[Senate Hearing 113-]
[From the U.S. Government Publishing Office]


 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2014 

                              ----------                              


                         THURSDAY, MAY 16, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:02 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Barbara A. Mikulski (chairwoman) 
presiding.
    Present: Senators Mikulski, Shelby, Collins, and Boozman.

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

STATEMENT OF HON. ROBERT S. MUELLER, III, DIRECTOR

            OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Chairwoman Mikulski. Good morning, everybody. Today the 
Subcommittee on Commerce, Justice, Science, and Related 
Agencies (CJS) will hear from the Director of the Federal 
Bureau of Investigation (FBI) Robert S. Mueller, III about the 
FBI and its budget priorities for fiscal year 2014. This 
process today will be in two areas: one, our open and public 
hearing; and then second we will move to a classified meeting 
to go over other aspects related to our global war against 
terrorism.
    We want to welcome Director Mueller for his last scheduled 
hearing before CJS. Director Mueller will be the longest 
serving FBI Director since J. Edgar Hoover when he retires in 
September. He is the only Director to serve out a full 10-year 
term plus an additional two.
    Director Mueller, we want to thank you for your service. We 
want to thank you for leading the FBI through probably one of 
its greatest transformations in FBI history. We want to thank 
you for staying an additional 2 years as we moved into a new 
enduring war, the cyber security aspects. We also want to thank 
you for being one of those nighthawk people who are always 
available 24-7, because that's the nature of threats that we 
face in our country, both here in our own country and those 
from around the world.
    Your leadership has transformed the FBI from a domestic law 
enforcement agency into a global antiterrorism and anticrime 
police force. So while maintaining a vigorous domestic law 
enforcement agency, there has also been the evolution to deal 
with these predatory threats.
    We're going to listen to your testimony today about what we 
need to make sure that the FBI is the premier Federal law 
enforcement agency in the United States of America and, I might 
add, in the world. We do know that there are many eyes on the 
FBI right now, particularly those related to the Boston 
Marathon bombing. I know all of us and all at the FBI mourn 
what happened there. For me, four Marylanders were injured.
    One, Erika Brannock, a 29-year-old preschool teacher from 
Trinity Episcopal, the Episcopal Children's Center in Towson, 
lost her leg, but she hasn't lost her spirit. She was there 
with her mother, her sister, and her sister's husband on that 
day. All the family members suffered some form of injury, but 
all are on the road to recovery.
    But every family has a story, and we want to thank those 
who responded. We planned for the worst, drilled the response, 
and there were the coordinated law enforcement efforts.
    So I know that we'll be talking; probably there will be a 
number of questions about that, particularly in terms of the 
authorities that the FBI needs to do its job, to be able to 
prevent such things from happening, the resources necessary to 
do the important work, and were there any investigatory gaps.
    But you know, while all eyes are on Boston, also all eyes 
are on the FBI. I was just struck during the last couple of 
days by what the FBI has been involved with: ricin-laced 
letters sent to Senator Wicker and a Mississippi judge. The 
plant explosion in Texas, a melancholy event, was it an act of 
a predator or was it an accident? Those three kidnapped girls 
from Ohio, the FBI was involved in there. That big, $45 million 
ATM heist which was exposed, $45 million in an international 
coordinated effort. And all at the same time going after 
everything from other bank robbers to those who have a 
predatory intent to our country.
    So we want to listen to the issues facing the FBI, and we 
are concerned about the budget. The President's request is at 
$8.4 billion. We know that the FBI's appropriation was enacted 
at $8.1 billion, but after the sequester it was $7.5 billion. 
We are deeply concerned that if sequester continues in fiscal 
year 2014, there will be an additional $700 million cut to the 
FBI. This is a stunning amount of money, particularly when we 
look at the incredible things that the FBI needs to do.
    We're heartened by the fact that the President has 
increased the appropriations request for new major programs: 
one such request is $87 million for the next generation of 
cyber initiatives; another anticipates the need for expanding 
the National Instant Criminal Background Check System by 
requesting $100 million for new people; $7.4 million for an 
important biometrics technology facility in Alabama.
    He has maintained support for critical programs, but 
they're flat-funded: counterterrorism, violent crime, fighting 
exploitation of children, in which I know you've been an 
enormous advocate, and the protection of civil rights by 
investigating hate crimes and the despicable practice of human 
trafficking. We're also concerned about the major reductions, 
particularly in something like eliminating the National Gang 
Intelligence Center and the consequences of that.
    So, Mr. Director, we're looking forward to hearing what the 
request will be, how you think it will meet important FBI 
needs. We also welcome you to comment on the sequester today 
and what the consequences to the FBI would be if sequester 
continues in fiscal year 2014.

