[Senate Hearing 112-353]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 112-353

              OVERSIGHT OF THE U.S. DEPARTMENT OF JUSTICE

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

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 4, 2011

                               __________

                          Serial No. J-112-18

                               __________

         Printed for the use of the Committee on the Judiciary










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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 CHUCK GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
CHUCK SCHUMER, New York              JON KYL, Arizona
DICK DURBIN, Illinois                JEFF SESSIONS, Alabama
SHELDON WHITEHOUSE, Rhode Island     LINDSEY GRAHAM, South Carolina
AMY KLOBUCHAR, Minnesota             JOHN CORNYN, Texas
AL FRANKEN, Minnesota                MICHAEL S. LEE, Utah
CHRISTOPHER A. COONS, Delaware       TOM COBURN, Oklahoma
RICHARD BLUMENTHAL, Connecticut
            Bruce A. Cohen, Chief Counsel and Staff Director
        Kolan Davis, Republican Chief Counsel and Staff Director

















                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Grassley, Hon. Chuck, a U.S. Senator from the State of Iowa......     2
    prepared statement...........................................   163
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................   183

                               WITNESSES

Holder, Eric H., Jr., Attorney General, U.S. Department of 
  Justice, Washington, DC........................................     4

                         QUESTIONS AND ANSWERS

Responses of Eric H. Holder Jr., to questions submitted by 
  Senators Leahy, Schumer, Whitehouse, Klobuchar, Franken, 
  Grassley, Sessions, Graham, Cornyn and Coburn..................    38

                       SUBMISSIONS FOR THE RECORD

Holder, Eric H., Jr., Attorney General, U.S. Department of 
  Justice, Washington, DC, statement.............................   167

 
              OVERSIGHT OF THE U.S. DEPARTMENT OF JUSTICE

                              ----------                              


                         WEDNESDAY, MAY 4, 2011

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:08 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Kohl, Schumer, Klobuchar, Franken, 
Coons, Blumenthal, Grassley, Sessions, Hatch, Kyl, and Graham.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning.
    The Committee holds this oversight hearing today as details 
continue to emerge about the successful military and 
intelligence operation that killed Osama bin Laden, the 
terrorist whom we know is responsible for thousands of American 
deaths in the attacks of September 11, 2001, the October 2000 
bombing of the USS Cole, the 1998 embassy bombings in East 
Africa, the 1993 bombing of the World Trade Center, and so many 
other attacks around the world.
    Nearly 10 years after the murderous attacks of September 
11th, a measure of justice has been wrought for the victims of 
those criminal acts. Osama bin Laden has paid for his actions 
against innocent Americans and innocent people around the 
world. This terrorist--and that is what he was, a terrorist, a 
murderer--perpetuated hate and destruction. His death is a 
fitting end to his reign of terror.
    One thing can be said for certain: Both President Obama and 
his national security team have never lost sight of the 
Nation's war against terrorism. Today I welcome back a member 
of that national security team and welcome back to the 
Committee for the sixth time Attorney General Holder. He has, 
as I said, been a key member of that national security team. 
His approach to fighting terrorism has been vigilant; he has 
not excused constitutional excesses out of fear, and he, like 
President Obama, has used our full arsenal to protect and 
defend the American people.
    This week there should be universal praise for the 
successful operation against Osama bin Laden and al Qaeda, 
those who attacked us on September 11th. But our need for 
vigilance in response to the continued threat from terrorism 
remains. No one doubts that. America will continue to face 
these threats for a long time to come, and we should always act 
with strength and not out of fear. I share the commitment of 
the administration and of Attorney General Holder to our core 
constitutional values, and I urge all Americans to not only 
support our President but all of us in Congress in both parties 
who work with him to keep America safe. I agree with what the 
President said at a dinner many of us attended at the White 
House this week. It is time to put aside partisanship and join 
together for the good of the country and all Americans. I would 
like to see the same unity we displayed right after the 9/11 
attacks.
    I remember us standing arm in arm on the steps of the 
Capitol, Republicans and Democrats alike, the support we showed 
for then-President George W. Bush and others in a common goal 
to stop terrorism.
    And I think to help the administration, the Senate must 
make sure that his full national security team is in place. I 
believe the Senate should confirm Deputy Attorney General Jim 
Cole's nomination without further delay. It is a key national 
security nomination that has been held up for too long. We 
should move forward with our consideration and the confirmation 
of Lisa Monaco to lead the National Security Division at the 
Justice Department. Her nomination is on the Committee's agenda 
this week, tomorrow, and it should not be delayed. I would like 
to see it go through quickly and get passed by the Senate.
    I appreciate Attorney General Holder's consistent support 
of our efforts to reauthorize the expiring provisions of the 
USA PATRIOT Act and to improve them by increasing 
accountability. He has said repeatedly that the legislation 
before the Senate, which we negotiated with the administration, 
poses no operational concerns.
    Turning to other aspects of the mission of the Justice 
Department, I am heartened by the important work the Department 
continues to do to fight the scourge of fraud, which has harmed 
so many hard-working Americans and which also contributed to 
our current economic crisis. Senator Grassley and I worked 
together in the last Congress to write and pass the Fraud 
Enforcement and Recovery Act that gave fraud investigators and 
prosecutors needed tools, and making use of these new tools is 
extremely important. I hope the Department will address the 
problem as aggressively as possible, especially the ongoing 
reports about inaccurate, forged, or fraudulent documents in 
the housing foreclosure process.
    More recently, the Attorney General has announced the 
formation of a new working group to tackle the problem of fraud 
related to oil and gas prices. These costs are hurting our 
economy. I want to make sure that we are facing it the way we 
should.
    I have a number of other areas which we will put in the 
record so we can continue. I want to reauthorize the Violence 
Against Women Act and the Trafficking Victims Protection Act, 
and I thank the Attorney General for being here, and I yield to 
Senator Grassley.

STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM THE STATE 
                            OF IOWA

    Senator Grassley. Yes, thank you, Mr. Chairman, for holding 
this oversight hearing.
    It has been over a year since this Committee has held an 
oversight hearing with the Attorney General, so, of course, 
there is much ground to be covered. In that intervening year, 
many developments at the Justice Department have raised serious 
questions about whether the Department is putting politics 
before the interests of the American people. These are serious 
issues, and I plan to ask a number of questions along that 
line.
    I am extremely disappointed in the Justice Department's 
response to my inquiry into the Bureau of Alcohol, Tobacco, and 
Firearms. I sent a letter in January about allegations from 
whistleblowers that our Government was allowing guns to be 
illegally smuggled to Mexico. The Department claimed the 
whistleblower allegations were false and that ``ATF makes every 
effort to interdict weapons that have been purchased illegally 
and prevent their transportation to Mexico.''
    I personally expressed my concern to the Attorney General 
about the accuracy of the Department's replies in our telephone 
conversation just this Monday. So I was stunned that just a few 
hours after our conversation, the Department sent another 
letter repeating the denial in slightly different words. 
According to Monday's letter, ``ATF's Operation Fast and 
Furious did not knowingly permit straw buyers to take guns into 
Mexico.''
    It is particularly disturbing that the Department would 
renew its denial at this late date in light of the growing 
evidence in support of the allegations. Documents and witness 
testimony show that the ATF allowed the sale of semiautomatic 
weapons to many straw purchasers, even after it knew that the 
guns they previously purchased were recovered in Mexico.
    Worst of all, on December 15, 2010, Border Patrol Agent 
Brian Terry was killed in an incident at the border where two 
of these weapons that the ATF knowingly allowed to be sold to 
criminals were found at the crime scene. At best, the ATF was 
careless in authorizing the sale of thousands of guns to straw 
purchasers. At worst, our own Government knowingly participated 
in arming criminals, drug cartels, and those who later killed 
Federal agents.
    The Department argues that the Congressional investigation 
of these allegations threatened the ongoing criminal 
prosecutions of straw purchasers. Yet the Department and the 
ATF chose to wait and watch those same straw purchasers do 
business for over a year before charging them with any criminal 
conduct. It was only after the death of Terry that the straw 
purchasers were finally charged.
    I take exception to the notion that Congress must hold off 
on an investigation on the grounds that discovering the truth 
could hinder prosecutions. The goal of a trial is to search for 
truth. If our system of justice works the way it should, the 
Department cannot ultimately prevent the truth from coming to 
light. Congress should not allow its fact-finding efforts to be 
stonewalled just because the details might be embarrassing to 
certain officials in the Department.
    The conduct in question by both ATF and the Department is 
serious. It may have lead to the death of at least one Federal 
agent and countless other crimes in the U.S. and Mexico. The 
Department should not stonewall Congress or seek to intimidate 
whistleblowers or other potential witnesses in Congressional 
proceedings. This cannot simply be swept under the rug. I plan 
to continue my work with the help of Congressman Issa and get 
to the bottom of who signed off on this operation that failed 
so tragically.
    In addition to the ATF matter, I want to discuss leaks of 
classified information. Attorney General Holder has publicly 
stated that, ``Unauthorized leaks of classified and other 
sensitive information are a real threat to our National 
security.'' Continuing to quote, ``To the extent that we can 
find anybody involved in breaking American law who has put at 
risk the assets and the people that I have described, they will 
be held responsible. They will be held accountable.''
    Unfortunately, these statements do not appear to represent 
the realities at the Department when it comes to prosecuting 
those who leak classified information. Just this week, it was 
reported in the press that the Department had dropped the 
prosecution of former Justice attorney Thomas Tamm who admitted 
to leaking classified national security information to the New 
York Times. I am concerned that the decision not to prosecute 
anyone related to this specific leak may indicate a reluctance 
to enforce the law.
    Leaks of classified information threaten the lives of our 
agents and allies in the field. They also threaten the 
integrity of our Government, especially in foreign relations 
conduct. I want to ask the Attorney General about this decision 
not to prosecute one of the Department's own because it is 
starting to look like there may be a double standard for 
leakers at the Department.
    I would also like to discuss what appears to be a new 
failed IT procurement at the Department. The Integrated 
Wireless Network, IWN, was recently abandoned by the Department 
of Justice, and it appears that the project will end without 
completing its original goal to integrate the wireless radios 
for all Federal law enforcement agencies. I am concerned that 
this program is starting to look like a lot of other failed IT 
programs at the Department--hundreds of millions of taxpayers' 
dollars with nothing to show for it.
    I am glad that the Attorney General is here so we can 
discuss these things. Thank you, Mr. Chairman.
    Chairman Leahy. Thank you very much.
    Welcome back, Attorney General Holder. And I apologize for 
the nosebleed, I apologize to Senator Grassley in leaving, and 
I am afraid to hear--it was not in anticipation of something 
explosive from your testimony, Attorney General, that gave me 
the nosebleed. I think it was the dry air. Go ahead, please.

