the 
International Trade Administration (ITA). As One Commerce, we are 
working relentlessly to support businesses and communities and to 
advance the frontiers of innovation, as I detail below.

                   BUILD IT HERE--SELL IT EVERYWHERE

    As you all know, the challenges and opportunities that American 
businesses face today are global in nature. Since my confirmation in 
October, I have focused the Commerce Department on becoming more 
nimble, responsive, and effective for American businesses. As my friend 
Fred Hochberg and I like to say, ``We want government at the speed of 
business.'' To reach this goal, the Department will focus on a simple 
imperative: In order to create good-paying jobs here at home, we need 
to help more businesses build their products here and sell them 
everywhere. To achieve this, we are focusing on:
  --Supporting advanced manufacturing;
  --Increasing U.S. exports; and
  --Attracting more investment in America from all over the world.
Advanced Manufacturing
    The President's fiscal year 2013 budget request for the Department 
of Commerce recognizes that we must build momentum in our manufacturing 
sector, particularly advanced manufacturing. By itself, the U.S. 
manufacturing sector would be the ninth-largest economy in the world. 
Manufacturing employs 12 million Americans and is a major source of 
innovation in our economy, with manufacturing companies accounting for 
72 percent of all private-sector research and development (R&D) 
spending. This is why the President's proposed budget would invest 
heavily in the manufacturing expertise at our National Institute for 
Standards and Technology (NIST).
    In support of the President's priority to strengthen advanced 
manufacturing, the President's fiscal year 2013 budget for NIST 
contains:
  --$135 million for advanced manufacturing R&D to target high-
        potential technologies such as the manufacture of advanced 
        materials and smart manufacturing processes, which will make 
        U.S. manufacturers more competitive; and
  --$21 million for the Advanced Manufacturing Technology Consortia 
        Initiative that will bring together industry, universities, and 
        the Federal Government to invest in highly promising R&D and 
        accelerate the transfer of innovative technologies and products 
        into the hands of American manufacturers.
    In addition, the Hollings Manufacturing Extension Partnership 
within NIST is funded at $128 million to help businesses save time and 
money and thereby improve the competitiveness of small- and medium-
sized firms in manufacturing.
    Partnerships can also strengthen our competitiveness in 
manufacturing. Gene Sperling, Director of the National Economic Council 
and Assistant to the President for Economic Policy, and I are co-
leading the new White House Office of Manufacturing Policy. We are 
focused on high-impact ideas, such as the creation of a new National 
Network for Manufacturing Innovation. The administration proposes to 
make a one-time $1 billion mandatory spending investment to catalyze 
the creation of a network of up to 15 regional institutes to foster 
innovation and accelerate technological advancements in manufacturing. 
These regional institutes will allow researchers, companies, and 
entrepreneurs to solve problems in pre-commercial technologies that 
will lead to U.S. leadership in tomorrow's manufactured goods.
    Our ``One Commerce'' approach brings significant resources to bear 
for the benefit of American manufacturing companies. The Commerce 
Department's bureaus--including NIST, ITA, Economic Development 
Administration (EDA), and U.S. Patent and Trademark Office (USPTO)--are 
collectively focused on supporting the commercialization of 
manufacturing technology, bridging the gap between the laboratory and 
the market, and maximizing the unique strengths that already exist in 
particular regions and manufacturing hubs around the United States. 
This will help us ensure that the next generation of groundbreaking 
products is not just invented here in America, but is also built here.
Increasing U.S. Exports
    We also want to help American companies sell their products and 
services to the 95 percent of the world's consumers who live beyond our 
borders. U.S. businesses are not exporting nearly as much as they 
could. Only about 1 percent of U.S. businesses export, and most only to 
one country. Many American companies would like to export but are 
unsure how to start. Small businesses in particular often face big 
challenges when it comes to getting export financing, building 
relationships with foreign suppliers, and dealing with unfamiliar 
foreign rules and regulations. President Obama's National Export 
Initiative (NEI), led by our Department, is designed to help businesses 
overcome these hurdles. And, in fact, U.S. companies increased their 
exports by 17 percent in 2010 and by an additional 14 percent in 2011, 
putting us substantially on track to meet the challenging goal to 
double American exports by the end of 2014.
    We have leveraged existing resources and enhanced the way we work 
to help American companies expand their global market share. In 2010 
and 2011, the Commerce Department coordinated 77 trade missions to 38 
countries with more than 1,000 U.S. companies. We have identified and 
prioritized work in markets and sectors where American businesses are 
the most competitive. In addition, we have expanded opportunities in 
new markets thanks to congressional implementation of the trade 
agreements with Colombia, Panama, and Korea.
    The fiscal year 2013 budget requests a total of $517 million for 
our ITA. As with other Commerce Department bureaus, ITA is closely 
examining its organization to speed up operations in order to focus on 
higher productivity results for American businesses. This budget 
request proposes a consolidation of ITA's four business units to three, 
organizing them by core function to provide more effective and 
efficient services to U.S. companies and to better focus on priority 
export markets, trade enforcement, and strategic partnerships while 
saving $8 million annually.
    ITA's budget also requests an additional $30 million to strengthen 
trade promotion by placing Foreign Commercial Service Officers and the 
equivalent of 90 locally engaged staff in high-growth markets such as 
China, India, and Brazil. An expansion of these priority markets will 
enable identification of more export opportunities for U.S. companies, 
more rapid and timely business counseling, and enhanced commercial 
diplomacy and advocacy support.
Attracting More Investment
    We also must promote investment into the United States. That 
includes U.S. companies expanding their operations domestically or 
bringing jobs back to the United States. It also means foreign 
companies investing here. This administration maintains a deep 
commitment to ensuring that the United States remains the most open 
economy in the world. America is already the number-one destination 
around the world for foreign direct investment, and foreign companies 
support more than 5 million jobs across the United States. Until the 
recent launch of SelectUSA, however, there has not been coordinated 
Federal effort to help either U.S. or non-U.S. businesses navigate the 
Federal and various State economic environments in order for the 
private sector to more rapidly and easily make these types of 
investments in America. The fiscal year 2013 President's budget 
proposes $13 million for SelectUSA to aggressively pursue and win new 
business investment in the United States.
    In order to spur job creation, the United States must encourage 
business investment from all sources, including encouraging companies 
that have moved jobs offshore to come back to the United States. To 
support this effort, we have launched a task force dedicated to 
investment and the in-sourcing of jobs. This task force is leveraging 
our existing resources to make promoting and facilitating business 
investment in the United States. a natural part of what the Department 
does, akin to export promotion and facilitation. Further, we are 
working to create an online calculator that will help companies 
determine the hidden costs of moving business out of the United States.
    Additionally, EDA will play a critical role through strategic 
grants that build assets in communities to support investment. 
Moreover, EDA is updating its investment priorities to include the in-
sourcing of jobs back to the United States; projects to facilitate in-
sourcing will be prioritized for funding within all EDA grant programs. 
In fiscal year 2012, EDA will offer support to grant applicants who are 
interested in bringing jobs back to the United States through its next 
round of Jobs and Innovation Accelerator Challenges--economic 
development grants that will focus on America's rural communities and 
strengthening advanced manufacturing. Those interested in accelerating 
job creation through in-sourcing will be encouraged to apply.

               SUPPORTING U.S. BUSINESSES AND COMMUNITIES

    The fiscal year 2013 budget for the Department of Commerce supports 
American businesses and communities--whether it's working directly with 
manufacturers to enhance their economic competitiveness or supporting 
communities through economic development and the delivery of daily 
weather forecasts and severe storm warnings.
    The Department works to strengthen communities, especially in 
disadvantaged or distressed areas, through private sector job creation. 
The President's budget provides $182 million for the EDA's Economic 
Development Assistance programs to drive 21st century innovation and 
economic development that leverage regional assets to foster economic 
growth.
    The budget provides $29 million for the Minority Business 
Development Agency (MBDA), which, through a network of 39 affiliated 
Minority Business Centers, supports the ability of minority businesses 
to grow and thrive in the global economy. We are investing in these 
centers because they are on the front lines of providing direct 
services to minority-owned businesses. This approach has worked. Over 
the last 3 years, our network of MBDA Business Centers has helped 
minority businesses obtain $10 billion in contracts and capital while 
helping to create and save nearly 20,000 jobs. And last year, MBDA 
registered the best annual performance in its 41-year history.
    The Bureau of Industry and Security (BIS) advances U.S. national 
security, foreign policy, and economic objectives through ensuring an 
effective export control and treaty compliance system and by promoting 
continued U.S. strategic technology leadership. The President's fiscal 
year 2013 budget recognizes, with a request of $102 million, the 
important role of BIS to ensure sensitive technologies are not exported 
to regimes unable to safeguard the technologies from bad actors, 
weapons proliferators, and terrorists. Within this request, $6 million 
is provided to hire 24 additional personnel at Commerce to handle the 
new workload under the administration's export control reform 
initiative to advance national security and overall economic 
competitiveness.
    Robust monitoring and enforcement of U.S. rights under 
international trade agreements, as well as enforcement of domestic 
trade laws, are crucial components of the administration's strategy to 
expand exports, ensure fair competition with our foreign trading 
partners, and grow the economy. ITA is a key partner supporting the new 
Interagency Trade Enforcement Center (ITEC), which will represent a 
more aggressive ``whole-of-government'' approach to addressing unfair 
trade practices, and will serve as the primary forum within the Federal 
Government for executive departments and agencies to coordinate 
enforcement of international and domestic trade rules. This budget 
requests an increase of $24 million to the Commerce Department that 
will support the ITEC and will significantly enhance the 
administration's capabilities to aggressively challenge unfair trade 
practices around the world.
    The Commerce Department also focuses on generating and providing 
timely data and analysis for public and private sector decisionmaking. 
The fiscal year 2013 President's budget requests $100 million for the 
Economics and Statistics Administration (including the Bureau of 
Economic Analysis [BEA]) and $970 million for the Census Bureau. BEA, 
which sits within the Economics and Statistics Administration (ESA), 
provides the tools to identify the drivers of economic growth and 
fluctuation, as well as measure the long-term health and sustainability 
of U.S. economic activity. This budget will strengthen BEA's ability to 
identify industry-specific trends within its GDP statistics.
    The fiscal year 2013 budget for Census sustains critical business 
and household data collection activities, such as the 2012 Economic 
Census that provides an every-5-year comprehensive view of American 
businesses and that forms the foundation for all our industry and 
business statistics. Similarly, the American Community Survey (ACS) is 
the only source for geographically detailed socio-economic information 
on a yearly basis. Businesses use ACS information in many ways, such as 
site selection and market intelligence, which promotes job creation and 
economic recovery. State and local governments use ACS information to 
support decisionmaking for key programs and services, such as schools, 
transportation, and emergency services. The Census Bureau request also 
invests $131 million in research and testing for the 2020 Decennial 
Census. This is a critical investment that is essential to saving money 
in future years. By devoting sufficient resources to this early state 
of the lifecycle, the Census Bureau will be able to develop the new 
approaches required to break the trend of doubling the cost of the 
decennial census each decade.
    This budget also supports U.S. businesses and communities by 
investing $5.1 billion, an increase of $153.9 million or 3.1 percent 
more than the fiscal year 2012 enacted level, for NOAA's vital work on 
weather forecasting, fisheries management, and coastal stewardship.
    NOAA's critical satellite operations will provide businesses and 
individuals with the data and information needed to plan for changing 
weather conditions. These satellites also provide advanced warning of 
severe storms so that actions can be taken to protect lives and 
property. The fiscal year 2013 budget invests $1.8 billion in NOAA 
satellites, including $916 million for the NOAA Joint Polar Satellite 
System (JPSS), and $802 million for the next generation geostationary 
satellite, GOES-R. Weather satellites, including JPSS and GOES-R, are 
critical to our Nation's infrastructure and economy and provide 93 
percent of the input to the Nation's weather prediction models. Severe 
storms in the past year, both tornados and hurricanes, have 
demonstrated the importance of our weather satellite system to provide 
advance warning of these disasters. fiscal year 2013 funding will 
ensure that GOES-R remains on its current schedule to replace the GOES-
N series of satellites currently in operation. Full funding is required 
to avoid any additional schedule slip to JPSS and to minimize the gap 
in polar satellite coverage between JPSS and the Suomi National Polar-
Orbiting Partnership (Suomi-NPP). NOAA and National Aeronautics and 
Space Administration successfully launched the Suomi-NPP in October 
2011. JPSS is scheduled to launch in the second quarter of 2017.
    NOAA's environmental data and services support commerce throughout 
the country. NOAA provides weather information that allows for safe and 
efficient transportation; drought and water data that inform 
agricultural decisions; space weather warnings needed to protect the 
national energy grid and worldwide communications from solar storms; 
and climate information that supports adaptation decisions for business 
and communities. Nearly 80 percent of U.S. import and export freight is 
transported through seaports, and by 2020, the value of all freight 
coming through U.S. ports is projected to increase by more than 40 
percent. The fiscal year 2013 President's budget requests $150 million 
to support navigational services nationwide, including mapping and 
charting and real-time observations and forecasts of water levels, 
tides, and currents. The budget also provides $972 million for weather, 
drought, and flood forecasting.
    The fiscal year 2013 President's budget for NOAA also provides an 
increase of $29.7 million to improve our understanding of climate, with 
a specific focus on research that underpins our understanding of 
climate processes. This includes an $8 million investment in the 
continued development and use of state-of-the-art Earth system models, 
which help businesses and communities address climate related issues, 
including sea level rise and Arctic climate change and $4.6 million to 
make progress in critical ocean observations and analysis.
    Healthy coastal economies rely on a healthy ocean ecosystem. NOAA's 
fiscal year 2013 budget will continue to ensure that critical 
information and tools are available to users and decisionmakers to 
support the management of our ocean and coastal resources to make 
certain future generations also have the ability to enjoy and benefit 
from these resources. Rebuilding our Nation's fisheries is essential to 
preserving the livelihood of fishermen, the economies of our coastal 
communities, and a sustainable supply of healthy seafood. The fiscal 
year 2013 President's budget requests $880 million for the National 
Marine Fisheries Service, funding science, management, and conservation 
of fisheries and protected resources. This includes a requested 
increase of $4.3 million to expand stock assessments and $2.3 million 
for survey and monitoring projects, which will be targeted at high-
priority commercially and recreationally viable fish stocks.

                 ADVANCING THE FRONTIERS OF INNOVATION

    The fiscal year 2013 budget supports key initiatives to help 
advance our scientific and technological frontiers and build the 
foundations for a secure future. Innovation is critical to our economy; 
it generates American jobs today and will drive the jobs of the future. 
Along with major research universities, businesses are the primary 
source of new ideas, from concept to commercialization, and the 
Department of Commerce is leveraging our resources to provide the 
tools, policies, and technologies that enable U.S. businesses to gain 
and maintain an advantage in world markets.
    Together, NIST and NOAA will invest an additional $1.3 billion in 
research and development efforts.
    As I mentioned earlier in my testimony, a focal point for the NIST 
budget request is on investments to support advanced manufacturing. 
Overall, the fiscal year 2013 President's budget requests $857 million 
in discretionary spending for NIST that addresses challenges to U.S. 
industry in a number of areas including advanced communications and 
cybersecurity.
    Specifically, we request $10 million to support research in 
advanced communications networks to build collaboration with the 
telecommunications industry to help lay the groundwork for an 
interoperable public safety communications network that seamlessly 
delivers voice, data, and video to first responders and other emergency 
personnel. In addition, cybersecurity remains a priority at NIST with 
the request of an additional $8 million for the administration's 
National Strategy for Trusted Identities in Cyberspace (NSTIC) program. 
This program supports the development of an online environment--the 
``Identity Ecosystem''--that improves on the use of passwords and 
usernames, and allows individuals and organizations to better trust one 
another, with minimized disclosure of personal information. This work 
is intended to have broad benefits for applications ranging from 
consumer financial transactions, to industrial supply chains, to health 
records, for which it is essential to have information security.
    The President's fiscal year 2013 budget requests $651 million for 
NOAA research and development. This includes NOAA's atmospheric and 
ocean, coastal, and Great Lakes research and applied science which are 
at the forefront of discovery and a key component of advancing the 
mandates of the America COMPETES Reauthorization Act of 2010. NOAA 
research is improving the forecasts of severe weather such as winter 
storms and flash floods, developing next-generation radars with the 
potential to extend lead times for detecting tornadoes, and 
operationalizing new marine sensor technologies with economic benefits.
    USPTO facilitates the generation of innovative and commercially 
viable processes and products, while protecting the intellectual 
property rights of inventors. The Congress helped tremendously in this 
effort last year with the passage of the America Invents Act, and the 
fiscal year 2013 budget supports USPTO's authority to spend all of the 
fees collected to accelerate patent processing and improve patent 
quality, as established in that law. The request supports continued 
reductions to pendency and backlogs, with goals of cutting the backlog 
in half to 329,500 by fiscal year 2015 and total pendency to 18.3 
months by fiscal year 2016. This would be a dramatic turn-around from 
where we were just 3 years ago. In fiscal year 2009, the backlog was 
nearly 800,000 and pendency was 34.6 months. In fiscal year 2013, USPTO 
expects to hire an additional 1,500 examiners to support this effort.
    EDA will dedicate $182 million in grants to foster innovation 
through innovation hubs across the United States, particularly in 
distressed communities. We know this new model of economic development 
works. The Jobs Innovation and Accelerator Program launched by EDA last 
year is estimated to create approximately 4,800 jobs and 300 new 
businesses, retain 2,400 jobs and train 4,000 people for careers in 
high-growth industries.
    The need to ensure our Nation has state-of-the-art digital 
infrastructure--to drive economic growth, create jobs, promote 
innovation, support Federal agencies' missions, and improve public 
safety--cannot be overstated. This is a core value of President Obama, 
and one that is reflected in several major initiatives undertaken by 
the administration and enacted by the Congress. The Department's 
National Telecommunications and Information Administration (NTIA) has 
been called upon to make some of the most complex and consequential 
technology and innovation programs a reality. Most recently, under the 
Middle Class Tax Relief and Job Creation Act, NTIA will establish 
``FirstNet'', an independent entity that will oversee the creation of a 
long-needed nationwide, interoperable public safety broadband network. 
Funded through proceeds of future spectrum auctions, this broadband 
network represents delivery on a promise made by this administration to 
America's first responders and the key challenge of network operability 
noted by the 9/11 Commission.
    In all, the President's fiscal year 2013 budget provides $47 
million to NTIA. These funds are needed for NTIA to continue its work 
in several areas critical to creating jobs, promoting innovation and 
growing our economy. This includes implementing the President's 
directive to double the amount of spectrum available for commercial 
wireless broadband service. It also includes managing and overseeing 
nearly $4 billion in Broadband Technology Opportunities Program 
projects, which are helping to expand broadband access and adoption 
across the country. These projects are allowing hospitals, libraries 
and universities, as well as individual citizens, entrepreneurs and 
small businesses, to succeed and thrive in the digital economy. The 
fiscal year 2013 President's budget request includes $27 million for 
NTIA to continue to oversee these projects to protect against waste, 
fraud and abuse, and ensure they deliver on their promised benefits--
including more than 70,000 miles of broadband networks by the end of 
fiscal year 2013--on time and on budget. Almost all projects are slated 
to be completed by the end of fiscal year 2013.
    The Department of Commerce is also active on the domestic and 
international fronts to preserve an open, interconnected global 
Internet that supports continued innovation and U.S. economic growth. 
Privacy is a key component of consumer trust in the Internet and of the 
online retail marketplace that accounts for around $200 billion in 
annual economic activity. The President's budget requests approximately 
$1 million for NTIA's work on promoting Internet innovation, in 
particular, by leading the administration's efforts to provide 
consumers with stronger privacy protections while maintaining the 
flexibility that companies need to innovate, here and around the globe.

                    STEWARDSHIP OF TAXPAYER DOLLARS

    Just as businesses across the United States. must find efficiencies 
and focus on results, the Federal Government has a responsibility to 
maximize results and be responsible stewards of taxpayer dollars, 
especially in difficult economic times. As I stated before, there were 
many difficult choices made in this budget, cutting programs across the 
Department. In fact, EDA, MBDA, and departmental management are 
decreased below their fiscal year 2012 enacted levels. In other 
bureaus, such as NOAA, sharp cuts were taken to specific programs to 
focus on the most essential initiatives. Programs were reviewed across 
the Department, and reductions were focused on specific programs or 
projects that, while performing important work and generating value, 
are lower priority because they are either similar to programs in other 
agencies or not central to the Department's mission.
    The Commerce Department is committed to reducing our administrative 
costs through savings and efficiencies. In doing so, we are not only 
being financially sound, but we are ensuring we can invest in the 
important initiatives that help American businesses compete and win.
    The fiscal year 2013 President's budget invests in key areas to 
improve administrative functions throughout the Department. These 
investments include an increase of $0.4 million for cybersecurity; $3.9 
million to upgrade the financial management, acquisition, and other 
administrative systems within the Department; and $2.2 million to 
continue to automate our manual human resource processes. Making these 
investments is key to future savings.
    To fund these investments, the Commerce Department has moved 
aggressively in the past year to reduce our administrative costs. We 
will meet our goal of saving $143 million by the end of fiscal year 
2012, in areas such as acquisition, fleet operations, human resources, 
and information technology. This builds upon our fiscal year 2011 
savings of approximately $50 million in administrative costs. Part of 
those savings resulted from Commerce shutting down approximately 3,000 
unused cell phone lines and optimizing rate plans, for an annual 
savings of $1.8 million, and issuing a printing policy that calls for 
less and smarter printing, which will save approximately $4.2 million 
annually.
    Next year we will achieve substantial additional savings. The 
fiscal year 2013 President's budget calls on the Department to achieve 
a total of $176 million in administrative cost savings, which is 
already underway by placing additional focus on reducing travel costs, 
employee IT devices, printing, fleet operations, management contracts, 
and extraneous promotional items. In addition, the Department has 
proposed administrative savings in NOAA by merging a small number of 
programs and reducing its footprint of facilities so that funding can 
be targeted at the agency's highest priorities.
    The Department of Commerce also continues to support the 
President's BusinessUSA Initiative--a comprehensive customer service 
plan to better meet the needs of businesses. Furthering the Commerce 
Connect initiative launched in late 2010, BusinessUSA ensures that 
businesses looking for assistance from the Federal Government can 
quickly connect to the services and information relevant to them, 
regardless of which agency's Web site, call center, or office they go 
to for help. BusinessUSA would link American businesses and 
entrepreneurs with Commerce Department and other Federal, State, and 
local partner resources. These services are provided faster and more 
comprehensively through a one-stop shop, beginning with a web portal 
and enhanced call center coordination. This is a key step in a new way 
for the Federal Government to be an asset to America's businesses--
applying information and customer service standards, technology, call 
centers, and field offices in a manner that provides the most useful, 
accurate, and timely services and information to businesses.

                               CONCLUSION

    The President's fiscal year 2013 budget request reflects the 
crucial role that the entire Department of Commerce plays in 
accelerating job growth, strengthening the economic recovery, and 
supporting American businesses all across our country. At the same 
time, the President's request recognizes the challenging budget climate 
in which we find ourselves and includes many difficult choices that 
meet the need for responsible reductions.
    By combining crucial investments with fiscal responsibility, the 
budget sets forth a meaningful plan to stimulate private sector job 
creation and promote American competitiveness for years to come. With 
each of our 12 bureaus working together with a focus on helping 
companies sell their goods and services around the globe, supporting 
businesses and communities, and advancing the frontiers of innovation, 
I am confident in our ability to deliver on that commitment.

                         INTELLECTUAL PROPERTY

    Senator Mikulski. Mr. Secretary, we're going to go by the 
5-minute rule, and I will then, I know, at the end, probably 
have a couple of wrap-up questions related to management and 
cost overruns.
    The Commerce Department's job is to work with the 
President, the Congress, and the private sector to really 
create jobs. And it has been the tradition of the Secretary of 
Commerce to really be like the President's ambassador to our 
domestic business community. We have the ambassadors to 
countries, but here we're one of the most vital private sectors 
in the world. So, we know that's a big job. And one thing we 
are concerned about on this subcommittee is certainly creating 
jobs.
    This is now going to take me to the whole issue of the role 
of the Commerce Department in cyber, and also with our 
intellectual property. Everybody likes to talk today about 
American exceptionalism. It really is our intellectual ideas. 
So, one, the whole idea that we don't want a valley of death, 
where people do research--how do they get their ideas 
patented?--because that is the major tool for protecting their 
intellectual property. It puts the fence up and protects them.
    The second issue we hear in both this subcommittee and in 
the Intelligence Committee that Senator Feinstein chairs is 
about cyber espionage, where there are those nation states that 
are out there cruising, and even in the private sector, that 
are stealing our ideas. Why invent the cure for cancer? Why 
invent something new that will be Internet-driven, when you can 
just steal it?
    So, my question to you is: What is the role of the Commerce 
Department in protecting America's intellectual property and 
making sure we end the backlog and deal with the cyber 
espionage problem?
    Secretary Bryson. Thank you, Chairman Mikulski. The 
Commerce Department has a significant role, a very significant 
role in dealing with the very considerable threats and costs of 
not having complete and fully protected cybersecurity.
    Chairman Mikulski, I want to say how much our people at 
NIST have valued your support. You've followed this. You've 
addressed it for a long period of time. And you're coming 
recently to the recognition----

                       PATENT APPLICATION BACKLOG

    Senator Mikulski. I appreciate the nice words. Tell me what 
you're doing on the backlog problem.
    Secretary Bryson. The backlog problem----
    Senator Mikulski. The backlog problem at the USPTO.
    Secretary Bryson. Yes. What we're doing is, we've set a 
standard now. A lot of work is under way. We will reduce the 
backlogs by 2015 by one-half.
    Senator Mikulski. And how are you going to do that, and 
what resources do you need?
    Secretary Bryson. A series of steps, but the most important 
is in the budget before you now, and that is the funding that 
would allow us to bring immediately, in the 2013 timeframe, 
1,500 new patent examiners to carry that backlog down, and 
reduce that considerable backlog.
    Senator Mikulski. But, we've heard that before. How is this 
going to be different than in the past? Oh, let's bring in 
more, but then so what. I've now been with several secretaries 
of Commerce. With all due respect, Sir, they tell me the same 
thing. We're going to hire more people and hooah, hooah, and it 
just doesn't make a difference. Either you're not hiring, 
either you're not keeping, you don't----
    Secretary Bryson. Dave Kappos, in my judgment, as the 
Director of the USPTO, is doing an outstanding job, 
extraordinary leadership. The America Invents Act gives us an 
additional set of tools. But, the hiring of 1,500 additional 
patent examiners has never taken place before. That is a big 
addition. They will be highly, highly capable people. Already, 
people are lining up to have those jobs, and it's an attractive 
place to work.
    Senator Mikulski. Well, I think what the subcommittee would 
like is a detailed management plan including not only the 
hiring, but how are you going to train them, how are you going 
to recruit them, what happened to the fast-track idea?
    [The information follows:]

    Patent Examiner Recruitment, Hiring, Training, and Prioritized 
                          Examination Process

    The Department of Commerce wishes to supplement the response to the 
question by Chairperson Mikulski regarding actions taken to address 
United States Patent and Trademark Office (USPTO) patent examiner 
recruitment, hiring, and training as well as the prioritized 
examination process

           PATENT EXAMINER RECRUITMENT, HIRING, AND TRAINING

    USPTO has conducted a significant amount of planning associated 
with bringing a large new cadre of patent examiners on board and the 
execution of this effort is in full swing. USPTO has undertaken a 
diverse approach to inform the public about patent examiner job 
opportunities, successfully attracting thousands of qualified 
candidates through extensive recruitment efforts. Recruitment 
strategies are being expanded in areas such as career fairs; aggressive 
outreach to veterans and transitioning servicemembers through 
networking with other Federal agencies and veterans groups; targeted 
advertising and email blasts to universities, professional 
organizations and associations; nationwide advertisements and outreach 
efforts via social media; and, internal agency-wide communications.
    USPTO expects the majority of hiring for fiscal year 2012 to occur 
in the latter half of this fiscal year. In addition, the hiring 
processes for patent examiners have been streamlined to minimize the 
time between application, candidate selection, and orientation. 
Accordingly, USPTO is on track to meet its hiring goal of 1,500 
examiners for fiscal year 2012, and will be working aggressively to 
hire up to an additional 1,500 examiners for fiscal year 2013.
    While hiring efforts have been offset in some earlier years by high 
attrition, Director Kappos and his team have strengthened recruitment, 
hiring, training, and retention efforts. Patent examiners are now 
staying at the agency longer and are more productive in working down 
the patents backlog. Over the last 12 months, the USPTO patent examiner 
attrition level was just 3.3 percent compared to more than 8 percent 
during 2005 through 2007.
    Once on board, the USPTO training program emphasizes heavy up front 
knowledge and skills training as well as ongoing development to produce 
a highly effective workforce. Through the Patent Training Academy, 
comprehensive programs are in place for new examiners utilizing a well-
established, certified curriculum that includes legal training, systems 
and software training, and in-depth training on examination practice 
and procedure. Each new examiner also creates an Individual Development 
Plan to address training and development needs through the first 2 
years of employment.
    The Academy was designed to provide the agency the capacity and 
flexibility necessary to effectively train large numbers of new hires. 
For instance, entry-level examiners are typically hired into classes of 
approximately 128 employees. To ensure an individualized training 
approach, classes are further divided into labs comprised of up to 16 
examiners where they are paired with a trainer and a lab assistant.
    Careful consideration and review of qualifications is given for 
each new examiner brought on board. For new examiners without 
Intellectual Property experience, the USPTO employs a phased training 
program covering the first 12 months of employment that includes an 
initial 4 months at the Academy. Examiners hired with experience in 
intellectual property, spend an initial 20 days at the Academy, but 
also continue training over their first 12 months of employment that 
includes an overview of U.S. statutes, rules, procedures, and practices 
as well as refresher training to strengthen employee-identified areas 
for further development.

                    PRIORITIZED EXAMINATION PROCESS

    With respect to implementation of process for faster processing of 
patent applications, the USPTO implemented a Prioritized Examination 
process (i.e., ``Track One'') in September, 2011 consistent with new 
authority provided under the America Invents Act. For utility and plant 
applications which are accorded prioritized examination after an 
additional fee is paid, the operational goal of the USPTO is to provide 
final disposition within 12 months, on average. Track One provides 
applicants with greater control over when their applications are 
examined and promotes examination process efficiency. Since inception, 
USPTO has received more than 3,500 Track One applications; the average 
time from acceptance to first office action has been 43 days.

    Senator Mikulski. Could we also now talk about cyber 
espionage?
    Secretary Bryson. Yes.

                            CYBER ESPIONAGE

    Senator Mikulski. Is that a threat, and how are you dealing 
with it?
    Secretary Bryson. Cyber espionage is a very considerable 
threat. We're not fully prepared, as a country, to address 
that.
    With regard to the Commerce Department's role, that is 
NIST, the extraordinary and extraordinarily important work of 
Pat Gallagher and that team. So, the role there is setting the 
standards that will apply across not just the Federal 
Government, not just across the United States, but likely 
around the world, and that work is under way with an excellent 
team, and you know that team, you've supported that team. We 
thank you for that. We believe in it deeply.
    Senator Mikulski. So, NIST is creating the standards to do 
what?
    Secretary Bryson. The standards to set what would then be--
the standards are the standards that are a level of attainment 
we have to have for protections. And one of the important 
things with NIST, as you know, is that then reaches out to the 
private sector, and we work with the private sector to reach 
agreement----
    Senator Mikulski. The standards for technology? Standards 
for management? What----
    Secretary Bryson. Standards for technology is the driver 
here.
    Senator Mikulski. So, in other words, we would build in 
standards to the technology, where it would only be self-
enforcing and self-policing. Is that right?
    Secretary Bryson. Yes. And it would grow into performance 
standards, with the agreement of the private sector. So, that's 
the dynamic, as you know, at NIST that is taking place--for 
years.
    Senator Mikulski. Right.
    Secretary Bryson. And we would then have performance 
standards against which we and others around the world would 
have to operate.
    Senator Mikulski. Thank you. Senator Hutchison.

                        GAPS IN WEATHER COVERAGE

    Senator Hutchison. Well, thank you, Madam Chairman.
    There is a growing concern about the management of the NOAA 
satellites. I think everyone is concerned about this. And the 
fact that we're having to pour so much money into them and 
they're not working as well as they should also has hurt the 
funding of other programs in NOAA, such as the fisheries, ocean 
monitoring, research, and education. And I'm very concerned 
about the P-3 hurricane hunters that are also proposed to be 
eliminated. So, I want to ask a couple of questions.
    First of all, the gap in weather coverage that is proposed 
to occur around 2017 for 24 months, is that something that's 
being addressed? And what would that kind of gap mean in our 
weather coverage and capabilities?
    Secretary Bryson. Thank you, Senator. We are putting our 
highest priority in this budget in the satellites. So, the way 
to think about this budget is, we are putting all the resources 
we have to put in to be assured that we put up these 
satellites, the JPSS satellites, those on the Geostationary 
Operational Environmental Satellites (GOES). We have put an 
entirely new management team in place. We have reports at all 
levels of the Commerce Department, including to me, on 
performance against goals. On the 2017 target, there is a gap. 
Our focus is on minimizing that gap. We believe we can succeed 
in doing that.

                           SATELLITE PROGRAM

    Senator Hutchison. Mr. Secretary, with the White House's 
interest in consolidations, has there been any talk of the 
satellite program either being moved to the National 
Aeronautics and Space Administration (NASA) or some kind of 
collaboration required between Commerce and NASA, so that you 
have their capabilities to work on this issue?
    Secretary Bryson. There has not been. Senator, we are 
confident the team, the experience, the preparation done by 
NOAA and in the Commerce Department puts us in a position to 
succeed very well in putting these satellites in operation and 
minimizing the 2017 gap, and taking further the truly excellent 
GOES program that is in place today.
    Senator Hutchison. Would you be open to working with NASA 
and seeing if the expertise that they have would expedite that?
    Secretary Bryson. NASA is a good program. We are 
sufficiently confident that we are going ahead with what we 
have with an excellent team of people, broad experience. We 
know how to do this, and what we are not eager to do is 
interrupt the program and work we're on now by turning to NASA 
now.
    [The information follows:]

 National Oceanic and Atmospheric Administration/National Aeronautics 
                 and Space Administration Relationship

    The existing National Oceanic and Atmospheric Administration 
(NOAA)/National Aeronautics and Space Administration (NASA) partnership 
is successful, and has been successful for more than 40 years. Both 
NOAA and NASA have worked closely together and have collaborated by 
leveraging the strengths of each agency to develop NOAA's polar and 
geostationary satellite series. NASA's contribution resides in space 
systems acquisition and, in turn, NOAA's contributions are in ground 
system development, satellite operations, and the development of 
weather, climate, oceans, and coastal products and services to meet the 
needs of the operational communities it serves. This positive 
collaboration and nonduplication of effort was confirmed in October 
2009 by an in-depth Government Accountability Office (GAO) review of 
NASA's Earth science projects, which found no duplication of effort 
between these climate and weather research missions and other Federal 
agencies (GAO-10-87R).
    Today, under the U.S. civil space program construct, recently 
reinforced by the National Space Policy, NOAA and NASA have developed 
and implemented a successful partnership that has delivered technology 
advances in Earth observation capabilities, whereby NASA conducts 
leading-edge research in Earth system science, including new 
technologies to monitor the environment while NOAA responds to demands 
for easily accessible and timely data and information about Earth and 
space observations. These technology advances have been transitioned 
for use operationally to improve weather forecasting, severe storm/
hurricane prediction and climate observations.

    Senator Hutchison. I'll take that as a ``No.''

                           HURRICANE HUNTERS

    Let me ask you about the hurricane hunters. That has really 
been a very valuable tool in the gulf coast, well, actually, 
the Atlantic as well, where they've been able to fly in and get 
good intelligence on how ferocious the center is, and how wide 
it is, and all that.
    Why are you supporting the elimination of that program, the 
three hunters?
    Secretary Bryson. Senator, we do not support the 
elimination of that program. Well, let me take it a little 
further. In this budget, we are confident that the so-called 
hurricane hunters, the three of them, with the very important 
support that we provide them in maintenance will serve this 
year very, very well, the fiscal 2013 year.
    What we're doing also at the same time is looking, for the 
fiscal year 2014 budget, at a series of possible steps we might 
take, and that's in the works now, looking at conceivable 
alternatives to the P-3 planes we have. We believe we're in a 
good position to be well protected for this year, but 
technology improves and advances, and there are conceivable 
alternatives, and we'll bring to this subcommittee the 
judgments we reach with respect to that, and the possibility 
that we will bring forth in fiscal year 2014 an alternative 
program.
    Senator Hutchison. Meaning other airplanes?
    Secretary Bryson. Conceivably, yes.
    Senator Hutchison. Okay. Because my information says that 
you've really only got one that's operational right now. Is 
that not correct?
    Secretary Bryson. That's not correct. We have three. They 
have their periods of maintenance each year. They've worked 
very well in the past, as you suggested. We are confident they 
will work well through 2013.
    Senator Hutchison. Okay. I really hope that we can see when 
hurricane season comes that those three are operational, 
because there's a conflict of our information, and that's very 
important when we get into the really bad hurricanes.
    Thank you.
    Senator Mikulski. I want to join with the Senator here, 
because there is confusion, and we are deeply concerned, and we 
know, particularly our gulf Senators, but all of us rely on 
those hurricane hunters. You have three planes. Three Orion 
planes. All planes need to be refurbished by 2016 to make them 
fly. Is that correct?
    Secretary Bryson. That may be. I can't confirm that, but it 
sounds like a reasonable estimate.
    [The information follows:]

   Status of the Hurricane Surveillance Aircraft (Hurricane Hunters)

    National Oceanic and Atmospheric Administration (NOAA) typically 
schedules maintenance to ensure aircraft are available for hurricane 
season, but the Service Life Assessment Program by Lockheed Martin, 
completed in June 2011, recommended new short-term maintenance and 
inspections for NOAA's P-3s that required NOAA to induct one aircraft 
into Special Structural Inspection during the 2012 hurricane season in 
order to remain airworthy.
    This means that during fiscal year 2012, only 1 of the 2 P-3s (N42 
and N43) currently used for hurricane surveillance will be operational 
at any specific time during the year due to scheduled maintenance. If 
unscheduled maintenance is required, that may leave no available P-3s, 
which would impact hurricane research, but would not significantly 
impact the current operational hurricane forecasting capabilities of 
the National Hurricane Center.
    Doppler data from the P-3s support the National Weather Service/
National Centers for Environmental Prediction Environmental Modeling 
Center's (EMC) development of the Hurricane Weather Research and 
Forecast System (HWRF), the first operational model designed to make 
use of high-density inner core observations. Use of inner-core 
observations has the potential to improve the prediction of hurricane 
track and intensity forecasting. In order to utilize the airborne 
Doppler data for the HWRF model initialization, EMC requires sustained 
sampling of the hurricane core at 12-hour intervals over a period of at 
least 36 hours (three back-to-back-to-back missions, 12-hours apart) 
when tropical cyclones threaten the United States (e.g., Hurricane 
Irene's extended threat to the eastern seaboard).
    Due to the availability of only one P-3 to support collection of 
airborne Doppler radar data during the fiscal year 2012 hurricane 
season, a mitigation strategy has been developed that will use two 
flight crews for the single P-3. This will minimize the impact on the 
research plan for at least three back-to-back-to-back 12-hour missions. 
While this mitigation strategy will meet the EMC's requirement, the 
primary risk is if the single P-3 cannot fly, due to equipment failure 
or unscheduled maintenance or if one or more of the three back-to-back-
to-back 12-hour missions is cancelled there will be a loss of the data 
collected.

   BACKGROUND ON NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION P-3S

    NOAA hurricane hunter planes are used for both hurricane research 
and operational hurricane forecasting. Two of NOAA's P-3 planes are 
used primarily for hurricane research. The Gulfstream jet (G-IV) is 
used for operational hurricane forecasting. In addition, per the 
National Hurricane Operations Plan, the Air Force maintains 10 WC-130 
planes to support NOAA hurricane reconnaissance requirements, providing 
approximately 800 flight hours per year in this capacity.
    N42 completed Special Structural Inspection in May 2012 and is 
currently available for day-to-day operations.
    N43 will undergo Special Structural Inspection and Phased Depot 
Maintenance from May 2012 through February 2013, after which it will be 
available for day-to-day operations.
    N44, which has not previously been used for hurricane research or 
operational forecasting, has reached End of Service Life and is 
currently not operational.
    The G-IV (N49) is currently operational and will be inducted into a 
Service Life Extension, engine overhaul, in October 2012 for 
approximately 5 months.
    The NOAA fiscal year 2012 Aircraft Allocation Plan is available 
here: http://www.omao.noaa.gov/12_airservices_allocation.html
    In fiscal year 2013, two P-3s (N42, N43) and the G-IV (N49) will be 
operational during hurricane season. Office of Marine and Aviation 
Operations will be able to meet current hurricane research and 
reconnaissance requirements at the requested funding level.

    Senator Mikulski. But, you need to know this.
    Secretary Bryson. Well, the reason we're focused on 2014 is 
to be in a position where we're entirely ready to make 
replacements in advance of that 2016----
    Senator Mikulski. Well, let me keep going here. The cost to 
refurbish each plane is $20 million, because, essentially, it's 
not like new carburetors, or, you know, let's clean up the 
leather seats here. These are planes that have to fly into a 
hurricane. So, what they need is new wings. This is big, and it 
is serious.
    Now, as I understand it, NOAA did not tell the Congress 
that all of the planes need extensive work, and that a second 
P-13 plane is due for scheduled maintenance this spring, and 
that there's concern that you're just going to have one plane 
fit for duty to fly into a hurricane. And, you know, this 
subcommittee is obsessed with the safety of people we ask to go 
into harms way, and whether it's our astronauts in space or our 
pilots into a hurricane. So, do you understand Senator 
Hutchison's question?
    Secretary Bryson. I do. Yes.
    Senator Mikulski. So, Sir, we really ask you to go back to 
the drawing board and come back to the subcommittee. We need to 
know what planes, what sequencing, and what money. Am I 
correct? Is that the thrust of it? Is that the trepidation that 
you feel, Senator Hutchison?
    Senator Hutchison. The information that I have is what you 
have, that one is completely out of commission while it is 
getting new wings, and one hasn't had the annual maintenance, 
and it's not reliable, leaving just one that is. And if we've 
got two hurricanes going or in different places, this could be 
a very necessary function, and maybe I think what the chairman 
and I are saying is that it doesn't appear to be the priority 
in the Department of Commerce that we think it should be.
    Secretary Bryson. Thank you, Senator. Let me say that we do 
not and would not take lightly the safety of people with 
respect to these planes. We are highly confident that we will 
come back to you, absolutely. We're highly confident, for 
example, that these planes will work satisfactorily entirely 
through this upcoming hurricane season.
    Senator Mikulski. But that's not what we're worried about. 
What we're concerned about is what planes need to be fixed 
when. We need a sequencing plan. We need a money plan to match 
what needs to be done. We need to have the sequences, the 
timing, and we need to know what's available when.
    Secretary Bryson. And we will do just that. And we will 
bring to you our planning with respect to 2014.
    Senator Mikulski. Before the hurricane season.
    Secretary Bryson. For example, the C30 looks like a 
conceivable candidate, but we're doing this in a very, very 
disciplined way. But, if you would like us to have the people 
at NOAA that are working on this now come to see you, the 
sooner we can work this through, we can do that as well.
    Senator Mikulski. I'm going to turn now to Senator Pryor.
    Senator Pryor. Thank you, Madam Chair. And thank you, Mr. 
Secretary, for being here. I see that you have Jim Stowers 
there, looking over your right shoulder. He's helped me in many 
capacities over the years. Jim, it's good to see you.