                           PREPARED STATEMENT

    I'm going to ask that my entire statement be included in 
the record. I now turn to my vice chairman, Senator Shelby.
    [The statement follows:]
           Prepared Statement of Senator Barbara A. Mikulski
    Good morning and welcome. Today, the Commerce, Justice, Science, 
and Related Agencies (CJS) Subcommittee will hear from Federal Bureau 
of Investigation (FBI) Director Robert S. Mueller III about the FBI's 
budget and priorities for fiscal year 2014.
    We welcome Director Mueller to his last scheduled hearing before 
the CJS Subcommittee. When he leaves office, he will be longest-serving 
FBI Director since J. Edgar Hoover, and the only Director to serve out 
a full 10-year term plus an additional 2 years. I thank you for your 
service to our Nation.
    Director Mueller is one of the nighthawks, always ready for that 3 
a.m. phone call. His leadership has transformed the FBI from a 
traditional domestic law enforcement agency into a global anti-
terrorism and anti-crime police force, keeping us safe here at home 
from threats. I note that two national tragedies bookend Director 
Mueller's service. He came into this job just a week before the 9/11 
terrorist attacks, and he will leave just after the Boston bombings.
    Today, all eyes are on Boston. We just sustained the first 
terrorist attack on the United States since 9/11, with the Boston 
Marathon bombings. It was an attack on the Nation that has impacted all 
of us--including my home State. Four Marylanders were injured in the 
attack. ``Erika Brannock is a 29-year-old teacher at Trinity Episcopal 
Children's Center in Towson. Erika grew up in Ellicot City and Bowie, 
and she sustained serious injuries to both legs and feet. Also injured 
was Ericka 's mother Carol Downing, who is from Monkton, Maryland. 
Carol ran in the marathon that day, and was taken to Brigham and 
Women's hospital after the bombing.
    Nicole Gross is a 31-year-old personal trainer who suffered two 
broken legs in the bombing. She was a star swimmer at Mount Hebron High 
School in Ellicott City, Maryland, and now lives in Charlotte, North 
Carolina. And Nicole's husband, Michael Gross, who suffered lacerations 
and burns in the bombing.
    When they were attacked and the Nation was attacked the American 
people responded. Thank you to the first responders who ran toward 
danger--the police, fire fighters, paramedics, nurses, and doctors. 
Working together, they saved lives and limbs.
    After 9/11, we funded training and preparedness, so first 
responders knew and practiced where to go, what to do, and how to help. 
Boston was ready to respond because they planned for the worst and they 
drilled their response. There were well coordinated law enforcement 
resources--the police and the FBI--through the Joint Terrorism Task 
Forces.
    After 9/11, FBI was charged with a new national security mission, 
to disrupt terrorist plots before they happen by identifying, tracking, 
and defeating terrorist cells and dismantling weapons of mass 
destruction on U.S. soil. Today, counterterrorism and 
counterintelligence activities make up more than 40 percent of the 
FBI's budget.
    Boston put the focus on the FBI's counterterrorism investigations. 
There were immediate successes in analyzing the evidence, pouring 
through the video, and identifying and catching the Tsarnaev brothers.
    But we also have questions about the process, things we need to 
know from the FBI. For instance, there appear to have been 
investigatory gaps. Tamerlan Tsarnaev was on the radar screen, but he 
slipped through the cracks. Is our system to share information on 
terrorist threats broken? Can it identify a lone wolf terrorist? We 
know that the FBI questioned Tamerlan Tsarnaev, but couldn't open a 
case. Does the FBI have the tools it needs to not only identify 
threats, but also to follow up on those threats? Is this budget request 
is enough to tackle all of the counterterrorism responsibilities and 
keep the FBI ahead of the bad guys?
    Today, all eyes are on Boston and all eyes are on the FBI. Since 
the Boston bombings, ricin-laced letters have been sent to the 
President, Senator Wicker, and a Mississippi judge. A fertilizer plant 
explosion in West, Texas, killed 15 and injured 200. Three women 
kidnapped in Cleveland, Ohio, escaped from a decade of captivity. A 
Minnesota pipe bomb attack was foiled in the planning stages. A $45 
million ATM heist was exposed and eight criminals indicted. Top Ten 