 STATEMENT OF HON. ERIC H. HOLDER, JR., ATTORNEY GENERAL, U.S. 
            DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

    Attorney General Holder. Good morning, Chairman Leahy, 
Ranking Member Grassley, and other distinguished members of the 
Committee. It is a privilege to appear before you today again 
to discuss the priorities and the accomplishments of the United 
States Department of Justice.
    Throughout my tenure as Attorney General, I have had the 
chance to work closely with this Committee to carry out our 
most important duty, and that is, protecting the American 
people. Today I am pleased to report that the Justice 
Department's efforts to fulfill this solemn obligation have 
never been stronger.
    Three days ago, thanks to many dedicated military and 
civilian leaders, intelligence and law enforcement officers, 
diplomats and policymakers, investigations, prosecutors, and 
counterterrorism experts, the decade-long manhunt for Osama bin 
Laden came to a successful end. This historic achievement was a 
tremendous step forward in attaining justice for the nearly 
3,000 innocent Americans who were murdered on September 11, 
2001, and I hope it will inspire a renewed commitment to 
collaboration across party lines, branches of responsibility, 
and agencies so that we can effectively address the most 
pressing challenges facing the American people.
    At the Justice Department, we are determined to build on 
the extraordinary record of progress that has been established 
over the last 2 years in meeting our responsibility to those 
whom we serve. We have thwarted potential terror attacks and 
charged more defendants with the most serious terror-related 
offenses than in any similar period in our history.
    At the same time, and despite very significant budget 
constraints, we have strengthened our operations and advanced 
our traditional missions. We have filed a record number of 
criminal civil rights cases and secured a record amount of 
False Claims Act recoveries. We have played a leading role in 
responding to the largest oil spill in America's history and 
worked to ensure that taxpayers do not foot the bill for its 
cleanup.
    We have also spearheaded the efforts of the interagency 
Financial Fraud Enforcement Task Force and successfully 
executed the largest financial and health care fraud takedowns 
on record and the biggest bank fraud prosecution in a 
generation.
    Now, these are historic achievements, but we have more to 
do. Going forward, our efforts will focus on four specific 
areas.
    First of all, our National security work will continue. 
Despite recent successes, our fight against terrorist threats 
is far from over. Already I have ordered the Department's 
prosecutors and law enforcement agencies to be mindful that bin 
Laden's death could result in retaliatory attacks. Now more 
than ever, we need access to the crucial authorities in the 
PATRIOT Act, and I call on Congress to reauthorize them for a 
substantial period of time before they expire at the end of 
this month.
    Second, we will protect Americans from violent crimes. We 
will continue to prosecute Federal criminal law violations 
aggressively, but in addition, we will implement research-based 
crime prevention strategies to combat gun, gang, and drug-
fueled violence. We will provide support to young people who 
need our help in avoiding lives of crime and to those who have 
served their time and are struggling to rejoin their 
communities. And we will strengthen relationships with our 
Federal, State, local, and tribal law enforcement partners. We 
also will increase support for law enforcement officers and 
work to reverse the alarming recent increase in line-of-duty 
officer fatalities.
    Third, we will protect Americans from financial fraud 
through our highly effective task force and through other 
outreach and prosecutorial initiatives. And we will continue to 
take proactive steps, like the recent launch of the oil and gas 
price fraud working group to safeguard consumers.
    Finally, we will protect the most vulnerable among us--our 
children, the elderly, victims of hate crimes, human 
trafficking, and exploitation--and we will enforce our civil 
rights laws to guarantee that the rights of all Americans are 
upheld.
    Now, to achieve these goals, I need my full team in place. 
I urge you to confirm the highly qualified individuals whom 
President Obama has nominated to serve alongside me in 
leadership roles at the Department. In particular, I hope the 
Senate will promptly confirm Jim Cole, whose nomination to 
serve as Deputy Attorney General has been pending for a full 
year.
    Finally, we need your help in ensuring the effective 
administration of justice. Today our Nation's court system is 
in a state of crisis, with more than 10 percent of Federal 
judgeships sitting vacant. If the Senate maintains the 
confirmation pace set during the last 2 years, the result will 
be a Federal judicial system stressed to the breaking point, 
with litigants waiting longer and longer for their day in 
court. I urge the Senate to act without delay on all 
outstanding judicial nominations.
    As always, I look forward to working with you to address 
these challenges and to advance our shared priorities, and I 
would be more than glad to respond to any questions that you 
might have.
    [The prepared statement of Attorney General Holder appears 
as a submission for the record.]
    Chairman Leahy. Well, thank you very much, Attorney 
General.
    As you know, this Committee favorably reported S. 193, the 
USA PATRIOT Act Sunset Extension Act in March with a bipartisan 
vote. You have previously said you think the bill strikes an 
appropriate balance, that it did not pose operational concerns 
for the Department. Would you agree that this bill is the 
product of careful negotiations between the Department of 
Justice, the intelligence community, and this Committee?
    Attorney General Holder. Yes, I would agree. And as I 
indicated in my opening statement, I think it is really 
critical that that bill become law as quickly as possible. We 
do not want to have the uncertainty that we have had over the 
recent past where we have had to come back for extensions of 
the PATRIOT Act that do not last long enough. We look for a 
reauthorization for a substantial enough period in order to 
provide certainty and predictability for the people who will 
have to enforce those very important provisions of the Act.
    Chairman Leahy. Would 3 years be considered substantial?
    Attorney General Holder. Three years sounds substantial. I 
am interested in getting----
    Chairman Leahy. A lot better than 3 months.
    Attorney General Holder. A lot better than 3 months, and I 
am also trying to get to 60, I guess, in this body and I guess 
217, 218, whatever it is in the other body. So whatever we can 
get to, to get to a substantial period would be appreciated.
    Chairman Leahy. Thank you. We talked before about the fact 
that American intellectual property is a major driver of our 
economy and job creation. At the same time, if you steal that 
intellectual property, it hurts us, but also we are finding 
more and more that when the intellectual property is stolen, it 
is actually financing major criminal enterprises. So I applaud 
the work you have done in conjunction with Homeland Security to 
set as a priority IP enforcement, including reconstituting the 
IP Task Force within the Department. We know that the theft of 
intellectual property, especially by rogue websites, is 
something both Republicans and Democrats on this Committee have 
tried to stop.
    Can you work with us on this, because--and do you agree 
that this is a major problem?
    Attorney General Holder. This is a very, very substantial 
problem.
    Chairman Leahy. I was concerned and I know Senator Franken 
has expressed his concern about recent reports that the Apple 
iPhone and the Google Android phone and other mobile 
applications may collect and store and track American 
consumers' location information without their consent. It does 
raise privacy rights and security issues.
    Last month, the Wall Street Journal reported that Federal 
prosecutors in New Jersey are investigating whether certain 
smart phone applications may violate Federal computer fraud 
laws because the applications obtain or transmit user 
information without the proper disclosure.
    I realize if you have got an on going criminal 
investigation you cannot talk about that, but can you tell us 
at least in general what steps the Department is taking on this 
issue? Senator Franken and others have raised this issue, and I 
am curious.
    Attorney General Holder. I guess I should first disclose 
that I am a satisfied owner of both an iPad and an iPhone. But 
having said that, I understand the Committee will be holding 
hearings in a couple of weeks with regard to this issue. It is 
something that we will follow and, on the basis of that and 
other things that we are looking at, determine if there is 
appropriate action that we can be taking.
    Chairman Leahy. Some have suggested the important digital 
privacy protections we put in place with ECPA, the Electronic 
Communications Privacy Act, may not apply to some or many of 
the mobile applications currently available. Will your 
Department work with us on the Committee on reform of ECPA?
    Attorney General Holder. Yes, we certainly want to do that. 
We want to make sure that we strike an appropriate balance 
between the legitimate privacy interests that that bill seeks 
to protect and the law enforcement interests that we have in 
being able to obtain information in order to protect the 
American people and to enforce our Federal criminal laws.
    Chairman Leahy. As you know, I have taken--and I realize I 
am switching to a number of different areas, but I know we are 
going to have a series of votes, so we may not get to a second 
round. But let us go to Khalid Sheikh Mohammed. I have 
expressed my concern that the trials of him and others are 
going to be conducted before a military commission at 
Guantanamo Bay and not before a Federal jury in American 
courtrooms. I express this because I have seen the hundreds of 
convictions in Federal courtrooms on terrorist issues. I have 
seen five or six before military tribunals. I have seen a very 
successful use of our Federal courtrooms, and you and I are 
both former prosecutors and are aware of that.
    So I am going to ask you the same question that actually is 
the exact same question I asked Attorney General Mukasey in 
2008. As our chief law enforcement officer, what has been done 
to ensure that the victims of 9/11 are treated with respect and 
dignity? And what accommodations are being made to protect 
their rights given the decision to proceed before a military 
tribunal in Guantanamo? The reason I asked the former Attorney 
General this, I wanted to make sure there is going to be 
transparency and access to all aspects of the trials there 
would be if it was in a Federal court in the United States.
    Attorney General Holder. The Department of Defense will 
take the lead in managing those proceedings. I think, however, 
that there will be a sensitivity to the needs or the wants of 
people who are victims of 9/11, relatives of victims of 9/11. 
Transparency I think will be something that will be a 
touchstone. The ability for members in that community to be 
able to observe the proceedings is something that I think is 
paramount. So as I said, I think that working with the 
Department of Defense we can ensure that those proceedings are 
held in an appropriate way.
    Chairman Leahy. You know, we worked very hard--in fact, I 
helped put together the procedure that we could do it during 
one of our major terrorist activities here in the United 
States, the Timothy McVeigh bombing of Oklahoma City. I worked 
very closely with the Department of Justice then and others so 
that the victims were able to observe the trial, even though it 
was from a different location, and I thought that was very, 
very important that they be allowed to.
    Lastly, I talked about the Leahy-Grassley Fraud Enforcement 
and Recovery Act, one of the first bills the President signed 
into law. In the coming weeks, Senator Grassley and I plan to 
introduce a new bill to build on the success of the Fraud 
Enforcement and Recovery Act by reinvesting a small part of the 
penalties collected back into more fraud investigation and 
prosecution.
    Do you agree that if we can do this, we can not only deter 
conduct which hurts Americans, but we can pay for it at the 
same time?
    Attorney General Holder. Well, I totally agree. The ability 
that we have to deter criminals in that area to protect the 
American people from fraudsters I think is almost directly 
related to the funds that we have, the number of people whom we 
can deploy. We have a proven record certainly over the last 2 
years, and even before that, which shows that we are capable of 
doing great things if we have the resources. And to the extent 
that you and Senator Grassley can help us in that regard, I 
think that would be much appreciated.
    Chairman Leahy. Thank you.
    I will yield to Senator Grassley.
    Senator Grassley. You heard my opening statement about the 
ATF so I am not going to repeat that. But on March 9, 2011, 1 
month after your Department's first denial of allegations that 
I have described, your Deputy Attorney General issued a 
directive stating this, and I would like to have you listen to 
this quote, and then I have got questions around this quote 
because there is something ironic about it. ``We should not 
design or conduct undercover operations which include guns 
crossing the border. If we have knowledge that guns are about 
to cross the border, we must take immediate actions to stop the 
firearms from crossing the border, even if that prematurely 
terminates or otherwise jeopardizes an investigation.''
    So I have three short questions here. I am going to state 
them all at once because they kind of go together. If the ATF, 
as the agency keeps telling us, did not knowingly allow guns 
into the hands of traffickers, then why was that directive even 
necessary? Why issue a memo telling people to stop doing 
something unless you think maybe they had been doing it? 
Doesn't that memo show that there was enough substance to what 
the whistleblower allegations were to me and even on television 
that the policy needed to be clarified?
    Attorney General Holder. Well, the memo was issued because 
the allegations had been raised, and I take those allegations 
seriously. It is why I sent the material to the Inspector 
General for an inspection.
    The possibility that that happened was sufficient, I 
thought, to have clarification sent to the field that we should 
never allow guns in an uncontrolled fashion to cross the border 
or actually to leave any investigation in an uncontrolled way. 
And that was the purpose of the memo. I frankly do not know. 
That is what the investigation I think will tell us. As I said, 
it is something that we take very seriously, and I think the 
proof of that is the fact that I issued that memo--or the 