                  ECONOMIC DEVELOPMENT ADMINISTRATION

    Let me start with science parks and regional innovation 
centers. I know that the fiscal year 2013 budget requests money 
for that. Has the Economic Development Administration (EDA) 
made any science park planning grants, or provided any science 
park construction loan guarantees?
    Secretary Bryson. Yes. EDA has done that. We know that 
you've been a strong, strong supporter of science parks. We 
really believe in these science parks. EDA has made grants: for 
example, a $95,000 planning grant to the Missouri Innovation 
Park; funding for infrastructure improvements at the Sandia 
Science Park Laboratory, in Albuquerque, New Mexico. So, we're 
believers in these science parks, and EDA, I think, is a leader 
in going out around the country to do just what you underscore 
here, and more should be done.
    Senator Pryor. Yes. I appreciate that. And I do think that 
they're key to our economic future. But, I also noticed that 
the subsidy rate this year is higher than last year. In effect, 
it works like an interest rate. Do you have an explanation for 
that? I believe this year it's 18.06 percent. Last year, it was 
15.5 percent.
    Secretary Bryson. Here's what I understand, and that is 
that at the recommendation of the Office of Management and 
Budget, there is no pre-established subsidy rate for science 
park loan guarantees. So our preliminary analysis indicates a 
low volume of potential applications in this area, and this is 
because science parks are affiliated with research institutions 
that can access credit at income tax rates, and loan guarantees 
by the Federal Government are taxable. So, what the Federal 
Government can do, it's somewhat affected by alternatives for 
the science parks. We're eager to be supportive in any way we 
reasonably can. It's going to be a fixed subsidy rate.
    Senator Pryor. All right. I think the way the law works 
requires the science parks to put up 20 percent of the money, 
and it seems like that would be a pretty good safe investment. 
So, I would think the interest rate would be lower than that. 
But, we can talk about that in a different context.
    Senator Blunt and I have filed the Export Promotion Act of 
2012. I don't know if you're familiar with it, but I would 
encourage you to take a look at it, and hopefully help generate 
some support for it. What we're trying to do, quite frankly, is 
what the President wants us to do which is continue to focus on 
exports and help the U.S. economy. We think that our approach 
is fairly common sense, and it doesn't cost much money.
    Let me ask about something else that the President 
mentioned. In his State of the Union Address, he talked about 
community colleges, and connecting the training for jobs with 
available jobs and sales. We've had a lot of success with that 
in Arkansas, using our 2-year colleges mostly, and some 4-year 
institutions, but mostly our 2-year colleges, to connect very 
closely with economic development, and manufacturers, and other 
employers in various areas around the State. It's worked very, 
very well. It's a classic public-private partnership. And if 
you haven't already, I'd hope that you would look at that 
model.
    Senator Wicker and I, as a result, introduced the Win Jobs 
Act that follows that Arkansas model. I think it's consistent 
with what the White House is talking about in this area. Maybe 
a little different approach, but I think the goals are 
certainly the same. So, I'd hope you'll take a look at that.

                             SEQUESTRATION

    I'm almost out of time here, but I do have a question that 
you probably don't really want to focus on too much, but I 
think it's important that the subcommittee have an answer on 
this. Have you made any contingency plans for a possible 
sequestration? If sequestration does, in fact, happen, how will 
that impact your day-to-day operations, how would that impact 
your budget, and what plans are you making in the event this 
happens?
    Secretary Bryson. Senator, do I have time to respond to 
you?
    Senator Pryor. Yes.
    Secretary Bryson. So, I'll take the sequestration first, 
then, if we have time, something quickly on--let me simply say 
I'd like to learn more of your proposal, so maybe we'll put 
that aside. But, I'd like to follow-up on that.
    With regard to sequestration, the President has taken a 
view that I share strongly, and that is sequestration would 
simply be a very bad thing for our country. And the cost of 
having sequestration go forward, rather than having you, as 
Members of Congress, move to a sounder way of going forward, is 
what we stand on. We believe in that, and we have invested no 
time at the Commerce Department trying to think through what 
would we do in the event sequestration went forward.
    We think it's such a bad thing for the country to just have 
sequestration roll out that we believe that it's probable, and 
we would, of course, do anything we can, but this is so much in 
your hands, to have a better approach to dealing with our 
Nation's budget.
    Senator Pryor. Thank you.
    Senator Mikulski. Thinking that it's a bad idea doesn't 
give a plan for a contingency. We all think it's a bad idea. 
So, we've agreed on that. But, I think the point that Senator 
Pryor raises at all of the CJS hearings, and it's a very 
valuable question, is: Have you thought about a contingency 
plan, and what the impact that would be on the agency?
    Wasn't that your question? Do you have a contingency plan?
    Secretary Bryson. We do not have a contingency plan. We've 
looked very roughly at what the numbers look like, and they 
would be severe cuts.
    Senator Mikulski. And do you have an idea of what the 
impact would be because of sequester?
    Secretary Bryson. We would go to doing what we've done in 
this budget and try ruthlessly to keep the most important 
programs and to cut everything else we had to cut. It would be 
a very bad result. We do not have a full plan.
    Senator Mikulski. On behalf of Senator Pryor, and myself, 
and really Senator Hutchison, and all of us, we need to know 
the consequences. So, if we could have kind of a snapshot of 
what you think they would be, and what areas cuts would be most 
likely to occur, and the impact.
    Senator Cochran, as our ranking guru on the Appropriations 
Committee.
    Senator Cochran. Thank you, Madam Chairman.

                        GULF OF MEXICO FISHERIES

    Mr. Secretary, I'm interested in knowing your 
recommendations for funding research to try to determine what 
steps needs to be taken by the private sector or government 
agencies to help restore good health in the Gulf of Mexico, 
following the disastrous weather challenges that we faced in 
the last year or two.
    Secretary Bryson. Well, the important thing in protecting 
public safety is the work that NOAA does in identification of 
warning systems. So, we have warning systems. Across the board 
you will see that we have cut programs, other than satellite 
program, so what we've done is eliminated from the programs 
things that weren't essential to preserve, for example, in this 
case, the key warning systems that make everyone aware of, for 
example, tornadoes, and other tsunamis, the things that would 
really affect people intensely. So, we go forth with that, even 
under circumstances of tough times, tough choices. We are 
committed to doing our part to reduce taxpayer dollars to the 
extent we possibly can in all the programs of the Commerce 
Department.
    Senator Cochran. There's been a lot of public concern 
expressed about the effects on the Gulf of Mexico from the BP 
Oil spill that occurred in the Gulf of Mexico. To what extent 
has the Department reached any conclusions about what the 
threats are to the continued vitality to fisheries and to the 
general environment in the Gulf of Mexico as a result of that 
oil spill?
    Secretary Bryson. Yes. NOAA has been deeply engaged in 
that. I've been fairly meaningfully engaged in it myself , in 
part, because, I think to the credit of British Petroleum, they 
would like to achieve a resolution of the outstanding claims 
and litigations here, and that's where I've worked with them on 
it. And what we hope to do is have a resolution that will be in 
agreement, that will encompass the impacted States there, and 
put these resources to work in moving rapidly to the protection 
of the ecosystem of the gulf there.
    Senator Cochran. You hear a lot of things that are said in 
a negative way about earmarks. Are there any earmarks in this 
proposal from the administration that we need to know about?
    Secretary Bryson. No. No. This is a matter of----
    Senator Cochran. What about your salary? Isn't that an 
earmark?
    Secretary Bryson. I don't know if I've thought of my salary 
as an earmark.
    Senator Cochran. Why not?
    Secretary Bryson. But I will tell you the----
    Senator Cochran. What's the difference in your salary and 
grants to grantees who are conducting research on the effects 
of the oil spill and other concerns that our Nation has in the 
Gulf of Mexico? Should it not be subjected to the same kind of 
scrutiny and questioning as something that is submitted for 
consideration in the budget by a Member of Congress?
    Secretary Bryson. So, we still do make grants in the gulf 
now. We have to have tough choices when we do that, but we'll 
go forward with that. There's no question about that. But, I'm 
not sure I'm answering your question very well, Senator. Maybe 
if you put it to me again, because I may be missing something 
here.
    Senator Cochran. Well, thank you very much. We'll revisit 
that later. I'll let others ask questions and we will come back 
to that later in the hearing.
    Senator Hutchison. I think you're defending the 
appropriations process.
    Senator Mikulski. We kind of liked that line of 
questioning, actually.
    Senator Brown.

                   STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Madam Chair. Secretary, welcome. 
Thank you for your candor. Folks, on that last question, I 
don't know what the right answer was either, but I appreciate 
Senator Cochran phrasing it the way that he did.
    Senator Mikulski. It wasn't personal, Mr. Secretary.
    Senator Pryor. It certainly wasn't.
    Secretary Bryson. Thank you.
    Senator Brown. We only have one time for one question. I 
have one comment and question. I have to preside at 11 o'clock.

                           TRADE ENFORCEMENT

    I want to talk to you about manufacturing. For 12 years, 
from 1997 to 2009, we had a decline every year in my State and 
nationally in manufacturing jobs, and the number of 
manufacturing plants around the country. You know that we have, 
almost every month since more or less the middle of 2010, 
seen--earlier than that, actually--an increase in manufacturing 
jobs, not to the level we want to be at, not even close. 
Workers, especially in my State, have faced firsthand the 
problem with our trade laws that require enormous injury from 
unfairly traded foreign products before any response by our 
Government. And the slowness of that and the arduousness of the 
process has made fighting back on behalf of our manufacturers 
and their workers especially difficult.
    For example, a coated paper case was filed. Relief was 
originally rejected, because the injury was existent, but not 
deep enough. Three years later, the industry and union re-
filed. Because thousands of jobs were lost, because of unfair 
trade practices, relief was granted, but it really was too late 
to help this industry. And that's been sort of emblematic of 
what we've seen.
    The Department has brought authority to initiate trade 
enforcement cases. Last week, I helped lead an effort supported 
by more than 180 House and Senate Members, calling for a full 
examination of China's policies and practices in the auto parts 
sector that have flooded our Nation. At the time of permanent 
normal trade relations (PNTR), well, after PNTR, a decade ago, 
we had about a $1 billion bilateral trade deficit with China in 
auto parts. Today, it's grown 800 percent. It's around $10 
billion. I'm glad you are working on the Interagency Trade 
Enforcement Center (ITEC). That's especially important.
    My question is this. In face of the reluctance, sometimes, 
of industries to bring trade cases, the union less reluctant, 
the industry more reluctant, because of potential and very real 
Chinese retaliation, from retaliation from their government, 
when can we expect an answer on whether you will and how you 
will take up the auto parts question? What other key sectors, 
in addition to auto parts, do you think we should be moving on 
when it comes to trade enforcement? What do we do to make our 
trade laws more responsive to the numerous issues with China's 
export subsidies?
    Thank you, Madam Chairman.
    Secretary Bryson. So, first, with respect to the auto 
parts, the question we have with regard to the auto parts is--
the laws are such that we, the Commerce Department, can 
ourselves initiate a case. The problem with that is the success 
of those cases has been relatively minor, because we have to 
have the data from the industry that allows the case to be 
made. So, on the auto parts, to my knowledge, none of the 
companies have come forth, and you're suggesting----
    Senator Brown. If I can interrupt, and I apologize, Madam 
Chair. Correct. But that's why a strong encouraging statement 
from you, public or private, to them, that you're serious, 
would go a long way. And these companies, it's a little bit of 
a cat and mouse game. The companies don't step forward, they're 
afraid of retaliation. Their history with Commerce, especially 
in the Bush years, but even in the Obama years and the Clinton 
years, frankly, maybe equally--they've not been encouraged, and 
we need you to step up and let them know that yes, you want to 
work with them. And I don't know if that message is clear yet. 
Perhaps it is, and I don't know it.
    Secretary Bryson. I think it is pretty clear that what has 
been done at the Commerce Department is extraordinarily 
different than what has been done in the preceding periods of 
time. So, take last year alone, 2011, with respect to China we 
increased by 50 percent the number of initiations of 
investigations over the prior year. So, over the 3 years, we've 
moved substantially ahead of what had previously been done.
    What we've done in the last few days, as perhaps you've 
seen, is a series of additional steps. This is a very, very 
intense, very demanding undertaking, and we are focused, 
absolutely, on serving our Nation with enforcement of the trade 
laws.
    Now we have the complementary White House office called 
ITEC, with which we cooperated. In fact, our budget includes 
significant resources. The budget before you now, it will 
enable us, among other things, to detail a number of people to 
ITEC, and the advantage of ITEC is more effectively bringing 
the entire Federal Government behind these exercises. So, this 
is incredibly, acutely important, and we will do everything we 
can in that respect to move these enforcement cases forward and 
to conclusions.
    And finally, I'll just say I want to especially thank you 
and the Congress on the GPX (GPX International Tire Corporation 
v. United States) decision, because on that we had 24 key cases 
that we had acted to final conclusions on, with countervailing 
duties, and an enormous amount at stake, 33 of the States in 
the country affected, tens of thousands of workers affected, 
and the court took that away from us. You put it back in place 
forever. It makes a great deal of difference for us.
    Senator Brown. Thank you. And Madam Chair, I would add, 
hopefully, 20 seconds. The GPX case, I think, shows the 
Commerce Department, and the President, and the country that 
the Congress will move quickly and bipartisanally on 
enforcement of trade laws. We know that was the right way to 
go. There was little or no opposition here. We moved it 
quickly. The President signed it. We're grateful for that.
    Thank you.
    Senator Mikulski. Thank you.
    Senator Murkowski.

                  STATEMENT OF SENATOR LISA MURKOWSKI

    Senator Murkowski. Thank you, Madam Chair. Mr. Secretary, 
welcome. It's going to be no surprise to you this morning, I'm 
going to talk about fish. When we talked prior to your 
nomination, I told you that this was my priority within the 
Commerce Department, and I wanted to make it your priority.
    Secretary Bryson. Yes.

                           FISHERY MANAGEMENT

    Senator Murkowski. And I will tell you, I'm a little bit 
disappointed, as I've looked through your statement that you 
have provided the subcommittee here today, out of 12 pages, 
pretty much single-spaced, we've got one paragraph here on 
fish. So, I want to give you an opportunity to elaborate, if I 
may.
    The effort to develop new catch-share programs within NOAA 
is moving forward. There's been some, I think, substantial 
amount of funding that is dedicated to that, and I understand 
that part of what NOAA's attempting to do is to really do the 
outreach, engage in an educational effort. I think that that's 
important. Our experience in Alaska, where we've been living 
with it, and been successful with it, is that the outreach is 
important. We also recognize that it's important that all the 
fishery management decisions are well thought out, affected by 
the public process, and that the Regional Fisheries Management 
Councils are very critical to this education effort, to this 
outreach effort.
    So, I'm a little bit concerned about how you will be able, 
successfully, to do what you're hoping to do with the outreach 
efforts to develop a new catch-share program, when you are 
decreasing pretty dramatically, a 14-percent cut to the 
Regional Fishery Management Councils. So, I'd like you to 
address that aspect of the NOAA budget and the fisheries, and 
also to provide for me some understanding here. It is critical 
that we make sure that we've got adequate funding for our stock 
assessments. I know that the chairman is concerned about this 
as well. We need to have that science. We need to know that 
it's science that is guiding these management decisions for us. 
And we, again, have been doing, I think, a pretty good job up 
north in making sure that we're operating off science based in 
good solid data.
    The request within the budget does include an increase for 
overall stock assessment, where much of those funds, I 
understand, are going to be used to develop new fisheries 
assessments. And I know in your written statement you say that 
the expanded stock assessments will be targeted at high-
priority commercially and recreational viable fish stocks. I'm 
not entirely certain what that means.
    What I need to convey to you is the concern that I'm 
hearing from folks up north that the surveys and the stock 
assessments that have been under way in the Bering Sea or the 
Gulf of Alaska are going to be reduced or impacted negatively 
as you focus your efforts in other areas, where perhaps you 
have less adequate or less rigorous data. If we don't have 
stock assessments conducted frequently and with reliability, 
then what happens is the total allowable catch levels will 
necessarily need to be reduced, because you've got to adjust 
for increased uncertainty. That then costs millions in revenues 
to harvesters, processors, and communities that really rely on 
this.
    So, it's kind of a two-pronged question here. Focus a 
little bit on the Regional Fishery Management Council and the 
role in the education and outreach that you're trying to do 
with the catch-share programs. And can you give me some level 
of assurance that the current level of stock assessment surveys 
that is under way is not going to be downgraded or reduced 
under this proposed budget.
    Secretary Bryson. Yes. I can give you that assurance. We 
are very focused on the role the Regional Fishery Management 
Councils play. We have cut some costs there, but in ways that 
we do not believe undermine their work at all, and with respect 
to the concern that there might be a reallocation of dollars 
away, for example, from Alaska to other regions in the country, 
no, under the law we can't, and, of course, wouldn't do that. 
So, the proportional effect of having less money in the 
aggregate going into fishery management councils, it's just pro 
rata across the United States.
    The key emphasis beyond that is that we have, for example, 
in Alaska, a really excellent Fishery Management Council. We 
are continuing to provide the funding for the science on how to 
take this further. So, funding, and you've touched on this, for 
the national catch-share program, will support use of this key 
fishery management tool, definitely including in Alaska, and 
you've touched on the impacts on the reduced stock assessment 
surveys. I understand the importance of science in managing 
these things in Alaska and elsewhere, and across the United 
States we're investing increases of $4.3 million to increase 
stock assessments; $2.3 million for surveys and monitoring; and 
$2.9 million for observers.
    So, again, the fundamental situation that we have here is, 
these are tough times, we're making tough choices, we're 
seeking to protect the taxpayer dollar and use it to the 
greatest benefit, and so we're building on the science. We're 
cutting back, but we're going forward with what we think 
carries forth the work of a long period of time of getting to a 
stronger position dealing with the fisheries.
    Senator Murkowski. Well, I appreciate your statement and 
the reassurance that we're not going to see a downgrade in 
these very important stock assessments, and the survey, and the 
data collection. I think you can understand my concern.
    As I look at a budget where very difficult decisions had to 
be made, I appreciate that, but where you see new programs then 
coming forward with a national ocean policy--we were successful 
last budget cycle in making sure that funding did not move 
forward for the Coastal Marine Spatial Planning Initiative. Now 
is not the time to be putting new programs onto the books, when 
we're effectively shortchanging the very, very important 
efforts that must be made when it comes to understanding and 
managing our very important fisheries and the fish stocks. And 
I know that the chairman works with me on this to help make 
sure we're doing the right thing.
    Thank you.
    Secretary Bryson. Thank you, Senator.
    Senator Mikulski. We face the same issues, whether it's our 
rockfish population or crabs. We do need accurate assessments. 
And unless the regulatory environment kicks in, it always has 
an impact on your fishermen, my watermen. Nobody's very happy 
at the answers, but we have to know that we're on solid water.
    Thank you.
    This concludes the first round of questions. I'm going to 
ask Senator Cochran if he has any additional questions or would 
like to submit them for the record.

                        GULF OF MEXICO FISHERIES

    Senator Cochran. Madam Chairman, thank you. I would like to 
ask another question relating to the Gulf of Mexico.
    I think we need to identify, if we can, in cooperation with 
the Department, the research priorities that affect the Gulf of 
Mexico. The impression that I've gotten in reviewing this 
budget request is that it's a very low priority, in view of the 
Department, and that concerns me. It is a vital and important 
fisheries resource for not just the Gulf States, but for the 
United States, generally speaking. It is a very important area 
ecologically, just as important as any other body of water that 
is adjacent to or a part of the United States' primary interest 
for fisheries and related activities.
    In that connection, the research programs that we have 
funded in the past are designed to help keep up with challenges 
to the ecological integrity of the Gulf of Mexico. And it just 
seems to me that it's taken a backseat to a lot of other 
programs by the administration. That's a concern that I'm 
raising, and I hope that you will be able to take another look 
at some of the priorities of the Department, and see if there 
can be a more equitable balance between our interests in the 
gulf and elsewhere along our ocean borders.
    Secretary Bryson. Senator, we really are committed to 
distribution of our funding, our science, our capabilities 
across the entire coastal regions of the United States, and we 
do care deeply about the gulf.
    Senator Cochran. Well, we want to see you put your money 
where your mouth is. That's kind of the old way they'd say that 
at home.
    Secretary Bryson. And I understand that, and we will do 
that. And I would just--we are in this situation that we 
believe we're doing what is necessary, by reducing anything we 
can reduce that isn't absolutely essential in our core 
programs, and going forth with our key fisheries programs. So 
we support fisheries and we support fishermen, and that's a big 
priority for us. And that is very much in this program.
    It's the things that don't have those direct impacts that 
we've cut back some on, and that's not in the Gulf or anywhere 
else in a particular way. That's across the United States as a 
way to try to be the way businesses must be, and that is 
really, really effective, in the dollars that they have and 
prioritizing them.
    Senator Cochran. Thank you.
    Senator Mikulski. Senator Hutchison.
    Senator Hutchison. Yes. I want to make a statement and then 
ask one question.
    Just to reinforce what my colleagues Senator Mikulski and 
Senator Cochran have just said: In NOAA's own National Marine 
Fisheries Service report, on its Web site, it says that there 
are 121 up-to-date stock assessments for the 528 stocks of fish 
or stock complexes under NOAA management. So 121 out of 528 is 
showing, I think, the concerns that we're raising.
    One of those that my constituents have been hoping for is 
the Red Drum. The Gulf of Mexico Fishery Management Council is 
struggling with so little data, because the Red Drum, for 
instance, hasn't had an assessment in 20 years, and remains 
closed as a result of outdated science, despite the fact that 
they believe the fishery may be rebounding.
    So, these are some of the additional facts that I would put 
on the table to show you why I think many of our fishermen and 
our industries throughout just don't have confidence in the 
science that's being done in NOAA on fishery data and 
information.
    So, I do think it's a priority that we need to address, 
because the commerce of our country can be enhanced if we can 
increase the export of marine life. So, that's my statement to 
add to theirs.

DEPARTMENT OF COMMERCE RESTRUCTURING: NATIONAL OCEANIC AND ATMOSPHERIC 
                             ADMINISTRATION

    My last question, though, is the one I mentioned in my 
opening statement about the President's plan, or looking at 
putting National Oceanic and Atmospheric Administration (NOAA) 
into the Department of the Interior, and I wanted your comments 
for the record before we finish this hearing.
    Secretary Bryson. Yes. I'd be happy to address that. So, 
the President's proposal for making a more efficient economic 
Department, creating a Department in a restructuring that would 
bring together all the entities in the Federal Government that 
are focused on economics, business, and data collection on how 
the economy works, all the things that are at the Commerce 
Department, and other places in the Federal Government, to me, 
that makes sense, but there has been no further work done on 
that, because in the President's eye and all of our eyes, the 
first question will be, is that a proposal that the Congress 
acts on. If the Congress were to act on that, then we'd go to 
work putting before you what we think the best way to manage 
these resources will be under that priority, and the President 
has thrown out the idea of NOAA transferring to the Department 
of the Interior. There's no further details on that, and 
there's no further work that's been done on it, but that is a 
possibility.
    But, the first question really will be, is the Congress 
ready to and will the Congress want to offer the President the 
opportunity to bring forth a plan that would, under this 
proposal, be an up or down vote in the Congress, as is true 
through the Depression, as you know, and all the way to 
President Reagan, but not since.
    Senator Hutchison. So, you're not saying you're against 
looking at it, if that makes sense for efficiencies.
    Secretary Bryson. Yes. I think that it--and again, I 
analogize almost everything. We're now speaking in the Commerce 
Department as an arm of the Federal Government that is seeking 
to operate at the speed of business, and we are trying to make 
decisions, and we're trying to preserve taxpayer dollars, and 
use them to the greatest result possible. And I regard that 
restructuring of the Department in this respect could enhance 
productivity. Yes.
    Senator Hutchison. Thank you.
    Senator Mikulski. We'll see what the authorizers do. It's a 
complicated topic.
    Secretary Bryson. It is.
    Senator Mikulski. You know, NOAA headquarters is in the 
State of Maryland, and some of its most significant assets are 
there--the NOAA satellite office, which does so much for the 
weather. And I invite colleagues to come with me to see this 
incredible operation. And then the NOAA weather office.
    We wonder where the NOAA agency will go, and will it stay 
in Commerce. Now, there's a whole rumor that it could become an 
independent agency, and people think, oh, gee, this will be 
swell. It's not going to be an independent agency. It's either 
going to stay here or it's going to go, through due diligence 
of the Congress working with the President's suggestion, or 
recommendation, to Interior, but it will not be an independent 
agency.
    Secretary Bryson. Yes. And if I could just make one 
comment.
    Senator Mikulski. Well, we don't want NOAA cut loose.
    Secretary Bryson. Yes.
    Senator Mikulski. We think NOAA really needs a lot of 
management, which is now going to go to my question.
    Secretary Bryson. Makes complete sense. Yes.

       NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION MANAGEMENT

    Senator Mikulski. Because, first of all, we know that the 
Commerce Department has--for the members of this subcommittee 
and the Congress, it is a major jobs agency.
    First of all, what you see here, we're coastal Senators, so 
we are NOAA focused, and within NOAA, it's everything from 
weather warnings, that you've heard, from Hawaii, to Alaska, to 
the Gulf, to the Bay, and the fisheries issues. So, many people 
come under the Commerce, Justice, Science, and Related Agencies 
Subcommittee, because of NOAA and the coastal significance.
    The coast is part of our heritage, part of our identity, 
but it's also a big part of our economy. What happens on a 
coast drives our economy. And for the great States that are 
surrounded by or so hard hit by water, like Alaska, it's 
important. So, we are looking at NOAA.
    What we're concerned about is the persistent problems at 
NOAA, and there are persistent management problems. Senator 
Hutchison raised the satellite issue and the other issues 
related to the weather department. She articulated, 
essentially, my questions, so I'm not going to duplicate them. 
But, we are concerned that satellites make up 37 percent of the 
overall NOAA budget. We are concerned that the satellite costs 
are starting to erode other activities at NOAA.
    Now, in the fiscal year 2012 bill, I directed NOAA to 
update the life-cycle cost for satellite programs. But, Mr. 
Secretary, you're a business man. You said you're operating at 
the speed of business. Well, we don't think that reform is 
operating at the speed of business. We need you, at the 
Secretary's level, to really use whoever you will designate to 
be a hands-on manager of these costs that are exploding at 
NOAA, because of the satellites. We need our satellites.
    This subcommittee went big time on-line to fund the JPSS. 
And we knew it was important. We were concerned about our 
colleagues in the most driven part of our Nation, that they 
need the JPSS for weather. It's part of our treaty obligation 
for weather. But, my God, when we're now at 37 percent, and 
every day we turn around, it's a new satellite cost, and gee, 
we hadn't thought of it.
    So, can I ask you, really, to make this one of your top 
management priorities? You are absolutely promoting our 
exports, working in international markets. We're glad you're 
going to India. It's a great democracy and a great sense of 
working together. But, we also need you to be looking at NOAA. 
So, what can I get from you to make sure that this doesn't 
continue, that NOAA doesn't seem to take this in the spirit 
that we do, and that then also goes to these airplanes that 
Senator Hutchison raised. I'm sure you are concerned about 
safety. We're concerned about safety and functionality as well. 
So, we need a hands-on sense of reform at the top management 
level at NOAA here in its satellites, in its planes, and its 
ships.
    Secretary Bryson. I commit to you that I will give it that 
priority. Yes.

                           CENSUS MANAGEMENT

    Senator Mikulski. Do I kind of represent the sentiments of 
the subcommittee here on this? So, know that we really respect 
the people who are working there at NOAA to be able to do this.
    This then also does go to the issues related at the Census 
Bureau. You know, the census happened, but barely. Now, I'm not 
faulting the people who work for the Census Bureau, but, again, 
I worked with Secretary Guttierez, then Secretary Locke, and 
now you, Sir, and once again, now, we're hearing, ``Oh. The 
census [cost] might double.'' Well, in the day of new 
technology, new ways of communicating with people, at the speed 
of business, we should be reducing costs on the census. And we 
need you, again, to assign a management person, because our 
problems with the census is everything comes in at the last 
minute, and if you don't fund it, we won't be able to do the 
census. It's 2012. We're working on the fiscal year 2013 
appropriations. We've got to really bring the Census Bureau 
into a discipline here.
    Secretary Bryson. Yes. Thank you, Senator. And I strongly 
commit to you that I will give that very high priority, and I 
do give it very high priority. And the key thing in this budget 
is they have the resources to do this work right now for 2013 
that will make it possible so that we can assuredly tell you 
that it will be lower cost per household and a complete census 
in 2020 than there has been in the 2010 census.
    Senator Mikulski. That's very good to hear, and we're 
really going to count on you.
    One of the areas where we know that there would be 
bipartisan consensus is we don't want a sequester either. Now, 
we might disagree on a line item or an agency here or there, 
but we know a sequester is not in the interest of the country 
over the long haul.
    The way that we're going be able to deal with that, and 
again, there's bipartisan consensuses, is how can we be more 
frugal now? And that means getting value for our dollar. So, 
where there are these persistent problems year after year, 
Secretary after Secretary, President after President, we need 
to really begin, we need to really now take a real steadfast 
attempt to bring these things that are always out of control, 
always coming over budget, under really a far greater fiscal 
discipline, so that we can approach this in a more frugal way, 
get value for our dollar. We need those satellites. We need our 
weather. We need our NOAA. We need our Census Bureau. But, we 
need them to take these issues very seriously, or we could end 
up into a situation where the Nation suffers and we suffer as 
well.
    So, let me conclude this hearing. Sorry, Senator. Did you 
have another question?
    Senator Murkowski. One very brief one, if I may.
    Senator Mikulski. Yes.
    Senator Murkowski. I will be very quick, but it is a very 
important issue.

                     ARCTIC OUTER CONTINENTAL SHELF

    Mr. Secretary, I don't know whether you were briefed by Dr. 
Lubchenco last week. I had an opportunity to meet with her 
about a Draft Environmental Impact Statement (DEIS) that has 
come out of her agency, and this relates to the Arctic Outer 
Continental Shelf (OCS). And as you probably know, there is a 
great deal of interagency coordination--you've got the National 
Ocean Policy, you've got Regional Ocean Partnerships, you've 
got David Hayes' interagency taskforce--and yet, National 
Marine Fisheries Service (NMFS) produced a DEIS this year that 
is in direct conflict with Department of the Interior's 
National Environmental Protection Act work. And this DEIS could 
significantly alter the framework of what is, hopefully, 
anticipated there in the Arctic, in terms of the numbers of 
operators that may be able to be in place, some of the 
geographic and time restraints. It is significant. And this was 
not the product of any interagency coordination.
    The team that produced it essentially said that it was done 
because the Department of the Interior didn't look the way that 
NMFS thought that it should look, even though it's Interior 
that has the authority over the OCS and the leases that have 
been sold with the expectation that their owners are going to 
be able to get some use out of them. So, I asked why this 
disconnect, and unfortunately, I did not receive an answer on 
that, certainly not a clear answer.
    But, this DEIS is simply too big a deal for your Department 
to not be able to answer some basic and pretty fundamental 
questions about its very existence. And until there's an 
understanding as to who is the lead here, and what the 
interagency process is supposed to be, I would ask you, Mr. 
Secretary, to pull that DEIS and go back to the drawing board. 
And if this is something that you can tell me that you have not 
been involved in, I would ask that you look into it and be 
engaged on that.
    Again, this could significantly impact the operation of 
this expansion that we are hoping to embark on this summer.
    Secretary Bryson. Senator, I have not been engaged in that. 
I will get back to you with respect to it. I will look into it 
promptly.
    [The information follows:]

 Draft Environmental Impact Statement on the Arctic--Outer Continental 
                                 Shelf

    The National Oceanic and Atmospheric Administration (NOAA) is 
responsible for implementing the provisions of the Marine Mammal 
Protection Act (MMPA). Under the MMPA, it is illegal to ``take'' \1\ a 
marine mammal without a permit or exception. One such exemption can be 
obtained by U.S. citizens conducting activities (other than commercial 
fishing) within a specified geographic region that may incidentally 
take marine mammals pursuant to section 101(a)(5) of the MMPA. Those 
exemptions are known as Incidental Take Authorizations.
---------------------------------------------------------------------------
    \1\ Under the MMPA, take means to harass, hunt, capture, or kill or 
to attempt to harass, hunt, capture or kill any marine mammal.
---------------------------------------------------------------------------
    The Department of the Interior (DOI) has jurisdiction over 
authorizing offshore oil and gas activities on the Outer Continental 
Shelf (OCS). If an oil and gas industry operator determines that their 
activity may ``take'' marine mammals, they need an MMPA Incidental Take 
Authorization from NOAA. Section 101(a)(5) of the MMPA directs the 
Secretary of Commerce (with authority delegated to NOAA National Marine 
Fisheries Service) to issue such authorizations if certain findings are 
made.
    Prior to issuance of an Incidental Take Authorization, NOAA must 
evaluate the potential impacts to the environment pursuant to the 
National Environmental Policy Act (NEPA). Although DOI has recently 
completed large-scale NEPA analyses regarding oil and gas activities on 
the Alaskan OCS, those documents did not fully address NOAA's action of 
issuing MMPA Incidental Take Authorizations for the take of marine 
mammals incidental to conducting oil and gas exploration activities in 
the Alaskan OCS. Therefore, in order to meet our statutory and 
regulatory requirements, NOAA determined it was appropriate to prepare 
an Environmental Impact Statement (EIS) evaluating issuance of MMPA 
Incidental Take Authorizations.
    NOAA has coordinated throughout this process with DOI's Bureau of 
Ocean Energy Management (BOEM). NOAA and BOEM signed a Memorandum of 
Understanding in February 2010 regarding the level of involvement and 
coordination that would occur throughout the development of the 
Environmental Impact Statement. The Federal Register Notice of Intent 
initiating this EIS process noted that BOEM would be a cooperating 
agency, as defined by NEPA. The two agencies have worked 
collaboratively throughout the development of the document, and BOEM 
staff prepared sections of the document where they had subject-matter 
expertise. The two agencies worked together to develop the numbers of 
anticipated activities that may reasonably occur over a 5-year period. 
The activity levels analyzed in the Draft EIS do not serve as a ``cap'' 
on industry activity. Rather, they were based on what the agencies 
predicted is reasonably likely to occur versus an outer bound of what 
one anticipates might occur.
    Since the March 22 hearing, Dr. Lubchenco has met with Deputy 
Secretary Hayes to discuss this EIS and the role of the Alaska 
Interagency Working Group in its development. Leadership from NOAA and 
BOEM met in early May to discuss the path forward, and BOEM agreed to 
re-evaluate the level of activity assessed in the EIS. The two agencies 
will continue to work collaboratively on this effort to ensure an 
accurate assessment of reasonably likely oil and gas exploration 
activity in the Alaskan OCS. Once finalized, this document will assist 
NOAA in making timely decisions regarding the issuance of MMPA 
Incidental Take Authorizations to the oil and gas industry in the U.S. 
Arctic Ocean.
    NOAA has also worked collaboratively with the Environmental 
Protection Agency regarding issues related to air and water quality and 
the potential impacts to those resources from the proposed actions of 
oil and gas exploration and the issuance of MMPA Incidental Take 
Authorizations when developing this EIS.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Murkowski. Okay. I would appreciate a very prompt 
response and would look forward to that.
    Thank you, Madam Chairman, for the additional couple 
minutes.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

           Questions Submitted by Senator Barbara A. Mikulski

                             SEQUESTRATION

    Question. Under the Budget Control Act of 2011, funding for 
virtually all Federal programs will face a possible across-the-board 
cut in January 2013 if the Congress doesn't enact a plan before then to 
reduce the national debt by $1.2 trillion. According to Congressional 
Budget Office (CBO) estimates, this would result in a cut of 7.8 
percent to all nonsecurity programs.
    What impacts would an across-the-board cut of 7.8 percent have on 
the Commerce Department? What are the consequences, both in terms of 
dollars and people served? Can you give us specific examples? Is there 
anything else that the Commerce Department can cut beyond what is 
proposed in the fiscal year 2013 request? How would public safety be 
impacted by a cut to National Oceanic and Atmospheric Administration 
(NOAA), particularly the agency's ability to accurately forecast 
weather? Do you have a plan for the Commerce Department to implement 
these cuts if the Congress doesn't enact an alternative plan?
    Answer. The administration believes that a sequestration can and 
should be avoided. According to the CBO, the sequester could cut 
overall domestic spending by about 8 percent. The Department 
anticipates a negative impact on our mission to create the conditions 
for economic growth and opportunity by promoting innovation, 
entrepreneurship, competitiveness, and stewardship informed by world-
class scientific research and information. The Department would have to 
reduce its efforts to support regional innovation strategies that 
foster job creation. Fewer small- and medium-sized businesses, and 
minority enterprises would be assisted in their efforts to export 
products and services. Some investments in research and advanced 
manufacturing technologies would be eliminated. Research efforts to 
bring the 2020 Census in at a lower cost per household would be 
hindered. Also, the cut would curtail the Department's ability to 
address foreign trade barriers and ensure market access cases are 
resolved successfully.
    A cut of this magnitude would likely require furloughs or the 
elimination of positions and reduce NOAA's ability to fully meet its 
mission. This type of reduction would also diminish the Department's 
ability to make necessary information technology (IT) modernizations 
and improvements in our IT security posture to appropriately address 
the current cyber environment. The Department would have to eliminate 
some key statistical series and surveys that provide important 
information in the decisionmaking processes of businesses and Federal, 
State, and local governments. In addition, it would reduce funding to 
develop next-generation weather satellites which are critical to 
maintaining the Nation's weather forecasting capabilities.

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

National Oceanic and Atmospheric Administration Satellites
    Question. Satellites acquisitions make up 37 percent of NOAA's 
budget in fiscal year 2013 and have started to erode funding for other 
operations at NOAA. That is why I directed NOAA in 2012 to provide 
updated life-cycle costs for all satellite programs.
    The fiscal year 2013 budget request for Joint Polar Satellite 
Systems (JPSS) is $916 million and includes an updated life-cycle cost 
for the program. The total cost increased by $1 billion from $11.9 
billion to $12.9 billion. NOAA is also cutting more weather sensors to 
keep costs down, going from 13 total sensors for both satellites to 
just 7. This new total cost estimate shows JPSS going in the wrong 
direction.
    Please explain the current gap in the weather coverage and how NOAA 
will keep it from growing?
    Answer. The methodology that NOAA has used to calculate the gap is 
based on a probabilistic methodology that is used for operational 
satellites. As such, the basis of the gap is focused on the ability to 
continue to provide data, without interruption, to support weather 
forecast models. It is difficult to say with absolute certainty when 
the projected gap may occur, and any estimates on the duration of the 
gap are based on probability analysis using assumptions about the 
lifespan of current satellites. Assuming that Suomi National Polar-
Orbiting Partnership (NPP) ceases to operate at the end of its 
projected life in 2016 and JPSS-1 becomes fully operational in 2018 
(after undergoing calibration and validation activities) following 
launch in the second quarter of fiscal year 2017, NOAA estimates that 
the potential data gap in the afternoon orbit could be up to 18 to 24 
months.
    In reality, Suomi NPP could last longer or shorter than what the 
current probability analysis suggests, which would impact the duration 
of the gap.
    Ultimately, NOAA's best chance to minimize any gap is to maintain 
the second quarter of fiscal year 2017 launch date of the JPSS-1 
satellite. Loss of data in the afternoon orbit will degrade NOAA's 
weather forecast skill at day 3 and beyond, providing the Nation less-
accurate information about significant weather events than would 
otherwise be available.
    Question. Funding for NOAA's core ocean and weather operations is 
suffering while procurement budgets balloon and satellite capabilities 
decrease. Why should NOAA remain the lead acquisition agency for these 
satellites?
    Answer. The administration is still developing a response to the 
Senate's proposal to move weather satellite acquisition from NOAA to 
National Aeronautics and Space Administration. As you know, this is a 
complicated issue which the Congress has been addressing for years. We 
are analyzing the possible impacts the organizational change could have 
on the satellite missions, as well as on satellite budgets and 
schedules.

               CUTS TO NATIONAL WEATHER SERVICE WORKFORCE

    NOAA's budget request reduces the National Weather Service's (NWS) 
IT staff by 80 percent, affecting 122 employees:
  --cuts 98 computer technician positions in local field offices; and
  --consolidates remaining 24 positions into six regional offices
    IT staff have proven to be valuable parts of the local weather 
forecast teams. Every local weather field office across America will be 
affected by these cuts.
    We experienced the most devastating weather on record in 2011. 2012 
is already shaping up to be just as bad. According to NWS, the recent 
February 28 to March 2 severe storm outbreak spawned 230 tornadoes 
across 14 States killing 54 people. Without NOAA's warnings, more lives 
would have been lost.
    Question. Dr. Lubchenco has stated that reducing computer tech 
staffing will not affect the quality of services, warnings, and 
forecasts. What does she mean by this?
    Answer. As a result of technological advances and efficiencies to 
remote communications, centralized Regional Information Technology 
Collaboration Units (RITCUs) would work in partnership with Weather 
Forecast Offices (WFOs) and the established Network Control Facility in 
Silver Spring to provide the same or an improved level of support as 
provided today to each WFO. WFOs would continue the same service 
delivery in the future as they do now, with no impact to mission or 
performance. RITCUs will be fully capable of addressing any software 
issue within their area of responsibility. The Advanced Weather 
Interactive Processing System (AWIPS) Network Control Facility (NCF) 
will continue as a secondary source of support capable of diagnosing 
and resolving most problems. Between the RITCU and AWIPS NCF, most 
problems will be resolved within an average of 5-10 minutes. In 
addition, robust, long-standing service backup capabilities allow an 
adjacent office to assume warning and forecast responsibility almost 
immediately. If the system goes down during severe weather and cannot 
be remedied remotely in short order, service backup would be 
implemented. To provide for continuity of operations in the field, 
long-standing and extensively tested service backup capabilities allow 
an adjacent WFO to assume the warning and forecast responsibility of a 
pre-determined, neighboring WFO almost immediately to ensure no service 
degradation to the public. Testing of backup plans is conducted at 
least annually in accordance with the NWS operations policy.
    Question. NOAA ramped up its weather computer workforce in 2000 to 
help with a new computer network. NOAA is currently updating that 
system and has requested $12 million in 2013 to prepare for more 
weather data from newer satellites. Why are these IT techs no longer 
valuable now?
    Answer. AWIPS is the backbone of forecast capabilities at WFOs. 
When AWIPS was first deployed, this technology was not well defined, 
nor was there technical expertise within local forecast offices to 
manage the additional IT requirements. To meet these challenges, the--
Information Technology Officer (ITO) position was created in 2001 to 
provide onsite configuration and upgrade support for AWIPS. Over the 
past decade, advances in NWS IT have allowed NWS to make significant 
technological advances and efficiencies into its remote support 
capabilities making these positions unnecessary. Currently, each WFO 
has one ITO, typically working day shifts on weekdays.