Fugitive child pornographer Eric Toth, was captured in Nicaragua. And 
gunmen opened fire on a New Orleans Mother's Day parade.
    In each case, the FBI was on the scene taking the lead or 
supporting other local, State, and Federal partners. We expect a lot of 
the FBI. We count on the FBI to keep 316 million Americans safe from 
terrorism and violent crime, to dismantle organized crime and drug 
cartels, to combat gang violence and illegal drug and gun smuggling, 
and to catch child sexual predators and cyber criminals.
    But what should the FBI expect of us, the Congress? Rather than 
providing the resources to face varied and growing threats, the 
Congress has subjected the FBI to shutdown and showdown politics, 
uncertain funding, and now the sequester. Because of sequester, the FBI 
is operating at $543 million less than the fiscal year 2013 enacted 
level, and unless we end the sequester, the FBI will be cut by at least 
$700 million in fiscal year 2014.
    We know what the FBI expects of us. They expect stable and 
consistent funding, so that the FBI has the resources needed to keep 
Americans safe. Every day, we expect the FBI to keep America safe from 
terrorists and criminals. The FBI expects the Congress to provide them 
with the resources it needs, on time and under the regular order, 
without shutdowns or showdowns. And that is what I intend to do as 
Chairwoman of the Appropriations Committee.
    Once again, I thank the people of the FBI and Director Mueller for 
his leadership. For the information of Senators, we'll begin our 
examination of the FBI's $8.4 billion fiscal year 2014 budget request 
with this open hearing, and then we will recess at 11 a.m. and move the 
hearing into a classified session, where we can talk more fully about 
Boston and other key national security threats like cybersecurity.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Madam Chairman.
    Director Mueller, we thank you for joining us here again 
today. You're no stranger. We also want to thank you for your 
service to the country.
    I want to begin by also thanking the men and the women that 
work with you at the FBI, who work every day to protect this 
Nation. We're all indebted to them for the sacrifices that they 
and their families make.
    Since the attacks of September 11, the FBI has been tasked 
with additional national security responsibilities. Today the 
FBI's mission includes, among other things, protecting the 
United States against acts of terror, foreign intelligence 
threats, cyber crime, while simultaneously maintaining focus on 
traditional criminal activities such as violent crime, public 
corruption, and white collar crime.
    Criminals and terrorists are increasingly agile and 
sophisticated. The same is required of the FBI. The constantly 
changing landscape of criminal activity at home and abroad has 
challenged the FBI's ability to quickly respond to emerging 
threats. In recent years we have seen threats arise in the 
areas of home mortgages, financial fraud, cyber security, and 
of course terrorism. But it won't stop there. I believe that 
new, unimagined threats will challenge the FBI and all of us in 
the future.
    To remain effective, I believe it's imperative that FBI 
have the inherent capability to retool and refocus to address 
these threats. Without a plan to address these threats, the FBI 
will continue to lurch from crisis to crisis, which is 
something none of us want.
    In the past, FBI has received additional resources from the 
Congress precisely because it has not been agile enough to 
refocus its efforts internally. This is not an effective way to 
address such pressing issues.
    The FBI request for fiscal year 2014, Madam Chairman, says 
$8.3 billion. Director Mueller, while the budget request 
targets a number of new initiatives and maintains core 
missions, I believe it lacks focus on how the FBI will address 
future unexpected threats that I've just mentioned. Recognizing 
the world in which we live and the tough fiscal climate, I'm 
concerned that the budget priorities reflected in this request 
do not always ensure that the Bureau is efficient, effective, 
and, more importantly, nimble for the foreseeable future.
    I'm committed, and I know the chairperson is, to working 
with you and others at what I believe are deficiencies in the 
budget and to budget limited resources in a manner that 
safeguards taxpayers while preserving public safety.