Deputy Attorney General issued that memo, and in addition to 
that, we have referred the matter to the Inspector General for 
inspection.
    Senator Grassley. Well, do you believe that that memo is 
consistent with all the previous Justice Department policies? 
Or does it represent a change in policy?
    Attorney General Holder. I do not think it represents a 
change in policy, but I certainly wanted to make sure that 
people in the field understood that that is, in fact, the 
policy; and to the extent that there was any confusion, I 
wanted to make sure that there was none, that that is, in fact, 
the policy of the Department of Justice. It is the policy that 
I expect to be enforced.
    Senator Grassley. One more series of questions on this 
point and then I will go on. Does this policy only affect guns 
that law enforcement actually knows will go to Mexico? What 
about guns that are likely to go to bandits operating near the 
border, like those captured at Agent Terry's murder scene? What 
about guns that are likely to go to other criminals operating 
in border towns on this side of the border? Should agents let 
those guns go even if they have a chance to intercept them 
earlier?
    Attorney General Holder. That is a good question, Senator, 
and, no, as I just indicated, my view is and the policy of the 
Department is that guns should not be allowed to travel in that 
uncontrolled fashion, whether they are crossing the border or 
this happens within the confines of the United States. 
Uncontrolled distribution of guns connected to any kind of 
investigation that we are doing is something that is not 
consistent with the policies that I want followed in the 
Department of Justice.
    Senator Grassley. OK. I have a chart that has been 
prepared--and all the members have it, and I assume that the 
Attorney General has it--by the Bureau of Alcohol, Tobacco, and 
Firearms in March of this year. It shows 1,318 weapons 
purchased by 15 suspects after they had been identified as 
targets of an investigation. All 15 targets were later indicted 
on related charges. However, the indictments came only after 
Agent Brian Terry was killed, and two guns from this case were 
found at the scene of the murder.
    I would ask unanimous consent to put that in the record.
    Chairman Leahy. Without objection.
    [The chart appears as a submission for the record.]
    Senator Grassley. The Justice Department cannot account for 
the current location of these 1,318 weapons. Is that right?
    Attorney General Holder. Senator, this is the first time I 
have seen this chart. I am not in a position at this point to 
answer that question. We can certainly look at the chart and 
get back to you. But I do not know.
    Senator Grassley. OK. Let me ask you this question, though, 
even though you have not seen the chart. If the agents had been 
allowed to intervene sooner, couldn't they have prevented these 
1,318 guns from getting into the hands of criminals?
    Attorney General Holder. Well, again, as I said, it is the 
policy of the Department not to allow guns to get into the 
hands of criminals irrespective of the border. Now, if it means 
they got into the hands of criminals and were then arrested 
immediately thereafter and there was a prevention of the use of 
the weapon by the criminal, that is one thing. If they were 
simply transmitted to a criminal and then they were lost track 
of, that is something that is not acceptable.
    As I said, I would have to look at these numbers and the 
cases to be able to answer the question in a more intelligent 
fashion.
    Senator Grassley. Well, that is three questions, and I 
would appreciate an answer in writing.
    Attorney General Holder. Sure.
    Senator Grassley. OK.
    [The information appears as a submission for the record.]
    Senator Grassley. Last week, it was reported that the 
Justice Department had notified a former Department attorney, 
Thomas Tamm, that it was no longer investigating him for 
leaking classified information to the New York Times. This 
announcement surprised many because Tamm publicly admitted he 
revealed classified information in a series of phone calls with 
reporters at the New York Times. This information ultimately 
was printed and revealed the existence of the Terrorist 
Surveillance Program.
    Attorney General Holder, you have stated publicly that, 
``To the extent that we can find anybody who was involved in 
breaking the law, they will be held accountable.'' Did you 
personally sign off on the decision not to prosecute Mr. Tamm?
    Attorney General Holder. No, I did not. The Tamm 
declination was done on the merits by career professionals 
within the Department of Justice. These kinds of declinations 
happen all the time without the involvement of me, the Deputy 
Attorney General, even the Assistant Attorney General for the 
Criminal Division.
    Senator Grassley. Can I ask one last question? My time is 
up.
    Chairman Leahy. Go ahead.
    Senator Grassley. Why would the Department fail to 
prosecute someone who admits knowingly revealing classified 
information?
    Attorney General Holder. Well, there are a variety of 
reasons why a case might be declined. I cannot get into the 
specifics of any particular case. That is generally not the 
policy of the Department. I will note that when it comes to 
cases that involve national security, sometimes there is a 
balancing that has to be done--and I am not talking about the 
Tamm case specifically now, but sometimes there has to be a 
balancing that is done between what our national security 
interests are and what might be gained by prosecuting a 
particular individual.
    But I can say that with regard to this matter, the decision 
was made on the merits by career professionals without any 
notion of a double standard.
    Senator Grassley. Then let me give you my judgment of it, 
and I will end. It just seems simply that when somebody admits 
that they broke the law in something as closely related to 
national security as that program was, it just seems to me that 
it sends a very, very bad signal that leaking is OK and you are 
not going to get prosecuted for it.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Senator Kohl.
    Senator Kohl. Thank you, Mr. Chairman.
    Attorney General Holder, before I turn to my questions, I 
would like to thank you for the personal attention you devoted 
to my concerns about a change in DEA policy that resulted in 
nursing home residents not being able to access pain medication 
in emergency situations. Using the legislative guidance you 
provided, we are working on a bill and plan to introduce it 
soon, and I look forward to continuing to work with you on this 
important issue.
    Mr. Attorney General, as we know, everybody all across the 
country is hugely upset by the rising gas prices which are now 
surpassing $4 a gallon in many States, including Wisconsin, and 
have nearly doubled in 2 years. While we know that the rise in 
gas prices has many causes, one important cause is the actions 
of the OPEC oil cartel which limits supply in order to maintain 
a high price.
    If the nations of OPEC were private companies, such conduct 
would be nothing more than naked price fixing, illegal under 
the most fundamental principles of antitrust law. That is why I 
have introduced my NOPEC legislation, designed to make nations 
that participate in OPEC price fixing liable under U.S. 
antitrust law. This bipartisan legislation passed the Senate 
with 70 votes in 2007 and last month passed the Judiciary 
Committee 14-1.
    Now, I recognize that I have proposed my bill now for many 
years, but does not the fact that gas prices are now over $4 a 
gallon make my bill more necessary than ever? Do you agree with 
me that the passage of this bill would give the Justice 
Department an important tool to combat price-fixing activity of 
the OPEC cartel? Why should OPEC be treated differently than 
any other price-fixing cartel that the Justice Department has 
taken action against under antitrust laws?
    Attorney General Holder. We are always eager to work with 
Congress to try to protect the American consumers. We have 
started a task force to look at this whole question of gas 
prices to see if there has been inappropriate market 
manipulation. Market forces are at work, but we are looking to 
see if, in fact, there are things that were done 
inappropriately.
    With regard to the bill that has been introduced and that 
you are supporting, we would certainly want to look at the 
bill, and I do not think the administration has taken a 
position on that. But I think we want to do all the things that 
we possibly can in conjunction with the members of this 
Committee and with Congress to try to protect the American 
consumers.
    Senator Kohl. Well, I appreciate your answer, and, you 
know, we understand the sensitivity and the politics of the 
issue. But OPEC--I think there are 13 nations of OPEC--as you 
know, they get together several times a year and limit supply. 
This is a violation of antitrust law, and I am sure you are 
familiar with that, and you know that. And that is the basis of 
our legislation. It is nothing more complicated than that.
    Can you give us a more definitive answer as to whether or 
not you would support a bill that would make it illegal for 
nations to get together and limit supply?
    Attorney General Holder. Well, again, I am not aware of an 
administration position here, but I think among the things that 
we would have to consider would be the foreign policy 
consequences of such a bill, what the impact of the passage of 
such a bill or any enforcement action taken by the Department 
of Justice if that bill were passed, what the foreign policy 
implications would be. And I do not mean to in any way indicate 
that your concern and the remedy that you are advancing to deal 
with that concern is something that should not be taken 
seriously, and it may, in fact, be something that the 
administration could support. I just am not aware of an 
administration position at this point. I would bet that we 
would want to hear from Secretary Clinton, among other people, 
with regard to what position the administration would take.
    Senator Kohl. Now, passage of this bill would not require 
the administration to take any action at all. If the 
administration determines that bringing an antitrust 
enforcement action under NOPEC would risk harming our foreign 
relations, then it could simply decide not to bring such an 
action. All our bill does is give the Justice Department a tool 
to use at its discretion and after consultation with other 
parts of the administration. So on the face of it, what is 
wrong with that?
    Attorney General Holder. Well, I am always looking for more 
enforcement tools, I will tell you that. And I am not a person 
or an Attorney General who will say no to a concern to a 
Senator with whom I have worked a great deal, and I think 
successfully in a number of areas, to say no to you. My only 
concern would be that I have other people who serve with me in 
the Cabinet. I have got a boss who I have to answer to in the 
executive branch. And I would not want to get too far out there 
and indicate where we stand with regard to this legislation.
    But I will say that it is certainly something that I will 
raise, we will talk about, and I will get back to you as 
quickly as I can with regard to where we stand on that.
    Senator Kohl. All right. Turning to another issue, we are 
all proud of the extraordinary efforts undertaken to finally 
bring Osama bin Laden to justice, and, of course, we 
congratulate all of those involved.
    Attorney General Holder, we all appreciate that the Justice 
Department's highest priority has been and will remain the 
steadfast and vigilant protection of national security. We know 
that the entire national security operation is working 
tirelessly around the clock to keep Americans safe, but after 
Sunday's dramatic events and the demise of bin Laden, we are 
living in a different environment today. CIA Director Panetta 
has warned that terrorists, and I quote, ``will almost 
certainly attempt to avenge bin Laden's death.''
    What have you done to step up your counterterrorism 
efforts? Have you considered whether the Department needs to 
make any changes or adjustments, major or more nuanced or 
subtle, to your counterterrorism strategy and investigations?
    Attorney General Holder. I think that is actually an 
excellent point, Senator, and one of the concerns that we have, 
as I indicated in my opening remarks, is what are we looking at 
in the short term if there are going to be retaliatory attempts 
or attacks as a result of bin Laden's death.
    I had a conference call with all of the United States 
Attorneys, I believe on Tuesday--maybe on Monday--going through 
with them steps that we wanted them to take, making sure that 
they as well as all the Federal investigative agencies were on 
their toes and being mindful of the fact that this is a 
difficult time for this Nation after the death of bin Laden. 
And so I think that we will ultimately be more safe as a result 
of his death, but in the short term I think we have some 
serious concerns that we have to be ready to address.
    Senator Kohl. My last question, Mr. Attorney General. The 
number one concern that I have heard from small rural police 
and sheriff departments in my State, and I am sure this is also 
the case in other States, is about maintaining their access to 
the Regional Information-Sharing Systems Program, otherwise 
known as RISS. RISS is a nationwide program that supports 
State, local, and tribal law enforcement with information-
sharing services, equipment sharing, training, and 
investigative and analytical support. This is one of the few 
federally funded programs that is able to reach small rural law 
enforcement agencies. This concern is not unique to my State. 
Law enforcement officers all across the country rely on the 
vital service that this program provides to keep their 
communities safe.
    However, in his budget request, the President called for 
RISS to be funded at $18 million, which is a cut of nearly 60 
percent from last year. Why has the administration requested us 
to severely cut a program that offers small rural agencies a 
low-cost solution to their investigative and communications 
needs that help them to keep our communities safe? A 60-percent 
cut.
    Attorney General Holder. Well, we are doing what we can 
given the budget situation that we face, and we have had to 
make some difficult choices. To the extent that we can support 
this program, which I think you are right, has worked 
effectively in the past, we will continue to do so. We had to 
make, as I said, some tough budgetary decisions, and to the 
extent that this program is cut, we will try to find other ways 
in which we can support our State and local and tribal law 
enforcement partners who have participated in this program.
    It is, as I said, regrettable that we have had to make 
these tough decisions. We have, however, tried to make sure 
that we have maintained an overall support for our State, 