                                 CENSUS

2020 Census
    Question. Controlling costs for the 2020 Decennial Census remains a 
top oversight concern. Both the Commerce Inspector General and 
Government Accountability Office track the 2020 Census as a high-risk 
challenge for the Department.
    Cost overruns were a problem for the 2010 Decennial Census, 
totaling more than $12 billion. That is 20 percent more expensive than 
original estimate of $11 billion, and double the cost of 2000 Census of 
$6.5 billion. This subcommittee had to make tough choices each year to 
continue funding the 2010 Census.
    Last year, the projected cost of the 2020 Census ranged between $22 
billion and $30 billion--more than double the cost of the 2010 
Decennial Census. The fiscal year 2012 Commerce, Justice, Science, and 
Related Agencies bill included language calling for curbed costs.
    How is the Census Bureau changing the way the agency is planning 
for the 2020 Decennial Census--particularly with driving down 
``nonresponse followup'' costs which is the most expensive part of the 
Census process? How is the Census Bureau avoiding techno-boondoggles 
such as the 2010 Census hand-held computer debacle? Why do you 
anticipate the 2020 Census costing twice as much as the 2010 Census?
    Answer. The Census Bureau recognizes that the rising cost of the 
decennial census in recent decades cannot be sustained, and we must 
make changes to the design of the decennial census to increase 
efficiency and control costs while maintaining the quality of the data. 
Accordingly, we have embarked on a research and testing program focused 
on major innovations to the design of the census oriented around three 
major cost drivers of the 2010 Census:
  --substantial investments in major, national updating of the address 
        frame just prior to enumeration;
  --the lack of full public participation in the self-response phase of 
        the census, requiring the hiring of a large field staff for 
        nonresponse followup; and
  --the failure or challenges with linking major acquisitions, the 
        schedule, and the budget. Major innovations in three key areas 
        of the design of the 2020 Census can control costs relative to 
        the 2010 Census design.
    The first key area is conducting a Targeted Address Canvassing 
operation as a result of improving address coverage and map feature 
updates as part of the fiscal year 2011 Geographic Support System (GSS) 
Initiative. The possibilities for maintaining our address list and maps 
range from a full address canvassing operation (similar to what we did 
for the 2010 Census, where we walked almost every street in America to 
verify and capture information about every housing unit with the 
correct geography), to targeted address canvassing, to not having to do 
address canvassing at all. The 2020 Census research and test work in 
conjunction with the GSS Initiative will be critical to understanding 
the extent to which we can reduce the amount of address canvassing.
    The second key area is Multiple Mode Response Options, which allows 
for the public to respond to the census via multiple modes, such as 
mail, telephone, Internet, face-to-face interview, and other electronic 
response options that may emerge to ensure that diverse subgroups of 
the population, including those that speak languages other than 
English, have every opportunity to submit their information. This also 
includes redesigning the most expensive component of the census, the 
nonresponse followup operation, where we enumerate households that do 
not initially provide their information to us. The Census Bureau will 
explore using existing data sources like the American Community Survey 
and administrative records to obtain data about those households that 
do not otherwise respond to the census. Using administrative records 
for a substantial number of nonrespondents could result in 
substantially smaller field and labor infrastructure, thereby saving 
billions of dollars. We can also save money by modernizing the IT and 
field support infrastructure.
    The third key area is investment program management and systems 
engineering efforts early in the decade. Based on lessons learned, 
there were areas of program management that have potential for 
improvement. To achieve the goals of the 2020 Census, sufficient 
investments in planning and research are being made early. In addition, 
the program's budget, schedule, and scope are being integrated, and an 
iterative process is being put in place that will allow flexibility in 
planning and design. To the extent possible, we will make decisions 
based on the evidence from our research. The goal of this extensive up-
front effort is to hold down costs later in the decade without 
compromising quality.
    The bottom line is that the more we can innovate, the more we can 
contain costs without sacrificing the high-quality census that the 
country requires. The Census Bureau is tasked with producing the most 
accurate data possible in every census, including the 2020 Census. 
However, obtaining a complete and accurate census every 10 years 
becomes more complex and difficult with each successive cycle. For the 
2020 Census, a larger, more diverse population will be more difficult 
and expensive to count. While we can reduce costs per household 
considerably by utilizing advances in technology and innovations in the 
design of the decennial census as described in these documents, there 
is a point at which reducing costs could lead to a significant 
reduction in the quality of census data. The 2020 research and testing 
program will help us gain a better understanding of the extent to which 
we can contain costs without sacrificing coverage and data quality.

  NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION'S HURRICANE HUNTER 
                                 PLANES

    This year, NOAA's ability to fly into hurricanes for storm 
forecasts has been severely cut as one of the agency's three P-3 Orion 
planes used for hurricane reconnaissance will be grounded indefinitely:
  --NOAA has three P-3 Orion planes.
  --All planes need to be refurbished before 2016 to make them safe to 
        fly.
  --The cost to refurbish each plane is $20 million.
  --NOAA did not request funding to refurbish the grounded plane.
  --NOAA did not tell the Congress that all of the planes need 
        extensive work.
  --A second P-3 plane is due for scheduled maintenance this spring.
  --NOAA with just have one plane and no back-up.
    It is common for one plane to be grounded for maintenance, but to 
permanently lose a capability without any budget path forward is 
unacceptable.
    Question. Why is NOAA not requesting proper maintenance funds for 
NOAA's Hurricane Hunters and what is their plan forward?
    Answer. NOAA would like to clarify that the two P-3s (N42, N43) are 
hurricane reconnaissance and research platforms. One P-3 (N44) has 
reached its End of Service Life (EOSL) and will be grounded. However, 
this aircraft was not used for hurricane reconnaissance or research. In 
that regard, NOAA is not losing capability.
    NOAA's P-3 planes have adequate funding for routine maintenance. 
All standard maintenance for NOAA aircraft is included within the 
Aviation Operation's budget. One of the three planes, the N44, which 
has not previously been used for hurricane research or operational 
forecasting, has reached its EOSL due to existing conditions of the 
wings and NOAA will make no further investments in the aircraft. The 
Service Life Assessment Program (SLAPs) showed that the remaining P-3s, 
the N42 and N43, will reach EOSL in fiscal year 2020 and fiscal year 
2019 with Special Structural Inspections. Investment in new wing sets 
for the N42 and N43 is not covered under the standard maintenance 
program, and has not yet been decided, as this is related to NOAA's 
current effort to systematically look at all observing systems and 
NOAA's requirements.
    NOAA typically schedules maintenance to ensure aircraft are 
available for hurricane season, but the SLAP by Lockheed Martin, 
completed in June 2011, recommended new short-term maintenance and 
inspections for NOAA's P-3s that required NOAA to induct one aircraft 
into Special Structural Inspection during the 2012 hurricane season in 
order to remain airworthy.
    This means that during fiscal year 2012, only one of the two P-3s 
(N42, N43) currently used for hurricane reconnaissance and research 
will be operational at any specific time during the year due to 
scheduled maintenance. If unscheduled maintenance is required, that may 
leave no available P-3s, which would impact hurricane research, but 
would not significantly impact the current operational hurricane 
reconnaissance and forecasting capabilities of the National Hurricane 
Center.
    Question. NOAA partners with a U.S. Air Force reserve unit who also 
fly into hurricanes using more modern C-130 planes. NOAA's and USAF's 
important flight missions are different, but complementary. Has NOAA 
looked at procuring more modern planes like C-130 rather than re-
winging its older planes?
    Answer. NOAA's Observing System Council (NOSC) is systematically 
looking at all observing systems and NOAA's requirements. The NOSC is 
chaired by the Assistant Secretary for Environmental Observations and 
Predictions, with the Assistant Administrator of NWS and National 
Environmental Satellite, Data, and Information Service (NESDIS) as the 
vice-chairs. Each Line Office is represented by a Senior Executive. 
Under the NOSC, an observing system committee will propose the optimum 
observing systems configuration necessary to meet NOAA's missions. NOAA 
has also begun to evaluate individual systems against these observing 
requirements and determine the effective observing suite across NOAA's 
diverse missions. NOAA is now comparing the results of this initial 
effort with other information we have gathered on observing system 
priorities to come up with a robust, interactive, responsive decision 
support tool for observing system integrated portfolio management.

               UNITED STATES PATENT AND TRADEMARK OFFICE

Protecting Intellectual Property
    Question. The backlog of unreviewed patents has decreased 7 percent 
since last year, but more than 657,000 patents are still waiting 
approval. The average waiting time to for a patent has decreased too, 
but it still takes more than 30 months for United States Patent and 
Trademark Office (USPTO) to make a decision. USPTO's goal is 18 months 
by 2016.
    USPTO's budget is based on the amount of fees collected each year.
    USPTO's fiscal year 2013 estimated fees will be $3 billion, $273 
million more revenue than fiscal year 2012.
    I understand that USPTO plans to use this increased revenue to 
tackle the backlog by hiring 1,500 new examiners and opening three new 
satellite offices.
    But USPTO will also spend $521 million on its IT portfolio, 
including:
  --Creating an end-to-end electronic patent process where applications 
        are submitted, handled, and processed all electronically; and
  --Adding ``cloud'' computing to create a virtual patent system.
    Question. How will USPTO's new IT infrastructure decrease the 
backlog so that more American ideas are patent-protected quicker?
    Answer. The new IT infrastructure will improve the network, data 
center, and communication tools both for the patent applicant and 
patent examiners. This improved infrastructure will increase 
reliability, speed, and accuracy in communication and automation 
solutions, which will in turn increase efficiency and quality. The end-
to-end electronic patent processing will be text-based, which will 
allow for computer automation and increased quality. The system will 
analyze data from documents received or prepared, and validate that 
information against rules or existing data. Cloud implementation of the 
data center will allow the USPTO to scale and meet seasonal demands on 
the systems in a cost-effective manner. This will increase our capacity 
to meet patent applicant and patent examiner expectations of a highly 
available system.
    Question. USPTO is a repository of American ingenuity. What is 
USPTO doing to protect America's intellectual property? How confident 
are you in USPTO's cybersecurity plan, especially will cloud computing 
coming online?
    Answer. USPTO is in compliance with the e-Government Act of 2002, 
which included the Federal Information Security Management Act. 
Currently, all USPTO IT systems that are in production have been 
authorized to operate in accordance with all Federal and NIST 
guidelines (i.e., FIPS 199, FIPS 200, NIST 800-37, Rev 1, NIST 800-53, 
Rev 3, and NIST 800-53a, Rev 1). As part of the continuous monitoring 
process, all USPTO information systems are assessed and reviewed each 
year to ensure that security controls implemented in each are:
  --working as intended;
  --have been implemented correctly; and
  --are producing the desired outcome with respect to meeting the 
        confidentiality, integrity, and availability requirements for 
        the information system in its operational environment.
    Changes to information systems are monitored closely and assessed 
for their security impact to ensure that proposed changes do not 
adversely affect the security posture of the information system.
    The CIO Command Center (C3)-combined with both the Network 
Operations Center and the Security Operations Center-continuously 
monitors all USPTO systems. Compliance and vulnerability scans, 
including penetration tests, are performed to ensure that IT devices 
have been configured in accordance with secure baselines, and that 
systems patching is current. After the scans are analyzed, plans of 
action and milestones are created to manage any findings. USPTO 
conducts quarterly scans and maintenance scans on server and network 
infrastructure devices. Security scanning tools are utilized to scan 
databases and web URLs. Real time monitoring tools are put in place to 
monitor and collect security events and application logs of systems.
    USPTO has improved the security of its webmail by enhancing access 
requirements to a two-factor authentication to minimize the risk of 
identity theft. These factors are:
  --Something the user knows (e.g., password);
  --Something the user has (e.g., a security token); and
  --By providing this enhanced level of security, user authentication 
        will positively identify customers before they interact with 
        mission-critical data and applications.
    USPTO generally supports the use of commercially available cloud 
technology when appropriate. For instance, the USPTO leveraged a 
commercial cloud to host a copy of the publicly available trademark 
data and documents (http://tsdr.uspto.gov/). However, since commercial 
cloud providers cannot ensure security standards comparable to those 
maintained at USPTO, certain USPTO data, such as pre-publication patent 
applications, would present an unacceptable risk of compromise if 
hosted in a public cloud. In addition, USPTO must remain the 
authoritative source of agency data to ensure the accuracy and 
integrity of that data. Only the USPTO can provide those assurances at 
this time.
    USPTO supports the leveraging of cloud technologies and is 
implementing in-house cloud-based solutions to take advantage of the 
capabilities while ensuring the security of our data. USPTO has started 
implementing its Next Generation applications (Fee Processing Next 
Generation, Trademark Next Generation) using web services instead of 
traditional three-tier web technologies in an effort to make its core 
applications cloud ready. Additionally, USPTO physical infrastructure 
is currently being refreshed and replaced with devices with virtual 
technologies to ensure that these applications can be moved into a 
cloud environment when they are ready to be deployed. Before 
applications can move to cloud, they must undergo resiliency testing to 
ensure that they can fully utilize the benefits of cloud computing 
(i.e., throughput, reliability, and elasticity).
    To help make the USPTO more efficient and meet daily challenges in 
this area, the USPTO has aligned its organization into a streamlined 
cybersecurity division by combining security operations, C3, and 
security audit and compliance groups under one umbrella office.
    Question. As the patent review backlog decreases, the amount of 
patent appeal cases will likely grow. How does USPTO anticipate dealing 
with this potentially new backlog?
    Answer. The Board of Patent Appeals and Interferences (BPAI) 
backlog of ex parte appeals currently stands at greater than 26,000 
appeals and continues to grow. In order to address the backlog, while 
at the same time addressing new proceedings that come to the Board 
under the America Invents Act, the Board is working to hire 100 new 
Administrative Patent Judges (APJ) in fiscal year 2012, and is planning 
to hire another 61 APJs using fiscal year 2013 resources. The USPTO 
will continue to monitor BPAI's workload to determine if additional 
hiring is necessary in the out-years.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Government Reorganization
    Question. Why do you wish to move National Oceanic and Atmospheric 
Administration (NOAA) to the Department of the Interior? What specific 
programmatic gain would be accomplished? What does the administration 
view as the risks associated with such a move?
    Answer. The Department of the Interior and NOAA manage most of the 
Federal Government's natural resources; a consolidation would 
strengthen the Federal Government's stewardship and conservation 
efforts. Merging the two would improve coordination of complementary 
programs for the conservation of natural resources, strengthen 
ecosystem-based management and science, enhance services to coastal 
communities, improve utilization of assets and facilities, and 
eliminate unnecessary administrative costs. NOAA would continue to 
provide critical weather, climate, marine, and coastal services to the 
Federal Government, States, businesses, and coastal communities within 
the Department of the Interior. There could be risks associated with 
the consolidation, for example, if programs are not well-integrated 
(leading to fewer efficiencies than expected) or there is uncertainty 
on the part of staff and other stakeholders who are not accustomed to 
the new organizational arrangement. However, because we view an 
effective transition as essential to the success of the reorganization, 
we would work hard to minimize these risks with careful transition 
planning, communications, and management. Exactly how they would be 
integrated will be the subject of considerable consultations with the 
Congress, agency staff and other stakeholders to ensure that the result 
is a stronger, more effective department that protects and enhances 
NOAA's core functions.
    Question. Why has the possibility of NOAA as an independent agency 
not been considered?
    Answer. The possibility of NOAA as an independent agency was one of 
the options that received serious consideration in the reorganization 
effort. However, the review concluded that merging NOAA with the 
Department of the Interior would be a better option as it would create 
the possibility for more synergies and efficiencies, thereby enhancing 
conservation and stewardship programs.
    Question. Does the administration believe that a NOAA organic act 
would be beneficial? If so why has there been no administration 
proposal in this regard?
    Answer. A NOAA organic act would provide a foundation of 
authorities to conduct the activities needed to meet the agency's 
missions. There are dozens of single laws authorizing NOAA's 
activities, but no central authority defines the mission and general 
functions of the agency. Having this authority in a single primary 
statute would codify NOAA's programs and activities in a consolidated 
manner which could be useful.

                   TSUNAMI HAZARD MITIGATION PROGRAM

    Question. Can you provide a specific description of the capacity 
that will be lost due to the cuts proposed to NOAA's Tsunami Hazard 
Mitigation Program (NTHMP)?
    Answer. NOAA places its ability to warn and advise the American 
public on the threat of tsunamis as its highest priority within the 
NTHMP. Tsunami Warning Centers' operations in Hawaii and Alaska are not 
compromised or degraded with the proposed reductions.
    The proposed reductions will eliminate grants to the NTHMP. The 
NTHMP is a consortium of State partners that use NOAA tsunami program 
funding to support local community education and mitigation activities. 
These activities include inundation mapping to develop evacuation 
plans, routes, and signage; education and awareness campaigns; 
provision of education materials; and training for the public and local 
officials.
    Despite the reduction in grants funding, NOAA would continue to 
support the NTHMP by:
  --setting standards of accuracy for NTHMP-developed inundation 
        models;
  --promoting community outreach and education networks to ensure 
        community tsunami readiness through funding from the 
        TsunamiReadyTM program;
  --promoting the adoption of tsunami warning and mitigation measures 
        by Federal, State, tribal and local governments, and 
        nongovernment entities;
  --conducting tsunami research; and
  --operating the U.S. Tsunami Forecasting and Warning Program.
    Question. I understand that the proposed cuts are to be taken 
mostly from activities designed to support education and community 
capacity building. How does NOAA propose to replace these efforts, and 
if not, why is this considered to be a low-priority activity?
    Answer. NOAA places its ability to warn and advise the American 
public on the threat of tsunamis as its highest priority within the 
NTHMP. Tsunami Warning Center operations in Hawaii and Alaska are not 
compromised or degraded with the proposed reductions.
    Education and outreach activities continue to be a priority for 
NOAA. NOAA is committed to continuing support and funding for the 
TsunamiReadyTM program. The TsunamiReadyTM 
program promotes tsunami hazard preparedness as an active collaboration 
among Federal, State, and local emergency management agencies, the 
public, and the NOAA tsunami warning system. Warning Coordination 
Meteorologists in each NOAA National Weather Service (NWS) coastal 
office are dedicated to working closely with local emergency management 
to develop capabilities and assist in planning infrastructure that will 
allow communities to become TsunamiReadyTM. NWS will 
prioritize efforts to concentrate on those coastal communities at 
highest-risk for destructive or life-threatening tsunamis.

                         MARINE DEBRIS PROGRAM

    Question. I understand that the Congress has previously provided a 
directive to NOAA regarding the consolidation of its various habitat 
programs but I do not believe that we ever considered NOAA's Marine 
Debris Program (MDP) to fall under this category. Can you explain why 
you have chosen to move it and include it with restoration programs 
when its primary mission is hazard response?
    Answer. NOAA is proposing to move the MDP to the NOAA Restoration 
Center to streamline grants programs. Since 2007, approximately $1 
million of the MDP's annual budget has been administered by the NOAA 
Restoration Center through the Community-based Restoration Marine 
Debris Removal Grants. The NOAA Restoration Center implements on-the-
ground habitat restoration projects for many different programs within 
NOAA.
    The Marine Debris Research, Prevention and Reduction Act of 2006 
established the NOAA MDP to focus on mapping, identification, impact 
assessment, prevention, and removal efforts, with a focus on marine 
debris posing a threat to living marine resources and navigation 
safety. Since the establishment of the program, NOAA has funded 
research as well as removal activities that threaten living marine 
resources or are in response to hazards.
    It is not expected that the consolidation of the MDP into NOAA 
fisheries would change the core functions, mission, or results of the 
program, as stated in the mandate referenced above. The program would 
still advance the act's goals, and NOAA would capitalize on this shared 
priority to create efficiencies through the streamlining of grants 
operations resulting in improved services for our stakeholders and 
greater impact on the ground.
    Question. Can you provide me with a comparison of the efficiencies 
provided by the MDP's current location in the Office of Response and 
Restoration as to those that might be gained with its proposed move to 
the Office of Habitat Management and Restoration?
    Answer. Since 2007, approximately $1 million of the MDP's annual 
budget has been administered by the NOAA Restoration Center through the 
Community-based Restoration Marine Debris Removal Grants. NOAA 
anticipates savings by streamlining grants administration and technical 
services provided with the goal of maximizing extramural funding 
provided. With this proposed move, the MDP will still be able to 
leverage the scientific expertise and capacity of the Office of 
Response and Restoration from within the Office of Habitat Management 
and Restoration, while achieving administrative cost savings as 
described above.
    Question. How does NOAA plan to spend the additional $1 million 
which the Congress appropriated to the MDP in fiscal year 2012? Will 
the funds be available for grants to State and local entities?
    Answer. In the fiscal year 2012 congressionally approved spend 
plan, the NOAA MDP was funded at $4,618,000, an increase of $718,000 
more than fiscal year 2011. NOAA is undertaking the following actions 
using these additional funds, as well as a portion of its base funds:
      Debris Survey and Removal at Midway Island.--The NOAA MDP 
        provided funding for survey and removal teams of NOAA's 
        National Marine Fisheries Service (NMFS) Coral Reef Ecosystem 
        Division to conduct marine debris surveys and debris removal at 
        Midway Island. There have been no confirmed reports of debris 
        from the 2011 tsunami arriving at Midway to date, but initial 
        ocean modeling indicated that the Northwestern Hawaiian 
        Islands, particularly at Midway Island and Kure Atoll, were one 
        of the first United States locations where a significant amount 
        of marine debris from the Japan tsunami may have made landfall. 
        Even though debris linked directly to the tsunami was not 
        detected at Midway, the effort removed 26 tons of accumulated 
        debris in this ecologically important and fragile area. Debris 
        removal, whether from the tsunami or other sources, reduces 
        risk of entanglement, ingestion, and other impacts to 
        endangered and other species of concern.
      Drifter Buoys.--NOAA is working with partners transiting the 
        North Pacific to deploy drifter buoys either in concentrations 
        of marine debris or other strategic areas of interest to help 
        NOAA better understand how the debris is moving.
      At-Sea Detection.--NOAA is conducting field trials and surveys 
        using unmanned aircraft systems (UAS) to help detect Japan 
        tsunami marine debris at-sea in open North Pacific waters in 
        areas of potential marine debris concentrations that have been 
        identified through modeling. Data from the UAS surveys will 
        improve marine debris modeling efforts and will be part of a 
        larger NOAA UAS program.
      Shoreline Monitoring in Alaska, California, Hawaii, Oregon, and 
        Washington.--NOAA, working with State and local partners from 
        government agencies, nongovernmental organizations, and 
        academia are acquiring baseline shoreline debris information at 
        more than 101 sites in the five affected States. Most of the 
        marine debris generated by the Japan tsunami is 
        indistinguishable from the normal marine debris that washes 
        ashore every day in Hawaii, Alaska, and on the west coast. 
        Results of the monitoring will help indicate when and where 
        Japan tsunami marine debris is making landfall. NOAA will also 
        use part of the additional funds to enter information on 
        tsunami debris into an online database that will both store the 
        data and disseminate them to response agencies at all levels of 
        government and to the public.
      Alaska Monitoring.--Prior to the March 2011 Japan tsunami, NOAA's 
        NMFS established shoreline monitoring sites within the Gulf of 
        Alaska to collect data on marine debris that poses entanglement 
        risks. These data have been providing a baseline to help detect 
        the landfall of Japan tsunami marine debris in Alaska. The 
        additional funds extend the existing time-series of monitoring 
        data and help gather vital information from more than 60 sites 
        in the Gulf of Alaska using the existing methodology and spot 
        application of NOAA MDP shoreline monitoring protocols.
      Contingency Planning.--Contingency planning to ensure there are 
        rapid response protocols in place requires significant 
        coordination at local, State, and Federal levels. NOAA has been 
        conducting workshops on the Japan tsunami marine debris issue 
        with partner agencies and organizations to provide a common 
        foundation of understanding about the debris and to facilitate 
        development of response contingency plans. Plans developed will 
        be particularly valuable for response to any large or hazardous 
        items that might make landfall on U.S. coastlines. The 
        workshops facilitated further engagement of State and local 
        resource management and response agencies, as well as 
        nongovernmental organizations concerned about marine debris 
        issues.
      Japan Tsunami Marine Debris Data Visualization.--NOAA's MDP 
        expects a significant increase of tsunami marine debris 
        sighting data to be reported and collected over the next 
        several months as a result of increased monitoring efforts. 
        This project makes these data available to our response agency 
        partners and the public through maps, graphics, and other 
        visualizations of debris in the water and on shorelines. NOAA 
        is cataloguing all debris sightings on NOAA's Environmental 
        Response Management Application (ERMA) and is sharing ERMA-
        derived products with the public and response agency partners. 
        ERMA was a successful vehicle for making data available to the 
        public during the Deepwater Horizon oil spill response.
    In July 2012, NOAA initiated action, using its authorities under 
the Marine Debris Research, Prevention, and Reduction Act, to provide 
$50,000 to each of the five Pacific States to aid in their marine 
debris removal activities. NOAA expects to award the funds in mid-
August.

                            HABITAT PROGRAMS

    Question. Can you explain what the funding in the new ``Habitat 
Management and Restoration'' line will go toward?
    Answer. Funding in the new Habitat Management and Restoration line 
will support:
      Sustainable Habitat Management.--Habitat management and 
        protection activities for sustaining and enhancing commercial 
        and recreational fisheries to:
      -- Conduct consultations with Federal agencies and constituents 
            nationwide to protect essential fish habitat in order to 
            support commercial and recreational fisheries and vibrant 
            coastal communities.
      -- Ensure fish passage at federally licensed hydroelectric dams 
            that block access to valuable spawning habitat.
      -- Advance research on the role of different habitats in 
            supporting sustainable fisheries and recovering listed 
            species, with benefits to the communities and economies 
            that depend on them.
      -- Implement the Deep Sea Coral Research and Technology Program 
            to identify and map locations of deep sea coral, analyze 
            new scientific information, and apply that knowledge in 
            fishery management plans.
      Fisheries Habitat Restoration.--Habitat restoration activities 
        to:
      -- Plan and construct habitat restoration projects for restoring 
            coastal and marine resources injured by oil spills, 
            releases of hazardous substances, or vessel groundings.
      -- Implement and support targeted restoration projects for 
            sustaining managed fisheries and recovering listed species 
            through technical expertise (planning, engineering, design, 
            monitoring, etc.) with limited financial resources for 
            project construction.
      -- Implement the Marine Debris and Estuary Restoration Programs, 
            including activities to research, prevent, and reduce the 
            impacts of marine debris.
    Question. Given that habitat restoration creates jobs and supports 
fisheries, why have you proposed to severely cut the Community-based 
Restoration Program in fiscal year 2013?
    Answer. Within the fiscal year 2013 President's budget, NOAA has 
prioritized the support of restoration activities for the Natural 
Resource Damage Assessment process, as mandated by the Oil Pollution 
Act and the Comprehensive Environmental Response, Compensation and 
Liability Act, over grants. Restoration activities compensate the 
public for lost trust resources that result from oil and other 
hazardous waste spills. Under these statutes, NOAA is responsible for 
addressing injury to natural resources, and acts on behalf of the 
public to protect and restore coastal and marine resources and their 
services. Jobs are also supported with this type of restoration work. 
This effort will take place in addition to consultative work and 
efforts to work with communities.
    Question. Why was the Coastal and Estuarine Land Conservation 
Program (CELCP) eliminated?
    Answer. Funding for the CELCP was eliminated due to the fact that 
the base level of funding severely limits the size and number of 
conservation projects that could be approved and the existence of other 
Federal agencies with existing land conservation programs.

                       NAVIGATION RESPONSE TEAMS

    Question. How will the proposed elimination of NOAA's Navigation 
Response Teams (NRT) affect NOAA's ability to fulfill its legal 
nautical charting mandate and respond to man-made and natural 
disasters?
    Answer. NOAA will pursue an agreement with Federal Emergency 
Management Agency to ensure that technical assistance to assess 
navigational hazards is available during Presidentially declared 
disasters. In 2011, the six NRTs spent a total of 25 days responding to 
emergencies. However, NRTs also currently work to identify local survey 
requirements, and as these efforts benefit the ports and surrounding 
communities, they can be conducted using non-Federal funding. Finally, 
NOAA would need to perform inshore validation of its nautical charting 
products and other navigation tools through contracted surveys and user 
feedback.
    Question. How will the absence of these NRTs extend response times 
and increase economic losses of the closed ports?
    Answer. Because the response to this question requires a comparison 
of unknowns to an existing program, NOAA cannot speak to whether this 
proposal would lead to extended response times and increased economic 
losses of closed ports.

    NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION SHIP KA'IMIMOANA

    The fiscal year 2012 President's budget included a request for 
$11.6 million for major repair periods (MRPs) for the NOAA ships 
Ka'imimoana and Miller Freeman. Recognizing the valuable nature of the 
missions served by these two vessels, the Congress acceded to this 
request and provided $11.1 million in the fiscal year 2012 
appropriation for these purposes under the Fleet Capital Improvements 
budget line. Subsequently, however, the Department of Commerce cut all 
but $1 million of these funds in the fiscal year 2012 NOAA spend plan 
to provide savings for undistributed cuts made elsewhere in the budget. 
NOAA has since indicated that the lack of available MRP funds in fiscal 
year 2012 will require that both the Ka'imimoana and the Miller Freeman 
be decommissioned for safety's sake.
    Question. Why did the Department decide that the Ka'imimoana refit, 
and thus the Ka'imimoana itself, was not needed?
    Answer. In the fiscal year 2012 President's budget, NOAA requested 
a one-time $11.6 million increase to support the highest-priority 
repairs aboard the NOAA ships Ka'imimoana and Miller Freeman. The final 
negotiated fiscal year 2012 Spend Plan resulted in $1 million for fleet 
repairs, due to competing mission needs within the total appropriation. 
As a result, the Miller Freeman will be decommissioned. On June 18, the 
NOAA Fleet Council met and voted to place the NOAA ship Ka'imimoana in 
warm layup status at the conclusion of the current field season (which 
just ended), as the vessel can no longer operate without required 
extensive repairs to ensure safe operations and extend the service life 
of the vessel. The MRP funding for fiscal year 2012 was not included in 
the final, approved spend plan, and instead of decommissioning the 
vessel at this time, the Council's directive to place it in warm layup 
status will allow us to maintain the vessel until the MRP funds may be 
allocated, or other actions taken.
    Question. Was there a change in the physical status of the 
Ka'imimoana between the time of the President's fiscal year 2012 budget 
submission to the Congress and the submission of the fiscal year 2012 
spend plan that led to the elimination of the MRP?
    Answer. No, there was not a change in the physical status of 
Ka'imimoana during that time. The Ka'imimoana will continue to operate 
during fiscal year 2012 as outline in the Fleet Allocation Plan. The 
ship would not have entered the MRP until early fiscal year 2013 as 
outlined in the President's fiscal year 2012 budget submission.
    Question. The Ka'imimoana's primary mission is to service the 
Tropical Atmosphere Ocean (TAO) buoy array which provides the Nation 
invaluable information regarding the status of the El Nino Southern 
Oscillation and its potential for impacts on our weather. How does NOAA 
plan to conduct fulfill the service needs of the TAO Array without the 
Ka'imimoana?
    Answer. The NOAA Fleet Council is examining the best means to 
ensure continuity of the TAO Array and will develop a fiscal year 2013 
Fleet Allocation Plan by September 2012 that meets TAO mission 
requirements. Currently, 12 of the 67 TAO/TRITON buoys are maintained 
by Japan and NOAA is evaluating the feasibility of conducting the 
Ka'imimoana mission supporting the TAO project with either in house 
support (potentially the NOAA ship Ronald H. Brown), the use of outside 
charter in collaborations with our partners in South Korea, or a 
combination of both.
    Question. If contract services are proposed, were necessary funds 
requested in the fiscal year 2013 budget? Please provide a detailed 
explanation of the short- and long-term budget effects, and any change 
in operational capacity, which may accrue from using contract services 
as opposed to a NOAA vessel as part of your answer.
    Answer. Yes, the fiscal year 2013 Operations, Research, and 
Facilities budget includes funding to support TAO continuity 
operations, through either NOAA vessel or charter. The Fleet Council is 
examining the best means to ensure continuity of the TAO Array and will 
develop a fiscal year 2013 Fleet Allocation Plan that meets TAO mission 
requirements. Long-term budget effects will be determined by the Fleet 
Plan and NOAA Observing System Council (NOSC) observing systems review. 
NOAA is currently identifying and prioritizing existing requirements 
and observing systems capabilities for the Fleet for a Fleet Plan that 
will determine the optimum configurations for meeting priority mission 
requirements and utilization of all observing platforms.
    Question. If savings were needed in fiscal year 2012 but no net 
long-term benefit would accrue from decommissioning the Ka'imimoana, 
why not defer its MRP to fiscal year 2013 and move the proposed MRP for 
the Thomas Jefferson to fiscal year 2014?
    Answer. NOAA will place the Ka'imimoana in an inactive status 
beginning in July 2012 due to concerns over the material condition of 
critical mission and ship board systems including deck machinery, 
tanks, and piping. Deferring the MRP to fiscal year 2013 would have 
required NOAA to idle the ship for more than 12 months until early 
fiscal year 2014 during which time further deterioration would occur 
increasing medium-term risks.
    Question. What other missions were served by the Ka'imimoana and 
how will their needs be met?
    Answer. The Ka'imimoana's primary mission is support of TAO. Other 
ocean observation and research missions are completed concurrently. 
Like TAO mission support, these requirements would need to be 
chartered.

                   INTERNATIONAL TRADE ADMINISTRATION

Task Force on Travel and Competitiveness
    Question. On January 19, 2012, President Obama issued Executive 
Order 13597, which is meant to, ``. . . to improve visa and foreign 
visitor processing and travel promotion in order to create jobs and 
spur economic growth in the United States.'' Among other things, the 
Executive order calls for the establishment of the Task Force on Travel 
and Competitiveness, co-chaired by the Secretaries of Commerce and the 
Interior, and including heads of the Departments of State, the 
Treasury, Agriculture, Labor, Transportation, and Homeland Security; 
Army Corps of Engineers; Office of the United States Trade 
Representative; Export-Import Bank; and other agencies invited to 
participate by the Task Force Co-Chairs. The Task Force is supposed to 
work on developing a National Travel and Tourism Strategy with 
recommendations for new policies and initiatives to promote domestic 
and international travel opportunities throughout the United States 
with the goal of increasing the United States market share of worldwide 
travel.
    Question. Can you please give an update on what the Task Force has 
done, and is working on?
    Answer. The Task Force on Travel and Competitiveness has been 
actively working to implement the Executive order. To date, the Task 
Force has met with the Tourism Policy Council to discuss the 
development of the National Travel and Tourism Strategy called for in 
the Executive order. Subsequent to that discussion, the Task Force has 
met three times to hone the Strategy in light of inputs from numerous 
Federal agencies and substantial public comments received from the 
travel and tourism industry and other stakeholders in response to a 
Federal Register notice. In addition, the Secretary of Commerce 
requested, and received, input from the U.S. Travel and Tourism 
Advisory Board that has also been considered in the development of the 
Strategy. The Task Force is on schedule to deliver its recommendations 
to the President within the 90-day timeframe called for in the 
Executive order.
    In March 2010, the Congress passed, and President Obama signed into 
law, the Travel Promotion Act (Public Law 111-145), creating a 
nonprofit corporation, Brand USA, to market the United States as an 
international travel destination.
    Question. In March 2010, the Congress passed, and President Obama 
signed into law, the Travel Promotion Act (Public Law 111-145), 
creating a nonprofit corporation, BrandUSA, to market the United States 
as an international travel destination. Does the Task Force work with 
BrandUSA, if so, how? Also, how do you ensure that the efforts of the 
Task Force and BrandUSA are not duplicative?
    Answer. Under the Executive order, the Task Force shall coordinate 
with the Corporation for Travel Promotion (dba Brand USA) through the 
Secretary of Commerce. The Department of Commerce works closely with 
Brand USA and has taken Brand USA's plans into account in the 
development of the National Travel and Tourism Strategy. In addition, 
representatives of Brand USA met with Secretary Bryson and Secretary 
Salazar, the Chairs of the Task Force on Travel and Competitiveness.
    The Task Force on Travel and Competitiveness and Brand USA perform 
separate functions that are not duplicative. The Task Force was formed 
for the sole purpose of developing a National Travel and Tourism 
Strategy. The strategy is focused on what the government can and should 
do to increase travel and tourism to and within the United States. 
Brand USA is a private sector organization charged with marketing the 
United States as a travel destination to international audiences. These 
efforts are complementary and avoid duplication. It is the intention of 
the Task Force that the National Travel and Tourism Strategy provide 
for the effective coordination of Federal agencies with Brand USA to 
support Brand USA's mission to increase international travel to the 
United States and communicate relevant U.S. policy.

                  REGIONAL FISHERY MANAGEMENT COUNCILS

    Question. How will the proposed cuts to funding for Regional 
Fishery Management Councils (RFMCs) and Commissions affect these 
organizations?
    Answer. NOAA greatly values the work of the RFMCs and Commissions. 
These bodies--which include commercial and recreational industry, 
Federal agencies, the conservation community, and State fishery 
managers--are critical for making sound fishery management decisions. 
Between fiscal year 2008 and fiscal year 2010, the Councils received a 
significant increase to ensure Annual Catch Limits were implemented in 
accordance with the 2006 reauthorization of the Magnuson-Stevens 
Fishery Conservation and Management Act. Now that Annual Catch Limits 
have been implemented, NMFS does not expect that the Councils will 
require the same amount of resources.
    NOAA's focus for fiscal year 2013 is maintaining and improving our 
science programs as the basis for sound, science-based management 
actions taken by these bodies. The Councils and Commissions will 
distribute funds to ensure the implementation of adaptive management 
measures in the highest-priority fisheries, building on the 2011 
milestone of implementing Annual Catch Limits in federally managed 
fisheries.
    A reduction in funding for the Councils in fiscal year 2013 will 
not reduce the transparency of the fishery management process nor limit 
public involvement. Further, Council activity will still be open to the 
public. While there may be changes in the frequency of the meetings 
held, there will be no change to the transparency of Council decisions.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
               United States Patent and Trademark Office

    Question. The United States Patent and Trademark Office (USPTO) has 
made great progress in the last few years to reduce the backlog of 
patent applications and issue higher-quality patents. While USPTO is 
working through this backlog, it is also in the process of implementing 
the Leahy-Smith America Invents Act, Public Law 112-29, which was 
signed by President Obama on September 16, 2011. USPTO needs full 
access to the fees it collects to continue its progress and reward 
inventors of true inventions with high-quality patents.
    Do you agree that ensuring the USPTO has full access to its fees is 
essential to the effective functioning of the USPTO?
    Answer. Yes, full access to fees is critical to help the USPTO 
achieve strategic goals and performance objectives, and to manage 
resources effectively. USPTO is committed to effective resource and 
performance planning linked carefully to operations. Planning and 
operations can be undermined significantly without full access to the 
revenue the USPTO collects.
    Question. How does an effective functioning USPTO, and patent and 
trademark system in general, benefit the United States economy?
    Answer. Innovation continues to be a principal driver of economic 
growth and job creation in the United States, and a strong patent and 
trademark system helps deliver that innovation to the marketplace. 
USPTO plays a critical role in serving America's innovators, and 
granting the patents and registering the trademarks they need to secure 
investment capital, build companies, and bring new products and 
services to the marketplace. Adequate funding allows the USPTO to 
ensure that innovators are getting high-quality examination in a timely 
manner. Economic evidence shows that patent applications that take too 
long to be examined and patents that are issued with overly broad 
claims, introduce unnecessary uncertainty into the marketplace. USPTO's 
patent grants and registration of trademarks directly contribute to 
strengthening our economy, create jobs, and help move us toward the 
President's goal of winning the future by out-innovating our 
competitors.
    Question. Will the proposed appropriations language for the USPTO 
ensure that USPTO can access its fees through the Patent and Trademark 
Fee Reserve Fund if the USPTO collects more than what the budget 
currently anticipates?
    Answer. Existing and proposed appropriations language is beneficial 
in enabling USPTO to access all fees through the Patent and Trademark 
Reserve Fund. USPTO would be required to submit a spend plan the Senate 
and House appropriation committees prior to accessing resources from 
the Fund.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Salmon Biological Opinion
    Question. The Department of Commerce's National Oceanic and 
Atmospheric Administration (NOAA) issued a biological opinion on the 
salmon in 2009 which required the State of California to restrict water 
flows in California's Sacramento River Delta in order to protect the 
salmon. Since then, the biological opinion has been criticized by the 
National Academy of Sciences, and U.S. District Court Judge Wanger 
issued a ruling that the National Marine Fisheries Service (NMFS) had 
not provided adequate justifications to support the biological opinion.
    Protecting endangered and threatened species is important, but so 
too are the farms and the communities in California's Central Valley 
that depend upon reliable water deliveries to produce the billions of 
dollars of crops that feed the Nation. It is my understanding that the 
revised biological opinion will not be completed until February 2016. 
The uncertainty this creates for agricultural and urban communities 
south of the Delta is a real concern.
    It has been 6 months since Judge Wanger issued his decision on the 
biological opinion. What has NOAA done since then to meet the Court's 
mandates?
    Answer. After Judge Wanger issued his decision on NOAA's 2009 
biological opinion, NMFS worked with the U.S. Bureau of Reclamation 
(BOR), the California Department of Water Resources, public water 
agencies, and nongovernmental organizations to develop a timeline 
toward the completion of a new biological opinion. All involved parties 
agreed that NMFS will deliver the final biological opinion by February 
2016, and the schedule was submitted and accepted by the Court. The 
Court rendered its final decision on the schedule in December 2011, 
agreeing with the submitted timeline, giving NOAA until October 2014 to 
complete a draft opinion and until February 2016 to complete a final 
opinion.
    NMFS has made the completion of the biological opinion project a 
high priority and has already begun analyzing the remand issues and 
integrating new science into the new biological opinion. We are 
gathering and analyzing new data and information that has become 
available since the issuance of the 2009 biological opinion. We have 
coordinated with BOR, U.S. Fish and Wildlife Service, California 
Department of Water Resources, California Department of Fish and Game, 
and University of California at Davis on data collection.
    Question. Can you explain why it will take NOAA 4 years to complete 
a new biological opinion and what is entailed in the process?
    Answer. This is one of the most complex and challenging Endangered 
Species Act consultations that NMFS has ever conducted. The geographic 
scope is very broad, the number of species affected is large, and the 
planning horizon is long (21 years). The judge recognized this 
complexity and ordered the new biological opinion to be completed by 
early 2016, with a draft issued by October 2014. NMFS has begun work on 
the new opinion and continues to await completion of the salmon life-
cycle analyses and will analyze 4 years of new data on salmon and the 
operating system to incorporate into the new biological opinion.
    The various tasks that must be completed by 2016 include effects 
analysis, integration and synthesis of effects, development of new or 
revised reasonable and prudent alternative actions, four-factor 
analysis, the NOAA Fisheries Southwest Fisheries Science Center's 
(SWFSC) life-cycle model, development of an incidental take statement, 
issuance of a draft biological opinion and reasonable and prudent 
alternative, external and peer review, incorporation of review 
comments, and issuance of final biological opinion by February 2016.
    Question. What, if anything, can be done to reduce the amount of 
time it will take to complete the new biological opinions?
    Answer. NMFS is working diligently to complete the new biological 
opinion. We continue to adapt the existing opinion in the interim, 
where possible by looking for ways to maximize both water reliability 
and species protections. For example, in January 2012, the Department 
of Justice filed with the court a stipulated agreement among NOAA, the 
Department of the Interior (DOI), the State of California, and several 
water contractors for spring 2012 water operations to enable increased 
water supply reliability, while upholding species protections. 
Furthermore, there are numerous tasks that must be completed by other 
agencies for NMFS to complete the biological opinion.
    Question. What new scientific research does NOAA intend to conduct 
or rely upon to develop the new biological opinion and does the 
President's budget fully fund these efforts?
    Answer. A salmon life-cycle model will be a central scientific 
component underlying the new biological opinion. This relies on 
completing new acoustic tag studies in the Sacramento and San Joaquin 
Rivers. NMFS intends to apply the model to evaluate how water 
operations or proposed reasonable and prudent alternatives might affect 
listed species and/or water supply under various scenarios. NMFS 
continues to use and incorporate the best available science in the 
development of the biological opinion.
    Central Valley salmon continue to be a high priority in the fiscal 
year 2013 budget request. To complete all the necessary work on this 
complex endeavor, we need to leverage both internal and external 
expertise and resources. We are currently in discussions with BOR about 
potential avenues for funding aspects of the life-cycle model. NMFS has 
already begun work on this key component of the new opinion.
    I understand that NOAA has recently begun implementing an adaptive 
management strategy that sets pumping permissions and restrictions 
based off of real-time data on salmon movements at the confluence of 
the San Joaquin and Old Rivers correlated with Old & Middle River 
flows.
    Question. In terms of water deliveries to south of Delta farmers, 
what benefits do you anticipate this strategy may provide?
    Answer. In January 2012, NMFS worked with the State of California, 
several water contractors, and DOI to develop a joint stipulation for 
spring 2012 water operations in the Central Valley, available at http:/
/swr.nmfs.noaa.gov/ocap/2012_stipulation.htm. The agreement allowed us 
to refine some of the more controversial aspects of the biological 
opinion for spring 2012 that we believe will benefit both recovering 
salmon and water users, and enable us to keep working on the new 
opinion. The agreement will provide greater flexibility and 
predictability to management of Central Valley water operations by 
enabling us to exercise real-time management where possible, thereby 
potentially having less of an impact to water supply.
    Question. Does the fiscal year 2013 budget request allow you to 
continue funding this project and other adaptive management strategies 
elsewhere on the system?
    Answer. Central Valley salmon continue to be a high priority in the 
fiscal year 2013 budget request. To complete all the necessary work on 
this complex endeavor, we need to leverage both internal and external 
expertise and resources. We are currently in discussions with BOR about 
potential avenues for funding aspects of the life-cycle model. NMFS has 
already begun work on this key component of the new opinion.
    While we will continue to operate within limited resources, we will 
prioritize implementation of this agreement. We will continue to 
explore new science that would enable greater reliability with respect 
to water supply, while ensuring the risk of extinction does not 
increase, and the potential for recovery is not impeded.
    Question. While the new biological opinion is being developed, are 
there any other additional projects or administrative steps NOAA 
believes could be taken that could provide salmon and water supply 
benefits?
    Answer. NOAA's opinion includes an annual adaptive management 
mechanism devoted to exploring new science and analyzing lessons 
learned from the previous year's implementation of the opinion. We are 
always exploring new data and alternative strategies to increase water 
supply reliability while ensuring the risk of extinction does not 
increase and the potential for recovery is not impeded.