local, and tribal partners, and there are a whole host of other 
things that we do in the Department, both budgetary and 
programmatic, to support them.
    Senator Kohl. Thank you. I would like to continue to lobby 
you on restoring some of that cut. Thank you so much.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Attorney General Holder, I have got a number of questions I 
will just raise with you that I care about deeply. First, I 
would just respond to your comment about money and resources 
being the critical thing in prosecuting fraud. I do not believe 
that is the critical thing. I think it is leadership from the 
top. I believe that we are going to be in a tight budget 
situation. You are not going to receive extra money. And every 
business that I know of is reviewing their entire structure, 
eliminating unproductive middle-level management and putting 
people in the courtroom to prosecute cases. I suggest that you 
need to do an aggressive job in that to get the taxpayers the 
kind of return that they are entitled to.
    And with regard to the Tamm case and the New York Times, I 
would like for you to give us all the information that you feel 
like you can give us concerning the failure to prosecute that 
case. I know the New York Times has been a fan of your 
terrorism policy and the President's terrorism policy. I am not 
in agreement with that, so it causes me concern that what 
appears to be an admission of wrongdoing is not prosecuted.
    With regard to the terrorist situation, I have asked you 
previously and I have asked Director Mueller about how to 
handle people who are arrested who are terrorists, and he said 
the decision was above his pay grade, Director Mueller said. I 
guess it is not above yours. But essentially I want to ask, Is 
it still the policy of the Department of Justice that a 
terrorist arrested would presume to be tried in civilian court?
    Attorney General Holder. I think what we will do, we will 
make a determination on a case-by-case basis, as I did on the 
same day that I announced that the Khalid Sheikh Mohammed 
matter was going to go into the civilian courts. I sent a 
number of cases to the military commissions, and we will 
continue to do that.
    I do think----
    Senator Sessions. With a presumption that it would go into 
civilian court. That was the policy that the committee you put 
together recommended--unwisely, I think.
    Attorney General Holder. Well, that is what the President 
indicated in his Archives speech, but it does not necessarily 
mean that we are not going to make use of, as I have made use 
of, the military commissions.
    Senator Sessions. Well, isn't it a fact, if you are 
presumptively to try an individual who is a terrorist planning 
or plotting or attempting an attack on the United States, that 
if you presumptively are going to move them into civilian 
court, they are entitled to Miranda warnings within a few 
minutes of arrest, they are entitled to the appointment of a 
lawyer, entitled to be brought publicly before a civilian 
magistrate, entitled to pre-trial discovery, entitled to a 
speedy trial? And isn't that--can that not be a detriment to 
interrogating that individual over a period of time and 
obtaining information that could protect Americans from further 
attack?
    Attorney General Holder. Well, I think if one looks at the 
way in which the civilian system has worked in the past, we 
have certainly had an ability to convict hundreds of 
terrorists. We have gotten actionable intelligence from people 
who were tried ultimately in the civilian system. We have 
modified how Miranda should be viewed. Guidelines have gone out 
to the field with regard to----
    Senator Sessions. Well, Miranda still has to be given 
within a matter of hours of arrest, at least. And, frankly, I 
am not sure what legal authority you have to delay it as long 
as Director Mueller indicated they may delay it. I do not think 
there is any court that has held that, but regardless of that, 
you would have to provide Miranda within a short period of time 
and appoint a lawyer, bring them before a court; therefore, 
revealing the fact that a terrorist may be arrested, allowing 
other terrorists to be knowledgeable of that and to perhaps 
escape.
    There are many complications that arise from treating these 
cases as a normal civilian case, are there not?
    Attorney General Holder. Well, there are, but let me share 
one concrete example with you with regard to the Miranda issue. 
With regard to the Shahzad case, the case that was successfully 
concluded in the civilian system, he pled guilty. He is now 
serving an extended period of time in jail. The U.S. Attorney 
and I talked on the evening that he was apprehended and made a 
decision that we would not give him Miranda warnings at all, at 
all, and----
    Senator Sessions. Other than you made a decision----
    Chairman Leahy. Could he finish the answer? I think he is 
entitled to finish his answer.
    Senator Sessions. OK.
    Attorney General Holder. And the decision was made so that 
we could get whatever intelligence that we could get from him 
while at the same time deciding that we would simply make the 
case without any statements from him. We successfully gathered 
significant intelligence from him, and we successfully 
concluded the civilian trial. It was a civilian matter; it was 
not a trial. A civilian matter.
    Senator Sessions. Mr. Attorney General, the problem is that 
there may be other people involved in this case, not just that 
individual, other people planning to attack American citizens 
and kill them that very moment. To put yourself in a situation 
where you are making a decision solely on whether you think you 
have enough evidence to convict him even if he makes an 
admission I think is a very problematic policy. So I----
    Attorney General Holder. Well, actually----
    Senator Sessions [continuing]. Guess my question to you 
fundamentally is--every law enforcement officer involved out 
there, every military person involved out there, needs to know 
what the policy is. So is the policy that they would be treated 
as--presumptively be tried in civilian court?
    Attorney General Holder. Well, as I said, the Archives 
speech that the President made was that there is a 
presumption--it is not an irrebuttable presumption--that cases 
go to the civilian court. And with regard to the Miranda issue, 
I think we have demonstrated hundreds of times--hundreds of 
times--that we can get actionable intelligence while at the 
same time prosecuting and putting people in jail for really 
extended periods of time.
    Senator Sessions. Well, I do not think it can be denied 
that individuals can be held who are attempting to attack the 
United States in military custody and they can be detained 
without trial as prisoners of war, they can be interrogated 
over a period of months or years, without Miranda warning and 
without lawyers. And if you decide at some point to try them in 
civilian court, they can then be tried in civilian court. It 
makes no sense to me whatsoever that the presumption would be 
anything other than a terrorist would be tried in military 
commissions, and it gives you the option sometime later, if you 
choose, to try them in the civilian court.
    With regard to the Defense of Marriage Act--my time is 
about up. I would just conclude on that to say I really--well, 
I want to ask you one question briefly. With regard to the fact 
that 11 circuits have held that the sexual orientation issue is 
to be decided based on a rational basis, whether those laws 
meet a rational basis test, when you have now decided that with 
regard to DOMA it requires a higher scrutiny--a strict 
scrutiny, apparently--are you taking the position that every 
one of those cases involving other different aspects of sexual 
orientation also should be judged by the higher strict scrutiny 
standard?
    Attorney General Holder. Many of those cases came before 
some significant events in the Supreme Court, certainly the 
Court decision that held that criminalizing homosexual conduct 
was unconstitutional. I mean, if you look from that point on, 
there have been a number of changes both in what the Court has 
said but also with regard to how our society has looked at 
certain things that Congress has done. Congress has repealed 
the military's ``Don't ask, don't tell'' policy. There have 
been lower courts that have held that DOMA----
    Senator Sessions. What has that got to do with the 
Constitution and the right and the standard?
    Attorney General Holder. As I was going to say, there are 
lower courts that have held that DOMA itself is 
unconstitutional. Given the history of discrimination that gay 
people have faced and given all the other things that I have 
just mentioned, given the fact that we were in a circuit that 
had not addressed this question, the determination that I made, 
after consulting with my colleagues in the Department of 
Justice, was that the heightened scrutiny level of inspection 
was appropriate. I made that recommendation to the President, 
and he agreed.
    Senator Sessions. And do you----
    Chairman Leahy. Senator Sessions, I think we are going to 
have to move on because we are going to have votes. I want to 
make sure--but if you have another comment you wanted to make.
    Senator Sessions. Just that I believe that was a failure of 
duty to defend the lawfully passed statutes of the United 
States. I believe more courts have upheld it than not. And I do 
believe that you had a responsibility to defend that law as 
Attorney General, regardless of whether or not you liked it, 
regardless of whether or not you would have voted for it, and 
the President had the same duty. And I think you violated that 
duty, and I am very disappointed in that fact.
    Chairman Leahy. And we will now go to Senator Schumer. I 
would note that I have been here with six Presidents, 
Republicans and Democrats; I have seen many instances where 
Presidents and administrations had decided not to defend a 
statute, both Republican Presidents and Democratic Presidents. 
And my position has been consistent on every one of those times 
that that is a judgment call that the executive branch----
    Senator Sessions. Well, it is not a political judgment 
call, Mr. Chairman.
    Chairman Leahy. I have said----
    Senator Sessions. I think----
    Chairman Leahy [continuing]. Even when some have criticized 
Republican Presidents saying it was a political judgment call, 
I have said that that is a judgment call the executive branch 
should carry.
    Senator Schumer.
    Senator Schumer. Thank you, Mr. Chairman.
    I have four questions, so I would like to try to get 
through them all. The first relates to James Cole, Deputy 
Attorney General. He received a recess appointment in December, 
but he still has not received his official appointment. Given 
the fast-moving pace of intelligence and investigations in 
terrorism--we now have the death of Osama bin Laden--and 
information that was gleaned from his compound, isn't it 
important, even more important now that we get him confirmed? 
Because as a recess appointment, he cannot do everything that 
he could do as a confirmed Deputy Attorney General. Is that 
correct?
    Attorney General Holder. Well, he can do just about 
everything, but, Senator, the point you make is a good one. It 
is a perfect one given the situation that we find ourselves in 
after the bin Laden death, for instance, the number of FISAs 
that we will be signing.
    Senator Schumer. Exactly.
    Attorney General Holder. We need to have all of the people 
in the Department who can sign--there are only three of us in 
the Department of Justice who can sign FISAs: me, the Deputy 
Attorney General, and the head of the National Security 
Division. We need to have all those positions filled.
    Senator Schumer. Right. Can he sign FISAs as a recess 
appointment?
    Attorney General Holder. Yes, he can.
    Senator Schumer. OK. So the problem is just that he is 
looking at an end of the term in December, and that given 
everything that is going on, it is not a very good idea.
    Attorney General Holder. It is not at all. We need to have 
our team in place, and we need to have some degree of----
    Senator Schumer. And so it is just there is a heightened 
need for him now, given all the new work that is going to come 
forward, including more FISAs and many other types of things 
that have to happen.
    Attorney General Holder. Absolutely.
    Senator Schumer. OK. The second question is a little bit 
related to that. I do not want you to get into specifics here. 
Obviously, we congratulate the administration and all of you on 
capturing bin Laden and killing him. But we also learned that 
there is a treasure trove of intelligence material found in his 
compound. That is sort of great, and a gold mine, I guess, for 
us. I do not want you to get into specifics, but can you tell 
me whether the FBI is coordinating with the State Department 
and Homeland Security to add names to the terrorist watchlist, 
revoke the visas of anyone who is found in the material 
confiscated in the bin Laden residence, what is happening 
there, and has anyone already been--you do not have to give 
names, but already been added to watchlists and had visa 
revocations because of that intelligence?
    Attorney General Holder. The material that was seized from 
that residence is being reviewed by an interagency team. CIA, 
Justice, other intelligence agencies, other law enforcement 
agencies are all contributing people and machines to go through 
that material.
    As we glean information from that material, we will make 
appropriate decisions with regard to who might be added to the 
terrorist watchlist, the no-fly list, all those things.
    Senator Schumer. You expect you probably will add people as 
a result of what you found?
    Attorney General Holder. My guess would be that we probably 
will.
    Senator Schumer. OK. Let me go to other subjects here: 9/11 
health. You know this is an issue of great importance to New 
York, the implementation of the Zadroga bill, signed by the 
President January 2nd, sent you a letter thereafter asking that 
the Victims Compensation Fund be up and running by Memorial Day 
to get the heroes the money they so desperately need to pay for 
their medical bills and other illness-related expenses.
    Apparently under the language of the bill as passed by the 
House, it is not clear that DOJ could use the appropriated 
funds to administer the program. We have now fixed this in the 
latest continuing resolution, which means that DOJ will have 
the funding to administer the program starting in the new 
fiscal year. But it is May 4th, and DOJ has not picked a 
special master. Can you commit to picking a special master 
within the month?
    Attorney General Holder. I would say that we will try to do 
this as quickly as we can, as soon as we can. I do not think 
that--we have identified a number of candidates. I think we----
    Senator Schumer. Is it likely you will have it within the 
month?
    Attorney General Holder. I would hope that within a few 
weeks we should have somebody.
    Senator Schumer. That is less than a month.
    Attorney General Holder. It could be slightly more. But I 
think we will have somebody very soon.
    Senator Schumer. OK. I am hopeful it will be within a 
month, and that is a real possibility, right, or likelihood?
    Attorney General Holder. We will work to try to--I will 
keep your words in my mind as we are----
    Senator Schumer. OK. Thank you. All right. After the 
special master is picked, it is then going to take time to 
draft and finalize the regulations, get the physical 
infrastructure for the VCF running. When can I tell the heroes 
the VCF will be up and running? And can I get your assurance 
you will do everything possible to have it up and running by 
October 1, 2011?
    Attorney General Holder. Yes, our hope is to try to do a 
lot of--being mindful of the fact that we can only expend funds 
once the fiscal year begins, I think there are other things 
that we can do in anticipation of the start of the fiscal year 
so that on October 1, with the person who would be named and 
would be ready to go, we can be up and running on that day.
    Senator Schumer. Good. That is the goal----
    Attorney General Holder. That I can pledge to you.
    Senator Schumer. Great. And there is a lot of anxiety--that 
is very good. There is a lot of anxiety about that because we 
have not picked anyone yet and because a lot has to be done 
ahead of time. But, OK, as long as we will be ready to go on 
October 1st with a person in place, with the infrastructure in 
place and up and running, that is very good news.
    I have time for one more, and I would like to ask you 
about--well, I would have liked to have asked you about--here 
it is: synthetic stimulants. On April 1st, I sent a letter to 
you and DEA Administrator Leonhart urging you to use emergency 
scheduling authority to ban MDPV and mephedrone, two harmful 
compounds in substances known as ``bath salts.'' As you know, I 
have been very active in trying to make sure that these are 
banned. We have introduced bipartisan legislation that would 
permanently ban these substances. However, I hope DEA will move 
forward with emergency scheduling of these compounds to stop 
the sale of these harmful drugs.
    At a recent hearing before the Caucus on International 
Narcotics Control, DEA indicated it will publish a notice of 
intent to do so. Can you confirm that and provide a more 
specific timeline for implementing such a ban?
    Attorney General Holder. Yes, it is our intention to move 
on that as quickly as we can. I have talked to Michele Leonhart 
about this. I do not know what the regulations--what the 
administrative timeframes are that we have to go through, but 
we will try to do this as fast as we can. We agree with you----
    Senator Schumer. Your intent is to ban them regulatorily if 
you can?
    Attorney General Holder. If we can.
    Senator Schumer. And I believe you can. I think that is 
pretty clear.
    Attorney General Holder. I think that we can. But we will 
work with DEA and with the Congress if we need additional tools 
in order to do that. But the harm that you have identified, the 
potential harm, I think is one that is worthy of our attention 
and worthy of our action.
    Senator Schumer. Great. Thank you, and I look forward to 
having you do that as quickly as possible. Thanks.
    Chairman Leahy. Thank you very much.
    Senator Kyl.
    Senator Kyl. Thank you.
    Mr. Attorney General, first I want to express my 
appreciation and congratulations for an action that the 
Southern District of New York U.S. Attorney took in connection 
with activities that your office was involved in relating to 
arrests for illegal Internet gambling, poker activities. The 
release, dated April 15th, I will just read for those who are 
not familiar with it: ``Manhattan U.S. Attorney charges 
principals of three largest Internet gambling companies with 
bank fraud, illegal gambling offenses, and laundering billions 
in illegal gambling proceeds.'' And the release has the 
specifics of the individuals involved, the entities involved, 
and the potential penalties.
    The thing that strikes me with this is, of course, it is 
very difficult to engage in these activities and get money back 
into the United States because it is all illegal and, 
therefore, initiated from outside the U.S. But they are able to 
do it through the Internet into the United States. It is pretty 
difficult to do that without conspiracy to commit bank fraud, 
wire fraud, money laundering and so on. So you are able to 
charge those other offenses here. But, interestingly, 
unfortunately, the laws that relate to Internet gambling itself 
only have a maximum 5 years in prison and $250,000 penalty. And 
when you add up all these other things, there is probably an 
adequate penalty potentially involved.
    My question to you is this: whether you are prepared today 
to agree with me that we probably need a stronger penalty, both 
monetary and potential jail time, for the illegal gambling 
activity aspect of this; and in any event, whether you would 
work with us to see whether there are some changes that would 
be necessary to enhance your office's ability to enforce these 
important laws.
    Attorney General Holder. I would be glad to work with the 
Committee and with you, Senator Kyl, in that regard. We are 
serious about the enforcement measures, processes and measures 
that we are taking with regard to Internet gambling. I think an 
example of that is what happened in the Southern District of 
New York, and it is consistent with that press release that you 
mentioned.
    To the extent that we need to talk about enhanced penalties 
for it gambling itself, I think that is something we would be 
more than glad to engage with you on.
    Senator Kyl. Well, I will be corresponding with your 
office, and I really would appreciate your attention to this. 
This is an important activity, particularly as it relates to 
kids nowadays. It is ubiquitous. It is difficult to enforce. 
But you have got some very, very capable people who devote time 
and attention to this, and it is, I think, an important 
activity, and I appreciate that.
    I want to visit for a minute about illegal immigration. I 
have talked to you on numerous occasions about the Department 
of Justice's role in something called Operation Streamline. It 
is just the code name for in many instances prosecuting and 
sending to jail for maybe 2 weeks, potentially up to 60 days 
for repeat offenders, people who cross the border illegally. 
That operation, which involves the Office of the Courts, the 
Department of Justice, and the Department of Homeland Security, 
essentially, has dramatically reduced illegal immigration in 
the Yuma Sector and in the Del Rio Sector of the border. But in 
the Tucson Sector, where over half of all of the illegal 
immigrants continue to come across the border, we do not have 
an adequate enforcement.
    I have asked you repeatedly for the numbers. I finally got 
the numbers through the late Judge John Roll, one of the 
unfortunate victims of the January 8th shooting in Tucson. He 
had been working with us on this, and he obtained from the 
Office of the Courts statistics on what it would cost to 
implement this. Part of it is DOJ, part of it is Office of the 
Courts, part of it is DHS.
    I gave a memo to the Secretary of Homeland Security and 
asked her in February to give that to you. Do you recall 
receiving that memo that describes all of these statistics that 
Judge Roll put together for us?
    Attorney General Holder. I am not sure about that. We 
actually spoke to--I had people in my office speak to Judge 
Roll about this. I am not sure I remember that memo, though.
    Senator Kyl. Would you do this for me, please--and I have 
asked for this in the past, and I have not gotten it, so I am 
getting frustrated. Would you have your folks take a look at 
this? I will give you another copy of the memorandum right 
after the hearing here. It is just a summary of what Judge Roll 
determined would be the rough estimate of costs for a doubling 
or a tripling of the prosecutions. What we got back on the one 
occasion you did respond was not responsive. We are not 
suggesting that on day one there be a 100-percent prosecution 
of everybody who comes across the border.
    The way it was done in Yuma with only--and I have forgotten 
the exact numbers, but they only had like 60 or 70 beds 
available. So they started with small segments of the border, 2 
or 3 miles, and as people were arrested in those areas, they 
were prosecuted. When it became clear to the coyotes who were 
pushing them across the border that if you crossed in that 
segment of the border, you got sent to jail, of course, they 
did not want to get sent to jail and they stopped crossing 
there. And those 60 or 70 beds was adequate to provide for 
that.
    Over the course of several months, those miles were 
expanded until finally the entire segment of the border called 
the Yuma Sector was covered, and they never needed to have more 
than that number of beds.
    Now, what you do not want to do is suggest to the bad guys 
exactly how you are running the operation, but the bottom line 
is you do not need to have all of the expenses from day one 
that it would take to prosecute everybody that crosses in a 
part of the border.
    What I am asking you to do is look at the way that it was 
implemented in the Yuma Sector and agree with us that at a 
relatively small cost, considering all the other things we are 
doing in terms of fencing and Border Patrol and all the rest of 
it, that implementing this program of prosecutions provides an 
extraordinarily effective deterrent and that you would commit 
to us that, as far as the Department of Justice is concerned, 
you would work to implement that program in the Tucson Sector, 
which remains, as I said, the one area that over half of all of 
the illegal immigration is in.
    Attorney General Holder. Well, you are right, we have had a 
number of conversations about this, and as I have indicated 
then--and I was sincere in what I said--I think that the 
Streamline concept is a good one. The problem I think that we 
have is what are the downstream impacts, and what you are 
saying about phasing it in as opposed to doing something at 100 
percent on day one is, I think, an idea that perhaps we should 
explore.
    There are downstream consequences when it comes to 
detention facilities. Courtrooms--Judge Roll, I remember him 
talking about that, the number of judges, prosecutors we would 
need. But, again, I think the concept--the proof is in the 
pudding. I think that the concept is a sound one, and I am kind 
of intrigued by the notion of a phase-in. These are tough 
budgetary times, so that is another thing that we have now that 
we did not have when I started as Attorney General.
    Senator Kyl. If I could, Mr. Chairman, just for 20 seconds 
here, have your indulgence. These are tough budgetary times, so 
you are looking for the most cost efficient ways to create a 
deterrent for people crossing. And you have got personnel, you 
have got high-tech equipment, you have got expensive fences, 
and you also send people down to Mexico City on the airplane 
rather than just sending them back across the border, so it is 
not easy for them to cross. A lot of techniques. This is an 
effective, efficient technique, I think.
    Could you tell me--and this will be my last point. Could 
you tell me who in your office I could communicate with 
personally about this so that I have got a real human being 
that I can have a conversation with?
    Attorney General Holder. Well, I have got my chief of staff 
sitting right behind me, and he is glad I am going to be giving 
his name up, but you can get in touch with him. His name is 
Gary Grindler.
    Senator Kyl. All right.
    Attorney General Holder. If he is not the right person, he 
can get the appropriate person within the Department of Justice 
for you to speak to.
    Senator Kyl. Thank you, Mr. Attorney General. Gary, I will 
be giving you a call. Thank you, sir.
    Chairman Leahy. Thank you.
    Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Mr. Chairman.
    Thank you for being here, Attorney General. I know some of 
the earlier questions on the terrorism policy were critical, 
and that debate has its place, but I just wanted to thank you 
and Director Panetta and all of the team that have been working 
on this. Just from the heart here, I know we get in these 
hearing rooms, and you do not realize what this meant for 
regular people. I was in Minnesota when this hit, the news 
about Osama bin Laden's death, and I talked to the mother of a 
man named Tom Burnett who was on that plane over Pennsylvania, 
and he was one of the passengers that stood up and wrestled 
those hijackers. And as we all know, they perished on that 
Pennsylvania field, but that plane would have crashed, as we 
know, into either the Capitol or the White House. Or the family 
of Max Beilke, who was the last soldier out of Vietnam. He had 
also served in the Korean War. He went back--he did not have 
enough of it. He went back on the civilian side, helped design 
the TRICARE system from Alexandria, Minnesota, and he was 
sitting at his desk at the Pentagon and was killed when that 
plane crashed into the Pentagon.
    So those are the families that felt that every time they 
saw Osama bin Laden on TV that he was mocking them and he was 
mocking our country. So I want to thank you and the rest of the 
administration for the good work.
    My questions are focused on some domestic issues. Senator 
Schumer had raised the issue of the synthetic drugs, and what 
he did not mention was the hallucinogen issue with 2C-E. I have 
introduced a separate bill in addition to the bill I am on with 
Senator Schumer and Senator Grassley, but this one is focused 
on 2C-E hallucinogens. We lost a young man in Minnesota and a 
number of other ones were close to death. They just thought 
these were synthetic drugs. I do not know that they realized 
the effect of these drugs. And I just wondered if you have been 
seeing an increase in these synthetic drugs.
    Attorney General Holder. Yes, we have seen an increase, and 
it is one of the reasons why I think Senator Schumer's idea of 
doing something on an emergency basis makes a lot of sense. And 
to the extent that we can, we will, because we have seen an 
increase in their use. They have obviously a detrimental 
effect--maybe not obviously. They do have a detrimental effect 
on the people who use them, and I think that their increased 
use warrants our increased attention. So we are focusing on 
them.
    Senator Klobuchar. Thank you, and we have these bills, 
which I hope you will help us with, to permanently ban them.
    Second, we have recently seen a number of high-profile 
incidents where hackers have broken into various businesses, 
computer systems like what happened with Sony. Senator Hatch 
and I are working on a cloud computing bill that we are soon to 
introduce that is focused specifically on cloud computing, but 
also a number of issues, but also on the hacking. And is the 
Department of Justice looking into these recent hacking 