    PACIFIC SALMON PROTECTED SPECIES RESEARCH AND MANAGEMENT FUNDING

    Question. It is my understanding that one project that is critical 
to developing a new salmon biological opinion is a new life-cycle 
modeling research program. This research is expected to take 3 years to 
complete at an annual cost of $2 million which would need to be funded 
by NOAA's Pacific Salmon Endangered Species Act account. However, the 
President's budget for this account is essentially the same as last 
year (approximately $58 million, with a $300,000 decrease).
    Does the President's budget proposal provide sufficient funding for 
NOAA's proposed salmon life-cycle modeling project and any other 
research necessary to complete the new biological opinion?
    Answer. Central Valley salmon continue to be a high priority in the 
fiscal year 2013 budget request. To complete all the necessary work on 
this complex endeavor, we need to leverage both internal and external 
expertise and resources. NOAA has already begun work on this key 
component of the new opinion.
    NMFS is working on a pilot life-cycle model leveraging our Pacific 
Salmon funding with a grant from BOR. We continue to work with them to 
identify the required funds in the BOR budget for full implementation.
    The pilot life-cycle model work has made clear that additional 
field studies would be useful. NMFS, in collaboration with the 
University of California at Davis, has done some pilot work on this 
issue, and has obtained extramural support for additional studies over 
the next 3 years. Additional areas of research for the longer term 
include telemetry studies that can quantify patterns of salmon movement 
and survival in relation to operation of the water project facilities, 
studies of predators (their distribution, abundance, and activity) and 
the movement and survival of very young salmon that are too small to 
tag with existing technology.
    NOAA has prepared a research plan that would fully address the 
questions surrounding management of water and salmon in the Central 
Valley.

                  PACIFIC COASTAL SALMON RECOVERY FUND

    Question. Funding for the Pacific Coastal Salmon Recovery Fund 
continues to decline. In fiscal year 2011 it was funded at $80 million. 
In fiscal year 2012 it received $65 million. The President's budget 
request for fiscal year 2013 is $50 million.
    Given that salmon populations along the Pacific coast are still 
recovering from the 2006-2008 fisheries collapse, do you think that 
continued decreases in funding for the Salmon Recovery Fund is 
justified?
    Answer. The long-term stability of the Pacific Coastal Salmon 
Recovery Fund since fiscal year 2000 has been a huge asset to NOAA's 
State and tribal salmon recovery efforts. The average annual 
appropriation level since the program's inception has been 
approximately $78 million. While the fiscal year 2012 funding level and 
the fiscal year 2013 President's budget do represent a relative 
decline, the Pacific Coastal Salmon Recovery Fund will continue to be 
an indispensable resource in support of salmon recovery and sustainable 
fisheries. The declining funding levels reflect the current fiscal 
climate rather than program performance. In response to declining 
funding levels, NOAA is increasing the program's focus on those 
projects identified in Endangered Species Act (ESA) recovery plans that 
are most likely to provide the greatest biological benefit to the 
species and their habitat.
    Question. Is there any concrete data you can offer in terms of 
recovery of the salmon fishing industry along the Pacific coast that 
can give us assurance that the Salmon Recovery Fund is working as 
intended to help restore the health of that industry?
    Answer. The abundance of Sacramento and Klamath Rivers Chinook 
salmon stocks has increased dramatically in 2012, providing much 
improved harvest opportunities over recent years. These stock 
improvements and the resulting benefits to the Pacific coast fishing 
industry are most likely attributable to favorable ocean conditions. 
Pacific Coastal Salmon Recovery Fund investments are focused on the 
protection and restoration of the freshwater habitats that are 
necessary to sustain salmon populations through future downturns in 
marine survival conditions. A significant portion of the Fund is 
directed at recovery of ESA-listed salmon and steelhead which are not 
the direct target of commercial fisheries. Since the inception of the 
Fund in fiscal year 2000, more than 10,200 projects have been 
completed, protecting and restoring nearly 880,000 acres of habitat and 
restoring access to more than 5,300 miles of habitat program-wide.
    The management of coastal Chinook salmon fisheries off southern 
Oregon and California is currently constrained by the availability of 
stock-specific monitoring information. For example, data on the 
nonlisted Klamath River Chinook salmon population is used as a 
surrogate for the California Coastal Chinook salmon stock (which is 
listed as threatened under ESA) to inform limitations on ocean 
fisheries. Focused resources, such as the Pacific Coastal Salmon 
Recovery Fund, are critical to improving the monitoring information 
available to guide fisheries management and to allow for increased 
utilization of nonlisted salmon runs when sufficiently abundant.

                        CONSOLIDATION OF OFFICES

    Question. On January 13 of this year, the White House proposed a 
plan to shrink the size of the Federal Government by, in part, merging 
existing agencies. For the Department of Commerce, the administration 
proposed, among other things, to consolidate NOAA into DOI.
    How do you think this proposed merger would affect the retention of 
qualified personnel and their expertise?
    Answer. The President's first priority is first to obtain 
reorganization authority. If the Congress grants him that authority, 
the administration would consult with Members of Congress, the relevant 
congressional committees, agencies, and stakeholders as it prepares a 
detailed reorganization proposal to submit to the Congress. Retaining 
qualified personnel with expertise will be a priority in the 
development and implementation of that proposal. Given that the core 
missions of NOAA would continue in any event, we believe we would 
retain our highly qualified staff.
    Question. Do you think that this proposed merger would result in 
the loss of senior management and create confusion and delays in making 
decisions?
    Answer. The goal of the proposed reorganization is to streamline 
and enhance decisionmaking and operations. We would plan carefully for 
the transitions associated with organizational changes in order to 
ensure that there be no delays in making decisions. Among other things, 
we would establish a senior team with strong leadership and agency 
representation that would establish a detailed action plan for 
integrating the agencies and programs to ensure a thoughtful process 
and no loss of functionality. No decisions have been made about 
organizational details, as we intend to seek the views of the Congress, 
agency staff, and other stakeholders on how a merger of NOAA and DOI 
could best improve communication and coordination of natural resource 
management programs.
    Question. How do you think NOAA's operational and research focus--
climate, oceans, fisheries, and weather--will be affected if they are 
folded into DOI, which has been traditionally focused on land 
management, nonmarine species, and oil and gas?
    Answer. DOI and NOAA manage most of the Federal Government's 
natural resources; a consolidation would strengthen the Federal 
Government's stewardship and conservation efforts. Merging the two 
would improve coordination of complementary programs for the 
conservation of natural resources, strengthen ecosystem-based 
management and science, enhance services to coastal communities, 
improve utilization of assets and facilities, and eliminate unnecessary 
administrative costs. NOAA would continue to provide critical weather, 
climate, marine, and coastal services to the Federal Government, 
States, businesses, and coastal communities within DOI. Exactly how 
they would be integrated will be the subject of considerable discussion 
with the Congress, agency staff, and other stakeholders to ensure that 
the result is a stronger, more effective department that protects and 
enhances NOAA's core functions.
    It is my understanding that in addition to the proposed 
consolidation of NOAA into DOI, the administration is also proposing to 
consolidate NMFS' southwest and northwest offices into a single west 
coast regional office. While I understand the need to reduce spending, 
I am concerned that these changes may impact NOAA's ability to address 
fishery issues critical to the delivery of water supplies in California 
and our fishing industry.
    Question. What assurances can you provide me that the proposed 
regional office consolidation will not result in a reduction in senior 
program staff that would diminish services or the timely execution of 
regulatory reviews or scientific support?
    Answer. The fiscal year 2013 budget request includes a reduction of 
$3.109 million and 20 full-time equivalents (FTE) for the 
reconfiguration of NMFS' southwest and northwest regional offices into 
a single west coast regional office. The regional offices are being 
proposed for reconfiguration because of the narrow range of functions 
between the two, the higher degree of overlap in the work conducted, 
and the fact that the both support one Fishery Management Council. This 
reconfiguration would prioritize mission-critical work to protect the 
west coast's living marine resources, and core work on protected 
species consultations would be maintained; however, NMFS's ability to 
work in a proactive fashion with constituents could be constrained.
    Additional action being taken within the west coast consolidation 
include, closing the Pacific Grove Laboratory; that staff would be co-
located with the main science divisions in Santa Cruz and La Jolla, 
California, resulting in a $0.641 million reduction and three FTE. This 
closure reduces facility operating costs of the SWFSC reducing the 
facilities footprint. This relocation would allow for greater 
integration of SWFSC's oceanographic expertise with its biological 
missions in fisheries, marine mammal, and turtle science. As an 
organizational unit, the Environmental Research Division that is 
leaving the Pacific Grove Lab would remain intact after the closure.

                          COASTAL PROTECTIONS

    Question. Coastal protection and restoration programs are vital for 
coastal communities and States. These programs help protect natural 
coastal resources, sustain commercial and recreational fishing 
activities, support habitat protection and restoration, augment 
tourism, and sustain and create jobs. Local communities depend on these 
activities for their personal, educational, and economic well-being. 
They are also cost-effective because they leverage cooperative 
agreements with non-Federal partners to complete projects. However, a 
number of coastal protection programs are facing cuts in the proposed 
fiscal year 2013 budget. For example, community-based restoration will 
decrease by $10 million; marine debris and estuary restoration programs 
will decrease by $1.2 million.
    With decreased funding, how do you propose to sustain protections 
for our coastal communities and economies?
    Answer. Although NOAA has made difficult choices in fiscal year 
2013 in the face of top line budgetary pressures, NOAA continues to 
make targeted investments in key coastal programs. NOAA is requesting a 
program increase of $1.2 million for the Tides and Current Data 
program, which will allow the program to fully maintain and inspect its 
network of National Water Level Observation Network (NWLON) stations. 
Data from these stations are critical to safe navigation and maritime 
commerce activities which are essential to coastal communities and 
economies. NOAA is also requesting an additional $500,000 for Regional 
Ocean Partnership Grants, which supports a targeted competitive grant 
program to advance regional approaches to addressing changes to ocean 
and coastal natural resources. In addition NOAA is requesting a program 
increase of $2 million to enhance its forecasts of harmful algal 
blooms, which can have profound effects on public health, fisheries, 
tourism, and other coastal economic activity.
    In areas where NOAA is requesting program decreases, NOAA is 
seeking new ways to prioritize essential programs, increase efficiency, 
and leverage partnerships with other Federal agencies, State and local 
governments, the private sector, and the nonprofit community. The 
fiscal year 2013 request includes a $10.1 million decrease for the 
Community-based Restoration Program. At the reduced level of funding, 
the Restoration Center will maintain its core operations and 
restoration capabilities to support mandated restoration activities 
related to Natural Resource Damage Assessment, Oil Pollution Act, and 
Comprehensive Environmental Response, Compensation, and Liability Act. 
Under these statutes, NOAA is responsible for addressing injury to 
natural resources, and acts on behalf of the public to protect and 
restore coastal and marine resources and their services.
    Funding for Community-based restoration partnership grants will be 
used for targeted projects, and NOAA will continue to provide technical 
expertise and leadership to States, tribes, and local communities 
implementing fishery and coastal habitat restoration projects, within 
the guiding principles of NOAA's Habitat Blueprint. For example, NOAA 
experts will provide support for cooperative programs including NOAA's 
Gulf Coast Recovery, Coral Reef Conservation, and Protected Species 
Programs; EPA's Great Lakes Restoration Initiative and other large 
ecosystem partnerships; and the U.S. Army Corps of Engineers' 
interagency coordination of coastal wetland protection, restoration, 
and research in Louisiana.
    Question. NOAA's modeling shows that marine debris from Japan's 
devastating 2011 tsunami may reach the Pacific coast in 2013. With 
decreased funding, will NOAA be able to properly mitigate the effects 
of that debris on coastal communities?
    Answer. In fiscal year 2012, NOAA is leading efforts to respond to 
debris from the Japan tsunami. Working with international, Federal, 
State, and local partners, the NOAA Marine Debris Program is collecting 
data on debris quantity, modeling debris movement, assessing potential 
impacts, and planning for efforts to mitigate potential harm to coastal 
communities and natural resources. NOAA has been able to leverage its 
emergency response expertise to coordinate interagency monitoring 
efforts, enhance modeling, develop decision-support tools, and conduct 
response planning.
    In fiscal year 2012 NOAA is directly supporting specially trained 
and highly skilled debris survey teams in their efforts to conduct 
marine debris monitoring surveys. These operations serve as an early 
assessment of the nature and quantity of debris making landfall from 
the Japan tsunami. These activities are also critical to establishing 
baselines for debris observations in Alaska, California, Hawaii, 
Oregon, and Washington so that specific effects attributable the 
tsunami can be documented. NOAA is also developing a marine debris 
response contingency plan and providing support for developing 
graphical representations of scientific forecasts of debris movement to 
better inform responders and improve public understanding of the 
problem. NOAA is not requesting dedicated funding for these activities 
related to the Japan tsunami in 2013. NOAA will continue to evaluate 
whether additional funds are required in the outyears.
    Question. What is NOAA doing to prepare the Pacific coast for the 
possibility of a damaging tsunami? What is still needed to be done in 
order to protect our coastal communities, industries, and 
infrastructures?
    Answer. Since 2005, in the wake of the Indian Ocean tsunami that 
took 240,000 lives, NOAA has continuously implemented a multi-year 
effort to strengthen the Nation's capacity to provide early warnings of 
tsunamis and to enhance coastal communities' preparedness. Both types 
of activities are necessary to mitigate the risks to coastal 
communities and economies from tsunami events.
    The first step toward tsunami preparedness is the ability to 
provide early warning upon a tsunamigenic event. In fiscal year 2006, 
NOAA expanded staffing at the Pacific Tsunami Warning and West Coast/
Alaska Tsunami Warning Centers to ensure 24-hour operations. Warnings 
are delivered to communities at potential risk within 5 minutes of 
detection of a seismic event with potential to generate a tsunami. To 
monitor tsunamic events and further refine its advisories and warnings, 
NOAA has deployed and operates a network of 39 Deep-ocean Assessment 
and Reporting of Tsunamis (DART) stations, 32 of which are stations in 
the Pacific, 4 of which are stations in the Caribbean, and 3 of which 
are in other areas of the Atlantic Ocean.
    To further enhance warning guidance, NOAA Tsunami Warning Centers 
receive real-time, high-frequency water data from NOAA's network of 210 
long-term coastal tide gauges on all U.S. coasts. With this 
information, Warning Centers are able to confirm the nearshore contact 
of a tsunami, quantify its impact, and validate models used for 
improving future warnings. The real-time data are also used by other 
emergency responders to validate the accuracy of the tsunami warnings 
arrival time and to make subsequent safety of life and property 
decisions. Real-time water level data from all NOAA National Ocean 
Service tide stations, known as NWLON, are made accessible for users by 
request.
    NOAA supports many training, education, and public awareness 
activities for tsunami preparedness. Through an ongoing partnership 
with the Federal Emergency Management Agency (FEMA) National Disaster 
Preparedness Training Center, NOAA is engaged in delivering FEMA-
certified training on Tsunami Awareness. In addition, NOAA has 
developed an education and outreach program in conjunction with the 
National Tsunami Hazard Mitigation Program (NTHMP). This education and 
outreach program includes NOAA's TsunamiReadyTM program, 
which thus far has recognized 71 of 272 at-risk communities on the 
Pacific (west) coast. NOAA continues tsunami inundation mapping, 
modeling, and forecast efforts for communities at risk, advancing next-
generation models for currents, and transition these research efforts 
into operations.
    In addition, NOAA supports development of decision support tools 
related to tsunami preparedness. For example, through the Coastal 
Geospatial Services Contract, NOAA works with the private sector to 
acquire and process high-resolution elevation data for coastlines. 
These data provide the foundation for accurate estimates of tsunami 
inundation and are the basis for local evacuation zones and tsunami 
response and mitigation activities. NOAA distributes this data, along 
with other technical resources, through the NOAA Coastal Service 
Center's Digital Coast Web site (www.csc.noaa.gov/DigitalCoast). NOAA 
also partners with state and local jurisdictions to assist in the 
distribution of tsunami evacuation maps through the Internet and mobile 
devices. For example, the online Hawaii Tsunami Information Service and 
its companion application for mobile phones reached more than 100,000 
residents and visitors in Hawaii during the hours following the March 
11, 2011 Japan earthquake and tsunami.

                          TSUNAMI PREPAREDNESS

    Question. Secretary Bryson, on March 14, 2012 NOAA posted a page to 
its Web site entitled, ``Japan's `harbor wave': The tsunami 1 year 
later''. The page makes an unequivocal statement: ``NOAA predictions 
saved U.S. lives and property''. I share this belief because on March 
11, 2011, NOAA's DART program transmitted timely information to 
California and the rest of the Pacific coast. And local emergency 
responders used this information and their NOAA-funded training to 
quickly and efficiently evacuate low-lying coastal areas.
    The system worked well, but next time we may only have minutes, not 
hours, to respond to a tsunami threat. That's why I question the 
proposed cut of more than $4.5 million to the NOAA tsunami preparedness 
and early warning system. The reduction to the buoy network is 
particularly concerning--it will mean decreased data availability a 
system that only operates at 72-percent efficiency.
    Secretary Bryson, if the proposed cut for the DART program is 
approved, how will it impact NOAA's ability to pinpoint the location of 
approaching tidal surges? What impact would the cut have on determining 
the precise time a surge would come ashore?
    Answer. Initial tsunami warnings are based on seismic data alone, 
which determines the magnitude and location of an earthquake. 
Therefore, data availability from a DART station will not impact the 
issuance of tsunami warnings.
    After seismic data is used to issue a warning, data is then 
received from DART stations as a tsunami affects the buoys. Data from 
affected stations are used to confirm the existence or absence of a 
tsunami in a specific area, determine the potential size of the 
tsunami, and further refine the area and temporal extent of any 
warnings. The redundancy built into the DART network and alternative 
sources of data (such as foreign buoys and sea-level gauge data) 
mitigate the impacts of reduced availability of DART data. In 
addition, National Weather Service (NWS) has recently signed an 
agreement in principle with Australia in which they will share 
operations and maintenance responsibility for some NOAA-operated DART. 
While the details of the agreement are still being worked out, we 
anticipate this sharing will mitigate the impact of lower funding 
levels for DART operations and maintenance.
    Question. The budget also proposes reducing funding for NTHMP. Will 
this result in fewer cities receiving mitigation grants? Or will the 
program simply provide less funding to each eligible entity?
    Answer. NOAA places its ability to warn and advise the American 
public on the threat of tsunamis as its highest priority within the 
NTHMP. The Tsunami Warning Centers' operations in Hawaii and Alaska are 
not compromised or degraded with the proposed reductions.
    The proposed reductions will eliminate grants to the NTHMP. The 
NTHMP is a consortium of State partners that use NOAA tsunami program 
funding to support local community education and mitigation activities. 
These activities include inundation mapping to develop evacuation 
plans, routes, and signage; education and awareness campaigns; 
provision of education materials; and training for the public and local 
officials.
    Despite the reduction in grants funding, NOAA would continue to 
support the NTHMP by: setting standards of accuracy for NTHMP-developed 
inundation models; promoting community outreach and education networks 
to ensure community tsunami readiness through funding from the 
TsunamiReadyTM program; promoting the adoption of tsunami 
warning and mitigation measures by Federal, State, tribal, and local 
governments and non-Government entities; conducting tsunami research; 
and operating the U.S. Tsunami Forecasting and Warning Program.
    Question. The United States Geological Survey estimates that there 
is a 99.7-percent chance that a magnitude 6.7 or greater earthquake 
will strike in California in the next 30 years. What is the likelihood 
that this event would trigger a tsunami on the west coast?
    Answer. Most California earthquakes are onshore, and therefore 
unlikely to generate a tsunami. However, without knowing the earthquake 
type, location and magnitude, NOAA is not able to estimate the 
probability of a tsunami.
    Question. If a seismic event occurs near-shore and it triggers a 
tidal surge, will your data be more or less reliable than tidal events 
that are triggered across the pacific ocean (such as the March 11, 2011 
tidal wave)?
    Answer. Regardless of location of the tsunamigenic earthquake, the 
NOAA Tsunami Warning Centers assess the threat and issue a tsunami 
warning within 5 minutes. The reliability of data from any seismic 
event is dependent upon the density of the seismic sensors in the area 
of the earthquake. For example, if an earthquake occurred in the middle 
of the Pacific Ocean, it would take longer to assess the 
characteristics of that event due to the low density of seismic 
sensors. The west coast, on the other hand, has a very dense system of 
seismic networks that would allow for a more rapid assessment of any 
earthquake.

                   INTERNATIONAL TRADE ADMINISTRATION

Solar Panel Trade Dispute With China
    Question. The Department of Commerce just released a preliminary 
determination that the Chinese Government is illegally subsidizing 
Chinese solar manufacturers, and recommended tariffs ranging from 2.9 
to 4.7 percent. Soon, the Department will release another preliminary 
determination about alleged dumping of those solar panels on U.S. 
shores, which may raise tariffs further. Unfair and illegal trade 
practices are clearly harmful to the U.S. solar industry, but I have 
also heard concerns from some solar companies that retaliatory tariffs 
could start a trade war, drive up prices, discourage customer demand, 
and stifle a growing industry here at home.
    What are you going to do to ensure that in the process of enforcing 
fair trade practices, the domestic U.S. solar industry would not be 
adversely affected by the Commerce Department's decisions?
    Answer. The U.S. antidumping and countervailing duty laws, as 
enacted by the Congress, provide very detailed rules and procedures for 
the investigation of these unfair trade complaints. In administering 
the laws, the Department follows these rules and procedures to the 
letter. The laws do not permit the Department to take into account the 
impact on other industries in determining whether and the extent to 
which the imports under investigation may be dumped or subsidized.
    The Obama administration is fully committed to enforcing our trade 
laws and to addressing unfair trade practices in accordance with our 
statutes, regulations, and obligations in order to help ensure that 
U.S. firms and workers have the opportunity to compete on a level 
playing field.

       NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

Internet Corporation for Assigned Names and Numbers
    Question. Secretary Bryson, as we have discussed before, there is 
great concern about Internet Corporation for Assigned Names and 
Number's (ICANN) proposal to open wide top-level domain names, 
expanding them from the present well-known .com, .org, and the others, 
to virtually anything. I was pleased that Commerce wrote to ICANN 
raising a number of specific concerns and suggestions about this 
proposal. I was also pleased with ICANN's response to this letter, 
where they showed a commitment to addressing these concerns. However, 
the rubber has not yet hit the road on this. ICANN is in the middle of 
accepting applications for new top-level domain names, so it has yet to 
put many of its commitments into practice.
    It is important, therefore, that the Commerce Department maintain 
strong oversight over ICANN. The principal leverage that Commerce has 
with ICANN is the ``IANA'', or Internet Assigned Numbers Authority, 
agreement which Commerce has with ICANN to run the system for 
associating domain names with Internet Protocol numbers, and which 
expires at the end of this month. Therefore, I was very pleased to see 
that Commerce last week did not renew this contract, but instead 
granted a temporary 6-month extension of the existing contract, while 
ICANN addresses certain issues.
    Can you elaborate on the reasons why Commerce only granted a short-
term, temporary extension?
    Answer. In anticipation of the impending expiration of the IANA 
functions contract, National Telecommunications and Information 
Administration (NTIA), via two public notices in February and June 
2011, consulted on how best to enhance the performance of the IANA 
functions. Based on the input received from stakeholders around the 
world, NTIA added new requirements to the IANA functions' statement of 
work, including the need for structural separation of policymaking from 
implementation, a robust companywide conflict of interest policy, 
provisions reflecting heightened respect for local country laws, and a 
series of consultation and reporting requirements to increase 
transparency and accountability to the international community.
    On November 10, 2011, the Department of Commerce issued a Request 
for Proposal (RFP) for a new IANA functions contract. The Department 
received no proposals that met the requirements requested by the global 
community, and, therefore, it cancelled the RFP. The Department intends 
to reissue the RFP in the coming weeks so that the requirements of the 
global Internet community can be served. To ensure the continued 
stability and security of the domain name system (DNS) during this 
period, NTIA issued a short-term extension of the contract.
    Question. I would suggest to you that continuing to limit the 
duration of this contract is an excellent way to ensure that ICANN 
follows through on its commitments to address the concerns of law 
enforcement, trademark holders, and others with the new ``generic Top 
Level Domain'' program and other ICANN operations.
    Answer. Thank you very much for your input. I share your interest 
in ensuring that ICANN follows through on its commitments.

                 FEDERAL BUREAU OF INVESTIGATION INPUT

    Question. Along these lines, I understand that the Federal Bureau 
of Investigation (FBI) made a number of recommendations to Commerce for 
provisions to include in the IANA agreement to help them in their 
efforts to combat child pornography, fraud, and other types of 
cybercrime--but Commerce did not include most or all of these 
recommendations.
    Why didn't you include the FBI's recommendations?
    Answer. The statement of work for the IANA functions contract was 
developed through a deliberative and iterative interagency process 
informed by two public notices in February and June 2011 about how best 
to enhance the performance of the IANA functions.
    Question. Can I have your commitment that you will work with the 
FBI to include as many of their recommendations as possible?
    Answer. NTIA has a long history of collaborating with all U.S. law 
enforcement agencies and continues to actively work with all Federal 
Government agencies through an interagency DNS Issues working group, 
which includes the FBI, to ensure that law enforcement concerns are 
being addressed. NTIA continues to take steps to address law 
enforcement concerns by working to strengthen the Registry and 
Registrar Accreditation Agreements, supporting enhancing ICANN's 
contract compliance, and encouraging implementation of the 
recommendations of the WHOIS Review team.
                                 ______
                                 
                Question Submitted by Senator Jack Reed

                       HENRY B. BIGELOW HOMEPORT

    Question. At a time of tight funding and rising fuel costs, the 
National Oceanic and Atmospheric Administration (NOAA) fleet faces 
major funding challenges. Amid these challenges, NOAA is attempting to 
determine the permanent homeport for Fisheries Survey Vessel Henry B. 
Bigelow, which has been located at Naval Station Newport in Rhode 
Island on a ``temporary'' basis since it was commissioned in 2006.
    For more than 6 years, NOAA has been wrestling with the decision on 
the Henry B. Bigelow's permanent homeport because of the costs of 
relocating to Woods Hole, which would require major dredging and 
infrastructure work to accommodate the Henry B. Bigelow. Those costs 
would be in excess of $20 million, according to NOAA's 2008 Facility 
Modernization Plan.
    More than a year ago, I wrote to Under Secretary Jane Lubchenco to 
suggest potential cost-saving options for permanently homeporting the 
Henry B. Bigelow in Rhode Island. Indeed, an independent evaluation 
conducted for NOAA by SRI International in 2006 evaluated Naval Station 
Newport and the Port of Davisville (Quonset). That analysis rated 
Newport higher than Woods Hole, and it was completed before 
improvements were made at the Port of Davisville to accommodate the 
Okeanos Explorer. Those improvements would have improved the Port of 
Davisville's already competitive score.
    Although I have discussed this issue with Dr. Lubchenco on several 
occasions, my letter has not been answered, and I fear less-costly 
alternatives to Woods Hole are being overlooked. While I understand 
that NOAA and the Department are still evaluating options, I would like 
to know when I can expect a reply to my letter. Given the impacts on 
the NOAA fleet, I would also appreciate an explanation of the potential 
costs.
    Answer. We appreciate the Senator's interest in this issue and the 
letter to Dr. Lubchenco expressing his views about the Henry B. Bigelow 
homeport. NOAA's response to the Senator's letter is in the final 
stages of clearance within the agency and we expect to transmit it to 
the Senator's office as soon as possible. Furthermore, we have 
completed an analysis of the options for the Henry B. Bigelow's 
homeport. Our analysis has been transmitted to the Department for 
further review. We will share the content of the analysis as soon as we 
are able.
    NOAA's fleet plays an essential role in supporting NOAA mission 
accomplishment. The stationing of NOAA's vessels is based on mission 
and operational requirements to support the science mission. In the 
past, when a vessel is replaced, NOAA has stationed the new vessel at 
the same station as the one being replaced. In the case of Henry B. 
Bigelow, the previous vessel was stationed at the Woods Hole Northeast 
Fisheries Science Center in Woods Hole, Massachusetts. In this 
instance, the Henry B. Bigelow is larger than the vessel it replaced, 
which would require additional investment in improvements to the Woods 
Hole pier and harbor. Since the Henry B. Bigelow was commissioned, it 
has been stationed at the Naval Station Newport, with the option of 
tying up at the commercial Port of Davisville when necessary for 
loading.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

    Question. As part of this year's budget, National Oceanic and 
Atmospheric Administration (NOAA) has proposed closing its laboratory 
at Sandy Hook, New Jersey. This lab is unique--it is located near major 
urban areas, helping scientists develop approaches to managing 
fisheries in impaired water bodies. It has lasting partnerships with 
local universities and fishermen. And it has a 50-year record of 
scientific achievement.
    Can any other single NOAA location provide this combination of 
qualities?
    Answer. The NOAA laboratory at Sandy Hook is an excellent research 
facility with unique capabilities. The laboratory's flow-through 
seawater system, large-capacity experimental tanks, and ocean 
acidification research facility provide an exceptional environment for 
behavioral ecology, habitat, and early life history research.
    However, it has one of the highest costs per square foot for high-
density occupied spaces within the continental United States--at 
$36.30/sq ft. Additionally, the 20-year lease for the Sandy Hook 
Facility expires in December 2013. While NOAA recognizes and 
understands that the Sandy Hook lab conducts important research on 
recreational fish species and serves as an outreach lab to recreational 
fishermen it must balance this with the need to reduce costs.
    Question. Regulators help keep our food safe, and ensure we have 
clean air to breathe. They also make sure that businesses that break 
the rules don't get an unfair advantage. The Office of Management and 
Budget (OMB) reports that regulations over the last decade produced as 
much as $700 billion in benefits at a cost of less than $70 billion.
    Do you agree with OMB finding that regulations yield benefits well 
in excess of their costs?
    Answer. Although NOAA has not done comprehensive analysis such as 
that done by the OMB, our experience is that the benefits to coastal 
communities and the environment resulting from collaborative work 
through the regional fishery management councils and the dedication of 
resources to managing and sustaining fisheries, for instance, exceed 
the costs to the Government.
    Question. The United States Patent and Trademark Office (USPTO) is 
evaluating locations for at least two new satellite offices. U.S. 
patent activity is an important factor in the USPTO's selection 
process. In 2010, the New Jersey/New York region was second in patent 
applications. New Jersey by itself was sixth, and New Jersey excels in 
many other categories the USPTO is considering.
    How does New Jersey compare to other locations as a candidate for a 
satellite office?
    Answer. In assessing potential satellite office locations, USPTO 
assessed more than 50 metropolitan areas against a variety of criteria. 
As mandated by the Leahy-Smith America Invents Act (AIA), cities were 
evaluated according to the ability of the USPTO to perform applicant 
outreach in the area; the ability to both recruit and retain qualified 
employees within the regional labor market; and, the potential economic 
impact of establishing a USPTO satellite office in the region. The AIA 
also required that the USPTO consider geographic diversity among its 
satellite office locations when selecting future sites. In addition, 
each location was evaluated on the basis of operating cost and other 
factors.
    Given the considered factors, data for the New Jersey/New York 
region did not at this time present the best comparative case as a 
whole despite high performance within some factor categories.
                                 ______
                                 
            Questions Submitted by Senator Susan M. Collins

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

New England Groundfish Monitoring
    Question. Maine's groundfish industry is facing a great deal of 
uncertainty as it continues to move to a new management system and in 
the face of new reports showing that the Gulf of Maine and Georges Bank 
cod stocks may not be as healthy as previously thought, a position at 
odds with the assessments of many working fishermen.
    National Oceanic and Atmospheric Administration (NOAA) announcement 
late last year that it would fund the full cost of observers in fishing 
year 2012 for the New England groundfish fishery was welcome news. 
Looking ahead to next year, I am concerned that the industry will still 
not be in the financial position to pay for the high cost of monitoring 
on the east coast. I understand that these monitoring programs not only 
provide assurance that catch limits are not exceeded, but also provide 
accurate catch data that is essential to good stock assessments. The 
budget requests $28 million for the National Catch Share Program. How 
much does NOAA estimate the total cost of monitoring coverage will be 
for the New England groundfish fishery in fiscal year 2013? How much 
has NOAA budgeted for in fiscal year 2013 to cover those costs? Given 
all of the uncertainty facing the New England groundfish industry, has 
NOAA looked at whether the fleet will be in an economic position to 
begin shouldering the costs of monitoring in 2013 and 2014? And given 
that NOAA uses this monitoring data to feed into its stock assessments, 
which is appropriately a Federal function, is it fair to ask the fleet 
to cover the entire cost of at-sea monitoring in future years?
    Answer. NOAA agrees that at-sea monitoring data is critical to 
accurate stock assessments and the effective functioning of the Sector 
program. NOAA will continue to work with the New England groundfish 
fishery on the appropriate mix of industry and Federal funds to support 
this function. NOAA works similarly with other federally managed 
fisheries where industry is or will be paying all of the at-sea 
monitoring costs, including several Alaska fisheries, Pacific 
Groundfish, and Atlantic scallops.
    National Marine Fisheries Service (NMFS) collects two types of data 
on the New England groundfish fishery through at-sea monitors and 
observers. At-sea monitors count fish and collect less detailed data on 
catch and bycatch (discards) and are utilized to monitor the fishery to 
track quota. Observers collect more detailed data related to catch such 
as age and length of targeted and discarded species, bycatch, and 
additional data such as, biological samples. All information collected 
is used in stock assessments and to understand the fisheries 
interaction with protected resources.
    At-sea monitors are funded primarily through the National Catch 
Share Program budget line, with additional funds from the Observer/
Training budget line. Observers are solely supported through the 
Observer/Training budget line.
    NOAA estimates that the total 2013 cost of observer/at-sea monitor 
coverage in the Northeast to be $17.9 million. The fiscal year 2013 
President's request for NOAA includes approximately 50 percent of the 
costs for at-sea monitors, or $2.2 million, and the total cost for 
observers, $13.9 million, which provides a total of $16.1 million of 
the estimated $17.9 million for observer and at-sea monitor coverage 
required (Table 1). This request takes into consideration recent 
developments, in particular the Gulf of Maine cod stock assessment. The 
remaining costs of at-sea monitors, approximately $2.2 million, are 
expected to be paid by the industry beginning in May 2013.
    NOAA recognizes the potential economic implications, in particular 
for small operators, of transitioning the costs of at-sea monitors to 
industry. Therefore, we continue to analyze the fishery, including 
economic information, and if circumstances warrant we will adjust as 
needed. NOAA continues to work with the New England Fishery Management 
Council and industry to consider alternative effective monitoring 
techniques, such as electronic monitoring (including an ongoing 
electronic monitoring pilot project) that could also be more cost-
effective.

      TABLE 1. FISCAL YEAR 2013 FUNDING REQUEST FOR OBSERVER/AT-SEA MONITOR COVERAGE IN NORTHEAST FISHERIES
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                          Region/fishery                               Fiscal year  2013 PPA       2013 request
----------------------------------------------------------------------------------------------------------------
NE Multi-species fishery (at-sea monitors and observers).........  National Catch Share Program              2.2
                                                                              (at-sea monitors)
                                                                             Observers/training             13.9
                                                                  ----------------------------------------------
      TOTAL......................................................  .............................            16.1
----------------------------------------------------------------------------------------------------------------

 POTENTIAL LISTING OF RIVER HERRING AS THREATENED UNDER THE ENDANGERED 
                              SPECIES ACT

    Question. Late last year, NOAA fisheries announced that it had 
determined that a petition to list alewife and blueback herring, 
collectively known as river herring, under the Endangered Species Act 
(ESA) merited further review and the agency would consider whether 
listing these species would be appropriate. Given the potential impacts 
that even a threatened listing could have on our nation's fishing 
communities, I hope you will urge NOAA fisheries to carefully consider 
effective management plans already in place, such as the programs in my 
home State of Maine.
    River herring are an important source of bait for Maine fishermen 
who already adhere to restrictions mandated by the Maine Department of 
Marine Resources (DMR). The Maine DMR's river herring management plan 
has proven effective in increasing river herring populations through 
habitat restoration and improvements, fish passage construction, 
stocking and transfer programs, and catch limits.
    My question is twofold: in your status review of the species, how 
are you working with State agencies that have a greater familiarity 
with the species than the Federal Government? And, what can be done by 
working proactively with States, particularly States that already have 
successful management programs in place, to avoid a listing under the 
ESA?
    Answer. The Atlantic States Marine Fisheries Commission has been 
working with representatives from each of the east coast States on a 
stock assessment for river herring for approximately the last 3 years. 
This stock assessment is a thorough compilation of the best available 
data on river herring and therefore, will be extremely useful in making 
a listing decision. In order to identify any gaps between the 
information contained within the stock assessment report and 
information that is needed to make a listing determination under the 
ESA, NMFS staff attended the stock assessment committee meeting in 
January 2012, at which the group finalized the data inputs for the 
report. The following are topics that must be addressed in an ESA 
listing decision that were not fully addressed in the stock assessment:
  --stock structure/identification of distinct population segments;
  --impacts of climate change on the continued existence of both 
        species;
  --status of Canadian stocks; and
  --extinction risk.
    Based on these existing gaps, NMFS has been working with Atlantic 
States Marine Fisheries Commission to plan individual workshops to 
address three of these data gaps (we are working with the Canadian 
Department of Fisheries and Oceans to obtain data on the status of 
these species in Canada). With the Atlantic States Marine Fisheries 
Commission's input and assistance, NMFS has identified experts for each 
of these topic areas, and we will be convening these workshops during 
this summer to help inform the status review and subsequent listing 
determination. Announcements of these workshops will be posted on our 
Web site. Reports from the stock structure and extinction risk analysis 
workshops will be peer reviewed by experts from the Center for 
Independent Experts and we will be seeking nominations for qualified 
peer reviewers for the climate change workshop report later this 
spring.
    NMFS has solicited information from the State agencies and the 
public that is relevant to the listing decision and the status review 
team is considering this information in the ongoing status review. We 
are also seeking input from State-recognized experts on the species and 
the management issues surrounding their status and recovery and will be 
inviting the States to send representatives to each of the workshops. 
The information from the workshops will be posted on our Web site 
providing the States and the general public with an additional 
opportunity to see the materials that are in the record, which will 
form the basis of a listing or no listing decision. The States and the 
public will also be provided with the opportunity to supplement the 
record with data and materials from people whom they recognize as 
experts during the peer review process of the workshop reports.
    NMFS has also been working with representatives from the State of 
Maine on restoring access to important spawning areas for both species 
in the State as part of our efforts to restore and recover Atlantic 
salmon and other members of the anadromous species complex. This 
includes focusing on restoration of access to important alewife 
spawning habitats in the St. Croix River. NMFS has also been working on 
restoring access in many other rivers in other States along the east 
coast, and has provided input and guidance for fish passage in many 
river systems under the Fish and Wildlife Coordination Act. All of 
these proactive measures to restore and recover these species will be 
considered in the Policy for the Evaluation of Conservation Efforts 
analysis in the listing determination.

                       STATE-FEDERAL PARTNERSHIPS

    Question. NOAA's fiscal year 2013 budget proposes to cut or 
eliminate some key programs that support important State and Federal 
partnerships. In particular, the proposals to eliminate funding for 
Interjurisdictional Fisheries Grants and reduce by 14 percent funding 
for the Atlantic Coastal Act are particularly worrisome to States. This 
funding helps support State efforts to restore and sustainably manage 
their marine fisheries, and reducing this funding could have severe 
ramifications for monitoring of the Nation's fisheries by the States. 
In Maine, we are particularly concerned about the potential impacts to 
monitoring of our lobster, Atlantic herring, and Northern shrimp 
stocks. How does NOAA propose to maintain and improve the basic 
scientific data collection programs needed for stock assessments of 
these stocks while at the same time cutting funding for these programs?
    Answer. NMFS agrees that the role of the Interstate Commissions in 
fostering partnerships and incorporating the needs of fishing 
communities and industry, recreational, Federal, and State interests 
into fishery management decisions is critical.
    Appropriated funding for the Interjurisdictional Fisheries Act 
grants has declined over the past 2 years. As a result, the benefits of 
the program relative to the administrative costs on both NOAA and the 
States to apply for, manage and report on the awards are no longer 
effective. The Interjurisdictional Fisheries Act grant funding is 
specified by statutory formula and would require a legislative fix. In 
applying the statutory formula to the amount of appropriations 
supporting Interjurisdictional Fisheries Act grants under the fiscal 
year 2012 conference mark, 18 of the 38 grants would have been for less 
than $6,000. NMFS determined that this funding was insufficient to 
justify the grant program, and therefore decided to zero out the grant 
program as part of the undistributed reduction included in the 
conference agreement. This reduction was included in the fiscal year 
2012 spend plan approved by the Congress in January 2012. The fiscal 
year 2013 President's budget maintained this decision. NMFS does not 
expect its fiscal year 2013 appropriation to increase to a level at 
which this program could be effectively managed.
    NOAA continues to work with its partners to find efficiencies to 
maintain the quality and effectiveness of our data quality and 
monitoring. NMFS will continue its current level of effort to collect 
data from its surveys, sampling, and dealer data collection that 
support the Atlantic States Marine Fisheries Commission's technical 
committees. NMFS' scientists serve on the Atlantic States Marine 
Fisheries Commission's committees that develop and apply population 
modeling for the assessment. As an example, for the NMFS Northeast 
bottom trawl, survey data, at-sea and in-port biological sampling data, 
and landings from federally permitted dealers are routinely used by the 
Atlantic States Marine Fisheries Commission.
    Also, in 2012-2013, NMFS is piloting a project to collect more 
samples from observed commercial lobster trips in Statistical Areas 515 
and 513, in the Gulf of Maine. The focus is on characterizing 
groundfish discards and reasons for lobster discard. There are about 10 
vessels that operate in this component of the fishery. This is intended 
to augment data on offshore lobsters for both lobster and groundfish 
management and assessment purposes. NOAA will continue to work with our 
partners to find other efficiencies to maintain the high level of 
quality data and analysis despite reductions in Federal and State 
budgets.