incidences? And are you doing a review of the statutes to see 
how we can update them so that we are as sophisticated in our 
enforcement as these crooks that are breaking the law?
    Attorney General Holder. I think the concern you raise is a 
good one. We have to try to stay ahead of the people who would 
perpetrate these crimes. What was sufficient law 6 months ago 
might not be sufficient now. What was good 5 years ago probably 
certainly is almost not sufficient now. And so we are in the 
process of looking at that and would like to work with you on 
potential enhancements that we think are appropriate.
    We are, in fact, looking--we have opened investigations 
with regard to those hacking situations that have gotten 
publicity over the last few weeks, the Sony incident among 
them.
    Senator Klobuchar. Thank you.
    In your testimony, you mentioned the alarming--this is your 
written testimony--trend of increasing fatalities among our 
Nation's law enforcement officers, and this troubles anyone, 
but as a former prosecutor, I will never forget the police 
funerals that I attended. Have you identified any causes for 
the increase in fatal violence against law enforcement? And 
what are some of the steps that we can take to combat this very 
serious problem?
    Attorney General Holder. Something that gives me a great 
deal of concern. We have seen about a 40-percent rise in the 
number of police officer deaths. This is at the same time that 
our homicide rate is going down pretty substantially and is at 
historic lows. We are pushing out a number of policies. We are 
making available bulletproof vests as quickly as we can to our 
State and local partners. And we make that conditioned on a 
mandatory wear policy that be adopted by our State and local 
partners.
    We also have something called the Valor Program that trains 
police officers on how to conduct themselves, how to deal with 
situations in which their lives might be threatened so they 
will know how to react when they are put in those situations.
    I also called a summit meeting about 3 weeks ago, 4 weeks 
ago in the Department where we brought together State and local 
leaders, police officers, and from police groups, as well as 
chiefs and sheriffs to talk about this problem, and out of that 
summit we have a working group that is trying to come up with 
ways in which we can try to keep our police officers, our 
sheriffs, safe.
    Senator Klobuchar. Thank you. And then, finally, the 
prevalence of health care fraud continues to be a concern. 
Recently I saw that a Los Angeles woman pled guilty to 
participating in a Medicare fraud scheme that cost something 
like $6 million in Medicare money. You have provided 
information in your testimony about how DOJ has tried to crack 
down on health care fraud. You mentioned that the area has 
produced a record $4 billion in recoveries in fiscal year 2010. 
I actually sat in on the Homeland Security hearing on this and 
know that there have been some stepped-up efforts with the hot 
spots with health care fraud.
    Do you believe that we are starting to deter would-be 
fraudsters? And is there anything else we should be doing 
legislatively to assist you with this effort?
    Attorney General Holder. We are working certainly within 
the Department of Justice and with our partners at HHS. 
Secretary Sebelius and I have started this thing called the 
HEAT program, where we put up these task forces in those places 
where, as you correctly call them, we find hot spots of 
Medicare fraud. They have been, I think, particularly 
effective.
    One of the things, unfortunately, that we see is that when 
we become effective in one city, they move to another place or 
the techniques that are used in one city go to another place. 
And so we have to expand the use of these task forces.
    That is another area where I think we want to work with you 
to look at the laws that we have on the books to make sure that 
they are adequate to meet the challenges that we face.
    The huge amounts of money that are lost to fraud in the 
Medicare programs and Medicaid programs is just astounding and 
could be used in obviously much better ways. And given the 
budgetary issues that we are facing, there are not only 
criminal concerns that I have, but there are budgetary fiscal 
ones that I have as well. And so I think that we in the 
executive branch should be working with you in the legislative 
branch to make sure that we have all the tools that we need.
    Senator Klobuchar. Thank you very much.
    Chairman Leahy. Thank you. I am going to yield to Senator 
Hatch, but I should note that because of a matter on the floor 
I am going to have to leave, but Senator Franken is going to 
take over the gavel. Again, Attorney General, I appreciate not 
only your being here, but the fact that anytime I have ever 
called with questions for the Department, you have responded. I 
also compliment Ron Weich, who gets bugged by us all the time, 
and I appreciate his responses.
    Senator Hatch, I yield to you.
    Senator Hatch. Well, thank you, Mr. Chairman. Welcome, Mr. 
General.
    Attorney General Holder. Good morning.
    Senator Hatch. I appreciate you being here.
    I do not expect an answer to this, but I hope that the 
Justice Department will not only look into the BCS, Bowl 
Championship Series, situation. It is a mess. It involves 
billions over years. The privileged conferences have tremendous 
advantages that are unfair for the unprivileged conferences. As 
much as 87 percent of the money goes to them. And I just hope 
that you will continue to follow up on that particular issue. 
It is an important one, I think.
    Attorney General Holder. Well, Senator, if I could just 
maybe very quickly, I do not disagree with you. You and I have 
talked about this issue, and I think I am free to say that we 
have sent a letter to the NCAA about this issue and will be 
following up.
    Senator Hatch. Well, I appreciate it because it is an 
important issue. If you look at the fiasco at the Fiesta Bowl 
and how that was handled, that gives you some idea of how royal 
these people think they are. And it just is not fair to the 
whole system. I think even BS States are realizing it is not 
fair.
    Now, General Holder, I naturally want to welcome you back 
to the Committee. I have another hearing going on right now in 
the Finance Committee, so my time is short. And if you can 
answer as close to yes or no, I would appreciate it. I may have 
additional written questions, but concise answers would help me 
here.
    You received a letter from me and 42 Senators regarding 
obscenity enforcement. This included half the members of this 
Committee on both sides of the aisle, and we are focusing on 
adult obscenity. We know you are at least trying to do 
something on child obscenity. But we are talking about adult 
obscenity as well, what is sometimes called ``hard-core 
pornography.'' Now, this is a separate category of material, 
and it is different from child pornography or child 
exploitation, which is very important to me, too.
    This material was toxic. It is illegal, and laws against it 
have not been enforced for a long time. In our letter, we urge 
you to study the information and research about the harms of 
such hard-core pornography that is available through resources 
such as the clearinghouse website pornographyharms.com.
    Now, I do not expect that you personally did that, but did 
you at least assign someone to review the evidence collected 
there as we asked?
    Attorney General Holder. We have, as you know, conflated 
what was the Obscenity Task Force into the Child Exploitation 
and Obscenity Section, and at this point, since we have been in 
office, seven obscenity cases have been brought that involve 
only adult pornography. This is of the 150 cases that we have 
brought involving pornography in total, most of which involve 
child exploitation. But as I said, seven of those cases have 
involved adult pornography.
    Senator Hatch. OK. I raised the issue of obscenity 
enforcement in the confirmation hearing before this Committee 
for Lanny Breuer, who now heads the Department's Criminal 
Division. In his answers to my written questions, Mr. Breuer 
wrote that, ``I believe that sexually explicit material can be 
harmful to individuals, families, and communities.'' I am sure 
you agree with that.
    Attorney General Holder. Yes.
    Senator Hatch. The research I referred to earlier as well 
as the testimony of activists on the ground reveals a growing 
connection between hard-core pornography and sex trafficking. I 
think you would agree that there is such a connection.
    Attorney General Holder. I believe there is.
    Senator Hatch. OK. That research, including work by Dr. 
Sharon Cooper at the University of North Carolina, shows how 
hard-core adult pornography normalizes sexual harm to children. 
I think you would agree with that.
    Attorney General Holder. Sure, and that is one of the 
reasons why we are as vigilant as we are in bringing those 
kinds of cases.
    Senator Hatch. OK. Do you believe that hard-core 
pornography relates to domestic violence?
    Attorney General Holder. To be honest, I do not know about 
the research in that area.
    Senator Hatch. I can tell you it does, and it is a big 
problem in our society.
    Did you know that the American Psychiatric Association 
recently added to its Diagnostic Manual a disorder that 
includes pornography addiction?
    Attorney General Holder. I was not aware of that, but I 
have seen reports of that in some cases that I am familiar 
with. But I was not aware of the American Psychiatric 
Institute.
    Senator Hatch. Now, would you send us, be kind enough to 
have your people send us the seven cases, a description of the 
seven cases? Because I think you need to do a lot more. We are 
getting awash with this stuff, and it is just really terrible, 
as far as I am concerned.
    We received a response to the letter that many of us signed 
from Ron Weich, I think is the way you pronounce the name, who 
heads the Office of Legislative Affairs. It said that the 
Department has charged violations of the Federal obscenity 
statute, but when my staff discussed this last week with OLA 
staff, they could not say which of those involved adult 
material or were unrelated to child pornography or child 
exploitation. And that is one of the things that I am concerned 
about. So I just want you to look into it. It means a lot to 
me, and I think it--I am sure it means a lot to you as well.
    Attorney General Holder. Yes, we are trying to unpack those 
numbers. We have, as I said, the overall number, and we are 
trying to come up with a way in which we can determine which of 
those 150 cases involve only adult matter. And as I said, at 
this point we have identified seven.
    Senator Hatch. OK. Well, I think that is important. It is a 
big deal to me.
    In about 2005, because the Child Exploitation and Obscenity 
Section was doing so little to prosecute adult obscenity, in 
our view, anyway, the Department created the Obscenity 
Prosecution Task Force to focus specifically on that. Now, my 
understanding is you dismantled that task force as a separate 
entity and incorporated its work back into the very section 
that had produced so little in this area in the first place, at 
least in our view. Again, that looks to me like the Department 
simply does not give enough consideration to adult obscenity 
and may not consider it to be a big deal. Just please look into 
it for me, will you?
    Attorney General Holder. As I said, we have reincorporated 
them. It does not mean that we are turning our backs on that 
issue. As I looked at the numbers from 2005 to 2010 that the 
task force brought, our numbers say, about 15 cases. Since we 
have made that change, we have brought, as I said, seven. So I 
think that the process that we have in place, the 
organizational structure that we have in place is, I think, an 
effective one. But we are always looking to make it better.
    Senator Hatch. OK. And if you would have your folks send us 
how many prosecutors and personnel you have working on these 
cases, I would appreciate that.
    Let me just quickly shift gears, if I could just ask this 
one last question, Mr. Chairman, because I would like to change 
subjects here.
    Let me ask about one of the approximately 200 detainees in 
U.S. custody in Iraq. Now, this person is a Hezbollah terrorist 
named Ali Musa Daqduq. He was captured in Basra in March 2007 
after planning and coordinating an attack on U.S. forces that 
killed five American soldiers and wounded three others. Now, he 
was captured on the battlefield in Iraq by military personnel. 
He is accused of clear violations of the law of war, and I 
believe really that he ought to be transferred to Guantanamo 
and prosecuted in a military commission.
    Is that what will happen? Or is the Department planning to 
prosecute him in Federal civilian court?
    Attorney General Holder. I have to tell you I am not 
familiar with that case. That is one that we would have to 
examine and see where the case can best be brought. Again, I am 
not familiar with it, but a determination would be made on a 
case-by-case basis as to where the trial can be most 
effectively had.
    Senator Hatch. OK. Well, it is my understanding that that 
case is sitting on the Deputy Attorney General's desk right now 
for review. I would like you to look into it. It is a serious 
case, five American soldiers who were killed by this terrorist, 
and, frankly, I think he ought to be tried at Guantanamo. I 
would appreciate you looking into it.
    Attorney General Holder. OK.
    Senator Hatch. I appreciate your service. We have had a 
long relationship together.
    Attorney General Holder. We have.
    Senator Hatch. I respect you. I naturally have some real 
questions about the Justice Department and the way things have 
gone, but I also understand it is a very tough job, too. But 
thank you. I appreciate you being here.
    Attorney General Holder. Thank you. I appreciate all your 
support.
    Senator Franken. [Presiding.] Thank you, Senator.
    The Chair recognizes Senator Coons, the Senator from 
Delaware.
    Senator Coons. Thank you, Mr. Chairman. Thank you, Senator 
Franken. I will do my best to be brief given the pressing 
commitments I understand both Senator Blumenthal and I have.
    Thank you, Attorney General Holder, for being with us today 
and for your service to our Nation. As a former county 
executive, I was grateful for the support of the Department for 
local law enforcement and was very concerned about the depth of 
the cuts in the continuing resolution and the path forward. I 
have four questions I will get to briefly, two about 
intellectual property enforcement, two about partnership with 
local law enforcement.
    If you could, first I would just be interested in your 
views on how your ability to support local law enforcement is 
being affected by the double-digit cuts in the current year's 
CR and going forward. You made reference before to the critical 
bulletproof vest partnership. I am also concerned about Byrne/
JAG grants, and in particular, I am interested in intelligence 