                   INTERNATIONAL TRADE ADMINISTRATION

Softwood Lumber Agreement--Monitoring
    Question. Recently, the United States and Canada agreed to extend 
the softwood lumber agreement to October 2015. The agreement has 
generally benefited Maine's forestry industry, but it has not been an 
easy path due to Canada's numerous violations under the trade 
agreement. The delicate balance of realizing adequate value of the 
agreement for U.S. industry has only been achieved due to the 
monitoring and enforcement work of the last two administrations. The 
Commerce Department plays an important role in the U.S. Government's 
efforts to monitor Canada's compliance with the agreement. This work 
must continue. Failure to adequately monitor and enforce this trade 
agreement places at risk jobs in communities that can least afford to 
lose them. Do you believe that you have the adequate resources to 
continue the Department's critical role in monitoring the Softwood 
Lumber Agreement? Will you commit to continue to make this monitoring a 
priority for the Department?
    Answer. The U.S. trade relationship with our neighbors is an 
absolute priority and Canada is our number one trading partner.
    The Softwood Lumber Agreement (SLA) is evidence of the United 
States and Canada's commitment to working together to resolve long-
standing trade disputes. As you know, the SLA was recently extended for 
2 more years and is now effective until October 12, 2015.
    The administration is committed to strong enforcement of its rights 
under these agreements. To date, in concert with the Office of the 
United States Trade Representative (USTR) and the Department of Justice 
(DOJ), we have been involved in three arbitrations under the SLA. The 
arbitration panel found in favor of the United States on many of the 
issues raised in the first two disputes, and just recently completed 
the third arbitration hearing.
    Commerce's International Trade Administration has targeted $99.6 
million to enforcement in the fiscal year 2012 budget, and the 
Administration has requested a significant increase in the fiscal year 
2013 budget for trade enforcement activities, including the Interagency 
Trade Enforcement Center (ITEC).\1\ Commerce will continue to work 
closely with USTR to ensure that U.S. rights under the SLA are 
vigorously enforced and defended.
---------------------------------------------------------------------------
    \1\ FY 2012 figure from ITA FY2013 Budget in Brief, Objective 12.
---------------------------------------------------------------------------
                                 ______
                                 
              Question Submitted by Senator Lindsey Graham

                   INTERNATIONAL TRADE ADMINISTRATION

    Question. I wrote to your Department earlier this year regarding 
the International Trade Administration's (ITA) U.S. Commercial Service 
(CS). While I look forward to your response, I understand the 
Department of Commerce intends to eliminate CS staff in developing 
economies. While I fully understand the budgetary constraints all U.S. 
Government agencies currently face, I worry such action is premature 
and would weaken opportunities for U.S. companies.
    Under the President's fiscal year 2013 budget, which commercial 
service professionals would be eliminated? How much would it cost to 
ensure no current CS professionals are eliminated? How much would it 
cost for the CS to operate at full capacity?
    Answer. Over the last decade ITA U.S. and Foreign Commercial 
Service (US&FCS) has been reshaped by tight budgets, which have 
resulted in hiring freezes and other ad hoc measures to reduce costs. 
US&FCS responded by undertaking a strategic review of its resources 
using expected budget levels and looking at where and how those 
resources were deployed. These calculations were based on deploying 
approximately 169 officers and 742 locally engaged staff (LES) in 70 
countries worldwide, representing 94 percent of the worldwide market 
for U.S. exports. Based on this information and coupled with 
administration priorities such as the National Export Initiative, 
US&FCS placed each country in Tier I, II, or III categories. Tier I 
represents countries such as China, India, and Brazil with the greatest 
current opportunity to maximize United States exports and the greatest 
demand for our services.
    In order to reposition resources to top tier countries US&FCS 
sought and received approval from the Office of Management and Budget 
and our Congressional Appropriations Committees to close 17 offices 
internationally in fiscal year 2012. The list included closing the sole 
US&FCS offices in seven countries (Algeria, Ecuador, Kazakhstan, Libya, 
Senegal, Switzerland, and Venezuela); nine constituent posts 
(Melbourne, Australia; Vancouver, Canada; Wuhan, China; Alexandria, 
Egypt; Florence, Italy; Sapporo, Japan; Nagoya, Japan; Tijuana, Mexico; 
and Vladivostok, Russia), and the African Development Bank (ADB) 
office. We are also reducing staff in some markets where we are not 
closing offices, mostly in mature, developed markets. Essentially, we 
are under-resourced in priority markets and must therefore address 
those needs before we can consider resourcing third tier markets.
    It is important to recall two elements of our history. First, 
US&FCS was created in 1980 to service U.S. business needs in our most 
commercially important export markets. This represented slightly more 
than 60 markets at that time. The intent was for US&FCS to focus on 
those markets judged to be the most important for expanding exports and 
advancing U.S. commercial interests. However, over time the US&FCS grew 
to have offices in 80 countries. A continuous review of our footprint 
and a common understanding and agreement on the identification of these 
priority markets for U.S. business remains fundamental to offering a 
successful US&FCS program. Given that we cannot be in every market, our 
partnership with the trade promotion program that the State Department 
offers in foreign markets in which US&FCS does not have a physical 
presence is of vital importance if we are to remain at the center of a 
whole-of-government effort to deliver a seamless global program. At 
present, we have partnership post arrangements with 57 State Department 
posts.
    The President's fiscal year 2013 budget proposes an increase of 
$30.3 million to place additional Foreign Commercial Service Officers 
and LES in high-growth, priority markets, including those developing 
economies that offer the greatest opportunity. US&FCS is working to 
determine the best placement of additional staff should increased 
funding materialize, and will evaluate its overseas presence and make 
appropriate adjustments to its footprint as markets and the demand for 
services require. On the contrary, should funding remain flat, US&FCS 
will look to further reposition resources from third and possibly 
second tier countries into the top tier. Absent the closing of 
additional posts due to market conditions or budget constraints, any 
decrease in staff would be accomplished through attrition.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran

                MARINE MAMMAL STRANDING--GULF OF MEXICO

    Question. When marine mammals strand themselves in the northern 
Gulf of Mexico and cannot be returned to the ocean, the National Marine 
Fisheries Service (NMFS) decides where to place these animals for their 
long-term care. Despite the fact that several dolphins have stranded 
themselves in the northern gulf, NMFS has chosen to send these animals 
to facilities that are not involved or participate in the stranding 
response in the area. Organizations such as Institute for Marine Mammal 
Studies (IMMS) assisting National Oceanic and Atmospheric 
Administration (NOAA) in the stranding response should be preferred in 
the allocation of these nonreleasable stranded animals as these 
facilities spend a lot of time, effort, and resources in assisting 
NOAA. Why is that the case?
    Answer. One of the primary goals of NMFS is the successful 
rehabilitation of stranded marine mammals and their release back to the 
wild. On occasion, we (along with the attending veterinarian) determine 
that rehabilitated animals should not be released for medical or 
behavioral reasons and they must be placed in permanent captivity. We 
place nonreleasable dolphins in public display facilities through an 
equitable and transparent consideration of the capabilities of 
interested facilities in meeting the specific animal's needs.
    Participation in the Marine Mammal Health and Stranding Response 
Program is not a criterion considered in the placement of animals. 
Nonreleasable animals are often placed with entities that do not 
participate in the rescue and rehabilitation of that species. For 
example, IMMS is on the national placement list to receive 
nonreleasable California sea lions, which is not a species found in the 
Gulf of Mexico.
    We have routinely alerted IMMS about each nonreleasable dolphin 
since it received its public display license in December 2009. In 2011, 
four young bottlenose dolphins were determined to be nonreleasable to 
the wild. One of these animals was placed at the facility where it was 
being rehabilitated because they could provide for the social and 
developmental needs of this animal. The IMMS expressed an interest in 
possessing each of the three remaining animals. We determined that they 
did not have the appropriate number and social composition of dolphins 
in its custody to integrate these young individuals, compared to other 
facilities where they were ultimately placed.
    We strive to ensure that nonreleasable dolphins are placed in 
appropriate social groups based on the animal's age and sex, and its 
social, health, and behavioral condition. This is especially critical 
for young animals in need of foster care from adult females with 
maternal experience. A copy of our detailed policy for placing 
nonreleasable marine mammals into permanent captivity is available 
through the following web link: https://reefshark.nmfs.noaa.gov/f/pds/
publicsite/documents/procedures/02-308-02.pdf.

                          SUBCOMMITTEE RECESS

    Senator Mikulski. Mr. Secretary, this concludes our 
hearing. We thank you for your testimony. We look forward to 
your ongoing cooperation. We, too, want to do business in the 
subcommittee at the speed of business.
    We also, while we've been insistent about certain 
performance standards and expectations, we really do want to 
let the people who work at Commerce know, whether they're doing 
trade agreements, enforcing trade, working on those incredible 
standards that take ideas into products that we need to thank 
the 40,000-plus people who work hard every day to create jobs, 
and sustain jobs, and keep our country safe. So, let's all work 
together, so that we can be a more frugal Government, and have 
some smart funding initiatives.
    This subcommittee stands in recess until next Wednesday, at 
2 p.m., when we're going to take the hearing of the NASA 
administrator.
    [Whereupon, at 11:25 a.m., Thursday, March 22, the hearing 
was concluded, and the subcommittee recessed, to reconvene at 2 
p.m. on Wednesday, March 28.]


  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              


                       WEDNESDAY, MARCH 28, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:03 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Barbara A. Mikulski (chairman) 
presiding.
    Present: Senators Mikulski, Brown, Hutchison, Shelby, and 
Cochran.

             NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

STATEMENT OF CHARLES F. BOLDEN, JR., ADMINISTRATOR

            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. The subcommittee on Commerce, Justice, 
Science, and Related Agencies (CJS) will come together, and we 
will be taking the testimony of the Administrator of the 
National Aeronautics and Space Administration (NASA), Charles 
F. Bolden.
    But before we do, I want to say that this is the last 
public hearing of Senator Kay Bailey Hutchison. This is not her 
last appearance before the subcommittee, but it's our last 
public hearing on CJS appropriations.
    And as her good friend and colleague, I have a present for 
you. This is not a goodbye gift. This is a commemorative gift. 
But we couldn't let this gathering of people, particularly from 
America's space program, its leadership, those who are 
interested in the space community, without taking this 
opportunity to just thank you for being a really great senator 
from Texas, a really great Senator for America and America's 
future, science, technology, a real advocate for the space 
program, keeping an eye on the bottom line. We just wanted to 
let you know this subcommittee, its members and all of us just 
think the world of you.
    Senator Hutchison. I thank you very much.
    Senator Mikulski. So let me present that to you. Take a 
peek.
    Senator Hutchison. Okay. Thank you very much.
    Senator Mikulski. No, it didn't come from him.
    Senator Hutchison. No, I know. I never get gifts from him.
    Senator Mikulski. He's going to give you one in a minute.
    Senator Hutchison. Oh, gosh, this is great.
    Senator Mikulski. Wait until you see this. This is----
    Senator Hutchison. I would rather have one from him.
    Senator Mikulski. This is so cool.
    Senator Hutchison. This is cool. That is really cool.
    Senator Mikulski. It is a crystal rocket.
    Senator Hutchison. It is.
    Senator Mikulski. It's the space shuttle, made here in the 
United States of America, on time.
    Senator Hutchison. And the time is right.
    Senator Mikulski. It's on time, it's on time.
    Senator Hutchison. I love it. Isn't that neat? Yes, I love 
it. Thank you.
    Senator Cochran. If you put it up here, it might launch.
    Senator Hutchison. Well, I love it, and thank you for the 
commemoration. I did not realize this would be our last 
official hearing, but we do have a lot of work to do, and I 
can't tell you how much I appreciate the relationship and the 
support that we have from our chairman and the members of this 
subcommittee. I think we've done great things for NASA, and 
we've been creative, and I can't tell you how much I appreciate 
the ability for us to be on the same wavelength and really 
accomplish something for our pre-eminence in space. So, thank 
you very much.
    Senator Mikulski. Senator Hutchison, it is our last 
scheduled hearing on the fiscal year 2013 CJS appropriations. 
The chair reserves the right to conduct other hearings as might 
be necessary as our process continues onward, or if there is a 
special event that would require special attention. So that's 
our last scheduled hearing, but we know you're going to be in 
the thick of it on this bill, all the way up to the President 
signing it.
    Senator Hutchison. For sure.
    Senator Mikulski. We're going to get underway pretty 
quickly, and we want to thank Administrator Bolden for being so 
flexible. This hearing was originally scheduled for Thursday, 
and because of other hearings at this time, we asked to 
rearrange this. So we thank you for your courtesy.
    What we're going to do today is have open statements from 
Senator Hutchison and myself, then go to questions. We'll 
follow the 5-minute rule, and look forward to hearing from the 
Administrator.
    So today we want to welcome Administrator Bolden, 
testifying on behalf of the fiscal year 2013 NASA 
appropriations.
    As chairwoman, I have three priorities for NASA: make sure 
we have a balanced space program that will make NASA move 
forward with the programs that the Congress has authorized and 
funded; we want NASA to be an economic engine, out-innovating, 
out-educating, and out-building what we need to do to keep 
America pre-eminent in space; also, as a duty to the taxpayer, 
we continue our rigorous oversight and accountability to make 
sure taxpayers' dollars are spent wisely and to acknowledge the 
fact that we need to focus on a more frugal Government. I want 
to make sure that NASA has what it takes to carry out its 
mission, explore the universe, understand and protect our 
planet, and create new knowledge and new technologies that lead 
to breakthroughs.
    The President's budget for NASA is $17.7 billion. I want 
the subcommittee to note this is $89 million less than the 
fiscal year 2012 level, and in the last 3 years NASA has 
already been cut by $1 billion. Within the request, NASA 
outlines three top priorities:
  --the Space Launch System (SLS) rocket and the Orion capsule, 
        I know of great interest to the members;
  --supporting the International Space Station (ISS) with 
        commercial flights for cargo and hopefully one day, 
        astronauts; and
  --building the James Webb Space Telescope (JWST), but also 
        continuing our focus on science.
    NASA will be asked to accomplish these priorities with far 
less than in the last NASA Authorization Act. In supporting 
these three priorities, NASA has made some tough choices. 
Science is cut by $179 million less than the fiscal year 2012 
level. The funding for the SLS and Orion is $291 million below 
fiscal year 2012. And NASA education funding, something I know 
is very important to the Administrator, is cut by $28 million.
    Additionally, if we don't avoid a sequester, NASA will be 
cut by another 8 percent across the board. We will want to hear 
from Administrator Bolden on how a cut like that will impact 
the NASA ability to carry out its mission.
    Oh, man, that pollen is--I hope the space capsules are 
cleaner than the Dirksen Building here.
    This subcommittee has always worked to make sure we have a 
balanced space program in science aeronautics, a reliable 
transportation system, and human space flight. For science, 
this budget will keep NASA's near-term launches on track. This 
is good news--important side missions to look at our solar 
system, understand the Sun, and protect our planet.
    I'm troubled that the budget does not invest adequately in 
future missions, the highest science priorities that are 
identified by the National Academies in their decadal surveys. 
We're concerned about the cuts in Planetary Science, Mission to 
Planet Earth, dark energy, and Heliophysics. We'll explore that 
more in the questions.
    We know that NASA is an economic engine, and we hope to 
hear more about what SpaceX and Orbital are doing and whether 
we're going to be on time and online.
    I just want to close by commenting on accountability and 
oversight. First of all, we need to compliment NASA for 
achieving for the first time since 2002 a clean financial 
audit, and I know that was due to your stewardship and 
insistence, Mr. Administrator, and we're counting on you and 
your team to continue vigilant oversight and accountability.
    I appreciate NASA's effort to also re-evaluate the JWST. 
We've got to make sure we stay online and to keep the project 
underway.

                           PREPARED STATEMENT

    The Government Accountability Office's most recent 
assessment of NASA's large projects found that NASA's large 
programs are often over-budget and behind schedule. They can do 
better, and we'll be able to talk about it.
    I ask unanimous consent that my full statement be in the 
record.
    [The statement follows:]

           Prepared Statement of Senator Barbara A. Mikulski

    Today the Commerce, Justice, Science, and Related Agencies 
Subcommittee welcomes National Aeronautics and Space Administration 
(NASA) Administrator Charles F. Bolden, Jr. who will be testifying 
about NASA's fiscal year 2013 budget request.
    As chairwoman, I have three priorities for NASA. First, is to 
implement a balanced space program. How will NASA move forward with the 
program the Congress authorized and funded?
    Second, is to be an economic engine. How is NASA putting America to 
work out-innovating, out-educating, and out-building? Third, is 
oversight and accountability. How is NASA ensuring our tax dollars are 
spent wisely?
    I want to make sure that NASA has what it needs to carry out its 
mission, explore the universe, understand and protect our planet, and 
create new technologies that lead to new breakthroughs creating jobs of 
the future.
    The President's budget request for NASA is $17.7 billion, which is 
$89 million less than the fiscal year 2012 level. In the last 3 years, 
NASA's appropriation has been cut by $1 billion. Within the request, 
NASA outlines three top priorities:
  --Space Launch System (SLS) rocket and Orion capsule;
  --supporting the International Space Station (ISS), including 
        commercial flights for cargo and astronauts; and
  --building the James Webb Space Telescope (JWST).
    NASA will be asked to accomplish those priorities with less, far 
less, than envisioned in the last NASA authorization act. In supporting 
those three priorities, NASA has made some tough choices. Science is 
cut $179 million below the fiscal year 2012 level; funding for SLS and 
Orion is reduced below the fiscal year 2012 level; and NASA education 
funding is cut $38 million or 28 percent.
    Additionally, if we do not avoid a sequester NASA will be cut by 
another 8 percent across the board. We want to hear from Administrator 
Bolden on how a cut like that will impact NASA's ability to carry out 
its mission.
    This subcommittee has always worked to preserve a balanced space 
program with science, aeronautics, and sustainable human flight. For 
science, this budget will keep NASA's near-term launches on track. This 
is good news. This supports important science missions to explore our 
solar system and the universe, understand the Sun, and observe and 
protect our planet.
    But I am troubled that the budget does not invest adequately in 
future missions--the next highest science priorities identified by the 
National Academies' decadal surveys. We must keep making progress on 
the Academies' recommendations, now and in the future.
    This year, we hope to see both SpaceX and Orbital launch cargo to 
ISS, results of a partnership between NASA and the private sector. Once 
Orbital starts launching out of Wallops there will be 400 new high-tech 
jobs on the Eastern Shore. SpaceX has created 1,500 jobs since it 
became part of the commercial cargo program in 2006.
    Nationwide, aerospace industries create a $50 billion trade surplus 
for the United States, and NASA should be a partner with them. Our new 
commercial space rockets can launch a new industry in places like 
Wallops Island. NASA-developed capabilities, like the satellite 
servicing group at Goddard, have the potential to create jobs for today 
and jobs for tomorrow--innovation jobs that can't be outsourced. That's 
why we have a strong coalition of space Senators, because we believe in 
NASA's ability to bring out the best of America.
    But to keep that support, NASA has got to be more frugal. Last 
year, NASA achieved a clean financial audit for the first time since 
2002. We are counting on NASA to remain vigilant on oversight and 
accountability.
    I appreciate NASA's efforts to re-evaluate JWST. Now NASA must keep 
to the plan. The General Accounting Office's most recent assessment of 
NASA's large projects found NASA's large programs--other than JWST--
average $79 million or 15 percent more than the budget and 8 months 
behind schedule.
    NASA has to do better. More than 80 percent of NASA's funding is 
awarded by contract. That's more than $14 billion of NASA's fiscal year 
2013 request. NASA's Inspector General has identified project and 
contract management as top challenges for the agency. This subcommittee 
will be a watchdog and we expect NASA to implement the Inspector 
General's recommendations.
    Frugal times demand a frugal space agency. Our space programs must 
be affordable, balanced, and wisely managed to gain support in frugal 
times. But make no mistake, NASA's mission is worth our passion.

    Senator Mikulski. We have many members here, and I know we 
will want to proceed.
    Senator Hutchison, do you have a statement?

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Thank you, Madam Chairman.
    Madam Chairman, I am concerned about the budget that the 
Administrator is putting forward today, and I want to go over 
just some of the agreements that we have made in the past and 
what the result of those agreements is in your budget, Mr. 
Administrator.
    Your testimony for the subcommittee lays out what NASA 
claims are its priorities, but what is said and what is being 
proposed don't really match. NASA's priorities, as we all 
agreed to in a meeting in my office just a few months ago, 
were, number one, the JWST, and it has been thoroughly reviewed 
and appropriately funded. It is a priority which is funded as 
anticipated.
    The second priority is the SLS and the Orion Capsule, which 
were studied inside and outside of NASA, and again 
independently before finally being allowed to move forward. The 
resulting independent analysis said the budget assumed in that 
analysis for the first 3 to 5 years, which was what we had 
agreed would be the amount, was accurate and provided what was 
needed to maintain schedule.
    So, of course, I was surprised when I got the call that 
NASA was going to cut this part of the budget by $170 million. 
This is a case where NASA has chosen to say it's a priority but 
has deliberately cut the funding that was assumed to assure 
that it could maintain its schedule.
    So this is, of course, a great concern to me and to the 
Members of Congress who agreed with these priorities and 
thought we had the agreement from NASA.
    Number three, the final priority is Commercial Crew, which 
receives a proposed increase of 104 percent more than last 
year. This is being asked for without any type of independent 
cost verification for the program and, at $830 million, exceeds 
the authorized amount for Commercial Crew by $330 million.
    Now, many in the space community say that a lot is riding 
on the upcoming cargo demonstration flight next month, and the 
fate of Commercial Crew is tied to its success. I think they're 
wrong. I think they should be saying it's about time, that we 
have been waiting for years longer than we have been promised 
by NASA and its commercial partners for this launch, and we 
hope the delay will produce success.
    But even though Commercial Crew continues to struggle to 
attain its goals, I recognize its importance. I do support 
Commercial Crew. However, I think NASA is continuing to throw 
money at too many companies with a hope of flying astronauts 
and not doing what it has done with the SLS and the launch 
vehicle, which is to undertake a study for the Commercial Crew, 
similar to what you have done in Orion and SLS, including an 
independent analysis of options, and then funding the programs 
that NASA believes have the most hope of gaining what we all 
want, which is the quickest American-provided commercial crew 
vehicle to ISS as possible.
    Members of Congress are already coalescing around NASA 
choosing no more than two companies, providing competition as 
well as funding realities that we see in our budget, and not 
stealing from the long-term future, which is Orion and the 
launch vehicle.
    If we provided the authorized level for this year for 
Commercial Crew and add the funds from last year that have yet 
to be spent, NASA would have more than $900 million available 
for Commercial Crew selections. That amount of funding fits 
within NASA's stated estimated cost of $300 to $500 million per 
Commercial Crew entrant, if two are selected. If you adhere to 
the three or four, you're going to go over the budget, you're 
going to continue to cut back on Orion and the launch vehicle, 
and it's going to mean that our long-term future is 
jeopardized.
    So I hope, Mr. Administrator, that you and the NASA 
personnel who have done such a great job for our country 
through all of these years of space exploration will go back to 
the drawing board and support Commercial Crew in a fiscally 
responsible way so that we can all, once again, be on the same 
page for our goals, which is a Commercial Crew vehicle that 
will go to ISS within a couple of years, at the same time that 
we are using the expertise from that and moving forward 
expeditiously for the longer-term lower-Earth orbit (LEO) 
ventures that will spell the real long-term future for the 
science and technology that we hope to gain.
    Thank you, Madam Chairman.
    Senator Mikulski. I liked it.
    We're going to turn to Administrator Bolden for his 
testimony, and then after the conclusion of his testimony, 
Senator Cochran, noting you are the vice chairman of the full 
Appropriations Committee and the many demands on your time, 
we'll turn to you for the first set of questions. Will that 
help you out?

              SUMMARY STATEMENT OF CHARLES F. BOLDEN, JR.

    Mr. Bolden. Madam Chair, Senator Hutchison and members of 
the subcommittee, today it's my pleasure and my privilege to 
discuss the President's fiscal year 2013 budget request for 
NASA. All of us at NASA are very grateful to the Congress and 
to this subcommittee for the strong level of support we 
continue to receive.
    And before I press on any more, I have to join the chair in 
recognizing Senator Hutchison for your long-term commitment to 
NASA, as well as to this Congress. Although this may be the 
last official public meeting of this subcommittee, I'm certain 
that this will not be the last time that you and I spend time 
together. I really look forward to it.
    But we have benefited from your guidance and your 
commitment since your election in 1993, and you have always 
been a strong advocate for human space flight and for the 
Johnson Space Center, a place that I called home at one time. 
You have been one of the Congress' strongest proponents for a 
space station, and you have insisted that we enhance its 
utilization, and you were the one that forced us or supported 
us in making it a national laboratory. You were a key champion 
for the Alpha Magnetic Spectrometer and for SLS and the Multi-
Purpose Crew Vehicle (MPCV) and for full utilization of ISS, 
and I really want to thank you personally.
    Your leadership in the appropriations action brought all of 
us together in your office, as you said, on a bipartisan basis 
with then Director of the Office of Management and Budget, Jack 
Lew, to get the three priorities for NASA that we have, at your 
insistence, that we prioritize. Otherwise, we were going 
nowhere.
    So I sincerely thank you on behalf of all of the NASA 
family, and I look forward to continuing to work with you until 
the last day you're in office, and then even after that, 
because I know you will continue to make your mark on the space 
program. But, thank you very much personally.
    Our requested budget, as has already been mentioned, was 
$17.7 billion, and this will enable NASA to continue to execute 
bipartisan space exploration as planned and agreed to by the 
President and the Congress in 2010. Despite the constrained 
fiscal environment facing the nation, this request supports an 
ambitious civil space program that puts us on a path to 
achieving a truly exciting set of goals, to send humans to an 
asteroid, and ultimately to Mars, and to broaden human activity 
in LEO.
    The fiscal year 2013 request supports all of the key 
priorities agreed upon by the President and congressional 
leadership. First, American astronauts continue to live and 
work in space onboard the now-completed ISS, conducting 
research to benefit life here on Earth and prepare us for deep 
space human exploration. NASA is committed to making this 
national resource available to broader research communities.
    We are also committed to ensuring that American companies 
launching from U.S. soil transport our astronauts and their 
cargo to the ISS. This year we will see the first commercial 
cargo flights to ISS, and with the approval of the funding 
request, we're on track to have an American company or 
companies transporting our astronauts to the ISS by 2017.
    Second, NASA is on track to develop a flexible deep space 
launch system that will be the most capable in history. We are 
making remarkable progress on contracts and design for the SLS 
heavy-lift rocket and the MPCV, Orion, which will carry 
American astronauts beyond LEO and into deep space within the 
next decade. Our fiscal year 2013 budget request supports our 
plan for an un-crewed test flight in 2017, and a crew test 
mission by 2021.
    Third, we continue progress toward a launch of the world's 
most advanced telescope, the JWST, in 2018. NASA's budget 
request supports a portfolio of innovative science missions 
resulting in a stream of data from orbits around the Sun, 
Mercury, the Moon, the asteroid Vesta, Mars, and Saturn. We now 
have missions on the way to Jupiter, Pluto, and Mars. Sixteen 
Earth science missions currently study the Earth.
    As this subcommittee knows, tough choices had to be made, 
so we will not be moving forward with the 2016 and 2018 exo-
Mars missions we had been planning with the European Space 
Agency (ESA). Instead, NASA is developing a new integrated 
strategy for sequence of strategically selected missions that 
increase scientific knowledge, advance key technologies, and 
inform and enable human exploration goals. Our plan, including 
the framework for our mission to take advantage of the 2018 to 
2020 launch opportunity, is targeted for completion hopefully 
in time to support the fiscal year 2013 appropriations process.
    As we finalize that, we will coordinate extensively with 
the science community, our international partners and, of 
course, the Congress. The fiscal year 2013 budget request 
continues to support ambitious Mars exploration, including two 
spacecraft currently orbiting Mars, the Opportunity rover on 
the surface, the Mars Science Laboratory, Curiosity, and the 
planned 2013 Mars Atmosphere and Volitle EvolutioN (MAVEN) 
mission to explore Mars's upper atmosphere.

                           PREPARED STATEMENT

    The fiscal year 2013 budget request also supports continued 
advances in new aviation, science, and space technologies, 
absolutely essential to enable NASA to achieve its ambitious 
goals. With the 2013 request, NASA will conduct aeronautics 
research to enable the realization of NASA's Next Generation 
Air Transportation System, or NextGen, and use NASA's education 
programs to inspire the next generation of scientists and 
explorers.
    NASA is grateful to the American people and to you on this 
subcommittee for your continued support in these challenging 
times. I thank you and I look forward to your questions.
    [The statement follows:]

              Prepared Statement of Charles F. Bolden, Jr.

    Madam Chair and members of the subcommittee, today it is my 
privilege to discuss the President's fiscal year 2013 budget request 
for National Aeronautics and Space Administration (NASA). Our requested 
budget of $17.7 billion will enable NASA to execute the balanced 
program of science, space exploration, technology, and aeronautics 
agreed to by the President and a bipartisan majority of the Congress.
    Despite the constrained fiscal environment facing the Nation, this 
request supports a robust civil space program that puts us on a path to 
achieving a truly exciting set of goals. We are working to send humans 
to an asteroid and ultimately to Mars, to peer deep into space to 
observe the first galaxies form, and to broaden human activity in low-
Earth orbit (LEO). We have completed assembling and outfitting of the 
U.S. segment of the International Space Station (ISS), allowing us to 
focus on full utilization of the station's research capabilities. NASA 
is making air travel safer and more efficient, learning to live and 
work in space, and operating a fleet of spacecraft to investigate the 
Earth, the solar system, and the universe.
    The fiscal year 2013 request supports the implementation of key 
priorities for NASA.
    First, since the historic construction of the ISS was completed in 
2011, and now that all the international partners have agreed to its 
extension to at least 2020, we must enhance its utilization to ensure 
the success of this national laboratory. For more than 11 years, 
international crews of space explorers have been living in orbit, both 
building the ISS and conducting a diverse research program 
continuously. NASA is committed to making this national resource 
available to the broader scientific and commercial research community. 
Key to its sustainment is the availability of a U.S. commercial crew 
and cargo delivery capability as soon as possible. NASA is working with 
American companies to establish the next generation of safe and 
efficient vehicles for access to LEO and the ISS. In calendar year 
2012, we will see the first commercial cargo flights to the ISS, 
demonstrating the innovation and capabilities of our industry partners 
and providing a path forward to ease our sole reliance on Russian 
transport of astronauts. We will continue to work with our industry 
partners to develop end-to-end systems for transporting crew and cargo 
to orbit. I am committed to ensuring that American companies, launching 
from U.S. soil, are providing the cargo and crew transportation 
services that we need to keep the ISS functioning. We are making steady 
progress on these launch services. Later this spring and summer, we 
expect that both of our private company partners, SpaceX and Orbital 
Sciences, will complete demonstration flights of their cargo vehicles 
to station and actually berth with the ISS, marking a major milestone 
in our goal to establish commercial space capabilities for LEO travel. 
Some modification of the Iran, North Korea, Syria Non-proliferation Act 
(INKSNA) provisions will likely be required for the continued operation 
of ISS and other space programs after 2016. The administration plans to 
propose appropriate provisions and looks forward to working with the 
Congress on their enactment.
    Second, with the fiscal year 2013 budget request, NASA is moving 
out on plans to develop a flexible launch system that will ultimately 
be the most capable in history. The Space Launch System (SLS) rocket 
and the Orion Multi-Purpose Crew Vehicle (Orion MPCV) will carry 
American astronauts beyond LEO and into deep space within the next 
decade. Following a thorough analysis of alternatives, NASA has 
established architecture for SLS and the Orion MPCV. In recent months 
we have continued to push forward with contracting and design efforts 
to make this system a reality. At the same time, we are moving forward 
on a critical effort to develop the technologies and capabilities 
required to support our ambitious exploration goals. Our fiscal year 
2013 budget request supports our plans for an uncrewed SLS test flight 
in 2017 and a crewed test mission by 2021.
    Third, we plan to continue progress toward the launch of the 
world's most advanced telescope in 2018. The James Webb Space Telescope 
(JWST) will operate deep in space to orbit the Sun nearly 1 million 
miles from Earth. From that vantage point, JWST will look out into 
space and back in time almost as far as it is possible to look. Over 
the past year, NASA has engaged in a thorough review of JWST, made 
important adjustments to management, and put the project on a sound 
financial footing. Since we completed this new plan, the project has 
met 19 of 20 fiscal year 2011 milestones (with one deferred without 
impact), and has met all fiscal year 2012 milestones to date on or 
ahead of schedule. NASA is confident that the fiscal year 2013 request 
supports a 2018 launch of JWST.
    Fourth, the fiscal year 2013 budget request supports continued 
advances in new technologies. The National Research Council (NRC) has 
determined that future U.S. leadership in space requires a foundation 
of sustained technology advances, but that the U.S. space program is 
now living on the innovation funded in the past. Our focus on new space 
technologies is absolutely essential to enable NASA to achieve its 
ambitious goals. At the same time, NASA technology research seeds 
innovation, supports economic vitality and helps to create new jobs and 
expanded opportunities for a skilled workforce. Space technology 
investments address long-term agency technology priorities and 
technology gaps identified by NASA Mission Directorates and within the 
agency's draft space technology roadmaps. On February 1, 2012, NRC 
released its final review of NASA's Draft Space Technology Roadmaps. 
The report, which notes that NASA's technology base is largely depleted 
and identifies 16 top-priority technologies necessary for NASA's future 
missions, which also could benefit American aerospace industries and 
the Nation. This NRC assessment will help guide NASA's technology 
priorities in the years to come.
    NASA's fiscal year 2013 budget request supports a portfolio of 
innovative science missions that will explore the diverse planetary 
bodies of our solar system, unravel the mysteries of our universe and 
provide critical data about our home planet. Currently operating 
missions continue to return a stream of data from orbits around the 
Sun, Mercury, the Moon, the asteroid Vesta, Mars, and Saturn. We now 
have missions on the way to Jupiter, Pluto, and Mars. Sixteen Earth 
Science missions in orbit study the Earth as an integrated system. The 
Hubble, Spitzer, Chandra, and Fermi space telescopes continue to make 
groundbreaking discoveries on an almost daily basis. In calendar year 
2011, the MESSENGER spacecraft entered orbit around Mercury, Ebb and 
Flow began mapping the gravity field of the Moon, and Juno launched on 
its way to Jupiter. Also in 2011, Aquarius produced the first global 
view of ocean surface salinity and the Suomi National Polar-Orbiting 
Partnership (SNPP) satellite began making observations of Earth's 
weather and climate. In 2012, we will launch the Nuclear Spectroscopic 
Telescope Array to study massive black holes, supernovae and other 
high-energy sources in the universe, and will launch the Radiation Belt 
Storm Probes into Earth's Van Allen belts. In 2013, we will launch the 
next land observing mission (the Landsat Data Continuity Mission) and 
complete environmental testing of the Global Precipitation Measurement 
mission, the Lunar Atmosphere and Dust Environment Explorer (LADEE) and 
the Mars Atmosphere and Volatile EvolutioN (MAVEN) mission.
    In view of these key priorities for NASA and of our constrained 
fiscal environment, we will not be moving forward with the 2016 and 
2018 ExoMars missions that we had been studying with the European Space 
Agency (ESA). Instead, NASA is developing a new, integrated strategy 
for Mars missions to ensure that the next steps for Mars exploration 
will support science, as well as longer-term human exploration goals, 
and take advantage of advanced space technology developments. NASA will 
complete this integrated plan, including the framework for a mission to 
take advantage of the 2018 or 2020 launch opportunities, no later than 
this summer and, hopefully, in time to support the fiscal year 2013 
appropriations process. The fiscal year 2013 request supports this 
approach, and this process will be informed by coordination with the 
science community and our international partners. The fiscal year 2013 
budget request continues to support robust Mars exploration, including 
two spacecraft orbiting Mars, the Opportunity rover on the surface, a 
multi-year exploration of Mars by the Curiosity Mars Science 
Laboratory, and the MAVEN mission to explore the Mars upper atmosphere. 
The August landing of Curiosity will be among the most difficult 
technical challenges that NASA has ever attempted and Curiosity's 
mission of exploration will far eclipse anything humanity has attempted 
on the surface of Mars in the past. We look forward to receiving a 
treasure trove of data from the surface of Mars to help answer 
questions about its past and present habitability.
    With the fiscal year 2013 request, NASA will conduct aeronautics 
research to enable the realization of the Nation's Next Generation Air 
Transportation System (NextGen), and the safer, more fuel efficient, 
quieter, and environmentally responsible aircraft that will operate 
within NextGen. Through the aeronautics research we conduct and sponsor 
with universities and industry, NASA helps to develop the technology 
that enables continuous innovation in aviation. As a result, U.S. 
companies are well-positioned to build on discoveries and knowledge 
resulting from NASA research, turning them into commercial products 
that benefit the quality of life for our citizens, provide new high-
quality engineering and manufacturing job opportunities, and enables 
the United States to remain competitive in the global economy.
    The request also continues NASA's dedicated efforts to inspire the 
next generation of explorers. NASA can provide hands-on experience and 
inspiration as few other agencies can. To foster the development of the 
U.S. workforce, NASA's education programs will focus on demonstrable 
results and capitalize on the agency's ability to inspire students and 
educators through unique missions and the big challenges that help 
today's young people envision their future in science, technology, 
engineering, and mathematics (STEM). NASA education is one of many 
Federal Government programs that support STEM education. NASA education 
is working with other agencies through the National Science and 
Technology Council's Committee on STEM Education to fund coordinated 
and effective student and teacher opportunities. NASA will focus its 
resources on demonstrated areas of strength in its unique role in STEM 
education, freeing resources for other agency priorities. NASA brings 
many assets, beyond funding, to support the administration's emphasis 
on STEM education. Our people, platforms like the ISS, and our 
facilities across the Nation all contribute to strengthening STEM 
education.
    NASA is grateful to the American people, and their representatives 
here on the subcommittee for the continued support for NASA despite the 
difficult resource challenges facing our Nation. A more detailed 
description of NASA's balanced program of science, space exploration, 
technology development, and aeronautics is provided below.

                                SCIENCE

    NASA's Science Mission Directorate develops and operates innovative 
spacecraft missions and instruments that help researchers deliver new 
discoveries of the Earth, the Sun, the planetary bodies in our solar 
system, and the universe beyond. The fiscal year 2013 budget request 
for science is $4,911.2 million.
    NASA's Earth Science Program advances knowledge of the integrated 
Earth system--the global atmosphere, oceans, land surfaces, ice sheets, 
ecosystems, and interactions among them. The fiscal year 2013 budget 
request for science includes $1,784.8 million for Earth science. In 
2011, NASA successfully launched Aquarius/SAC-D, a cooperative ocean 
surface salinity mission conducted with the Argentine Space Agency, and 
with our partner the National Oceanic and Atmospheric Administration 
(NOAA) and the SNPP. SNPP is the first step in developing the Nation's 
next-generation climate and weather monitoring missions. During 
calendar year 2012, NASA will select the first small satellite mission 
under the Earth Venture (EV) program as recommended in NRC's decadal 
survey for Earth science. The fiscal year 2013 budget will fund all 
three components of the EV program:
  --this new small mission;
  --the on-going EV-1 airborne science campaigns; and
  --the first EV-I instrument of opportunity.
    Fiscal year 2013 will see the launch of the Landsat Data Continuity 
Mission and the completion of environmental testing for the Global 
Precipitation Measurement mission. The fiscal year 2013 budget will 
also fund continued development of the first two Tier 1 decadal survey 
missions, Soil Moisture Active Passive mission and ICESat-2. Finally, 
the fiscal year 2013 budget will fund continued development of three 
key missions to assure delivery of sustained Earth observations 
(Gravity Recovery and Climate Experiment-Follow on, OCO-2, and the 
SAGE-III instrument that will fly on the ISS) and fund the continued 
operation of 16 missions currently in orbit as well as research using 
the resultant data. The fiscal year 2013 budget request for Earth 
science sustains support for focused research, applications, and 
technology development activities that redeem the investment in our 
ongoing missions, while positioning us to accomplish essential new 
missions in the future. NASA's Earth science program leads to improved 
prediction services by other agencies, providing direct tangible 
benefits to communities, businesses, and citizens.
    NASA's Planetary Science Program explores the content origin and 
evolution of the solar system and the potential for life beyond Earth. 
The fiscal year 2013 budget request for science includes $1,192.3 
million for planetary science. In the second half of 2011, NASA 
launched Juno on its way to Jupiter, Gravity Recovery And Interior 
Laboratory (GRAIL) to the Moon, and the Mars Science Laboratory to the 
Red Planet. GRAIL's ``Ebb'' and ``Flow'' spacecraft will conduct their 
mission to map the Moon's gravity field and interior structure during 
the first half of 2012. The Mars Science Laboratory rover Curiosity 
will land in Gale Crater on Mars on August 6, 2012. The fiscal year 
2013 budget request funds the operation of Curiosity on Mars. The 
fiscal year 2013 budget will also fund the beginning of development of 
the next Discovery mission that will be selected from among three 
candidates completing their studies in 2012. In fiscal year 2013, NASA 
will be completing development of the LADEE mission to the Moon and the 
MAVEN mission to Mars for launch in late calendar year 2013/early 
fiscal year 2014. Also in fiscal year 2013, NASA will continue the 
development of the OSIRIS-REx mission to return samples from an 
asteroid, and will continue operation of the Dawn (the asteroid Vesta), 
Juno (Jupiter), Cassini (Saturn), New Horizon (Pluto), and MESSENGER 
(Mercury) missions. However, the resources available over the budget 
horizon are insufficient to enable either a future Mars or Outer 
Planets flagship mission as identified by last year's planetary science 
decadal survey.
    NASA remains committed to a vigorous program of Mars exploration 
and continuing America's leadership role in Mars exploration within the 
available budget. As stated above, NASA is discontinuing its effort on 
instruments for the joint (NASA/ESA) 2016 ExoMars Trace Gas Orbiter 
mission and the 2018 mission that NASA had been exploring with ESA. 
Instead, NASA will develop an integrated strategy to ensure that the 
next steps for Mars exploration will support science as well as long-
term human exploration goals. This process will be informed by 
coordination with the science community and international community. 
NASA is developing a plan for a reformulated medium-class robotic 
science Mars mission, within available resources, to take advantage of 
the favorable location of Mars and Earth in 2018 or 2020. NASA's plan 
is to work with potential international partners including ESA and the 
science community to lay out an initial framework for this mission over 
the next several months and produce a mission architecture by this 
summer. The budget request includes $62 million in fiscal year 2013 for 
this mission.
    NASA's Astrophysics Program seeks to discover how the universe 
works, explore how the universe began and evolved and search for Earth-
like planets. The fiscal year 2013 budget request for science includes 
$659.4 million for Astrophysics. NASA will continue to conduct science 
operations flights of the SOFIA aircraft in 2012 and 2013 as we upgrade 
its science instruments, and will continue parallel development of 
efforts leading to achievement of a full operational capability in 
2014. The fiscal year 2013 budget will fund the early stages of 
development of the next Astrophysics small Explorer mission to be 
selected early in calendar year 2013. Also in 2013, NASA will complete 
development of its instrument contributions to Japan's Astro-H mission 
for launch in fiscal year 2014. The fiscal year 2013 budget enables 
NASA to continue development of the GEMS Explorer mission toward a 
launch in 2015. Finally, the fiscal year 2013 budget will fund the 
operation of eleven Astrophysics missions currently in operation, 
including the Hubble, Spitzer, Chandra, and Fermi space telescopes.
    The JWST is an infrared telescope designed to study and answer 
fundamental astrophysical questions ranging from the formation and 
structure of the universe to the origin of planetary systems and the 
origins of life. The fiscal year 2013 budget request for science 
includes $627.6 million for JWST. A scientific successor to the Hubble 
Space Telescope and the Spitzer Space Telescope, JWST will be used by 
international teams of astronomers to conduct imaging and spectroscopic 
observations. The Observatory will be located in an orbit near the 
second Sun-Earth Lagrange point, approximately 1.5 million km from 
Earth. The telescope and instruments will be operated at a temperature 
of 40 degrees above absolute zero (40 Kelvin) shielded from the heat of 
the Sun by a large sunshield, to enable the Observatory to achieve 
unprecedented sensitivity over its entire wavelength range. NASA 
completed a new baseline cost and schedule for JWST at the end of 
calendar year 2011, and is now implementing that new baseline. All 18 
JWST primary mirror segments have been completed. NASA expects to take 
delivery of all four JWST instruments in fiscal year 2012-2013. In 
fiscal year 2013, NASA will begin sunshield fabrication and continue 
development of the Integrated Science Instrument Module and the ground 
segment.
    NASA's Heliophysics Program seeks an understanding of the Sun, and 
the complex interaction of the coupled system comprising the Sun, 
Earth, other planetary systems, the vast space within the solar system, 
and the interface with interstellar space. The fiscal year 2013 budget 
request for Science includes $647 million for Heliophysics. Later this 
year, NASA will launch the Radiation Belt Storm Probes mission, and the 
fiscal year 2013 budget will fund completion of its checkout and its 
early operations. The fiscal year 2013 budget will fund completion and 
launch of the Interface Region Imaging Spectrograph (IRIS) small 
Explorer mission as well as beginning of the development of the next 
small Explorer to be selected in early in calendar year 2013. Fiscal 
year 2013 will be a peak year in the development of the Magnetospheric 
Multiscale mission to be launched in 2015. The fiscal year 2013 budget 
will also fund the continued formulation of the Solar Probe Plus 
mission and development of the Solar Orbiter Collaboration with ESA. 
NASA expects to receive the new NRC Heliophysics decadal survey this 
spring, and will use it to shape the fiscal year 2014 budget request in 
this area.
    Also during fiscal year 2013, NASA will continue development of 
environmental operational satellites for NOAA on a reimbursable basis. 
These include the Joint Polar Satellite System, Geostationary 
Operational Environmental Satellites (GOES-R series), Jason 3, and the 
Deep Space Climate Observatory. Funding for these programs is in the 
Department of Commerce budget request for NOAA.
    In addition to the space missions emphasized above, the fiscal year 
2013 budget funds NASA's Science Mission Directorate to continue to 
sponsor competitively selected research by universities, industry, and 
government laboratories across the Nation. Using data from these 
missions, the Nation's scientific community pursues answers to profound 
scientific questions of interest to all humanity as well as questions 
that enhance our national capability to predict environmental change 
including severe storms, droughts, and space weather events, and 
thereby enhance our economic and environmental security.