sharing. This Committee will hold a field hearing in Delaware 
later this year about intelligence sharing and the partnership, 
which is currently very strong, between Federal and local law 
enforcement in Delaware. So some comment, if you would, on the 
impact of the budget and intelligence sharing with local law 
enforcement.
    Attorney General Holder. Yes, my hope would be that, with 
regard to intelligence sharing, we should not be adversely 
impacted by the budgetary issues that we are confronting. 
Intelligence sharing really is the key to good law enforcement 
in this day and age, and we will place priority emphasis on 
that.
    I am concerned, however, about the reduction that we will 
have certainly in the COPS program, among other things. There 
are going to be problems there that we did not have before the 
budgetary problems, and what we are going to try to do is come 
up with ways in which we use the more limited funds we have in 
the most effective way. But we just face a fiscal reality that 
we are not going to have as much money to distribute.
    Senator Coons. I was concerned to see the COPS technology 
program, for example, zeroed out. My predecessor in this seat, 
our Vice President, was a strong advocate for the Violence 
Against Women Act and the COPS program, and I will endeavor to 
do my best to work in partnership with you to sustain their 
funding and their vital role.
    I am also concerned about intellectual property 
enforcement. I am very pleased with your task force on 
intellectual property and your good work in that field, and I 
just wanted to briefly, if I could, raise the concerns I have 
about counterfeit pharmaceuticals in particular, which are a 
very real and growing problem affecting thousands of Americans.
    You have a recent Operation In Our Sites effort, a multi-
agency mission that has been seizing and closing down websites 
that are trademark infringers. To the best of my understanding, 
it does not yet include online pharmacies that are a 
significant source of counterfeit pharmaceuticals. Is that 
something you think the Department might expand to use your 
legal authority and forfeiture statutes to go after?
    Attorney General Holder. I think that is certainly 
something that we ought to consider. If one looks at the 
intellectual property issues, there are economic consequences, 
potential problems for our infrastructure, national security 
consequences, and when it comes to pharmaceutical issues, the 
health and well-being of our fellow citizens. And so the 
thought that you have is, I think, one that we ought to 
consider and one that I would look forward to working with you 
on. We want to make sure that our efforts are as complete as 
they can be and that we are protecting as many of the American 
people as we can.
    Senator Coons. And last, if I could, there are strong 
efforts obviously underway to combat IP theft, but I am 
concerned about trade secrets, which are in some ways more 
difficult to identify but in many ways more important even to 
protect, and the very real and growing threat of industrial 
espionage. Are there things that we can and should be doing in 
this Committee or in the Congress to support you, the efforts 
of your agency? Do you need any additional resources, whether 
statutory or financial, to strengthen the hand of your agency 
in combating either industrial espionage or trade secret theft?
    Attorney General Holder. If you would allow me to do this, 
maybe let me canvass the people in the Department who are most 
knowledgeable about this and who are concerned with this on a 
day-to-day basis and maybe get back to you about how we might 
work together with regard to--I think you correctly identify 
issues that should be concerns, industrial espionage and trade 
secrets. So let me get back to you in that regard.
    Senator Coons. Tremendous. Thank you very much, and thank 
you for your service.
    Senator Franken. Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
to my colleague, Senator Coons, for accommodating my schedule, 
and I do apologize. I have to preside at about noon, so first 
and foremost, thank you for your excellent, distinguished 
service to our Nation in this job and other positions that you 
have held and the tremendous leadership that you have given to 
the Department of Justice.
    As you know, I have asked that there be an investigation 
into illegal manipulation of gasoline and oil prices, crude 
oil, at every level, not only at the retail level where price 
gouging may have occurred, but I have written asking that there 
be investigations. And I noticed in establishing the working 
group and the Financial Fraud Task Force, you have very 
carefully stayed away from the use of the term 
``investigation.'' Indeed, in your testimony today, you have 
used the word ``examine'' rather than ``investigate.''
    Again, I urge that there be an investigation, that it 
involve the FBI, subpoenas, even a grand jury if necessary, and 
ask now for your reaction to that suggestion.
    Attorney General Holder. I can see that you are still a 
State Attorney General, Senator. We are working with, I should 
point out, State Attorneys General in this regard because I 
think they are a very important component of this task force.
    I am not hesitant necessarily to use the word 
``investigate'' or call it an ``inquiry.'' It is a task force 
that is looking to see if there have been inappropriate steps 
taken to try to manipulate the market, to price gouge, to 
somehow do things that are wrong and that harm the American 
people. We will be aggressive in that regard.
    We understand that there are market forces that are at play 
here and do not want to sell this as more than it can be. But 
we take very seriously the harm that the American people have 
suffered as a result of the rise in gas prices, and to the 
extent those were inappropriately driven, we will take action.
    Senator Blumenthal. And I do not want to belabor the point 
now. I would welcome an opportunity to sit with you and key 
members of your staff on this subject, because I think that all 
the indications are that speculation is at an all-time high and 
unprecedented level, and that it is a major part--not the only 
reason, but a major cause of the spiraling phenomenon that is 
plaguing the industry and crushing not only our consumers but 
the fragile economic growth that is so important to our Nation 
at this point. So I would welcome an opportunity to continue 
this discussion as soon as possible.
    And I want to just turn briefly to the Sony breach of 
confidential information. Again, I have asked for an 
investigation into the hacking that has occurred now reportedly 
affecting another 25 million consumers after the first hacking 
which was discovered affecting more than 70 million people. So 
more than 100 million are potentially victims, and indeed 
potentially victims of identity theft. But the focus in my view 
should be on not only the hacking itself but also possibly on 
Sony's response, which I regard as having been completely, 
egregiously, and unacceptably inadequate in failing to notify 
consumers promptly, as would be required under some State laws, 
for example, Connecticut's law, and failing to take protective 
measures and offer protective services to consumers.
    So, again, I ask for your reaction.
    Attorney General Holder. As I think I previously indicated, 
the Sony matter is under active investigation. There is not a 
lot I can say about the case as a result of that, but we are 
using our investigative capacity personnel from the Department 
as well as the FBI are, in fact, looking at this matter, and it 
is something that we are taking extremely seriously.
    Senator Blumenthal. And I believe going forward there is a 
clear need--and I know Senator Franken has been really leading 
on this effort--for measures that would provide stronger 
incentives and, if necessary, remedies for failure to safeguard 
this information more effectively and also offer protective 
services in the event there are these breaches. And I would ask 
again for cooperation from the Department in this effort.
    Attorney General Holder. Yes, I think that is right. We 
have to not only take effective enforcement efforts once a 
breach has occurred; we have to also focus on preventive 
efforts that can be taken by companies that have this data, 
that acquire this data. And to the extent that we can work with 
the Committee and with industry to try to come up with 
effective ways that we can prevent these breaches from 
occurring, I think everybody is actually better served by that. 
And we would be more than glad to work with you.
    Senator Blumenthal. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Franken. Thank you, and I see that Senator Graham 
has returned, so the Senator from South Carolina.
    Senator Graham. Thank you, Senator Franken.
    Good morning.
    Attorney General Holder. Good morning.
    Senator Graham. Congratulations to the administration for, 
I think, what will be a historic operation when it comes to the 
operation against bin Laden. I think now the President made a 
very difficult decision, and that is, putting boots on the 
ground, but I certainly think the right decision.
    What I want to do is sort of talk about the way forward on 
terrorism issues. I know that KSM, going back into military 
commissions, was a hard decision for you. We had respectful 
disagreements, but I just want to be on the record. I believe 
very strongly there is a place for Article III courts and that 
I am an all-of-the-above approach when it comes to trial 
venues. And just for the record, the reason I objected to KSM 
and the co-conspirators is they had been held as enemy 
combatants for so long under the law of war, and I just really 
was worried about mixing systems. But the Christmas Day bomber, 
the situation with the Times Square bomber, these are class 
examples, I think, of where you could grab somebody off the 
battlefield and go right into an Article III court.
    Now, let us talk about the interrogation programs we have. 
I am somewhere between waterboarding and the Army Field Manual. 
I believe, as I have said many times--I have been a military 
lawyer for 30 years--waterboarding as a technique has been 
talked about among the legal community and the military for a 
very long time as something not appropriate, and I think going 
down that road--and I am sure there was some information 
gleaned from waterboarding, but overall the reason we stopped 
this practice, it was causing a lot of problems for the 
country.
    Having said that, I think the best way to interrogate enemy 
prisoners is to keep them off balance, form relationships over 
time, but basically have procedures they cannot train against.
    So, Mr. Attorney General, as I understand it, the CIA is no 
longer involved in interrogation of terrorist suspects 
directly. Is that true, or do you know?
    Attorney General Holder. I am not sure that that is 
accurate. I could perhaps get back to you on that, but I----
    Senator Graham. Well, here is what--and check my homework 
here. The Executive order the President issued shortly after 
taking office took off the table the enhanced interrogation 
techniques that are classified in the Detainee Treatment Act, 
and now the only techniques available to us are in the Army 
Field Manual. They are online. So I would urge you to look at 
that. I just think it is a mistake to deny the CIA the ability 
to use classified techniques in the Detainee Treatment Act that 
I helped write because the enemy needs to be kept off balance. 
So if you could look at that and get back with me, and it is my 
understanding the CIA, after this Executive order, no longer 
directly interrogates enemy suspects, terrorism suspects. Go 
ahead.
    Attorney General Holder. One thing I would say, Senator, is 
that when the changes were made with regard to the techniques 
that could be used, the intelligence community was canvassed, 
and they indicated that with regard to the techniques that were 
no longer to be employed and the ones that could be used, they 
thought that gave them adequate tools in order to do their 
jobs.
    Senator Graham. But my question is I believe that the only 
techniques available to the intelligence community and to our 
military are the Army Field Manual, and that was never written 
with a view to be the exhaustive techniques available to 
interrogate prisoners. It really is a guide to our troops to 
make sure they do not get in trouble. And if the CIA is no 
longer directly involved in interrogations, I would like to 
know that, if that is true. And if they are limited to the Army 
Field Manual, I would like to know that.
    Attorney General Holder. What gives me pause is I know that 
the CIA is a part of the HIG.
    Senator Graham. Right.
    Attorney General Holder. So that is why I am hesitant. You 
are saying----
    Senator Graham. No, and please check it out. I want to be 
on record. It is my belief that the policy today is that the 
Army Field Manual is the exclusive means of interrogating 
terrorist suspects, it is online, and that the enhanced 
interrogation techniques authorized under the Detainee 
Treatment Act are no longer being used, and my view is that is 
a mistake.
    Now, when we go forward with future captures, Guantanamo 
Bay, we have both tried to find ways to create a new prison. I 
have been sort of out there saying it does not bother me that 
you would create a prison in the United States as long as there 
is a national security-centric legal system around it. But I 
think we have lost that argument. I do not believe Guantanamo 
Bay is going to be closed anytime soon by the Congress. Is that 
your assessment?
    Attorney General Holder. We are going to continue to try to 
close it, but I think it is going to be difficult given the 
votes that we have seen in the Congress and the sentiment 
that----
    Senator Graham. Yes, and to my colleagues who understand, I 
think it is a well-run prison now. It has had problems in the 
past, but the administration, working with us, we wrote a new 
Military Commissions Act in 2009, which I am very proud of, and 
you helped write it. So I think we have got Guantanamo Bay in 
pretty good shape right now for all those who want to be 
reasonable.
    But given that dilemma, I understand we may have some 
people in our capture now that might be good candidates for 
Article III trials or military commission trials that were 
captured abroad. Where do we put people? If we caught someone 
tomorrow that would be a terrorist suspect, an al Qaeda member, 
if we can Zawahiri--you just name the person--where would we 
put them?
    Attorney General Holder. I guess it would depend on the 
charges that we could bring. Certainly if we have an Article 
III case that we can bring against them, we can put them in any 
of the Federal facilities that we have.
    Senator Graham. What if you had an enemy combatant that you 
wanted to hold for, you know, extensive interrogation, lawful 
but you wanted to hold him? Where would you put that person?
    Attorney General Holder. We have overseas facilities that 