                          AERONAUTICS RESEARCH

    NASA aeronautics research will enable the realization of the 
Nation's Next Generation Air Transportation System (NextGen), and the 
safer, more fuel efficient, quieter, and environmentally responsible 
aircraft that will operate within NextGen. Through the research we 
conduct and research we sponsor with universities and industry, we help 
to develop the technology that enables continuous innovation in 
aviation. American companies are well-positioned to build on 
discoveries and knowledge resulting from NASA research, turning them 
into commercial products, benefiting the quality of life for our 
citizens, providing new high-quality engineering and manufacturing job 
opportunities, and enabling the United States to remain competitive in 
the global economy. NASA's fiscal year 2013 budget request for 
aeronautics is $551.5 million to continue our tradition of developing 
new concepts for aeronautics applications.
    The fiscal year 2013 request for aeronautics research includes 
$168.7 million for the Fundamental Aeronautics Program, which seeks to 
continually improve technology that can be infused into today's state-
of-the-art aircraft, while enabling game-changing new concepts such as 
Hybrid Wing Body airframes, tilt-rotor aircraft, low-boom supersonic 
aircraft, and sustained hypersonic flight. In fiscal year 2010 and 
2011, we conducted emissions measurements for alternative nonpetroleum 
fuels derived from coal and biomass that showed dramatic reductions in 
particulate emissions in the vicinity of airports. In fiscal year 2013, 
the program will perform emissions measurements behind aircraft 
operating at relevant altitudes and cruise speeds to provide the first-
ever data on the impact of alternative fuels on contrail formation, an 
important factor in aviation climate impact. In fiscal year 2013, the 
program will also increase its research on composite materials to 
enable airframe weight reductions beyond those achieved with current 
materials and structural design concepts.
    NASA is combining hypersonic and supersonic research into a single 
project to focus on fundamental research for high-speed flight. 
Research into hypersonic flight is also relevant to the Department of 
Defense (DOD) and NASA will retain critical core competencies and 
national asset testing capabilities to continue productive 
collaborations with DOD. Responsibility for fundamental research on 
entry, decent, and landing technologies will be transferred to space 
technology to increase synergy with the agency's exploration and 
science missions. NASA will continue to work with DOD to maximize the 
efficiencies of current assets and investments and increase partnership 
to accomplish common goals. These realignments will enable NASA to 
focus on higher-priority research to improve the safety and minimize 
the environmental impacts of current and future aircraft and air 
traffic management systems. The fiscal year 2013 request for 
aeronautics research includes $104 million for the Integrated Systems 
Research Program. This program evaluates and selects the most promising 
environmentally friendly engine and airframe concepts emerging from the 
fundamental research programs for further development, integration, and 
evaluation in relevant environments. Last year, the program completed a 
major study by three aircraft manufactures to identify the critical 
technologies needed to simultaneously reduce emissions, fuel burn, and 
noise in aircraft entering service in 2025. In fiscal year 2013, the 
program will start a 3-year focused research effort on these 
technologies to advance their technology readiness. The program is also 
addressing the emerging desire to integrate Unmanned Aircraft Systems 
(UAS) into the National Airspace System. Current Federal Aviation 
Administration (FAA) regulations are built upon the condition of a 
pilot being on-board the aircraft. The Program will therefore generate 
data for FAA use in rule-making through development, testing, and 
evaluation of UAS technologies in operationally relevant scenarios.
    Reductions in environmental impact will be achieved not only 
through new aircraft, engines, and fuels, but also through improved air 
traffic management procedures, which is the focus of the Airspace 
Systems Program with $93.3 million requested for fiscal year 2013. Last 
year the program advised the FAA on new air traffic management concepts 
for more efficient routing of flights during their cruise phase. We 
also completed evaluations of concepts for new fuel-efficient arrival 
procedures and will deliver requirements for those concepts to the FAA 
this year. In fiscal year 2013, the program will begin demonstrations 
to verify that several new procedures for air traffic management during 
arrival and taxiing to the gate that are enabled by NextGen Automatic 
Dependent Surveillance-Broadcast (ADS-B) technology can work together 
seamlessly. This effort will demonstrate near-term and mid-term ADS-B 
application benefits and provide airlines with data to support their 
strategic decisions related to the significant investments they need to 
make to equip their aircraft with ADS-B capability.
    The Aviation Safety Program, with $81.1 million requested for 
fiscal year 2013, conducts research to ensure that current and new 
aircraft and operational procedures maintain the high level of safety 
which the American public has come to expect. In fiscal year 2011, the 
program advanced data mining methods that permit the discovery of 
flight operations and aircraft maintenance issues through automated 
analysis of the vast amounts of data generated during flight operations 
and by sensors onboard aircraft. These methods have enabled the 
development of new software for aircraft central maintenance computers 
on both business jet and large commercial aircraft that can identify 
the early stages of hardware faults 30 to 50 flights earlier than 
previously possible. This allows airline maintenance personnel to 
address equipment issues before they cause a disruptive maintenance 
delay at the airport gate. The program also focuses on mitigating 
environmental hazards to aviation and in fiscal year 2013 will conduct 
a flight campaign to characterize ice water content at high altitudes 
in tropical regions as a first step to understanding the causes of 
severe loss of power due to engine icing that has occurred on a number 
of occasions.
    U.S. leadership in aerospace depends on ready access to 
technologically advanced, efficient, and affordable aeronautics test 
capabilities. NASA's Aeronautics Test Program, with $78.1 million 
requested for fiscal year 2013, makes strategic investments to ensure 
the availability of these ground test facilities and flight test assets 
to researchers in Government, industry, and academia. In addition to 
this strategic management activity, the program will continue 
developing new test instrumentation and test technologies. Last year 
the program completed nearly $50 million worth of upgrades to major 
facilities funded through the American Recovery and Reinvestment Act. 
These upgrades provide improved research capabilities at Glenn and Ames 
Research Centers for aircraft and engine icing research, and tilt-rotor 
designs for a new generation of rotorcraft. New capabilities were also 
added to the Langley 14x22 Subsonic Wind Tunnel that will enable 
researchers to measure noise signatures from novel aircraft designs at 
a fraction of the cost of noise measurement acquired by flying real 
aircraft over airport microphone arrays. NASA's Aeronautics Test 
program enables and sustains U.S. leadership in aerospace yielding 
high-quality jobs and ultimately a productive aerospace sector.
    The Aeronautics Strategy and Management Program provides for 
research and programmatic support that benefits each of the other five 
programs, and has a requested budget of $26.4 million for fiscal year 
2013. The program manages Directorate functions including innovative 
concepts for aviation, education and outreach, and cross program 
operations.
    NASA is making meaningful contributions to the aerospace community, 
but we cannot do all these good things alone. Therefore, our 
partnerships with industry, academia, and other Federal agencies are 
critical to our ability to expand the boundaries of aeronautical 
knowledge for the benefit of the Nation. These partnerships foster a 
collaborative research environment in which ideas and knowledge are 
exchanged across all communities and help ensure the future 
competitiveness of the Nation's aviation industry. They also directly 
connect students with NASA researchers and our industrial partners and 
help to inspire students to choose a career in the aerospace industry.

                    HUMAN EXPLORATION AND OPERATIONS

    In 2011, NASA combined the Exploration Systems and Space Operations 
Mission Directorates to create the Human Exploration and Operations 
(HEO) Mission Directorate. HEO encompasses everything from the ISS and 
the commercial cargo and crew vehicles that will support it, to NASA's 
new exploration vehicles, which will take astronauts beyond LEO. HEO 
also includes research and technology development efforts that will 
enable deep space exploration, as well as critical infrastructure and 
operational capabilities that ensure NASA's ability to conduct testing, 
launch science missions, and communicate with its spacecraft across the 
solar system. As NASA reformulates its Mars exploration plans, we will 
ensure that the next steps for Mars exploration will take into account 
long-term human exploration as well as science goals.
    The fiscal year 2013 budget request includes $2,769.4 million for 
human exploration capabilities, which the agency proposes to rename 
Exploration Systems Development. This program includes development of 
the Orion MPCV, SLS heavy-lift launch vehicle, and the supporting 
ground infrastructure required for NASA's future crewed missions of 
exploration beyond LEO and into deep space. The amounts requested align 
with the plan developed and supported by an independent cost analysis 
performed last summer.
    NASA's Orion MPCV will carry astronauts to, and support operations 
at, a variety of destinations in our solar system for periods of up to 
21 days. NASA has recently completed a number of tests on Orion MPCV, 
including a test of the main parachute, and a series of water drop 
tests on the 18,000-pound Orion MPCV Boiler Plate Test Article. The 
Orion ground test article will undergo and complete acoustic, modal, 
and vibration environment compatibility testing at Lockheed Martin 
Denver during fiscal year 2012. The results of these tests will help 
improve the design for the actual flight vehicle. In May, the Orion 
Crew Module primary structure will be moved to Kennedy Space Center in 
Florida for the start of Assembly, Integration, and Production. NASA 
plans to conduct an uncrewed high-energy-atmospheric entry test mission 
of the Orion MPCV in fiscal year 2014. Designated Exploration Flight 
Test-1 (EFT-1), this flight test will provide critical data to 
influence key design decisions. EFT-1 will also validate innovative new 
approaches to space systems development and operations to reduce the 
cost of exploration missions. For EFT-1, an early production variant of 
the Orion MPCV spacecraft will be integrated on a Lockheed Martin-
procured, heavy-class launch vehicle. The flight test will provide an 
opportunity to significantly inform critical design elements by 
operating the integrated spacecraft hardware and software in flight 
environments that cannot be duplicated by ground testing.
    On September 14, 2011, NASA announced the design of the SLS, which 
will initially be capable of lifting 70-100 metric tons before evolving 
to a lift capacity of 130 metric tons for more demanding missions. NASA 
has worked diligently to accomplish the contracting and design work 
necessary to support a 2017 initial flight mission for the SLS. In 
fiscal year 2013, SLS will continue detailed preliminary design and 
development and undergo a preliminary design review to evaluate the 
completeness/consistency of the program's preliminary design in meeting 
all requirements with appropriate margins, with acceptable risk, and 
within cost and schedule constraints. This comprehensive review will 
determine the program's readiness to proceed with the detailed critical 
design phase of the project.
    The SLS will use a liquid hydrogen and liquid oxygen propulsion 
system, building upon the investment made by the Nation over the last 
40 years. The vehicle's core stage will utilize existing Space Shuttle 
Main Engines (SSME RS-25D) for the initial capability. NASA's use of 
the SSME inventory will reduce initial design costs and take advantage 
of an existing human-rated system. NASA plans to modify and use the 
existing SSME contract with Pratt & Whitney Rocketdyne to acquire RS-
25D engine servicing and testing for the initial launch system.
    The upper stage of the SLS needed for the full-up SLS capability 
will also use a liquid hydrogen and liquid oxygen propulsion system 
that includes the J-2X, a new upper stage engine previously planned for 
use in the Ares-I vehicle. NASA is negotiating a modification to the 
Ares I Upper Stage contract with Boeing to develop the SLS core stage 
and upper stage, including avionics. SLS will also utilize the existing 
J-2X contract with Pratt & Whitney Rocketdyne to continue developing 
the upper stage engine.
    NASA has been running J-2X components through a series of tests. In 
November and December 2011, the agency conducted three J-2X engine 
tests, firing the motor for a total of 680 seconds. These were the last 
of 10 engine test firings completed in 2011. In January and February 
2012, NASA also conducted a series of J-2X Power Pack Assembly tests. 
These tests are part of a series of more than 100 power-pack and 
integrated engine tests that NASA has planned to complete the engine 
design and certify the J-2X for use in the SLS Upper Stage.
    NASA plans to use five-segment solid rocket boosters for the 
initial capability test flights of the SLS. We will conduct a 
competition to develop the follow-on boosters based on performance 
requirements. In support of this effort, on February 9, 2012, the 
agency released a NASA Research Announcement (NRA) for Advanced Booster 
Engineering Demonstration and Risk Reduction. Proposals are due in 
April and contract awards are expected in October 2012.
    On February 1, 2012, NASA also released a draft for an NRA for 
advanced development of key technologies in propulsion, avionics, 
structures and materials, and other areas. The final release is planned 
for March, with proposals due in May and contract award in October 
2012.
    Exploration Ground Systems (EGS) will develop the necessary ground 
systems infrastructure at the Kennedy Space Center and operational 
plans and procedures to prepare, assemble, test, launch, and recover 
the Exploration architecture elements for long-term beyond-Earth orbit 
exploration. EGS will focus on the lifecycle of a launch complex as an 
integrated system (from development, activation, operations, 
maintenance of capabilities to manufacture, assemble, test, checkout, 
launch, and recover flight hardware) to enable more efficient and cost-
effective ground processing, launch and recovery operations.
    The fiscal year 2013 budget request includes $829.7 million for the 
Commercial Spaceflight theme. This effort will support commercial 
providers to develop and operate safe, reliable, and affordable 
commercial systems to transport crew and cargo to and from the ISS and 
LEO.
    As part of the Commercial Orbital Transportation Services (COTS) 
program--NASA's commercial cargo effort--NASA has partnerships with 
Space Exploration Technologies, Inc. (SpaceX) and Orbital Sciences 
Corporation (Orbital) using funded Space Act Agreements. These 
agreements include a schedule of fixed-payment performance milestones 
culminating in a demonstration mission to the ISS that includes vehicle 
launch, spacecraft rendezvous, ISS berthing, and re-entry for disposal 
or return to Earth. Both COTS partners continue to make progress in 
developing and demonstrating their systems. Based on the success of 
their first COTS demo flight in December 2010, SpaceX plans to fully 
develop and assemble their next vehicle with the capabilities and 
equipment necessary to complete rendezvous and berthing demonstration 
to the ISS, thus potentially combining milestones that had been planned 
for separate flights. If successful, this will accelerate the 
completion of the COTS Space Act Agreement and enable delivery of cargo 
under the Commercial Resupply Services contract. This mission is 
tentatively planned for April 2012. Orbital Sciences is currently 
mating the main engines for its Antares vehicle to the core stage in 
preparation for an integrated static fire later this year. The maiden 
flight of the Antares is planned for launch no earlier than the second 
quarter of 2012, and it will include a Cygnus spacecraft mass 
simulator. Orbital Sciences' COTS demonstration flight to the ISS is 
slated for no earlier than the third quarter of 2012. The pad complex 
at Wallops Flight Facility in Virginia is being readied and space 
flight hardware, including the first Pressurized Cargo Module, two 
Antares core sections, and a Castor-30 upper stage, has already been 
delivered to Wallops Flight Facility.
    The Commercial Crew Program (CCP) aims to facilitate the 
development of a U.S. commercial crew space transportation capability 
with the goal of achieving safe, reliable, and cost effective access to 
and from LEO and ISS. Since 2009, NASA has conducted two CCDev 
competitions, soliciting proposals from U.S. industry to further 
advance commercial crew space transportation system concepts and mature 
the design and development of elements of the system. During the second 
CCDev competition, known as CCDev2, NASA awarded four funded Space Act 
Agreements that are currently being executed with Blue Origin, The 
Boeing Company, Sierra Nevada Corporation, and SpaceX, all of which are 
making good progress in achieving their milestones. NASA has also 
signed Space Act Agreements without funding with three additional 
companies:
  --Alliant Techsystems, Inc.;
  --United Launch Alliance; and
  --Excalibur Almaz, Inc.
    Under the CCP, NASA plans to partner with U.S. industry, providing 
technical and financial assistance to facilitate industry's development 
of an integrated crew transportation system. In the longer term, once 
those entities are certified, NASA plans to buy transportation services 
from commercial entities for U.S. and U.S.-designated astronauts to the 
ISS.
    The Congress appropriated $406 million for CCP in fiscal year 2012 
which reflected a substantial reduction from NASA's request for this 
program. The fiscal year 2012 appropriation enables the agency to move 
forward with its plans to support the development of commercial 
services that may eventually support crew transportation and rescue 
capabilities in support of ISS. However, the constrained budget 
environment necessitated a reassessment of NASA's overall strategy for 
this Program. On December 15, 2011, NASA announced a modified 
competitive acquisition strategy designed to make the best use of 
available resources and to pursue the most effective path to the 
achievement of a commercial crew capability. Instead of using firm-
fixed price contracts for the next phase of the program, the agency 
plans to continue using multiple, competitively awarded and funded 
Space Act Agreements for another round of CCP. NASA will use 
procurement contracts to certify these capabilities before they are 
used to support ISS. Using competitive Space Act Agreements instead of 
contracts at this juncture will allow NASA to maintain multiple 
partners during this phase of the program, and provide NASA with the 
flexibility to more easily adjust to various funding levels. This new 
acquisition strategy will allow NASA to preserve greater competition 
and maintain momentum to provide a U.S.-based commercial crew launch 
capability at the earliest possible time.
    NASA is pleased with the steady progress of U.S. commercial 
providers in developing domestic cargo and crew transportation 
services. NASA currently has contracts for cargo services and intends 
to purchase crew services from U.S. providers once they are certified 
to our crew requirements. Obtaining needed cargo and crew 
transportation services from U.S. providers is NASA's preferred method 
for sustaining and fully utilizing the ISS. Nevertheless, given current 
funding levels for the development of U.S. crew transportation systems, 
we anticipate the need to purchase Soyuz crew transportation and rescue 
capabilities into 2017. As NASA has previously testified, modification 
of INKSNA provisions will likely be required for the continued 
operation of ISS and other space programs after 2016. The 
administration plans to propose appropriate provisions and looks 
forward to working with the Congress on their enactment. NASA is 
evaluating how this issue impacts the development of U.S. crew 
transportation systems and NASA's acquisition of services for the ISS 
and goods and services for other NASA human spaceflight activities, 
given the possibility that some U.S. domestic providers will need to 
use Russian goods and services. In addition to the need driven by the 
ISS transportation requirements, NASA will require Russia-unique 
critical capabilities for the life of the ISS, such as sustaining 
engineering for the Russian-built, United States-owned Functional Cargo 
Block, that are not available elsewhere.
    The fiscal year 2013 budget request includes $333.7 million for 
Exploration Research and Development (ERD). The ERD theme will expand 
fundamental knowledge that is key to human space exploration, and will 
develop advanced exploration systems and capabilities that will enable 
humans to explore space in a more sustainable and affordable way. ERD 
is comprised of the Human Research Program (HRP) and the Advanced 
Exploration Systems (AES) Program, which will provide knowledge and 
advanced human spaceflight capabilities. NASA's Office of the Chief 
Technologist (see below) coordinates closely with ERD to ensure that 
NASA's long range, crosscutting Space Technology research is 
complementary to ERD's human exploration focused work.
    HRP and its associated projects will continue to develop 
technologies, countermeasures, diagnostics, and design tools to keep 
crews safe and productive on long-duration space missions. ISS crews 
are conducting relevant human medical research to develop knowledge in 
the areas of clinical medicine, human physiology, cardiovascular 
research, bone and muscle health, neurovestibular medicine, diagnostic 
instruments and sensors, advanced ultrasound, exercise and 
pharmacological countermeasures, food and nutrition, immunology and 
infection, exercise systems, and human behavior and performance. While 
this research is aimed at enabling astronauts to push the boundaries of 
exploration beyond LEO, NASA anticipates that investigations conducted 
aboard ISS may have broad application to terrestrial medicine, as well. 
For example, the growing senior population may benefit from experiments 
in the areas of bone and muscle health, immunology, and from the 
development of advanced diagnostic systems.
    The AES program is pioneering new approaches for rapidly developing 
prototype systems, demonstrating key capabilities, and validating 
operational concepts for future human missions beyond-Earth orbit. AES 
activities are uniquely related to crew safety and mission operations 
in deep space, and are strongly coupled to future vehicle and 
exploration capability development. Early integration and testing of 
prototype systems will reduce risk and improve affordability of 
exploration mission elements. The prototype systems developed in the 
AES Program will be demonstrated in ground-based test beds, field 
tests, underwater tests, and flight experiments on the ground and then 
on the ISS. Many AES projects will evolve into larger integrated 
systems and mission elements that will be tested on ISS before we 
venture beyond-Earth orbit, thus leveraging the value of ISS as a vital 
exploration test-bed.
    The fiscal year 2013 budget request includes $70.6 million for the 
Space Shuttle Transition and Retirement. In 2011, the shuttle flew out 
its remaining missions safely. On February 24, Discovery launched on 
mission STS-133, carrying supplies to ISS, as well as the permanent a 
Multi-purpose Module--a Multi-Purpose Logistics Module transformed to 
remain on orbit, expanding the Station's storage volume. On May 16, 
Endeavour, STS-134, carried the Alpha Magnetic Spectrometer and 
attached it to the Station's truss structure. The final shuttle 
mission, STS-135, launched on July 8, delivered critical supplies to 
the ISS. With the landing of Atlantis on July 21, 2011, the 30-year 
shuttle program was brought to a close. The space shuttle program is 
now focused on the transition of key assets and infrastructure to 
future programs, and the retirement, and disposition of program assets.
    In fiscal year 2012, NASA is funding United Space Alliance's (USA) 
Space Program Operations Contract Pension Liability. During the shuttle 
program, USA consistently incorporated and billed the maximum allowable 
costs into their indirect rates, but the deterioration of the equities 
and credit markets caused their plan to be underfunded by a currently 
estimated $522 million. The estimate will fluctuate until payout in the 
summer of 2012. The variance is protected in the transition and 
retirement budget line item. The Space Program Operations Contract, 
which accounts for almost all of USA's business base, is a cost-type 
contract covered by the Cost Accounting Standards. These standards 
stipulate that any costs of terminating plans are a contractual 
obligation of the Government (if deemed allowable, allocable, and 
reasonable). NASA and USA entered into an agreement under which USA 
froze their pension plans as of December 31, 2010, and deferred any 
decision about terminating their plan until after NASA received its 
fiscal year 2012 appropriation, allowing NASA to address this issue 
with fiscal year 2012 funds. If funding remains after the pension plan 
termination, it will be used to defray space shuttle closeout costs 
that would otherwise require fiscal year 2013 funding. If there is a 
shortfall, it will reduce available space shuttle funds for closeout 
and some activity could move later than planned. NASA will keep the 
Congress informed as this issue evolves.
    The fiscal year 2013 budget request includes $3,007.6 million for 
the ISS program. This funding will support ISS Operations and 
Maintenance, ISS Research, and ISS Crew and Cargo Transportation. The 
ISS has transitioned from the construction era to that of operations 
and research, with a six-person permanent crew, three major science 
labs, an operational lifetime through at least 2020, and a growing 
complement of cargo vehicles, including the European Automated Transfer 
Vehicle and the Japanese H-II Transfer Vehicle (HTV). The fiscal year 
2013 budget request reflects the importance of this unparalleled 
research asset to America's human spaceflight program.
    In the NASA Authorization Act of 2005 (Public Law 109-155), the 
Congress designated the U.S. segment of the ISS as a National 
Laboratory, and directed the agency to seek to increase the utilization 
of the ISS by other Federal entities and the private sector. NASA has 
made great strides in its effort to engage other organizations in the 
ISS program, and the agency now has Memoranda of Understanding with 
five Federal agencies and Space Act Agreements with nine companies and 
universities. In the NASA Authorization Act of 2010 (Public Law 111-
267), the Congress directed that the agency enter into a cooperative 
agreement with a not-for-profit organization to manage the activities 
of the ISS National Laboratory. To this end, on August 31, 2011, NASA 
finalized a cooperative agreement with the Center for the Advancement 
of Science in Space (CASIS) to manage the portion of the ISS that 
operates as a U.S. National Laboratory. CASIS will be located in the 
Space Life Sciences Laboratory at Kennedy Space Center in Florida. The 
independent, nonprofit research management organization will help 
ensure the Station's unique capabilities are available to the broadest 
possible cross-section of U.S. scientific, technological and industrial 
communities. CASIS will develop and manage a varied Research and 
Development portfolio based on U.S. national needs for basic and 
applied research; seek to establish a marketplace to facilitate 
matching research pathways with qualified funding sources; and 
stimulate interest in using the national lab for research and 
technology demonstrations and as a platform for STEM education. The 
goal is to support, promote and accelerate innovations and new 
discoveries in science, engineering and technology that will improve 
life on Earth.
    The fiscal year 2013 budget request includes $935 million for Space 
and Flight Support (SFS). The budget request provides for critical 
infrastructure indispensable to the Nation's access to and use of 
space, including Space Communications and Navigation (SCaN), Launch 
Services Program (LSP), Rocket Propulsion Test (RPT), and Human Space 
Flight Operations. The SFS budget also includes investment in the 21st 
Century Space Launch Complex, whose primary objective is to modernize 
and transform the Florida launch and range complex at the Kennedy Space 
Center to benefit current and future NASA programs, along with other 
emerging users. Fiscal year 2013 is an important period for NASA's SCaN 
program. The program is responsible for NASA's Tracking and Data Rely 
Satellites (TDRS) that provide a critical backbone for space 
communications. Fiscal year 2013 will include the scheduled launch 
TDRS-K, an additional satellite in the system; completion of TDRS-L 
integration; and the development of TDRS-M, which will be ready for 
launch in 2015. These spacecraft will refurbish this important network 
as aging TDRS are retired after 20 years of service to the Nation. Also 
under construction is a 34-meter antenna at the Deep Space Network's 
Canberra Deep Space Communication Complex, with plans to build a 
second, to replace the aging 70-meter antenna. These antennae in the 
Southern Hemisphere will be particularly important as the Earth's 
rotation brings this site into the best range for tracking NASA's deep 
space missions in the coming decade. In preparation for supporting 
NASA's space science program, SCaN is developing space communications 
technology, including the Lunar Laser Communications Demonstration and 
the Laser Communication Relay Demonstration, which will lead to the 
capability of handling the huge increase in scientific data expected 
from NASA's planned spacecraft. Additionally, this capability could 
enable greater bandwidth and capabilities to support expanded 
education, participatory engagement, and interactive exploration 
opportunities. SCaN also anticipates the launch of its SCaN Test-bed in 
June on the Japanese Space Agency's HTV cargo vehicle. The test-bed, 
composed of three Software-Defined Radios, will provide the bridge to 
advance technological innovation by actual testing in the real space 
environment. As a pathfinder it will be made available to industry, 
academia, and other Government agencies.
    LSP has several planned NASA launches in fiscal year 2013, 
including the, Landsat Data Continuity Mission, TDRS-K, and IRIS, and 
will continue to provide support for the development and certification 
of emerging launch services. In fiscal year 2013, the RPT program will 
continue to conduct test facility management, maintenance, sustaining 
engineering, operations, and facility modernization projects required 
to keep the test-related facilities in the appropriate state of 
operational readiness. The RPT program will continue to assist in 
rocket propulsion testing requirements definition for LEO and in-space 
propulsion systems and related technologies

                            SPACE TECHNOLOGY

    The Office of the Chief Technologist (OCT) coordinates the agency's 
overall technology portfolio. OCT ensures that NASA's investments are 
cost-effective and that they are aligned with the agency's near- and 
far-term goals. Over the last year, OCT has engaged thousands of 
technologists and innovators to develop and test cutting-edge 
technologies distributed across the country. While NRC conducted its 
review of NASA's technology roadmaps, OCT worked with mission 
architecture teams to identify key technology areas requiring immediate 
investment. Using these internal, cross-agency working groups, NASA 
selected nine technologies to receive priority funding based on their 
criticality in extending human presence beyond LEO and their ability to 
dramatically further scientific exploration of the solar system. These 
``Big 9'' projects are:
  --Laser communications relay demonstration;
  --Cryogenic propellant storage and transfer;
  --Low-density supersonic decelerators;
  --Composite cryogenic propellant tanks;
  --Robotic satellite servicing;
  --Hypersonic inflatable aerodynamic decelerators;
  --Deep space atomic clock;
  --Large-scale solar sail; and
  --Human-robotic systems.
    On February 1, 2012, NRC released its final review of NASA's Draft 
Space Technology Roadmaps. NRC identified 16 top-priority technologies 
necessary for future missions, and which could also benefit American 
aerospace industries and the Nation. The 16 were chosen by the NRC from 
its own ranking of 83 high-priority technologies out of approximately 
300 identified in the draft roadmaps. In the coming months, OCT will 
lead an agency-wide analysis and coordination effort to inform future 
technology investments on the basis of the NRC report.
    The fiscal year 2013 request for space technology is $699 million 
and funds on-going high-priority space technology projects that will 
increase the Nation's capability to operate in space and enable long-
term human exploration and develop efficiencies for deep space science 
missions. In fiscal year 2013, NASA will begin to see major milestones 
achieved within Space Technology's ``Big 9'' efforts. Designed to 
deliver data rates that will enable new class of deep-space exploration 
missions, the Laser Communications Relay Demonstration project will 
begin ground validation activities of advanced laser communication 
systems. Enabling precise landing of higher-mass payloads to the 
surface of planets, the Low Density Supersonic Decelerators effort will 
complete three critical full-scale tests to demonstrate parachute and 
inflatable decelerator performance required prior to supersonic-speed 
flight demonstration. The Composite Cryogenic (low-temperature) 
Propellant Tank project will design and build a 5-meter-diameter 
composite cryogenic propellant tank that will yield lower-mass and 
lower-cost rocket propellant tanks. The Cryogenic Propellant Storage 
and Transfer demonstration mission will conduct ground tests of the 
critical technologies required to enable long-term storage and handling 
of cryogenic fluids in space in preparation for a flight demonstration. 
While these projects will make visible individual steps in fiscal year 
2013, they are part of a broader portfolio of activities that space 
technology will pursue in order to generate new technologies for use by 
NASA, other government agencies, and U.S. industry.
    Within space technology, NASA funds Crosscutting Space Technology 
Development at $293.8 million to enable NASA to develop 
transformational, broadly applicable technologies and capabilities that 
are necessary for NASA's future science and exploration missions, and 
also collaborates on the aerospace needs of other government agencies 
and the U.S. space enterprise. NASA's CSTD activities are funded 
through a mix of competitive and strategically guided projects to 
attract a broad array of participants. Investments support research 
fellowships, NASA Innovative Advanced Concepts (NIAC), Centennial 
Challenges, suborbital flight opportunities, and advancements in small 
satellite technologies and systems.
    NASA also funds Exploration Technology Development at $202 million 
to invest in the long-range technologies required for humans to explore 
beyond LEO. ETD technologies are higher-risk investments that 
complement architecture and systems development efforts within 
exploration by maturing breakthrough technology prior to integration 
with operational capabilities. As projects are matured, new projects 
are selected competitively to provide the opportunity to develop the 
best ideas, innovations, approaches, and processes for the future human 
space exploration efforts.
    Funded based on a percentage of the agency's total extramural R&D, 
the Small Business Innovative Research (SBIR) and Small Business 
Technology Transfer (STTR) programs continue to support research and 
development performed by small businesses through competitively awarded 
contracts. Estimated at approximately $173.7 million in fiscal year 
2013, these programs produce innovations for both Government and 
commercial applications. SBIR and STTR provide the high-technology 
small business sector with the opportunity to develop technology for 
NASA, and commercialize that technology to provide goods and services 
that address other national needs based on the products of NASA 
innovation.
    Partnership Development and Strategic Integration, funded at $29.5 
million, comprises key agency responsibilities managed by OCT:
  --technology partnerships;
  --technology transfer and commercialization; and
  --the coordination of NASA's technology investments across the agency 
        through technology portfolio tracking and technology road-
        mapping.
    By providing coordination between Mission Directorates and Centers, 
and identifying collaboration opportunities with other government 
agencies and performing technology transfer, NASA can deliver forward-
reaching technology solutions for future science and exploration 
missions, and help address significant national needs.
    Within this portfolio, OCT engages in national technology 
development initiatives such as the National Robotics Initiative, the 
National Nanotechnology Initiative and the Advanced Manufacturing 
Partnership, and seeks partnerships with external entities for 
collaborative technology development. OCT engages the larger aerospace 
community including other Government agencies, and where there are 
mutual interests, develops partnerships to efficiently develop 
breakthrough capabilities.

                               EDUCATION

    The fiscal year 2013 request includes $100 million for NASA's 
Office of Education to develop STEM education activities that only NASA 
can provide. The funding request would allow undergraduate and graduate 
students to work alongside NASA scientists and engineers through 
internships and fellowships at NASA centers. It includes educator 
professional development, helping our country's educators become 
proficient in STEM topics, and providing them opportunities to practice 
hands-on investigations. NASA will also continue to support the 
institutions where learning takes place. Through the Space Grant and 
Minority University Research and Education projects, NASA will work 
with hundreds of universities and community colleges, strengthening 
their capacity to train the next generation of scientists and 
engineers, encouraging student design challenges, and connecting 
faculty with NASA research. And, because we know inspiration doesn't 
just happen in a classroom, we will engage learners in NASA content at 
our visitor centers and in partnership with museums, science centers, 
planetariums and other informal education venues.
    NASA is one of many Federal Government programs that support STEM 
education. NASA is working with other agencies through the National 
Science and Technology Council's Committee on STEM education to effect 
optimal revisions to fund coordinated and effective student and teacher 
opportunities. NASA will focus its resources on demonstrated areas of 
strength in its unique role in STEM education. NASA brings many assets 
to support the administration's emphasis on STEM education beyond 
funding. Our people, platforms like the ISS and our facilities across 
the Nation all contribute to strengthening STEM education.
    Recognizing that the nature of our work is inspirational to 
learners and educators, NASA will leverage the talents of our workforce 
to support the critical STEM education needs of our Nation. In 
collaboration with other Federal agencies, NASA will leverage unique 
assets ISS, to provide meaningful experiences. In March, educator 
Astronaut Joe Acaba, a former middle and high school teacher, will 
begin a 6-month mission onboard the ISS. During his time in space, he 
will work closely with our education team on the ground to share his 
experience with classrooms across America.

                          CROSS-AGENCY SUPPORT

    The fiscal year 2013 budget request includes $2,847.5 million for 
cross-agency support, which provides critical mission support 
activities that are necessary to ensure the efficient and effective 
operation and administration of the agency. These important functions 
align and sustain institutional and program capabilities to support 
NASA missions by leveraging resources to meet mission needs, 
establishing agency-wide capabilities, and providing institutional 
checks and balances. Within this budget request, NASA has taken steps 
to reduce its administrative expenses, including a hiring slowdown and 
reduced travel.
    NASA's fiscal year 2013 budget request includes $2,093.3 million 
for Center Management and Operations, which funds the critical ongoing 
management, operations, and maintenance of nine NASA Centers, as well 
as associated major component facilities. NASA Centers continue to 
provide high-quality support and the technical engineering and 
scientific talent for the execution of programs and projects. This 
technical expertise represents a true national resource. Center 
Management and Operations provides the basic support required to meet 
internal and external legal and administrative requirements; 
effectively manage human capital, information technology, and facility 
assets; responsibly execute financial management and all NASA 
acquisitions; ensure independent engineering and scientific technical 
oversight of NASA's programs and projects in support of mission success 
and safety considerations; and, provide a safe, secure, and sustainable 
workplace that meets local, State, and Federal requirements.
    NASA's fiscal year 2013 budget request includes $754.2 million for 
agency management and operations, which funds the critical management 
and oversight of agency missions, programs and functions, and 
performance of a broad spectrum of NASA-wide activities. These programs 
include Safety and Mission Success activities, essential to reducing 
the likelihood of loss of life and likelihood of mission success in our 
human and robotic programs. Safety and Mission Success funding supports 
the maintenance of independent safety, health, medical and engineering 
assessments of systems and processes, as well as the performance of the 
broad risk assessments, mitigations, and acceptance related to critical 
agency decisions. Agency Information Technology Services encompasses 
agency-level cross-cutting services and initiatives in Information 
Technology (IT) innovation, business and management applications, and 
infrastructure necessary to enable the NASA mission. The Strategic 
Capabilities Assets Program (SCAP) ensures that vital agency test 
capabilities and assets, such as flight simulators and thermal vacuum 
chambers are sustained in order to serve agency and national needs. The 
agency management and operations account funds salary and benefits for 
civil service employees at NASA headquarters, as well as other 
headquarters personnel costs, such as mandated training. It also 
contains labor funding for agency-wide personnel costs, such as agency 
training, and workforce located at multiple NASA Centers that provide 
the critical skills and capabilities required to execute mission-
support programs agency-wide.

       CONSTRUCTION AND ENVIRONMENTAL COMPLIANCE AND RESTORATION

    The fiscal year 2013 budget request includes $619.2 million for 
construction and environmental compliance and restoration. NASA 
construction and environmental compliance and restoration provides for 
the design and execution of all facilities construction projects, 
including discrete and minor revitalization projects, demolition of 
closed facilities, and environmental compliance and restoration.
    The fiscal year 2013 budget request includes $552.8 million for the 
Construction of Facilities (CoF) program, which funds capital repairs 
and improvements to ensure that facilities critical to achieving NASA's 
space and aeronautics programs are safe, secure, sustainable, and 
operate efficiently. The agency continues to place emphasis on 
achieving a sustainable and energy-efficient infrastructure by 
replacing old, inefficient, deteriorated buildings and infrastructure 
with new, efficient, and high-performance buildings and infrastructure 
that will meet NASA's mission needs while reducing the agency's overall 
footprint and future operating costs. In August 2011, NASA opened the 
agency's first building designed for ``Net-Zero'' energy operations, 
the Propellants North Administration and Maintenance Facility at the 
Kennedy Space Center in Florida. Two active programs that result in 
NASA achieving greater efficiencies and reduced operating costs are 
NASA's demolition program and recapitalization program, in which old 
inefficient facilities are replaced with new, efficient, consolidated 
facilities. Twelve horizontal infrastructure projects that sustain our 
major utility systems are included in this request; completion of these 
projects will reduce our usage of potable and process water, 
electricity, and steam.
    The fiscal year 2013 budget request includes $66.4 million for the 
Environmental Compliance and Restoration (ECR) program, which supports 
the ongoing clean-up of sites where NASA operations have contributed to 
environmental problems. The ECR program prioritizes these efforts to 
ensure that human health and the environment are protected. This 
program also supports strategic investments in sustainable 
environmental methods and practices aimed at reducing NASA's 
environmental footprint and lowering the risk of future cleanups.

                               CONCLUSION

    NASA's fiscal year 2013 budget request of $17.7 billion represents 
a substantial investment in a balanced program of science, exploration, 
technology, and aeronautics research. Despite the constrained budget 
environment facing the Nation, this request supports a robust space 
program that keeps us on a path to achieving a truly audacious set of 
goals. NASA is working to send humans to an asteroid and ultimately to 
Mars, to observe the first galaxies form, and to expand the 
productivity of humanity's only permanently crewed space station. We 
are making air travel safer and more efficient, learning to live and 
work in space, and developing the critical technologies to achieve 
these goals. The coming year will include the first commercial cargo 
flights to the ISS, a nuclear-powered robot the size of a small car 
landing on the surface of Mars, and the launch of the Nation's next 
land-observing satellite. We have spacecraft studying the Sun, circling 
Mercury, cruising to Pluto and investigating almost everything in-
between. In the face of very difficult times, the American people 
continue to support the most active, diverse, and productive space 
program in the world. We at NASA are honored by our fellow citizens' 
continued support and we are committed to accomplishing the goals that 
the Congress and the President have laid out for us. The program 
described and supported by our fiscal year 2013 budget request 
represents our plan to accomplish those goals.

    Senator Mikulski. Senator Cochran.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Madam Chair, thank you very much.
    Mr. Administrator, welcome to our subcommittee. We 
congratulate you on your continued leadership for NASA, and we 
are really proud that Mississippi has had a very conspicuous 
role to play in our space flight efforts, specifically being 
the home of the SLS and the testing that has been consistent 
with the mission of NASA up to this point.

                     ENGINE TESTING AND DEVELOPMENT

    We hope that NASA is considering what it's going to do and 
how it's going to proceed with testing, what funds will be 
needed so that we can respond in the Congress with the support 
from those others who support NASA, and we'd like to see the 
programs that we think are in the national interest continue. 
At the Stennis Space Center, we play a big role in that, in my 
view.
    Is that something that you could agree with? Or if there 
are other plans that NASA has that we're not aware of, could 
you let us know what they are?
    Mr. Bolden. Senator, as you and I have discussed before, 
Stennis plays a key role in the future of NASA, whether it's 
with NASA engine testing and development or whether it's 
commercial engine testing and development. And the other thing 
that you know very well--I refer to Stennis as the Federal 
city. We host a number of other Federal agencies at Stennis, 
and we're very proud to do that, everything from the Coast 
Guard and Special Operations Forces, the Navy. All the buoys 
are re-done onboard the Stennis facility, so we're very proud 
of that, and we see Stennis continuing its role as a Federal 
city.

                      MAIN PROPULSION TEST CENTER

    Senator Cochran. Well, I'm hopeful that we will have enough 
advanced notice and advice so that we can be supportive and 
helpful, if that's the will of this subcommittee and of the 
Senate.
    I wonder if you could say at this point what the costs 
would be if we reactivated the testing for space flight or for 
launches that would occur under NASA's jurisdiction. What 
specific plans do you anticipate having to implement?
    Mr. Bolden. Senator, I think what you're addressing is the 
total test of the main propulsion test center the way that we 
used to do it, which is the cluster of all five engines for the 
SLS. We're evaluating right now whether we really need to do 
that. We think we will, and we will come back to this 
subcommittee and to the Congress to say what we think we need 
to do in terms of shifting funds from something else that we 
were going to do to be able to conduct that test. I'm not 
prepared to give you an estimate right now, but I will take it 
for the record and get back to the subcommittee on it.
    [The information follows:]

                      Main Propulsion Test Center

    The National Aeronautics and Space Administration (NASA) plans to 
conduct an integrated test of the Space Launch System (SLS) Core Stage 
prior to the launch of the first flight, Exploration Mission-1 (EM-1), 
which is scheduled for launch at the end of 2017. The current plan is 
to conduct this integrated test (including a tanking test and two full-
duration 550-second firings) on the SLS core stage that will be used 
for EM-1. After a review by the Rocket Propulsion Test Program, the 
agency has decided to conduct this test on the B-2 test stand at the 
Stennis Space Center. The agency estimates that the total construction 
costs associated with preparing B-2 to support this integrated test are 
approximately $168 million. The agency will provide the Congress with 
the construction of facilities plan as part of the fiscal year 2012 
operating plan update.

    Senator Cochran. That would be helpful for us to know just 
for our information, and also planning, to be sure we have room 
within our budget resolutions to provide the funding that would 
be needed.
    I understand that rocket test facilities would get the same 
kind of systems-level testing of the SLS and that an evaluation 
could be done by NASA at this time of the potential commercial 
uses of such facilities and the resources that may be needed in 
the next fiscal year. Do you have any specific requests in this 
budget year that's coming up of the specific amounts that would 
be needed for any of those activities?
    Mr. Bolden. Senator, as was requested by the Congress, we 
are just about finished with the report on the utilization and 
rehabilitation of the rocket test facilities, and that will 
give us definitive answers to the question you just posed. So 
we're pretty close. I have a draft of that report. It should be 
ready soon, and if we need additional funds, we will be coming 
to the Congress for that.
    Senator Cochran. Well, we thank you for that.
    Madam Chair, I'll yield the floor after making an 
observation that we continue to be complimented that the 
Stennis Space Center is known as the Federal city, and we are 
hopeful that we will continue to be good hosts and supportive 
of the efforts that are made there to help make sure that we 
carry out the programs that were designed there at Stennis and 
continue to be cherished in the memory of those of us who live 
in Mississippi.

                       JAMES WEBB SPACE TELESCOPE

    Senator Mikulski. Administrator Bolden, we'll probably go 
to a second round, but in my first round I want to focus on the 
JWST. I think as you've heard from the members here, we're each 
interested in where NASA, through our appropriations process 
and authorizing, is making a significant investment in some 
really big projects with really big bucks behind it, for which 
there is no margin for error or cost overruns and so on.
    Last year, this subcommittee took a major step with the 
bipartisan concurrence of everyone to make sure we put the JWST 
on track. This is after we had asked for a significant 
management review because we were concerned 2 years ago that 
the JWST was off track, off budget, and we were concerned that 
it was going to be cancelled not because of technology 
dysfunction but because of management dysfunction.
    So last year we put in a significant amount of money, and 
this year the budget request is for $628 million to keep it on 
track for launch by 2018. My question to you is, is the JWST on 
track, and how do we know it to be so?
    Mr. Bolden. Senator, no one was as concerned as I was when 
I found out the condition of JWST, and I can tell you now that 
after the management changes we made at the Goddard Space 
Flight Center, at headquarters, and also in the prime 
contractor of Northrup Grumman, I'm very confident that JWST is 
on track.
    I get a status report on milestones and costs every month, 
and for almost a year-and-a-half now we have met or exceeded 
the time on every--when I say exceeded, it has been quicker 
than forecast. So we have met or bettered every milestone, and 
we are on cost. There were 27 milestones that we laid out. To 
this date, 26 of them have been met. The only one we didn't, we 
delayed because of the results that we wanted to get from one 
of the other milestones there.
    So, two things. The management in place, the diligence and 
discipline with which we are approaching the project, the 
constant oversight that's given from my office by me and my 
associate administrator makes me confident that the JWST is 
going to make a 2018 launch with the funding that we have 
requested in this budget.
    Senator Mikulski. Do you believe that it will make 2018?
    Mr. Bolden. Yes, ma'am, I do.

                         SEQUESTER CONSEQUENCES

    Senator Mikulski. Well, what will happen if there's a 
sequester?
    Mr. Bolden. Senator, I think I've talked to everybody about 
this. While I am a realist, I'm probably the world's greatest 
optimist, and I am confident that this Congress will avoid that 
and that we will have a budget, and that we will be able to 
meet our 2018 deadline.
    Senator Mikulski. Well, you couldn't be an astronaut 
without being an optimist.
    Mr. Bolden. Yes, ma'am. I heard that this morning, as a 
matter of fact, that you don't want people who fly things 
making budgets----
    Senator Mikulski. You have to have one of the most 
optimistic views.
    But I am asking you, what would be the consequences of a 
sequester, and have you looked at it, both for the JWST and 
also the consequences of a sequester on the NASA budget?
    Mr. Bolden. Senator, I think anyone would say--and we have 
not taken a hard look at the results, what would be the result 
of a sequester, but we all know that it would be a significant 
cut to the NASA budget, which is already strained. We would 
have to come back to the Congress and talk about how we meet 
our priorities and whether we decided that we were going to put 
all of our funds on the priorities and forsake everything else. 
That would be the only way that we would be able to see those 
three priorities stick to the dates that we have right now.
    Senator Mikulski. So has the administration directed you as 
the NASA Administrator to have contingency plans in the event 
of that?
    Mr. Bolden. No, ma'am, we have not. The administration's 
position is as I--while they're not as optimistic as I am all 
the time, I think we all are optimistic that between the 
administration and the Congress, we'll find a way to work this 
out and we won't get to sequester. So we are not making 
contingency plans or anything.
    Senator Mikulski. Well, I think I'm optimistic, too. I 
would have never done the things I have in my life if I wasn't 
optimistic. But I think I'm also the kind of person that--I 
believe in a double cord if I needed a parachute, and I like 
having brakes on a car, and I like having airbags.
    So I really would recommend to both the administration and 
to you, again, complying with their directions, to really be 
ready for some real challenges. We hope not.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. We hope not, but I think there is a big 
flashing yellow light on our screen.
    But, having said that, I've got a flashing yellow light on 
my time. Let me turn to Senator Hutchison.
    Senator Hutchison. I'm happy to let Senator Shelby and 
Senator Brown go next.
    Senator Mikulski. Senator Shelby.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you. Thank you, Senator Hutchison.
    Mr. Administrator, I believe that the core mission of NASA 
is to build cutting-edge systems that will allow us to expand 
our knowledge of the universe. This administration, I believe, 
seems to think that NASA's job is to use taxpayer money as 
venture capital to support speculative commercial companies, 
the future Solyndras of the space industry.

    THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION'S CORE MISSION

    Despite identifying SLS as a priority program, you 
requested $150 million less in the fiscal 2013 budget year than 
the Congress provided in 2012 for the SLS vehicle development. 
At the same time, you doubled funding for commercial programs. 
When is this administration going to get the message that the 
Congress, I believe, is not willing to subsidize so-called 
commercial vendors at the expense of NASA's core mission of 
engineering and exploration?
    Mr. Bolden. Senator, I could not agree more with your 
position that our job is technology development and exploration 
and cutting-edge science and technology, and that's what we 
asked for in the budget. We put forth a budget that requests 
$675 million for space technology, which covers the gamut of 
what we do. It contributes to the heavy-lift launch vehicle. It 
contributes to a next-generation MPCV. It contributes to our 
science program. It will enable us to better go to Mars, both 
robotically and in human space flight.
    So we did not have a space technology line until the fiscal 
year 2012 budget. The President asked for $1.5 billion for 
space technology in the first budget that I brought to this 
Congress my first year as the NASA Administrator. So we agree 
with you that we do need to be about cutting-edge technology, 
and we're trying to do that.

                     COMMERCIAL PROVIDERS PROGRESS

    Senator Shelby. In your statement, you said that you're 
pleased, and I'll quote you, ``pleased with the steady progress 
of U.S. commercial providers in developing domestic cargo and 
crew transportation services.'' I would note that one of your 
commercial cargo providers was originally scheduled to complete 
three demonstration flights by September 2009. They have only 
completed one, and many expect the date of that second launch 
to slip again soon, as it just did in February.
    Your other cargo vendor was expected to complete a single 
demonstration flight by December 2010. That flight has not even 
been scheduled yet.
    I guess the question posed here is how much longer will 
their flights have to be delayed before you, as the 
Administrators are no longer ``pleased'' with these providers?
    Mr. Bolden. Senator, I'm confident that one of the----
    Senator Shelby. Are you still pleased with them?
    Mr. Bolden. Senator, I'm pleased with their progress. One 
of our providers, SpaceX, is scheduled to launch on the 30th of 
April, and I think----
    Senator Shelby. Do you think they will keep that date?
    Mr. Bolden. I think they will make that. The other one, 
Orbital Sciences, has a lot of things that are out of their 
control in terms of a launch facility, but I think they will be 
ready to launch sometime this summer. The big thing for us and 
them is to get the launch pad ready at Wallops so that they can 
run a main propulsion test, and then they'll be ready to fly 
their first demonstration.
    I would caution everyone to be somewhat resistant to talk 
about delays. I came to NASA in 1980 to join the astronaut 
program, and that was 2 years after the shuttle was supposed to 
have flown. I am personally thankful that we did not fly in 
1978 because we weren't ready. I worked as a member of the tile 
repair tiger team, because when we flew Columbia from its 
manufacturing facility in Palmdale, California to the Kennedy 
Space Center, it got there and a large majority of the tiles 
were missing.
    We weren't ready, and we learned a lot of things that 
caused us to delay. But when we flew STS-1, it was an 
incredible achievement.
    So I think the commercial providers are doing very well. 
They're meeting challenges that have come their way. We advise. 
We can't tell them what to do, but we have relatively good 
insight into what they're doing, and we're confident that the 
decisions they're making are prudent. We would much rather see 
them delay than to fly and fail, because we cannot use a failed 
system.

                      GOVERNMENT BUYING PRACTICES

    Senator Shelby. I'm very concerned that NASA seems to be 
abandoning its plan to abide by the Federal acquisition 
regulations (FAR) in the commercial crew program and instead 
continue to use Space Act agreements. Space Act agreements will 
provide you more flexibility, but they do so at the expense, 
some of us believe, of transparency and accountability on the 
part of the contractor. I think such agreements in this case 
are dangerous to both astronauts who might fly in commercial 
rockets and the American taxpayers who, to date, have had to 
fund them.
    You claim, Mr. Administrator, that the budget cuts made by 
this subcommittee have, quote, ``necessitated'' is your word, 
you to abandon traditional Government buying practices. I would 
note that you are currently funding four separate vendors in 
the commercial crew program, some of whom have never built a 
single piece of space hardware, and only one of whom has ever 
built hardware that carried humans.
    My question is this. Is it not possible that the answer to 
your budget issues is to fund fewer vendors? Wouldn't you 
rather have more effective Government oversight over one or two 
providers rather than less oversight over four or more?
    Mr. Bolden. Senator, there are a couple of answers to your 
question. One is, when we purchase services from the private 
companies, they will be operating under contracts that comply 
with FAR. So we won't purchase services under a Space Act 
agreement. We'll purchase services under FAR. We have chosen to 
extend our utilization of Space Act Agreements because it does 
allow us to carry hopefully more than one potential provider 
for as long as we can so that we get competition and we get the 
best product.
    In the commercial crew development program, we funded as 
many providers as we could, and it's important to understand 
the difference between the commercial crew development program 
(CCDEV), which is what we are about to end, and the acquisition 
program that we're about to enter where we buy a launch 
provider for commercial crew. CCDEV--some were looking at 
capsules, some were looking at launch vehicles. United Launch 
Alliance (ULA) was not looking at either. They were looking at 
a self-monitoring maintenance system on a vehicle. So we had 
different providers. We utilized their expertise to give us 
information and technology that we needed to put into the 
ultimate system.
    So hopefully the result from the effort and the money that 
we put into CCDEV will be, as all of you say, a final product 
from or to providers that takes advantage of all of the 
benefits that we got from the individual providers with 
individual components of the total system.
    Senator Shelby. But isn't some of the program, it seems to 
a lot of people, to be a march away from NASA--in other words, 
into the private sector and vendors--rather than what NASA has 
proven over many years to have?
    Mr. Bolden. Senator, quite the contrary. It is a march to--
--
    Senator Shelby. Explain.
    Mr. Bolden. It is a march toward the exact way that we did 
Mercury, Gemini, Apollo, the shuttle, except the acquisition 
method. With those, we bought a vehicle, and then we owned it 
and we managed it, and that's what cost us money. The 
infrastructure, the underlying cost for the space shuttle was 
$2 billion a year whether I used it or not. That's because I 
had to maintain the facilities, I had to keep the people to run 
it, I had to do everything.
    Under the commercial program, we will purchase a service. 
And I will remind everyone, Senator Hutchison mentioned, why 
couldn't we do like we did with SLS and MPCV? Because we 
previously had a robust competition in the old Constellation 
program, we got a product like Orion, and when we started 
looking at what we wanted to use for a MPCV, it made it not 
easy because we still had to go through a process of 
evaluation, independent assessment, but we were able to accept 
the Orion vehicle lock, stock, and barrel from what was in the 
Constellation program.
    But that does not say it was not chosen under competition. 
It had rigorous competition. Same thing for the SLS. It 
underwent rigorous competition, and we used that, and we were 
able to go back to the procurement people and say, look, we're 
not trying to just take something unproven. This is the result 
of rigorous competition. The way I described it, we tried to 
take the nuggets from Constellation and transition them into 
SLS/MPCV, and I think that's what we got.
    We won't know until we fly, but I think we are well on our 
way to demonstrating that the process we used there, which I 
will remind everybody was severely questioned by many--why are 
you doing it this way? Why don't you just go get another 
vehicle? We didn't think that would be prudent because we 
wanted to take advantage of the competition that had brought us 
those vehicles.
    Senator Mikulski. Senator Brown.

                   STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Madam Chair.

A HEALTHY NATIONAL AERONAUTICS AND SPACE ADMINISTRATION RELYING ON TEN 
                                CENTERS

    The previous administration declared 10 healthy centers and 
laid out responsibilities for each. When we sat down before 
your confirmation more than a year ago, you assured me this 
policy was no longer needed because NASA had 10 healthy 
centers. But without a 10 healthy centers policy, you're asking 
us now to give you the ability to shift funds around with no 
guarantee that the research centers or flight centers or 
specific programs will be funded at adequate levels.
    How do all of us know you have a serious commitment to 
making sure there are 10 healthy centers? Are you laying out a 
detailed plan for us so that we know that?
    Mr. Bolden. Sir, I think when you and I talked numerous 
times, I said I don't like the term ``10 healthy centers'', 
because that term implies that you've got to force a workplace 
where it may not belong. What I like is a very healthy NASA 
that relies on 10 centers with diverse skills and capabilities 
that support a healthy agency, and not individual centers.
    I think what hopefully all of you are seeing is that we are 
trying our best to make sure that every center that is 
presently a member of the NASA family gets an adequate share of 
the work that we are doing in the three principal mission areas 
of aeronautics, human space flight, and science.
    If you look at Glenn, for example, Ray Lugo probably would 
admit he has a significant share, if not the lion's share, of 
the technology development funds. Even though the program may 
not be run out of Glenn, the money is being spent through 
Glenn, and there's a big difference between where a program is 
housed and where the money is being spent.
    Glenn is a vital center for us not only for human space 
flight, but they are the heart and soul, along with Dryden and 
Langley, for aeronautics research. What we're doing right now 
to support DOD and even commercial aviation, a lot of that is 
being done out of Glenn, whether it's icing tests, or they're 
the major center for rotary research. So it's very helpful.
    Senator Brown. I don't think any of us think that the issue 
is forcing work at any one of these centers.
    I have a couple of comments about aeronautics. Aeronautics, 
the first ``A'' in NASA is aeronautics, before the ``S'' for 
space. NASA is requesting $551 million for aeronautics, less 
than last year, one-half of what's authorized. Put that aside 
for a minute.
    But sort of along the lines of Senator Cochran's comments 
about the Stennis Center, from your comments I'm concerned that 
NASA is out-sourcing hundreds of millions of dollars for 
research and development at the Space Flight Center when the 
research centers can do this work. Why does this business model 
no longer seem so workable to do this at the centers, 
especially a research center like NASA Glenn?
    Mr. Bolden. Senator, I'm not sure that we're not following 
the model that utilizes the skills at the individual centers. I 
may misunderstand your question. I think we are utilizing the 
skills at the centers, and we redistribute work such that it 
goes to the strongest center. We sometimes use people from one 
center to do work at another, and we either detail them there 
or we let them do the work that belongs to another center in 
their home center. So maybe I don't understand your question.

                         PLUM BROOK TEST CENTER

    Senator Brown. I'm not sure I agree with that, but let me 
shift, though, because I just have a couple more minutes.
    About Plum Brook, I appreciate, first of all, your 
correcting some of our House counterparts when they refer to 
Plum Brook as a test stand. As you know, it's not a test stand. 
It's a one-of-a-kind test center. I'm looking for what you can 
tell us NASA can do to better utilize those facilities. For 
instance, one example, the Europeans want to use Plum Brook. I 
understand NASA headquarters seems to be holding this up. Why 
wouldn't we jump at this opportunity for the ESA to want to use 
Plum Brook and its terrific facilities?
    Mr. Bolden. Senator Brown, I'll have to get back to you. I 
am not aware of us holding this up--if, in fact, ESA is asking 
to test a vehicle at Plum Brook, I'm not aware of what we're 
doing to disallow that. So I will take that question for the 
record and get back to you.
    [The information follows:]
                        Plum Brook Test Facility
    The National Aeronautics and Space Administration (NASA) 
headquarters issues with the European Space Agency (ESA) test agreement 
have been worked fairly quickly and involved the use of the facility by 
a foreign entity and a question regarding whether the funding for the 
modifications to the test facility represented an augmentation of the 
NASA budget. Both of those issues were worked early in the year, and at 
this point we are awaiting a decision from ESA.

    Senator Brown. Okay. Our understanding is there has been a 
delay. We don't know why. It's a significant proposal, and we 
will follow up with you, then.
    Mr. Bolden. Okay. Senator, that would be in opposition to 
my stated direction to everybody that we should find people to 
put in our facilities.
    Senator Brown. Okay. Good, good.
    Mr. Bolden. I don't care where they come from.
    Senator Brown. Good to hear. Thank you.
    Thank you, Madam Chair.
    Senator Mikulski. Senator Hutchison.

                             PRIORITY GOALS

    Senator Hutchison. Mr. Administrator, as I mentioned, I'm 
just waiting for the--I'm going to ask you a question, you're 
not going to answer it, and we're going to be where we are and 
we're going to settle this one-on-one, I know. But I'll just 
ask----
    Mr. Bolden. Senator.
    Senator Hutchison. I'll try my best. I talked about and you 
acknowledged that we set three priority goals, and you fully 
funded one. You have now gone 100 percent over on one and cut 
the other, the third priority, by virtually the same amount 
that you went over on the second priority. So you can imagine 
why we would think that you are cutting the Orion and the SLS 
in favor of commercial crew.
    What I would hope is that we could come to the joint goals 
and all work together for commercial crew, but not at the 
expense of Orion and SLS.
    One thing that you mentioned you're funding at a 21-percent 
increase this year is technology. Why is it that you feel so 
compelled to cut the future, which is SLS and Orion, in favor 
of the immediate, which is commercial crew, as we acknowledge? 
Why not keep the three priorities, keep the faith with the 
Congress, and help us feel like we're all going in the same 
direction?
    Mr. Bolden. Senator, I do believe that we are doing our 
best to keep faith with the Congress. When we agreed upon the 
three priorities, we said we were going to fund SLS and MPCV 
and we were going to comply with the schedule that we had laid 
out for everyone. I provided a list to the subcommittee of 
achievements with both SLS and MPCV to date. Some of them are 
well ahead of where we expected to be.
    [The information follows:]
          Space Launch System/Orion Multi-Purpose Crew Vehicle
    The Orion Multi-Purpose Crew Vehicle (MPCV) and Space Launch System 
(SLS) Programs continue to meet milestones on schedule.
    Recent accomplishments of note for Orion MPCV include:
  --Key Decision Point-A Authorization Memo was signed by the Agency 
        Project Management Council on February 28, 2012. This provided 
        official approval for the Orion Program to proceed from the 
        pre-formulation phase into the design, development, test, and 
        evaluation (DDT&E) phase.
  --The Orion Formulation Authorization Document was approved by Human 
        Exploration and Operations Mission Directorate on April 2, 
        2012.
  --Arrival of first Exploration Flight Test-1 (EFT-1) flight hardware 
        at the Kennedy Space Center's Operations and Checkout (O&C) 
        facility (2 SM longeron). This milestone signifies confidence 
        that the EFT-1 vehicle will soon begin its ground test 
        campaign.
  --Transfer of Crew Module (CM) Assembly Structure from Denver (post-
        Ground Test Article [GTA] use) to O&C.
  --Transfer of the CM used for the Pad Abort-1 (PA-1) test from O&C to 
        Vehicle Assembly Building (VAB) for public display (opens space 
        in O&C for EFT-1 production and GTA arrival).
  --CM barrel delivered to NASA Manufacturing Assembly Facility (MAF). 
        CM2 (Barrel-to-Aft Bulkhead) and CM1 (Aft Bulkhead-to-Cap) 
        welding completed.
  --Orion has also successfully completed 22 major hardware tests from 
        June 2011 through May 2012, including 4 parachute drops, 9 
        hydro impact splash downs, 6 vibro-acoustic tests, and 3 
        avionics simulations.
    SLS has made substantial progress since the program entered 
formulation in November 2011, with the following notable 
accomplishments:
  --Systems Requirements Review/Systems Definition Review now underway 
        to establish baseline vehicle requirements before entering 
        detailed preliminary design.
  --Integrated acquisition teams in place and negotiations underway to 
        definitize contracts with stages, engines, and boosters 
        contractors.
  --Design loads analysis and wind tunnel tests incorporating Orion 
        MPCV in work.
  --Ten tests as of May 2012 (for a total of more than 1,000 seconds of 
        total run time) of the J-2X engine on the A-2 test stand at the 
        Stennis Space Center. Engine 10001 has since been fitted with a 
        clamshell for further engine characterization starting in May.
  --As of May 2012, 13 powerpack tests had been completed, and J-2X 
        powerpack series #2 were underway on the A-1 test stand at the 
        Stennis Space Center.
  --All RS-25 Space Shuttle main engines and associated ground support 
        equipment transferred from the Kennedy Space Center to the 
        Stennis Space Center for future testing and integration into 
        Core Stage.
  --As of May 2012, there had been three demonstration firings of the 
        five segment solid rocket motor design to be used for the EM-1 
        and EM-2 flights in 2017 and 2021.
  --Completed 24-inch motor firing test on March 14, 2012.
    Accomplishments for Orion MPCV and SLS are updated monthly at: 
http://www.nasa.gov/exploration/systems/mpcv/orion_reports_archive.html 
and http://www.nasa.gov/exploration/systems/sls/sls_highlights.html

    Mr. Bolden. So while I know you're talking about dollars, 
I'm actually talking about accomplishments, getting us to a 
2014 launch date for Orion that Lockheed Martin wants to do, an 
exploration test flight. They're going to make that. So 2 years 
from now, we're going to fly Orion. That was not even in our 
program before. I think at the rate we're going right now, the 
funding profile that we have, while not optimal, will get us to 
a 2017 first un-crewed flight of SLS and MPCV combination. That 
will be a first-generation SLS/MPCV, and then no later than 
2021 we will see a crewed mission on SLS/MPCV.
    Additional funds would help the 2021 date because we could 
pull some things forward, we could reduce some risk, but it 
won't affect the 2017 launch date, the first un-crewed mission. 
So I think we have put funds against SLS and MPCV to get to the 
objective, to meet the objectives that we agreed to with the 
Congress.
    While commercial crew and cargo is not a priority, so to 
speak--it is not one of the priorities agreed upon by the 
Congress and the administration because there are only three--
but commercial crew and cargo are vital for me to be able to 
live up to my promise to you on ISS. Without an American 
capability to supply both cargo and crew to ISS, the gap is 
going to continue to increase. I am going to continue to rely 
on the Russians to provide transportation for both cargo and 
crew, and I'm not sure that I can adequately enhance ISS the 
way I want to do it.

               ORION AND SPACE LAUNCH SYSTEM AUDIT STUDY

    Senator Hutchison. Mr. Bolden, when you thoroughly studied 
Orion and SLS, you studied it in NASA, and then you studied it 
outside of NASA. You had an outside group that you were adamant 
had to make the final decision, and you paid a lot of money for 
that further independent study. And, probably what I would 
consider to be 1 year late, you finally got the report back 
that said if the assumptions are correct for the next 3 to 5 
years, the budget will be sufficient to make the goals for 
Orion and SLS a reality.
    And yet the very next year, we have you coming forward 
cutting that budget that was the basis of your very sought 
after and required outside audit study before you would move 
forward. So here we are in what looks like the stepping back 
from what your outside study showed was necessary so that 
you're going to be able to come in next year and say, ``Gee, 
you know, we didn't get that funding that was the basis of that 
study, and so we probably can't do Orion and SLS'', which is 
the kind of rhetoric we have heard in the past.
    So I just wonder why you would be so obvious in cutting the 
Orion and SLS budget when you staked the whole credibility of 
going forward on the study that said we had to keep these 
assumed levels of spending.
    Mr. Bolden. Senator, it is my hope that before you leave 
the Congress, NASA will be able to show you where it's not 
going to cost us as much as is presently budgeted right now to 
complete SLS and MPCV because the technologies that we're 
developing will reduce the cost, that we will move to lighter-
weight tanks, we will move to composite tanks. The original 
estimates we gave everybody were based on current state-of-the-
art technology of the day. If we stay with that, then I'm not 
being responsible.
    So my hope is--and we have to live within the budget that 
you gave us, and that budget also has to provide funds for a 
wedge for additional things that will go with SLS and MPCV to 
make it a true exploration system. So that money has to come 
from within. So we are trying our best, as Senator Shelby and 
Senator Cochran mentioned, and as all of you have, we're trying 
to call upon our best technologists both in the agency and 
academia and in industry to help us get to the point where we 
are much more efficient in the development of our vehicles, 
that they are much better than the currently envisioned, and 
that we can get the job done that you set. We will not change 
the date----
    Senator Hutchison. Mr. Bolden, you are so insistent that 
you're living within the budget that we gave you for Orion and 
SLS. But oddly, you're going $300 million more than the 
authorized level for commercial, and you're saying on Orion and 
the SLS you're going to have new technology that's going to 
bring the cost down, so everything is going to be fine.
    But on the other hand, you now are looking at three or four 
companies that you're subsidizing on the commercial crew side, 
so there doesn't appear to be any kind of future advantage for 
technology like you're proposing that you're going to have for 
the Orion and SLS. It doesn't seem to make any sense that 
there's a way forward that you can meet all of our goals with 
integrity by subsidizing competitive commercial crew 
enterprises.
    Mr. Bolden. Senator, I have to re-emphasize the fact that 
we are making progress, tangible progress on SLS and MPCV. 
We've completed, I don't want to read through the list, but 
we've completed water drop tests on Orion. We have actually 
completed risk reduction. We've had an industry day on the SLS. 
We have taken steps that will reduce the risks on the vehicle 
itself as we do it. We have transferred main engines over to 
the Stennis Space Center for testing after modifications.
    So we are doing everything that we can. And I will take----
    Senator Hutchison. Is this going to be $170 million in 
savings? Is that what you're saying?
    Mr. Bolden. No, ma'am. But I will----
    Senator Hutchison. Well, that's what you're cutting out of 
this year's budget.
    Mr. Bolden. I will take one thing for the record. I think 
that you and I are disagreeing on what the fiscal year 2012 
appropriation amount really was, and I will take it for the 
record. But I think a check of the budget will show that the 
fiscal year 2012 appropriation is actually in excess of what we 
submitted as needed based on the independent cost assessment, 
but I will take that for the record.
    [The information follows:]

          Space Launch System/Orion Multi-Purpose Crew Vehicle

    For fiscal year 2012, the Congress appropriated $1.943 billion for 
Space Launch System and associated ground systems, $15 million more 
than the Independent Cost Assessment (ICA) profile when adjusted to 
include civil service labor. Also for fiscal year 2012, the Congress 
appropriated $1.2 billion for the Orion Multi-Purpose Crew Vehicle, 
$181 million more than the ICA profile when adjusted to include civil 
service labor.

    Mr. Bolden. I think the fiscal year 2012 funding for SLS/
MPCV exceeded what we said we would need in the independent--
substantiated by the independent cost assessment. I know that 
the fiscal year 2012 budget was greatly reduced from what we 
said we would need in order to be able to close the gap with 
commercial crew. And so we're trying to get to the balance that 
you insist upon so that we have a commercial capability to 
supply ISS and keep the gap from growing there.
    Senator Hutchison. Thank you.
    Mr. Bolden. We have not changed the delivery dates on SLS 
and MPCV. In fact, we have improved them somewhat by buying 
down risk with the test, the demonstrated activities that we've 
done to date.
    Senator Hutchison. Thank you, Madam Chair.
    Senator Mikulski. Mr. Administrator, as you can see, there 
are a lot of yellow flashing lights, and even skepticism about 
the amounts that are in the priorities.
    I'm going to go to another round, just very quickly, but 
let me say this.
    First of all, this $17 billion-plus budget request is 
pretty much the same as what it was when President Clinton and 
Vice President Gore were in the White House. So though we ask 
for greater responsibility, though we've had some severe 
challenges, even an accident, we are still pretty much in the 
same money that we were 15 years ago. I know of no other 
Federal agency that has a major international presence that has 
been kept at that level. So I think we all have to be realistic 
here about expectations of what we want NASA to do.
    If we had followed the Norm Augustine recommendations for a 
balanced space program and a steady percentage of increase, and 
Mr. Augustine did that during the administration of President 
Bush, the elder, who we worked with very closely on many of 
these matters, you would be somewhere between $22 and $24 
billion. But we're doing things in a different way, and lessons 
learned.

                       JAMES WEBB SPACE TELESCOPE

    So let me just say a concluding remark about JWST. I 
appreciate the fact that the NASA administration, and also 
Northrop Grumman, is taking very seriously our insistence on 
keeping the project on time, on line, and meeting its 
objectives, and we're going to count on you to continue to do 
that. I know you've dispatched some of your most trusted NASA 
leaders to be able to oversee it from the NASA area.
    I just want to say this, and I've said this to the others 
involved in JWST that don't think this is like the Hubble.
    Mr. Bolden. Yes, ma'am.

                       COMMERCIAL CARGO AND CREW

    Senator Mikulski. If anything gets screwed up, I can't pull 
a rabbit out of the hat. I don't have a rabbit, and I don't 
have a hat. So we need to do that.
    Now, let's go to commercial crew. The questions have been 
extensively asked, but here is my question. I happen to support 
the commercial endeavor for both cargo and crew. I think it's 
bold, I think it's promising, but I'm concerned that it's 
behind schedule.
    My concern is that now the best-case scenarios about the 
launch for these is 2017. We've extended the life of ISS to 
2020. Isn't this a hell of a lot of money for a 3-year effort? 
Could you comment on that?
    Mr. Bolden. Senator, I will comment, and I am not making a 
promise to anyone because I'm not in a position to make this 
commitment, but in anticipating what we can do with ISS, the 
international partners--and that's the 19 member nations of the 
ESA, Japan, Canada, the United States, and Roscosmos and 
Russia--have all been engaged in engineering estimates of how 
long can we fly ISS, and we have all agreed that ISS can be 
flown to at least 2028.
    So when I talk about the life of ISS, I don't limit it to 
2020. To fly it beyond that, as we all learned after President 
Obama said he wanted to fly it until at least 2020, beyond the 
2016 original date for termination, requires approval of all 
the international partners. But all of them are on the record 
saying that we know we can fly ISS until 2028, and most of them 
are on the record saying they would like to utilize it beyond 
that.
    So what NASA wants to do is get a commercial capability, 
get a U.S. capability in place as soon as possible so that we 
can enhance its utilization, can make it a true national 
laboratory, as Senator Hutchison has insisted, and fly it as 
long as we can, support it as long as we can. I don't foresee 
us, just because 2020 arrives, saying that's the end of ISS. To 
me, that would make no sense. We should fly it as long as the 
nations feel there is a need. I think all of us believe that if 
we're really going to do a robust exploration program, there 
will be a long-term need for a micro----
    Senator Mikulski. As you can understand. First of all, it 
cost us $50 billion.
    Mr. Bolden. So beyond 3 years----
    Senator Mikulski. It cost us $50 billion to build ISS.
    Mr. Bolden. $100 billion.
    Senator Mikulski. And a lot of blood, sweat, and tears. As 
you know, we had some melancholy events along the way. Now we 
have ISS, and we have great international partners who signed 
up to go with the United States. They were kind of a coalition 
of the willing in space. We need to use that ISS.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. We need to justify it to the taxpayer, 
and we need to show it in the scientific community. So we've 
got to get up there.
    So let's start with cargo. I understand that SpaceX expects 
to--we need rockets in the air.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. Again, it's cargo, it's not people. When 
do you think SpaceX will launch?
    Mr. Bolden. Weather and everything else considered, I think 
they will be able to hold to their April 30 launch date.
    Senator Mikulski. So it will be April or the first week in 
May, depending on weather.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. And when is Orbital going to launch at 
Wallops?
    Mr. Bolden. Orbital's best estimate right now--and I 
promised you, I need to give you concrete numbers. Orbital's 
best estimate right now is, if the Mid-Atlantic Regional 
Spaceport (MARS) can finish the launch pad----
    Senator Mikulski. MARS, for my colleagues and the record--
--
    Mr. Bolden. I'm sorry. MARS is the controlling entity. They 
own the launch pad at Wallops. They are building it for the 
State of Virginia. It's sort of like Space Florida and Florida. 
They contracted with a company to actually do the building. 
When you and I were out for the inauguration of the horizontal 
processing facility, we took a walk up on the launch pad and we 
both felt good because the physical structure is----
    Senator Mikulski. But I want to feel good now.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. So where are we?
    Mr. Bolden. It is not ready. But we have brought people up 
from the Kennedy Space Center, from Langley, from Marshall, 
from Stennis to help them with technical expertise to try to 
make sure that they can complete it on a date certain, and that 
date certain I have to provide to you, and that I'll have to 
take for the record.
    [The information follows:]

                    Mid-Atlantic Regional Spaceport

    The Mid-Atlantic Regional Spaceport Launch Pad 0A at Wallops Flight 
Facility is scheduled for completion and turnover to Orbital Sciences 
Corporation (OSC) in June-July 2012. OSC's Antares launch vehicle 
maiden test flight is scheduled for late summer, with the demonstration 
mission to the International Space Station scheduled by end of 2012.

    Senator Mikulski. Well, I'm very frustrated by this.
    Mr. Bolden. As am I.
    Senator Mikulski. Because there was much promised, and the 
launch pad, it was going to be a new day for Spaceport Wallops. 
This offer was promised for not only a return to ISS, but other 
launch capabilities that would serve our national interest, 
which we don't have to elaborate on here. And I am puzzled and 
perplexed that for the last 8 weeks I keep hearing that there's 
a problem with the launch pad, but I don't hear solutions. What 
I hear is that you've dispatched people, but I don't hear a 
solution, and we need to hear a solution.
    Mr. Bolden. Yes, ma'am. And I will bring that to you. I 
have had discussions with Mr. Bill Gerstenmaier, who heads our 
human exploration operations at Mission----
    Senator Mikulski. But I'm directing these comments also to 
MARS and to the people in charge of that, that they've got to 
get it going.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. Because I think there is growing 
frustration and skepticism about this, and yet we hear that the 
rockets are ready, everything is ready. And so we've got to 
start saying, is this endeavor a go? The clock is ticking.
    Mr. Bolden. Yes, ma'am.

                     SCIENCE MISSIONS IN THE FUTURE

    Senator Mikulski. This, then, goes to my last question with 
science. We feel that with the JWST, we are continuing to 
secure America's pre-eminence in astronomy and astrophysics, 
that it is the next generation of Hubble, and we, who have the 
Space Telescope Institute in Maryland, are so proud of not only 
the Hubble but the fact that Dr. Reese of the Space Telescope 
Institute and the Hopkins faculty has won a Nobel Prize.
    Much is being said about American exceptionalism, and we 
believe that it is in these endeavors that we have really 
demonstrated that. So we need that, but we need to look ahead 
also to what is the science today and what is the science of 
the future, and what can we afford. So the people have to make 
decisions. We make decisions about budgets, but people make 
decisions about careers.
    So right now, the scientific community is concerned about 
where are we heading with small-, medium-, and large-size 
science missions in the future. Based on the National Academy 
of Sciences--not only Senator Barr or Senator Kay Bailey 
Hutchison or any of us here, but the National Academy--what is 
in this appropriations request that lays the groundwork for 
future recommendations in things like dark energy, 
astrophysics, heliophysics, and Earth science? Or are we in 
such an age of frugality that we aren't going to make those 
investments?
    Mr. Bolden. Senator, we are going to continue to make those 
investments. People talk about flagship missions. Flagships are 
something that are of such importance to science, they answer 
the most challenging questions, and NASA has not given up on 
flagship missions. We don't have a new flagship in place, but I 
have to remind everyone that JWST is a flagship mission that we 
are going to launch in 2018. The Mars Science Laboratory, 
Curiosity, which is on its way to Mars right now, is a flagship 
mission which we launched in November and will land on Mars in 
August of this year. SLS/MPCV in the area of human exploration 
is a flagship mission.
    Senator Mikulski. You see, that's my whole point. There we 
are with flagship. We spend a lot of our time keeping it 
focused and on line because it continually comes to us with 
underestimates. So then we have the flagship. So there we are, 
and I'm not minimizing their significance, but they're the 
Santa Marias. But there's a whole group out there that wonders 
about the Ninas and the Pintas, and are we so busy bailing out 
the Santa Marias, we don't get to the Ninas and Pintas.
    Mr. Bolden. Senator, we have Ninas and Pintas on the way, 
as a matter of fact, and what we have been able to do with the 
Ninas and Pintas, something like Juno, Gravity Recovery and 
Interior Laboratory (GRAIL), now Ebb and Flow, and some of the 
other medium-class or small-class science missions that are 
underway or in work, MAVEN for example, going to Mars to 
measure its upper atmosphere, these missions which have come 
about post-2009-ish or so, where we started utilizing a policy 
of joint confidence-level assessments where we looked at cost 
and schedule, and we are now holding programs to cost and 
schedule in a way that we were not able to do before.
    Juno is on its way to Jupiter, on cost, on schedule. GRAIL, 
Ebb and Flow, are at the Moon doing science, on cost, on 
schedule. Suomi National Polar-Orbiting Partnership, which we 
produced----
    Senator Mikulski. Those are underway. So that----
    Mr. Bolden. MAVEN is in work. MAVEN is scheduled to launch 
in 2013. It is currently on cost, on schedule.
    I would even go so far as to say, while JWST is a flagship 
and it started out in bad shape, I am very proud to say that 
since we restructured JWST and re-planned it and we are now 
under new management, we hung a new shingle, JWST is on cost 
and on schedule.
    Now, that is absurd to say that for a mission that is 
billions of dollars over what the original assessment was. But 
since we worked with your staff and you and we made a promise 
to you that we were going to deliver, we have done so. We are 
on cost and on schedule, in some cases ahead of schedule with 
JWST. We are doing things differently than the way we used to 
do it.
    We have to deliver. We know that. Or otherwise we perish.
    Senator Mikulski. Well, and so do the contractors.
    Mr. Bolden. Yes, ma'am. Anyone who thinks that NASA can 
make all this happen without our incredibly valuable 
contractors just doesn't know how we do business. We spend 85 
percent of the taxpayers' money going out to the contractors, 
and so we have to hold their feet to the fire. I can point to 
missions now where I think we are holding their feet to the 
fire. They understand, because of people like you who have 
brought them in and said, okay, I don't have another hat, and I 
don't have a rabbit, I think they understand what you've told 
them, and they are performing.
    We're on the way to launching a replacement for the 
Orbiting Carbon Observatory, OCO-2. Right now, that's on cost. 
And OSIRIS (Origins-Spectral Interpretation-Resource 
Identification-Security-Regolith Explorer--OSIRIS-REx)----
    Senator Mikulski. I think we understand that.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. Well, thank you for that answer.
    Mr. Bolden. Yes, ma'am.
    Senator Mikulski. Senator Hutchison.
    Senator Hutchison. No further questions.
    Senator Mikulski. So, Mr. Administrator, we thank you for 
your testimony. I think Senator Hutchison and I, in thanking 
you, we want to thank really all the men and women who work at 
the NASA centers, the contractors who support them, and also 
very important allies that participate with us in these very 
important projects. We view Canada, Japan, who itself is facing 
some challenges with their own budget because of the natural 
disaster--we treasure the relationship with Japan both in 
space, science, and in national security.
    So we all need to work together and keep those Santa Marias 
afloat and make sure we have the Ninas and the Pintas, all of 
which we can afford. And we wouldn't mind the Navy's budget 
either.
    So, having said that----

                     ADDITIONAL COMMITTEE QUESTIONS

    Mr. Bolden. Senator, I appreciate that. I do want to take 
an opportunity to congratulate you on the milestone that you 
yourself achieved this past weekend. That is something worthy 
of all of our applause for you.
    And, Senator Hutchison, I do want to thank you again.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

          Questions Submitted by Senator Kay Bailey Hutchison

                             SEQUESTRATION

    Question. At each of our hearings this year each department has 
been asked about the impact of the budget sequestration might be. As 
National Aeronautics and Space Administration (NASA) budget already has 
a cut as part of the fiscal year 2013 budget request, and several 
programs are being reduced to the bare minimum needed to maintain 
schedule, the impact of sequestration could cause mission schedules to 
slip and when that happens, increased costs inevitably follow.
    What will the overall impact be to the agency?
    Answer. NASA has not initiated planning for sequestration and fully 
expects that the Congress and the administration will enact balanced 
deficit reduction legislation and thereby avoid the need for a 
sequestration. If necessary, the administration will be addressing 
important technical questions concerning a sequestration and NASA 
cannot speculate at this time the size or effect of sequestration.
    Question. If sequestration requires reductions to programs at NASA, 
what will NASA's rationale be for applying funding reductions to its 
programs? Will NASA reduce every program, project and activity by the 
percentage, and if not, justify the agency's decision to spare some 
programs over others from the effects of a funding reduction?
    Answer. NASA has not initiated planning for sequestration and 
cannot speculate at this time the size or effect of sequestration.

                            ORION AS BACKUP

    Question. The NASA authorization specifically identifies space 
launch system (SLS) and Orion to be used as a backup to commercial 
crew. This was done in case the primary providers are unable to fulfill 
the need for International Space Station (ISS) support. You have 
previously stated that commercial crew is plan A for reaching the ISS, 
and it is also plan B because NASA would like to subsidize more than 
one company for their development and then pay them again to ride to 
the space station. At the same time, if they cannot deliver, NASA will 
have to scramble to determine a rocket configuration for Orion to do 
the job, or continue paying the Russians for seats.
    Does NASA have a plan, if the need arises, to exercise the Orion 
backup capability?
    Answer. The Orion Multi-Purpose Crew Vehicle (MPCV) will have the 
capability to provide an alternate means of delivery of crew and cargo 
to the ISS. Although funds are not currently being spent to enable this 
capability, this capability will not be precluded. This would be a 
highly inefficient use of the SLS and MPCV designs, so NASA would only 
develop the capability ``in the event other vehicles are unable to 
perform that function'' per the NASA Authorization Act of 2010 (Public 
Law 111-267).
    Question. If a plan exists, or even if one does not, please provide 
an estimate for the cost and timeline that would be needed for Orion to 
take crews to the ISS in case of commercial crew being unable to 
deliver crews to the ISS as defined in section 302(c)(1)(D) of Public 
Law 111-267.
    Answer. SLS and Orion MPCV are expected to execute the system's 
first launch in 2017 and be crew capable in 2021. SLS is a heavy lift 
launch vehicle and has payload capability far and above that which is 
necessary to support ISS crew rotation and resupply activities; 
therefore, launching an SLS for ISS-related activities would be a 
highly inefficient use of the system that is simply not cost-effective. 
However, in an emergency, the SLS could be used for low-earth orbit 
(LEO) operations. In addition, the Orion MPCV is a crew vehicle that is 
primarily designed for deep space exploration and, if needed for an 
emergency, could function as a backup vehicle for the ISS crew. The 
current Orion design is specifically designed and tailored for deep 
space exploration and a high-speed re-entry to Earth, which includes 
systems that are not necessary for LEO missions. Launching the Orion 
MPCV capsule for use in LEO would also be an inefficient use of a 
robust system intended for other purposes.
    NASA has assessed the content changes needed to perform ISS 
missions as a backup, including required technical changes and the 
associated cost and schedule. The additional Orion MPCV costs for the 
ISS mission would be at minimum $300 million. Additional cost would be 
incurred if schedule is critical.

                       SHUTTLE RETIREMENT PAYMENT

    Question. As part of the close out of the shuttle program, NASA has 
a one-time payment to the contractor for their employee retirement 
plan. This payment was agreed to by NASA when the United Space Alliance 
(USA) was created to service the orbiters for NASA. Last year, the 
subcommittee was assured that the amount funded in last year's 
appropriations bill was the amount necessary to make this payment. 
However, since that time the amount has changed and the payment will 
likely be higher than NASA anticipated when funds were appropriated for 
this payment.
    Can you tell us what the current payment is anticipated to be and 
which programs NASA intends to look to in order to make up the 
difference if necessary?
    Answer. Our latest estimate is that termination of USA employee 
retirement plans will cost between $535 to $555 million. This estimate 
could change once the formal termination is approved; however, we do 
not anticipate that it will greatly change. The difference between what 
was appropriated, $470 million, and the final cost will be covered 
within the Space Shuttle Retirement and Transition line of the Space 
Operation account.