we can make use of for, you know, interrogation and for 
detention.
    Senator Graham. Well, Bagram, you know, Parwan Prison, I 
would really argue that the Afghan Government cannot become the 
American jailer, and if you caught someone in Somalia, if you 
took them to Afghanistan, that would create a lot of problems 
for operations there.
    The answer, to me--and I have asked Special Forces, ``Where 
would you put these people''--I asked Secretary Gates and asked 
Admiral Mullen--``if you caught someone tomorrow in Somalia or 
Yemen, a high-value target, where would you put them? '' They 
say they do not have an answer for that because Gitmo is off 
the table.
    Do you see anytime soon Gitmo being allowed to be used in 
special cases of high-value targets that were caught in the war 
on terror?
    Attorney General Holder. I do not think that is our 
intention. Our intention is, even given the issues that we have 
with Congress, to try to close that facility and to try to make 
use of other locations that we would have for interrogation, 
for instance.
    Senator Graham. I just do not believe there are other 
viable locations. We need to think this thing through. There 
are detainees at Bagram Air Base, now Parwan Prison, that are 
not going to be left in Afghan control because they are third-
country nationals, and we need to find what to do with those 
detainees, because they are not going to be left in Afghanistan 
because I just do not trust the Afghan legal system. So I would 
like to work with you on these issues.
    One last point. There is a lot of chatter out there about 
the use of force against bin Laden. Would you agree with me, 
Mr. Attorney General, that given the intelligence about bin 
Laden, he promised never to be captured alive.
    Attorney General Holder. Yes, let me make something very 
clear. The operation in which Osama bin Laden was killed was 
lawful. He was the head of al Qaeda, an organization that had 
conducted the attacks of September the 11th. He admitted his 
involvement. As you indicate, he said he would not be taken 
alive. The operation against bin Laden was justified as an act 
of national self-defense.
    It is lawful to target an enemy commander in the field. We 
did so, for instance, with regard to Yamamoto in World War II 
when he was shot down in an airplane.
    Senator Graham. Absolutely.
    Attorney General Holder. So he was, by my estimation, the 
estimation of the Justice Department, a lawful military target. 
And the operation was conducted in a way that is consistent 
with our law, with our values.
    If he had surrendered, attempted to surrender, I think we 
should obviously have accepted that. But there was no 
indication that he wanted to do that and, therefore, his 
killing was appropriate.
    Senator Graham. Well, I agree with everything you said. I 
would just like to add one final comment. From a Navy SEAL 
perspective, you had to believe that this guy was a walking 
IED.
    Attorney General Holder. Exactly.
    Senator Graham. So if I were a Navy SEAL and I made a 
positive ID on this guy, I would want to take him down as far 
away from my teammates as possible. So to those out there who 
question what happened here, the intelligence and the 
statements from the man himself said he would never be taken 
alive, that he had bombs strapped to himself. I think the Navy 
SEAL team had to believe that the moment they encountered bin 
Laden, whether he raised his hands or not--that could be a fake 
surrender--that they were well within their rights, and 
shooting him as soon as possible probably protected everybody, 
including the SEALs and women and children. So I agree with 
you, Mr. Attorney General. This was an operation within the 
law, and the Navy SEALs acted appropriately, and I am proud of 
the fact that they protected women and children at their own 
detriment. They took time to shield women and children from the 
helicopter being blown up. They protected the women and 
children the best they could in this firefight. And the moment 
they saw bin Laden, they had to consider him a threat. And I 
could not believe a scenario where you would believe he could 
reliably surrender.
    So I just want to put my two cents' worth in there, and I 
look forward to working with you on these tough issues.
    Attorney General Holder. I look forward to working with 
you, Senator, but I think you make some very valid points that 
I think people should focus on. It was a kill-or-capture 
mission. He made no attempts to surrender. And I tend to agree 
with you that even if he had, there would be a good basis on 
the part of those very brave Navy SEAL team members to do what 
they did in order to protect themselves and the other people 
who were in the building. They conducted themselves totally 
appropriately in that the loss of life was minimal or as 
minimized as it could be. Substantial numbers of women and 
children were not impacted during their entry into those 
buildings, and I am proud of what they did. And I really want 
to emphasize that what they did was entirely lawful and 
consistent with our values.
    Senator Graham. I totally agree. Thank you.
    Senator Franken. Thank you, Senator Graham.
    Mr. Attorney General, since we are on the subject, I just 
want to commend you and your Department and, of course, those 
troops who did an unbelievable job, and everyone who played a 
role in this tremendous operation of bringing bin Laden to 
justice, so congratulations and thank you.
    I want to get into contractor fraud, which has been a 
concern of mine for quite a while. I have been long concerned 
that contractors have been getting kind of a free pass after 
they commit procurement fraud. And I asked Lanny Breuer a 
number of questions about this back in January.
    Since then, a report by the Department of Defense confirmed 
some of my suspicions. Over a 3-year period, DOD paid $270 
billion to more than 91 contractors who were found to be 
civilly liable for contract fraud, and another $10 billion to 
an additional 120 contractors who settled civil fraud causes. 
What is even more astounding is that 30 contractors who were 
convicted of criminal fraud against the government received 
another $682 million in contracts from DOD after they had been 
convicted of criminal fraud.
    Now, I understand that your Department is not responsible 
for making debarment decisions, but do you agree that it is 
just bizarre that we are awarding billions of dollars in new 
contracts to entities that cannot be trusted?
    Attorney General Holder. It is an interesting question. I 
know that we have to deal with these things, as strange as this 
might sound, on a case-by-case basis. It is sometimes possible 
that a company that has done inappropriate things and has been 
held civilly liable, maybe even criminally liable, has new 
management and they have gotten rid of the people who were 
responsible for the fraud in its previous iteration, and on 
that basis the Department of Defense has made the determination 
that they can continue to do business with the company.
    In the absence of some kind of remedial steps, though, I 
would agree with you that it does not make sense to continue to 
do business with those who have defrauded the American people.
    Senator Franken. Well, I think there have been cases in 
which they have not changed personnel and that we have just 
gone right back to them. I think that is a good idea that we 
could be debarring CEOs or divisions or heads of divisions or 
heads of departments of companies where there have been 
problems, especially where it might not be in our best interest 
to go after the entire company. But I think that we should 
definitely be encouraging that and not goint right back to the 
same people without requiring a change in the people 
responsible.
    Attorney General Holder. I would agree with you. The notion 
that perhaps there be some presumptions that perhaps can be 
overcome by the changes that a company has made. One of the 
things that I would want to make sure is that the Government 
agencies that are involved have the maximum amount of 
flexibility so that they can take appropriate sanctions when 
that is necessary, but do it in a way that is consistent with 
serving the interests of the American people.
    Senator Franken. Well, I will give you an example. The 
Department of Health and Human Services recently notified the 
CEO of Forest Laboratories that it intends to specifically 
exclude him from doing business with the government, and I 
think that would force the company to get rid of him, and that 
follows a large investigation and settlement of civil and 
criminal charges related to the sales of antidepressants. And I 
applaud that approach and think we need to go after individual 
executives more, especially when there is evidence that they 
had knowledge of or encouraged this type of misconduct. 
Unfortunately, though, the tactic of targeting specific 
executives just seems to be very rare, particularly among our 
largest contracting agencies like the Department of Defense and 
the Department of State, and I fear that most contracting 
officers are simply not equipped to make some of these 
decisions and that we should be relying more on Inspectors 
General to lead investigations and make recommendations.
    What do you think we could do to encourage greater 
coordination between DOJ and the Inspector General community on 
these issues?
    Attorney General Holder. I think we certainly have to 
communicate. I think we do a pretty good job of it now. To the 
extent that there are problems that you have identified, I 
would certainly want to hear about them and see if there are 
ways in which we can change the way in which we communicate 
with the IGs. We have a pretty robust fraud enforcement 
program--I think a very robust fraud enforcement program. It is 
a priority matter for us, and we have had some notable 
successes, as my written and opening statement have indicated. 
It does not mean that we cannot do more and that we are not 
looking for ways in which we can do our job better.
    The IGs I think have particular strengths in that they know 
their agencies better than outsiders are going to know them, 
and I would hope that as they identify conduct that is 
potentially criminal that they are making sure that they refer 
that information to the Justice Department so that we can take 
appropriate enforcement actions, whether it is civil or 
criminal.
    I would also say that with regard to your point about 
looking at individuals, that is something that we have to do. 
This cannot simply be seen as the cost of doing business, that 
you defraud the United States, you pay a big fine, and then you 
continue to interact with the Government and continue to get 
contracts and no harm befalls anybody except maybe the 
shareholders because this company has had to pay the Government 
a huge amount of money. To the extent that we can identify 
individuals who are responsible for these actions, it is my 
instruction, it is our intent to hold them accountable, to hold 
them individually liable for these actions.
    Senator Franken. I think that would incentivize not 
committing fraud.
    Attorney General Holder. Right.
    Senator Franken. Which I think is a good thing.
    Attorney General Holder. Yes. People behind bars tends to 
stick in individuals' minds as opposed to the notion that my 
company is simply going to have to pay, you know----
    Senator Franken. Or I am not even necessarily talking 
behind bars, just career ending. That also catches people's 
attention.
    I want to touch on something and then let you go because I 
am the only thing between you and going. It is something that 
Senator Blumenthal talked about--the Sony Playstation and 
Epsilon data breaches, which have shown us all this month how 
vulnerable our private information is online. Among those 
companies affected by the Epsilon breach were several Minnesota 
companies as well as many, many Minnesota customers.
    A few weeks ago, I wrote a letter to Assistant Attorney 
General Lanny Breuer, again, asking if our current anti-hacking 
laws are strong enough to deter hackers. I wanted to really ask 
about two questions.
    First, does the Department of Justice have any 
recommendations to update or strengthen these anti-hacking 
laws, including the Computer Fraud and Abuse Act within that?
    Attorney General Holder. Senator, what I would like to do 
is maybe get in touch with our experts and ask them that 
question and put something in writing for you with regard to 
suggestions that we might have.
    I will say that with regard to both the Epsilon matter and 
the Sony matter, they are currently under investigation in the 
Department of Justice.
    Senator Franken. Right, and thank you for that.
    This is a slightly different question, but should those who 
have this data be required to protect the data? Because it is 
one thing--we were talking about anti-hacking, the people that 
hacked into Sony, the people that hacked into Epsilon. There 
are a lot of third parties who have a lot of data that can get 
hacked into. In updating our privacy laws, is there possibly a 
role to require--and I am not sure whether you do this by law 
or a regulatory function--to require them to have a protocol to 
secure this data in a way that cannot be hacked or that is 
state-of-the-art?
    So, I mean, because if you have all this data and if there 
is no requirement to have a certain level of security, it seems 
like we are inviting hacking.
    Attorney General Holder. As I indicated to Senator 
Blumenthal, I actually think that the idea that you are raising 
is a good one, and maybe there is a way in which this 
Committee, the Justice Department, other involved Federal 
agencies, and industry can get together and look at that issue, 
because I really do think that the focus has to be on 
prevention. That is the way in which you offer the maximum 
protection to consumers, not after the horse is out of the barn 
and where we are doing what we can to enforce the laws and hold 
people responsible, but to prevent people from suffering the 
loss of their identities, their financial information.
    And so I would pledge to work with you or any group that 
you put together----
    Senator Franken. That would be great. I am Chairman of a 
new Subcommittee on Privacy and Technology and the Law, and I 
will take you up on that.
    Attorney General Holder. Good.
    Senator Franken. OK, and I will let you go.
    Attorney General Holder, I just want to thank you for your 
time, for your testimony, and for your service. We always 
appreciate hearing from you and learning all about what is 
going on at the Department of Justice. Thank you again for 
being here.
    The record of this hearing will be kept open for a week. 
This meeting stands adjourned.
    Attorney General Holder. Thank you, Senator.
    Senator Franken. Thank you.
    [Whereupon, at 12:06 p.m., the Committee was adjourned.]
    [Questions and answers and submission for the record 
follow.]




                                 
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