                     SANTA SUSANA FIELD LABORATORY

    Question. I understand that NASA is involved in the cleanup of a 
former rocket engine test facility in Ventura County, California--
called the Santa Susana Field Laboratory (SSFL). In December 2010, NASA 
and Department of Energy signed administrative orders on consent 
(AOC(s)) with the State of California that obligated the Federal 
parties to cleanup portions of the site.
    What level of cleanup did NASA commit to in the AOC, and is that 
cleanup level required by Federal or state law?
    Answer. The AOC calls for a cleanup to ``background''. Per AOC 
section 2.1, ``[t]hat is, at the completion of the cleanup, no 
contaminants shall remain in the soil above local background levels, 
with [certain specific exemptions].''
    Federal law required cleanup of sites contaminated any hazardous 
materials. NASA entered into the AOC as part of an out of court 
settlement with the Department of Toxic Substance Control (DTSC). Under 
the terms of the AOC, compliance with the AOC ``shall constitute NASA's 
full and complete compliance with all applicable provisions of Chapters 
6.5 and 6.8 of Division 20 of the California Health and Safety Code 
(the California Hazardous Waste Control Law, sections 25100 et seq. of 
that Code, and the California Hazardous Substances Account Act, 
sections 25300 et seq. of that Code), including specifically, but not 
limited to, California Senate Bill 990 (Stats. 2007, c. 729), which has 
been codified as section 25359.20 of the California Health and Safety 
Code, but only with respect to the application of these provisions to 
radiologic or chemical contamination of soil at the Site or any 
contiguous radiologic or chemical contamination of soil emanating from 
within Area II and the portion of Area I owned by NASA, within or 
without the SSFL boundaries, identified by DTSC as part of the 
investigation of chemical contaminants.''
    The AOC also requires NASA in section 4.2.3 that ``NASA shall 
conduct all activities under this Order in a way that will promptly 
comply with the requirements of NEPA.''
    Question. How does this level of cleanup compare to cleanup levels 
at other sites that NASA is involved in?
    Answer. The final cleanup levels (what is meant by background for 
the proposed action) have not been specifically established by the 
State. In order to conduct the required National Environmental Policy 
Act (NEPA) evaluation of the proposed AOC cleanup and reasonable 
alternatives, NASA has developed estimates based on the background 
levels determined in 2005 along with the latest laboratory reporting 
limits used by the State. The chart below summarizes the proposed AOC 
cleanup and three other standard land-use scenarios under other cleanup 
programs.

                                                 PROPOSED ACTION
----------------------------------------------------------------------------------------------------------------
                                                                   Alternative 1   Alternative 2   Alternative 3
                                                    AOC cleanup    (Residential)   (Industrial)   (Recreational)
----------------------------------------------------------------------------------------------------------------
Removal volume (cy).............................         502,000         182,000          92,000          58,000
Estimated cost..................................    $210 million     $80 million     $40 million     $25 million
Truckloads required.............................          26,421           9,579           4,842           3,052
Duration (months) assuming 12 trucks per day....             100              36              18              12
----------------------------------------------------------------------------------------------------------------

    Question. If the cleanup is not required by law, and it differs 
from cleanups at other sites, why is NASA making this commitment?
    Answer. NASA entered into the AOC as part of an out-of-court 
settlement with DTSC. Cleanup of contaminated sites with hazardous 
materials is required under Federal law, specifically the Resource 
Conservation and Recovery Act (RCRA) and the Comprehensive 
Environmental Response, Compensation Liability Act (CERCLA). NASA's 
cleanup actions are completed under these authorities or under State 
authorized RCRA or CERCLA programs.
    Question. Under the AOC how many cubic yards of soil will need to 
be removed?
    Answer. The final cleanup levels have not been specifically 
established by the State. However, based on engineering estimates to 
meet levels required by section 2.1 of the AOC limits and assuming 
excavation and offsite disposal, the current estimate would be 
approximately 502,000 cubic yards. This estimate is based on background 
levels determined in 2005 and current laboratory reporting limits.
    Question. What is NASA's cost estimate for complying with the AOC? 
How much more will the SSFL AOC cleanup cost compared to what it costs 
NASA to do the cleanup it does at other sites?
    Answer. The final cleanup levels (what is meant by background for 
the proposed action) have not been specifically established by the 
State. In order to conduct the required NEPA evaluation of the proposed 
AOC cleanup and reasonable alternatives, NASA has developed estimates 
based on the background levels determined in 2005 along with the latest 
laboratory reporting limits used by the State. The chart below 
summarizes the proposed AOC cleanup and three other standard land use 
scenarios under other cleanup programs.

                                                 PROPOSED ACTION
----------------------------------------------------------------------------------------------------------------
                                                                   Alternative 1   Alternative 2   Alternative 3
                                                    AOC cleanup    (Residential)   (Industrial)   (Recreational)
----------------------------------------------------------------------------------------------------------------
Removal volume (cy).............................         502,000         182,000          92,000          58,000
Estimated cost..................................    $210 million     $80 million     $40 million     $25 million
Truckloads required.............................          26,421           9,579           4,842           3,052
Duration (months) assuming 12 trucks per day....             100              36              18              12
----------------------------------------------------------------------------------------------------------------

    Question. Does cleanup under the AOC need to comply with NEPA?
    Answer. NEPA is a statutory requirement (42 U.S.C. 4321 et seq.) 
and, as such, is reflected as a requirement of the AOC. Under the terms 
of the AOC: ``4.2.3. NASA shall conduct all activities under this Order 
in a way that will promptly comply with the requirements of NEPA''.
    Question. Will compliance with NEPA require consideration of all 
land-use and cleanup alternatives?
    Answer. Section 4.2.3 of the AOC requires that ``NASA shall conduct 
all activities under this Order in a way that will promptly comply with 
the requirements of NEPA.'' NASA is obligated to evaluate all 
reasonable alternatives or a range of reasonable alternatives in enough 
detail so that the public can compare and contrast the environmental 
effects of the various alternatives. NASA is currently conducting an 
environmental review of the impacts of the AOC and will consider land 
use and cleanup alternatives consistent with NEPA's statutory and 
regulatory obligations.

                         CONCLUSION OF HEARINGS

    Senator Mikulski. Thank you.
    If there are no further questions, Senators may submit 
additional questions for the official record. We'll request 
NASA's response within 30 days.
    This is the subcommittee's final regularly scheduled budget 
hearing. However, the subcommittee reserves the right to hold 
others should the need arise.
    And the subcommittee stands in recess, subject to the call 
of the chair, with an anticipated mark-up of our bill sometime 
in mid-to-late April.
    [Whereupon, at 3:20 p.m., Wednesday, March 28, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2013

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [Clerk's Note.--The subcommittee was unable to hold 
hearings on nondepartmental witnesses. The statements and 
letters of those submitting written testimony are as follows:]

        Prepared Statement of the American Geosciences Institute

    The American Geosciences Institute (AGI) supports Earth science 
research sustained by the National Science Foundation (NSF), the 
National Oceanic and Atmospheric Administration (NOAA), the National 
Institute of Standards and Technology (NIST) and the National 
Aeronautics and Space Administration (NASA). Frontier research on the 
Earth, energy, and the environment has fueled economic growth, 
mitigated losses and sustained our quality of life. The subcommittee's 
leadership in supporting geoscience-based research is even more 
critical as our Nation competes with rapidly developing countries, such 
as China and India, for energy, mineral, air, and water resources. Our 
Nation needs skilled geoscientists to help explore, assess and develop 
Earth's resources in a strategic, sustainable and environmentally sound 
manner and to help understand, evaluate, and reduce our risks to 
hazards. AGI supports the President's budget request of $7.373 billion 
for NSF, $859.75 million for NIST, and $1.785 billion for Earth science 
at NASA plus $5.3 billion for NOAA.
    AGI is a nonprofit federation of 50 geoscientific and professional 
societies representing more than 250,000 geologists, geophysicists, and 
other Earth scientists. Founded in 1948, AGI provides information 
services to geoscientists, serves as a voice for shared interests in 
our profession, plays a major role in strengthening geoscience 
education, and strives to increase public awareness of the vital role 
the geosciences play in society's use of resources, resilience to 
hazards, and the health of the environment.
    National Science Foundation.--AGI supports an overall budget of 
$7.373 billion for NSF. AGI greatly appreciates the Congress' support 
for science and technology in recent appropriations and through the 
America COMPETES Reauthorization Act of 2010. The forward-looking 
investments in NSF are fiscally responsible and will pay important 
dividends in future development that drives economic growth, especially 
in critical areas of sustainable and economic natural resources and 
reduced risks from natural hazards. Support for science will save jobs, 
create new jobs, support students, and provide training for a 21st 
century workforce.
    National Science Foundation Geosciences Directorate.--The 
Geosciences Directorate (GEO) is the principal source of Federal 
support for academic Earth scientists and their students who are 
seeking to understand the processes that sustain and transform life on 
this planet. About 63 percent of support for university-based 
geosciences research comes from this directorate and more than 14,600 
people will be directly supported through GEO in fiscal year 2013 with 
thousands of others deriving support indirectly.
    The President's request for fiscal year 2013 asks for $264 million 
for Atmospheric and Geospace Sciences; $189 million for Earth sciences; 
$362 million for Ocean sciences; and $91 million for Integrative and 
Collaborative Education and Research within GEO. Much of the 
geosciences research budget is for understanding that is critical for 
current national needs, such as water and mineral resources, energy 
resources, environmental issues, climate change, and mitigation of 
natural hazards. AGI asks the subcommittee to strongly support these 
funding levels.
    GEO supports infrastructure and operation and maintenance costs for 
cutting-edge facilities that are essential for basic and applied 
research. Ultimately the observations and data provide knowledge that 
is used by researchers and professionals in the public, Government and 
private sector. GEO research and infrastructure helps drive economic 
growth in a sustainable manner. Geoscience-based research tools and 
academic expertise helped to end the BP Deepwater Horizon oil spill, 
saving billions of dollars for industry and untold costs to the 
environment. Research funding continues to help the gulf coast recover 
environmentally and economically.
    Among the major facilities that NSF supports, the Academic Research 
Fleet would receive $73 million; EarthScope Operations would receive 
$26 million; Incorporated Research Institutions for Seismology would 
receive $11 million; Ocean Drilling Activities would receive $39 
million; the Ocean Observatories Initiative would receive $40 million; 
and the National Center for Atmospheric Research would receive $92 
million. AGI strongly supports robust and steady funding for 
infrastructure and operation and maintenance of these major facilities.
    NSF's Office of Polar Programs (OPP) funds basic research in the 
Arctic and Antarctica that helps the United States maintain strategic 
plans, international efforts, security goals, natural resource 
assessments, cutting-edge polar technology developments, and 
environmental stewardship of extreme environs. OPP's funding helps 
support researchers and students, the U.S. military, and the private 
sector. OPP is estimated to directly support almost 3,325 people in 
fiscal year 2013 and thousands of others indirectly. AGI supports the 
President's request of $449.7 million for this important program.
    National Science Foundation Support for Earth Science Education.--
The Congress can grow the depleted geosciences workforce; stimulate 
economic growth in the energy, natural resources, and environmental 
sectors; and improve natural resource literacy by supporting the full 
integration of Earth science information into mainstream science 
education at the K-12 and higher education levels. AGI strongly 
supports the Math and Science Partnerships (MSP), the Graduate Research 
Fellowships (GRF) and the Research Experiences for Undergraduates (REU) 
within NSF's Education and Human Resources Division. These programs are 
effective in building a science and engineering workforce for the 21st 
century.
    Improving geoscience education, one of the goals of NSF-EHR, to 
levels of recognition similar to other scientific disciplines is 
important in the following ways:
  --Geoscience offers students subject matter that has direct 
        application to their lives and the world around them, including 
        energy, minerals, water, and environmental stewardship. All 
        students should be required to take a geoscience course in 
        primary and secondary school.
  --Geoscience exposes students to a range of interrelated scientific 
        disciplines. It is an excellent vehicle for integrating the 
        theories and methods of chemistry, physics, biology, and 
        mathematics. A robust geoscience course would make an excellent 
        capstone for applying lessons learned from earlier class work.
  --Geoscience awareness is a key element in reducing the impact of 
        natural hazards on citizens--hazards that include earthquakes, 
        volcanic eruptions, hurricanes, tornadoes, and floods. Informal 
        geoscience education that leads to reducing risks and preparing 
        for natural events should be a life-long goal.
  --Geoscience provides the foundation for tomorrow's leaders in 
        research, education, utilization and policymaking for Earth's 
        resources and our Nation's strategic, economic, sustainable, 
        and environmentally sound natural resources development. There 
        are not enough U.S.-trained geoscientists to meet current 
        demand and the gap is growing. Support for geoscience research 
        and education is necessary to stay competitive and to wisely 
        manage our natural resources.
    National Oceanic and Atmospheric Administration.--AGI supports a 
budget of $5.3 billion for NOAA, which is consistent with the request 
of other stakeholders and more than the President's request of $5.061 
billion. We hope the subcommittee will continue to support the National 
Weather Service (NWS); Oceanic and Atmospheric Research (OAR); National 
Ocean Service (NOS); and the National Environment Satellite, Data and 
Information Service (NESDIS). These programs are critical for 
understanding and mitigating natural and human-induced hazards in the 
Earth system while sustaining our natural resources. These programs 
prevent billions of dollars of losses, keep the private and public 
sectors growing, and save lives. For example, drought forecasts are 
worth up to $8 billion to the agriculture, transportation, tourism, and 
energy sectors while NexRad radar has prevented more than 330 
fatalities and 7,800 injuries from tornadoes since the early 1990s. The 
additional request of AGI and stakeholders would bring NWS, OAR, and 
NOS back to fiscal year 2010 levels, while supporting nonprocurement 
needs in NESDIS.
    National Institute of Standards and Technology.--We support the 
President's request of $860 million for NIST in fiscal year 2013. Basic 
research at NIST, conducted by Earth scientists and geotechnical 
engineers, is used by the public and private sector on a daily basis. 
The research conducted and the information gained is essential for 
understanding climate change and natural hazards in order to build 
resilient communities and stimulate economic growth with reduced impact 
from risk. In particular, we support Measurements and Standards to 
Support Increased Energy Efficiency and Reduced Environmental Impact 
and Measurements and Standards to Support Advanced Infrastructure 
Delivery and Resilience. Energy efficiency and reduced environmental 
impact research will improve the health of our planet and reduce energy 
costs. The advanced infrastructure research will help to reduce the 
estimated average of $52 billion in annual losses caused by floods, 
fires, and earthquakes.
    NIST is the lead agency for the National Earthquake Hazard 
Reduction Program (NEHRP), but has received only a small portion of 
authorized and essential funding in the past. AGI strongly supports the 
reauthorization of the National Earthquake Hazards Reduction Program 
(NEHRP) in 2012. We hope the appropriations subcommittee will continue 
to support this effective and cohesive program, even if the authorizing 
legislation takes more time to complete. NEHRP is an excellent example 
of how to coordinate different entities for the safety and security of 
all. NEHRP develops effective practices and policies for earthquake 
loss reduction and accelerates their implementation; improves 
techniques for reducing earthquake vulnerabilities of facilities and 
systems; improves earthquake hazards identification and risk assessment 
methods and their use; and improves the understanding of earthquakes 
and their effects.
    National Aeronautics and Space Administration.--AGI supports the 
vital Earth observing programs within NASA. AGI supports the 
President's request of $1.785 billion for Earth science programs within 
the Science Mission Directorate at NASA. The investments are needed to 
implement the priorities of the National Academies Earth Science and 
Applications from Space Decadal Survey. NASA needs to maintain its 
current fleet of Earth-observing satellites, launch the next tier and 
accelerate development of the subsequent tier of missions. The 
observations and understanding about our dynamic Earth gained from 
these missions is critical and needed as soon as possible. Earth 
observations are used every day, not just for research, but for 
critical information to aid society in mundane tasks, like weather 
forecasting and emergency services, such as tracking volcanic ash 
plumes or oil spills that disrupt the economy and the environment. The 
requested increase for fiscal year 2013 and proposed increases for 
future years are wise and well-planned investments that benefit 
everyone.
    We appreciate this opportunity to provide testimony to the 
subcommittee and would be pleased to answer any questions or to provide 
additional information for the record.
                                 ______
                                 
 Prepared Statement of the American Indian Higher Education Consortium

    This statement focuses on the National Science Foundation (NSF).
    On behalf of this Nation's 37 tribal colleges and universities 
(TCUs), which compose the American Indian Higher Education Consortium 
(AIHEC), thank you for the opportunity to express our views and 
recommendations regarding the National Science Foundation's Tribal 
Colleges and Universities Program (NSF-TCUP) for fiscal year 2013.

                           SUMMARY OF REQUEST

National Science Foundation--Education and Human Resources Directorate
    Since fiscal year 2001, a TCU initiative has been funded and 
administered under the NSF-Education and Human Resources (EHR). This 
competitive grants program enables TCUs to enhance the quality of their 
science, technology, engineering, and mathematics (STEM) instructional 
and outreach programs. TCUs that have been awarded an NSF-TCUP grant 
have completed comprehensive institutional needs analysis and developed 
a plan for how to address both their institutional and NSF goals, with 
a primary institutional goal being significant and sustainable 
expansion and improvements to STEM programs. Through NSF-TCUP, tribal 
colleges have been able to establish and maintain programs that 
represent a key component of the pipeline for the American Indian STEM 
workforce. We urge the subcommittee to fund the NSF-TCU competitive 
grants program at a minimum of $13,350,000.

 TRIBAL COLLEGES AND UNIVERSITIES SHOESTRING BUDGETS: ``DOING SO MUCH 
                            WITH SO LITTLE''

    Tribal colleges and universities are accredited by independent, 
regional accreditation agencies and like all U.S. institutions of 
higher education, must periodically undergo stringent performance 
reviews to retain their accreditation status. TCUs fulfill additional 
roles within their respective reservation communities functioning as 
community centers, libraries, tribal archives, career and business 
centers, economic development centers, public meeting places, and child 
and elder care centers. Each TCU is committed to improving the lives of 
its students through higher education and to moving American Indians 
toward self-sufficiency.
    TCUs have advanced American Indian higher education significantly 
since we first began four decades ago, but many challenges remain. 
Tribal colleges and universities are perennially underfunded. In fact, 
TCUs are the most poorly funded institutions of higher education in the 
country.
    The tribal governments that have chartered TCUs are not among the 
handful of wealthy gaming tribes located near major urban areas. 
Rather, they are some of the poorest governments in the Nation. Tribal 
colleges are home to some of the poorest counties in America.
    The Federal Government, despite its trust responsibility and treaty 
obligations, has never fully funded the principal institutional 
operating budgets, authorized under the Tribally Controlled Colleges 
and Universities Assistance Act of 1978. The Tribal College Act 
authorizes basic institutional operations funding on a per Indian 
student basis; yet the funds are not appropriated in the same manner. 
In fiscal year 2011, the Congress proposed level funding for TCU 
institutional operating grants and appropriated the communal pot of 
funds at the same level as fiscal year 2010. However, due to a spike in 
enrollments at the TCUs of more than 1,660 Indian students in a single 
year, the TCUs are receiving funds at $549 less per Indian student 
toward their institutional operating budgets. Fully funding TCUs' 
operating budgets would require $8,000 per Indian student. The tribal 
colleges are currently operating at $5,235 per Indian student. By 
contrast, Howard University located in the District of Columbia, the 
only other minority-serving institution to receive institutional 
operations funding from the Federal Government, is funded at 
approximately $19,000 per student. We are by no means suggesting that 
Howard University does not need this funding, only that the TCUs' 
operating budgets are clearly grossly underfunded.
    While TCUs do seek funding from their respective State legislatures 
for the non-Indian State-resident students (sometimes referred to as 
``nonbeneficiary'' students) that account for 20 percent of their 
enrollments, successes have been at best inconsistent. TCUs are 
accredited by the same regional agencies that accredit mainstream 
institutions, yet they have to continually advocate for basic operating 
support for their non-Indian State students within their respective 
State legislatures. If these nonbeneficiary students attended any other 
public institution in the State, the State would provide that 
institution with ongoing funding toward its operations.
    TCUs effectively blend traditional teachings with conventional 
postsecondary curricula. They have developed innovative ways to address 
the needs of tribal populations and are overcoming longstanding 
barriers to success in higher education for American Indians. Since the 
first TCU was established on the Navajo Nation in 1968, these vital 
institutions have come to represent the most significant development in 
the history of American Indian higher education, providing access to, 
and promoting achievement among, students who might otherwise never 
have known postsecondary education success.

                             JUSTIFICATIONS

National Science Foundation-Education and Human Resources
    American Indian students have the highest high school drop-out 
rates in the country. On average, more than 75 percent of all TCU 
students must take at least one developmental course, most often 
precollege mathematics. Of these students, our data indicate that many 
do not successfully complete the course in 1 year. Without question, a 
large proportion of the TCUs already limited resources is dedicated to 
addressing the failings of K-12 education systems.
    To help rectify this, TCUs have developed strong partnerships with 
their K-12 feeder schools and are actively working, often with support 
from NSF-TCU grant programs, to engage young students in community and 
culturally relevant science and math programs. These efforts include 
weekend academies and summer STEM camps that reinforce and supplement 
the instructional programs area K-12s are able to provide.
    Beginning in fiscal year 2001, NSF-TCUP has provided essential 
capacity building assistance and resources to TCUs. In the 
approximately 10 years since the program began, NSF-TCUP has become the 
primary Federal program for building STEM capacity at the TCUs. NSF-
TCUP has served as a catalyst for capacity building and positive change 
at TCUs and the program can be credited with many success stories. 
Today, American Indians are more aware of the importance of STEM to 
their long-term survival, particularly in areas such as renewable 
energy and technology-driven economic development.
    The NSF-TCU program, administered by the Education and Human 
Resources Directorate, is a competitive grants program that enables 
TCUs to develop and expand critically needed science and math education 
and research programs relevant to their respective communities. Through 
this program, TCUs that have been awarded an NSF-TCUP grant have been 
able to enhance their STEM instructional offerings, workforce 
development, and outreach programs.
    For example, College of Menominee Nation (CMN) in Keshena, 
Wisconsin has established strong programs in pre-engineering, computer 
science, natural resources, the biological and physical sciences, and 
sustainable development, mainly through support from NSF-TCUP. CMN's 
Sustainable Development Institute now hosts regional and sometimes 
international conferences on sustainable practices and in 2011 hosted 
an important conference for tribes located in the Great Lakes region to 
review current research on, and discuss strategies for responding to 
emerging challenges attributed to, climate change. CMN is an example of 
how TCUs are using their STEM programs as a springboard for taking 
critical leadership roles within their communities. Additionally, 
faculty and students at Haskell Indian Nations University in Lawrence, 
Kansas are using the university's Sequoyah Computer and GIS Lab to 
support their work with the Omaha and Winnebago Tribal Nations in 
collecting and analyzing hydrologic and botanical data necessary to 
support resource management decisionmaking by the tribal leadership.
    Unfortunately, not all of the TCUs have had an opportunity to 
benefit from this program; yet, funding for this vital program has been 
static, and the percentage of proposals funded has declined each year 
beginning in 2004. We strongly urge the subcommittee to fund the NSF-
TCU grants program at a minimum of $13,350,000.

                               CONCLUSION

    Tribal colleges and universities provide access to quality higher 
education opportunities, including STEM-focused programs, for thousands 
of American Indians. The modest Federal investment that has been made 
in TCUs has paid great dividends in terms of employment, education, and 
economic development. Continuation of this investment makes sound moral 
and fiscal sense.
    We greatly appreciate your past and continued support of the 
Nation's tribal colleges and universities and your serious 
consideration of our fiscal year 2013 appropriation request.
                                 ______
                                 
  Prepared Statement of the American Institute of Biological Sciences

    The American Institute of Biological Sciences (AIBS) appreciates 
the opportunity to provide testimony in support of fiscal year 2013 
appropriations for the National Science Foundation (NSF). We encourage 
the Congress to provide NSF with at least $7.373 billion in fiscal year 
2013.
    The AIBS is a nonprofit scientific association dedicated to 
advancing biological research and education for the welfare of society. 
AIBS works to ensure that the public, legislators, funders, and the 
community of biologists have access to and use information that will 
guide them in making informed decisions about matters that require 
biological knowledge. Founded in 1947 as a part of the National Academy 
of Sciences, AIBS became an independent, member-governed organization 
in the 1950s. Today, AIBS has nearly 160 member organizations and is 
headquartered in Reston, Virginia, with a Public Policy Office in 
Washington, DC.
    The NSF is an important engine that helps power our Nation's 
economic growth. Through its competitive, peer-reviewed research 
grants, NSF is leading the development of new knowledge that will help 
to solve the most challenging problems facing society, and will lead to 
new scientific discoveries, patents, and jobs. The agency's education 
and training programs are helping to ensure that the next generation 
has the scientific, technical, and mathematical skills employers are 
seeking. Investments in research equipment and facilities enable the 
country to continue to innovate and compete globally. These efforts, 
however, require a sustained and predictable Federal investment. 
Unpredictable swings in Federal funding can disrupt research programs, 
create uncertainty in the research community, and stall the development 
of the next great idea.
    NSF is the primary Federal funding source for fundamental research 
in the nonmedical life sciences at our Nation's universities and 
colleges. The NSF provides approximately 62 percent of extramural 
Federal support for nonmedical, fundamental biological, and 
environmental research at academic institutions.
    NSF is a sound investment that pays dividends. The use of peer-
review to evaluate and select the best proposals means that NSF is 
funding the highest-quality research. Importantly, the fiscal year 2013 
budget request would allow the agency to fund 300 additional research 
grants, thereby supporting roughly 5,000 additional researchers, 
teachers, and students.
    The research supported by NSF is unique from the science funded by 
other Federal agencies. Unlike most Federal agencies, which focus on 
applied research, NSF supports basic research that advances the 
frontiers of our knowledge about biodiversity, genetics, physiology, 
and ecosystems. Recent discoveries that stem from NSF-funded research 
include:
  --Creation of designer enzymes that can convert biomass into biofuels 
        faster, more efficiently, and less expensively.
  --Refined understanding of the mechanism by which the flu virus 
        infects humans. This insight could help to develop more 
        effective treatments for the flu and save lives.
  --Identification of long-term environmental changes in U.S. 
        ecosystems, such as changes in hydrology and nutrient inputs in 
        lakes in the Midwest.
  --Knowledge of the physiological effects of human-caused marine 
        stressors, such as pollution and low oxygen, on crustaceans' 
        ability to fend off bacterial infections. This research has 
        ramifications for several economically important fisheries.
  --Insight into the benefits of antimicrobial plant resins used in 
        beehives on honeybee health. This discovery could have 
        implications for colony collapse disorder, which has devastated 
        bee populations in North America.

                    BIOLOGICAL SCIENCES DIRECTORATE

    The Biological Sciences Directorate (BIO) funds research in the 
foundational disciplines within biology. These fields of study further 
our understanding of how organisms and ecosystems function. 
Additionally, BIO supports innovative interdisciplinary research that 
improves our understanding of how human social systems influence--or 
are influenced by--the environment, such as the NSF-wide Science, 
Engineering, and Education for Sustainability program. In collaboration 
with NSF's engineering, math, and physical science directorates, BIO is 
working to develop new, cutting-edge research fields. For example, the 
BioMaPS program is accelerating understanding of biological systems, 
and applying that knowledge to new technologies in clean energy.
    The fiscal year 2013 budget request for NSF would enable the agency 
to continue to fund highly competitive grant proposals in BIO's five 
core programmatic areas:
  --Environmental biology;
  --Integrative organismal systems;
  --Molecular and cellular biosciences;
  --Biological infrastructure; and
  --Emerging frontiers.
    Each of BIO's program areas also contribute to the education and 
training of undergraduate, graduate, and postdoctoral students.
    Equally important, BIO provides essential support for our Nation's 
place-based biological research, such as field stations and natural 
science collections. The Long-Term Ecological Research program supports 
fundamental ecological research over long-time periods and large 
spatial scales, the results of which provide information necessary for 
the identification and solution of environmental problems.
    The budget request also would sustain an effort to digitize high-
priority specimens in U.S. scientific collections. This investment will 
help the scientific community ensure access to and appropriate curation 
of irreplaceable biological specimens and associated data, and 
stimulate the development of new computer hardware and software, 
digitization technologies, and database management tools.
    The fiscal year 2013 budget would continue efforts to better 
understand biodiversity. Funding is included for the Dimensions of 
Biodiversity program, which supports cross-disciplinary research to 
describe and understand the scope and role of life on Earth. Despite 
centuries of discovery, most of our planet's biodiversity remains 
unknown. This lack of knowledge is particularly troubling given the 
rapid and permanent loss of global biodiversity. Better understanding 
of life on Earth will help us to protect valuable ecosystem services 
and make new bio-based discoveries in the realms of food, fiber, fuel, 
pharmaceuticals, and bio-inspired innovation.
    The budget request includes funding in the Major Research Equipment 
and Facilities Construction account for the continued construction of 
the National Ecological Observatory Network (NEON). Once completed, 
NEON will provide the infrastructure necessary to collect data across 
the United States on the effects of climate change, land use change, 
water use, and invasive species on natural resources and biodiversity. 
This information will be valuable to scientists, resource managers, and 
Government decisionmakers as they seek to better understand and manage 
natural systems.

      SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS EDUCATION

    The requested budget would allow NSF to build upon its central role 
in science, technology, engineering, and mathematics (STEM) education. 
Support for the scientific training of undergraduate and graduate 
students is critically important to our research enterprise. Students 
recruited into science through NSF programs and research experiences 
are our next generation of innovators and educators. In short, NSF 
grants are essential to the Nation's goal of sustaining our global 
leadership in science, technology, engineering and mathematics and 
reigniting our economic engines.
    We encourage the subcommittee to provide the requested funding for 
the successful Graduate Research Fellowship program. The budget request 
would provide funding for 2,000 new fellowships, which are important to 
our national effort to recruit and retain the best and brightest STEM 
students. The budget would also provide a needed $2,000 increase to the 
fellowship's stipend, which has not changed since 2005.
    The agency budget request also would provide important research 
support to early career scientists, helping them to initiate their 
research programs. The Faculty Early Career Development program 
(CAREER) supports young faculty who are dedicated to integrating 
research with teaching and learning. The fiscal year 2013 budget would 
enable NSF to support approximately 40 more CAREER awards than in 
fiscal year 2012.

                               CONCLUSION

    Continued investments in the biological sciences are critical. The 
budget request for NSF will help spur economic growth and innovation 
and continue to build scientific capacity at a time when our Nation is 
at risk of being outpaced by our global competitors. Please support an 
investment of at least $7.373 billion for NSF for fiscal year 2013.
    Thank you for your thoughtful consideration of this request and for 
your prior efforts on behalf of science and NSF.
                                 ______
                                 
      Prepared Statement of the American Public Power Association

    The American Public Power Association (APPA) supports adequate 
funding for staffing antitrust enforcement and oversight at the 
Department of Justice (DOJ). For the DOJ Antitrust Division we support 
the President's fiscal year 2013 request of $165 million.
    APPA is the national service organization representing the 
interests of more than 2,000 municipal and other State and locally 
owned utilities in 49 States (all but Hawaii). Collectively, public 
power utilities deliver electricity to 1 of every 7 electric consumers 
(approximately 46 million people), serving some of the Nation's largest 
cities. However, the vast majority of APPA's members serve communities 
with populations of 10,000 people or less.
    The DOJ Antitrust Division plays a critical role in monitoring and 
enforcing antitrust laws affecting the electric utility industry. With 
the repeal of the Public Utility Holding Company Act (PUHCA) included 
in the Energy Policy Act of 2005, the electric utility industry has 
experienced an increase in mergers that could result in increased 
market power in certain regions. This development, coupled with the 
volatility and uncertainty continuing to occur in wholesale electricity 
markets run by regional transmission organizations, makes the oversight 
provided by DOJ more critical than ever.
    We appreciate the opportunity to submit this statement outlining 
our fiscal year 2013 funding priority within the Commerce, Justice, 
Science and Related Agencies subcommittee's jurisdiction.
                                 ______
                                 
      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM) is pleased to submit 
the following testimony on the fiscal year 2013 appropriation for the 
National Science Foundation (NSF). ASM is the largest single-life 
science organization in the world with about 38,000 members. ASM 
endorses the administration's fiscal year 2013 request of $7.373 
billion for NSF, a 4.8-percent increase more than the fiscal year 2012 
level. For more than 60 years, NSF grants have been responsible for 
breakthroughs in science, technology, engineering, and mathematics 
(STEM), sponsoring research with economic benefits and providing 
opportunities to train new generations of STEM professionals.
    U.S. global competitiveness in science and technology can only be 
sustained by increased resources devoted to research and development 
(R&D). In NSF's most recent biennial Science & Engineering Indicators 
report, U.S. investment in R&D declined during the 1999-2009 period 
relative to other nations' investments. It is critical that funding be 
increased for the NSF because it is the primary source of Federal 
research funding in multiple STEM disciplines.
    Each year, NSF distributes funds to about 1,900 colleges, 
universities, and other U.S. institutions. This year NSF will support 
about 285,000 researchers, postdoctoral fellows, and other trainees, 
teachers, and students. In fiscal year 2013, it expects to make more 
than 12,000 new awards selected from more than 55,000 submitted 
research proposals. NSF is responsible for 61 percent of the total 
Federal budget for basic academic research.
    NSF's fiscal year 2013 budget will support the American 
Competitiveness Initiative and the National Bioeconomy Blueprint 
designed to resolve issues in health, food, energy, and the 
environment. NSF has launched several new initiatives to accelerate 
innovation, including the NSF Innovation Corps (I-Corps) program to 
build partnerships between NSF-funded researchers and the private 
sector. The Science, Engineering and Education for Sustainability 
(SEES) program will use sustainability science to generate important 
innovations in clean energy like microbial produced biofuels.
    NSF-funded scientists contribute new information about living 
organisms that benefits public health, our economy, and the 
environment. In the past year, NSF-supported researchers at academic 
institutions have reported the following results, among many others:
  --Electron microscopy and 3-D image reconstruction revealed the 
        seahorse-shaped structure of a protein complex in Escherichia 
        coli that can adapt to defend the bacteria against viruses and 
        other microbial threats, indicating a bacterial immune system 
        analogous in part to the human immune system.
  --In stressful environments, Bacillus subtilis bacteria increase 
        their survival by pulsing genes, like those initiating cell 
        repair, on and off, counter to previous belief that once turned 
        on, the genes remain active.
  --Some patients develop blood infections from implanted cardiac 
        devices because the biofilm bacteria involved have gene 
        mutations that make the bacteria more likely to adhere to 
        device surfaces, according to research partly funded by NSF's 
        Directorate for Geosciences.
  --Viruses known to infect E. coli bacteria (M13 phages) have been 
        tricked into self-assembling as thin films with 3-D features 
        like filaments or ridges, offering a potential nanoscale tool 
        that might eventually lead to tissue regeneration and repair.
  --Genetic sequencing of the bacteria that cause speck disease in 
        tomatoes (Pseudomonas syringae pv. tomato), comparing isolates 
        from 1975 and 2000, revealed that the economically important 
        plant pathogen evolves more rapidly than expected, increasing 
        its resistance to the tomato immune system and becoming more 
        virulent.
  --Novel therapeutics effective against drug-resistant influenza 
        viruses might be developed using new research on the pocket-
        shaped surface cavities of avian influenza viruses that are 
        targeted by flu drugs, based on computer simulations of how 
        these cavities move and change.
  --Scientists have sequenced the genomes of two fungal pathogens 
        responsible for plant diseases that severely impact global food 
        supplies, wheat stem rust and poplar leaf rust, in a 6-year 
        collaborative program involving several universities, NSF, the 
        U.S. Department of Energy, and the U.S. Department of 
        Agriculture (USDA).

   NATIONAL SCIENCE FOUNDATION FUNDING SUPPORTS DIVERSE RESEARCH IN 
                          BIOLOGICAL SCIENCES

    The fiscal year 2013 budget requests $733.86 million for NSF's 
Directorate for Biological Sciences (BIO), a 3-percent increase more 
than the enacted fiscal year 2012 level. We are concerned that funding 
for the BIO divisions has remained essentially flat since fiscal year 
2010. BIO-supported research contributes important insights and new 
knowledge across the wide spectrum of living organisms and systems, 
with obvious applications to public health. Fiscal year 2013 funding 
will further current BIO strategies that emphasize cross-cutting 
research combining several scientific disciplines or leveraging the 
interfaces between the physical and biological worlds.
    Within its research portfolio, the Directorate invests in the five 
so-called Grand Challenges in Biology:
  --synthesizing life-like systems;
  --understanding the brain;
  --predicting organisms' characteristics from their DNA sequences;
  --elucidating interactions between the Earth, its climate and its 
        biosphere; and
  --understanding biological diversity.
    BIO grant recipients and training programs seek answers to major 
problems like climate change, energy shortages, animal and plant 
diseases, and threats to our environment. In fiscal year 2013, BIO 
funding will be distributed among more than 18,000 scientists, 
students, and K-12 teachers to promote relevant research and education.
    This year, the first test sites in the NSF-funded National 
Ecological Observatory Network (NEON) will be operational. NEON is a 
unique research infrastructure that will study all biological entities 
identified in large geographic areas over extended periods. Included in 
NEON research will be numerous studies of microbial communities, their 
responses to environmental change, and how they can be utilized in 
useful ways. Another large-scale NSF project with microbe-based 
components is the agency wide SEES program, distributing grants in 
bioremediation and microbial genetics.
    BIO provides about 62 percent of Federal funding for nonmedical 
basic research in the life sciences at academic institutions and 
supports important microbial research. Over the past 2 years, BIO has 
awarded more than 580 grants worth about $111 million to microbiology-
related projects, which have advanced basic and applied microbiology, 
such as new ways to produce drugs against infectious diseases and 
potential remediation methods to clean polluted environments.
    The Ecology and Evolution of Infectious Disease (EEID) program is a 
joint BIO effort in partnership with USDA's National Institute of Food 
and Agriculture and National Institutes of Health's (NIH) National 
Institute of General Medical Sciences. The principal focus is the 
dynamics of disease transmission, and the program supports academic 
research on the ecological, evolutionary, and socio-ecological 
processes that determine the spread of diseases. Through this program, 
NSF multidisciplinary research is creating inventive approaches to 
controlling infectious diseases. Potential grantees are encouraged to 
utilize investigative teams of physicians, veterinarians, food 
scientists, virologists, and multiple other specialists in their 
proposals.
    Last year, EEID-funded researchers identified the mosquito and bird 
species most responsible for West Nile virus transmission and linked 
bacteria in human sewage to white pox disease that is killing elkhorn 
coral in the Caribbean. Recently funded EEID projects include studies 
of the transmission of brucellosis among bison in Yellowstone Park, the 
spread of the fungal disease white-nose syndrome among hibernating 
bats, and how wildfires and extreme droughts affect the spread of the 
infectious plant disease called sudden oak death that has attacked 
millions of trees in California and Oregon. EEID's mission encompasses 
the varied factors that determine transmission of diseases to humans, 
nonhuman animals, and plants, enabling research in infectious disease 
not replicated elsewhere.

    NATIONAL SCIENCE FOUNDATION FUNDING SUPPORTS BASIC RESEARCH IN 
            ENGINEERING, MATHEMATICS, AND PHYSICAL SCIENCES

    NSF supports interdisciplinary studies in all STEM fields as the 
boundaries have become increasingly blurred among biological, physical, 
and computing sciences. The Directorate for Engineering would receive 
$873.33 million, an increase of 6.1 percent; the Directorate for 
Geosciences (GEO), $906.44 million (2.4 percent); and the Directorate 
for Mathematical and Physical Sciences (MPS), $1,345.18 million (2.8 
percent).
    GEO--which provides about 55 percent of Federal funding for basic 
geosciences research--supports diverse academic studies of the global 
environment. GEO-funded research, scientist training, and education 
contribute new knowledge about the oceans, our atmosphere, water 
quality, and other environmental systems. GEO funds help underwrite 
observatories, ocean drilling projects, and other large-scale programs 
that would be unlikely without NSF support. The resulting research also 
has added to our understanding of natural disasters like earthquakes 
and tornadoes. Geochemists' identified microbes in the Gulf of Mexico 
following the Deepwater Horizon oil spill that ingest natural gases 
like methane and ethane at cold temperatures, which should inform 
future contaminant remediation.
    The Directorate of MPS provides one-half of the Federal funding for 
basic research at academic institutions. Its contributions to the SEES 
program include grant awards for sustainable chemistry research. MPS 
recently appointed a committee of external experts, called NSF 
Materials 2022, to develop future research strategies in materials 
science that will undoubtedly utilize biological systems among others. 
In fiscal year 2013, MPS also will continue its partnership with the 
BIO and ENG directorates in the Research at the Interface of the 
Biological, Mathematical and Physical Sciences (BioMaPS) program, which 
integrates biological, engineering, mathematical, and physical sciences 
to study naturally occurring networks. BioMaPS-funded projects generate 
bio-based materials, through new approaches to manufacturing devices 
and platforms. MPS funding for this creative program would increase 50 
percent in fiscal year 2013, recognition of the potential contributions 
from mathematical and physical sciences to technologies like 
bioimaging, renewable fuels, and biosensors.
    The Directorate for Engineering contributes about 35 percent of 
Federal funding for basic engineering research at academic 
institutions. Bioengineering research offers exciting new solutions to 
challenges faced in healthcare, environmental stewardship, and the U.S. 
economy. The Division of Chemical, Bioengineering, Environmental, and 
Transport Systems (CBET) underwrites SEES-related research and 
education aimed toward sustainability in water, climate, and energy. 
The CBET research portfolio includes emerging specialties like 
biosensing and investigations that involve engineers, life scientists, 
and bioinformatics experts.

                               CONCLUSION

    ASM recommends that the Congress approve the administration's 
fiscal year 2013 budget request for the NSF, the Nation's principal 
sponsor of basic research in crucial technical areas. It is important 
that the Congress sustain NSF's proven successes in STEM-related 
research and education. By funding academic research, NSF serves the 
public as a partner in achieving our national imperative to enhance 
discovery and innovation across STEM disciplines.
                                 ______
                                 
         Prepared Statement of the American Society of Agronomy

    The American Society of Agronomy (ASA), Crop Science Society of 
America (CSSA), and Soil Science Society of America (SSSA) represent 
more than 18,000 members in academia, industry, and Government, and 
13,000 Certified Crop Advisers. The largest coalition of professionals 
dedicated to the agronomic, crop, and soil science disciplines in the 
United States, ASA, CSSA, and SSSA are dedicated to utilizing science 
in order to meet our growing food, feed, fiber, and fuel needs. With an 
ever-expanding global population and increasing food demands, 
investment in food and agriculture research is essential to maintaining 
our Nation's food, economic and national security. We are pleased to 
submit the following funding recommendations for fiscal year 2013.
    ASA, CSSA, and SSSA understand the budgetary challenges facing the 
Senate Commerce, Justice, Science, and Related Agencies Appropriations 
subcommittee. We also recognize that the Commerce, Justice, and 
Science, and related agencies appropriations spending bill has many 
valuable and necessary components, and we applaud the past efforts of 
the subcommittee to fund critical research through the National Science 
Foundation (NSF). ASA, CSSA, and SSSA urge the subcommittee to support 
an increase in fiscal year 2013 funding for NSF of 5 percent more than 
the fiscal year 2012 enacted level, bringing total funding to $7.4 
billion, the same funding level recommended in the President's fiscal 
year 2013 budget request. This strong level of funding will enable NSF 
to continue valuable projects that promote transformational and 
multidisciplinary research, provide needed scientific infrastructure, 
and contribute to preparing the next generation science, technology, 
engineering, and mathematics workforce.
    Within NSF we support the following programs that help advance our 
understanding of the basic crop and soil sciences. These sciences 
underpin future solutions to many of the most pressing challenges 
including food security, sustainable renewable energy production, and 
environmental protection that confront both our country and the world.

                    BIOLOGICAL SCIENCES DIRECTORATE

Molecular and Cellular Biosciences
    ASA, CSSA, and SSSA support funding Molecular and Cellular 
Biosciences (MCB) at $132.68 million for fiscal year 2013 (an $6.89 
million or 5.5-percent increase more than fiscal year 2012). MCB 
supports fundamental research and related activities designed to 
promote understanding of complex living systems at the molecular, 
subcellular, and cellular levels. The division supports research across 
a broad spectrum of experimental systems, ranging from organisms, such 
as plants and microbes, to the use of in silico approaches.
Integrative Organismal Systems
    ASA, CSSA, and SSSA support increasing Integrative Organismal 
Systems (IOS) funding to $220.52 million (an increase of $8.19 million 
or 3.9 percent more than fiscal year 2012), which would allow 41 
percent of the IOS portfolio to be available for new research grants. 
In order to meet increasing demands and develop more robust crops, 
additional fundamental understanding regarding the basic biology of 
these crops is needed. IOS maintains its commitment to support 
fundamental plant genome research through the Plant Genome Research 
Program (PGRP). In addition, the Developing Country Collaborations in 
Plant Genome Research program links U.S. researchers with partners from 
developing countries to solve problems of mutual interest in 
a