                           PREPARED STATEMENT

    I look forward to hearing from you, Mr. Director, about the 
FBI's budget and its priorities. I'm also interested in hearing 
about the FBI's work pre- and post-Boston bombing. And finally 
the recent acknowledgment by the Department of Justice that 
they have obtained the telephone records of the Associated 
Press journalists has many people concerned. While I appreciate 
that this is an ongoing investigation, I hope that you will be 
as forthcoming as possible in addressing this issue here today.
    Thank you, Mr. Director.
    [The statement follows:]
            Prepared Statement of Senator Richard C. Shelby
    Thank you, Madame Chair.
    Director Mueller, thank you for joining us today to discuss the 
FBI's 2014 budget request.
    I want to begin by thanking the men and women of the FBI who work 
every day to protect this Nation. We are all indebted to them for the 
sacrifices they make.
    Since the attacks of September 11th, the FBI has been tasked with 
additional national security responsibilities. Today, the FBI's mission 
includes protecting the United States against acts of terror, foreign 
intelligence threats and cyber-crime while simultaneously maintaining 
focus on traditional criminal activities such as violent crime, public 
corruption, and white-collar crime.
    Criminals and terrorists are increasingly agile and sophisticated. 
The same is required of the FBI.
    The constantly changing landscape of criminal activity at home and 
abroad has challenged the Bureau's ability to quickly respond to 
emerging threats. In recent years we have seen threats arise in the 
areas of home mortgages, financial fraud, cyber-security and, of 
course, terrorism. But it won't stop there. I believe that new, 
unimagined threats will challenge the FBI in the future.
    To remain effective, it is imperative that the Bureau have the 
inherent capability to retool and refocus to address nascent threats. 
Without a plan to address these threats, the FBI will continue to lurch 
from crisis to crisis.
    In the past, the Bureau has received additional resources from 
Congress precisely because it has not been agile enough to refocus its 
efforts internally. This is not an effective way to address such 
pressing issues.
    The FBI request for 2014 is $8.3 billion. Director Mueller, while 
the budget request targets a number of new initiatives and maintains 
core missions, it lacks any focus on how the Bureau will address the 
future, unexpected threats that I just mentioned.
    Recognizing the world in which we live and the tough fiscal 
climate, I am concerned that the budget priorities reflected in this 
request do not ensure that the Bureau is efficient, effective and, more 
importantly, nimble for the foreseeable future.
    I am committed to working with you and the Chair to address, what I 
believe are deficiencies in the budget and to target limited resources 
in a manner that safeguards taxpayer dollars while preserving public 
safety.
    I look forward to hearing from you Director Mueller about the 
Bureau's budget and its priorities. I am also interested in hearing 
about the FBI's work pre- and post- the Boston bombing.
    Finally, the recent acknowledgement by the Department of Justice 
that they have obtained the telephone records of Associated Press 
journalists has many of us concerned. While I appreciate this is an 
ongoing investigation, I hope that you will be as forthcoming as is 
possible in addressing the issue here today.
    Thank you Madame Chair.

    Chairwoman Mikulski. Mr. Director.

            SUMMARY STATEMENT OF HON. ROBERT S. MUELLER, III

    Mr. Mueller. Thank you. Good morning, Chairman Mikulski and 
Ranking Member Shelby. Even though not here, I thank the other 
members of the subcommittee who have served over a period of 
time on this subcommittee. I want to thank you for the 
opportunity to appear here today and, on behalf of the men and 
women of the FBI, let me begin by thanking you, particularly 
you two, for your continuous support over the 11 years that we 
have worked together.
    As pointed out, we live in a time of diverse and persistent 
threats from terrorists, spies, and cyber criminals. At the 
same time, we face a wide range of criminal threats, from white 
collar crime to public corruption, to transnational criminal 
syndicates, migrating gangs, and child predators. Just as our 
national security and criminal threats constantly evolve, so 
too must the FBI counter these threats even during a time of 
constrained budgets as, Senator, you have pointed out.
    Today, I would like to highlight several of the FBI's 
highest priority national security threats. I'll start with 
Boston. As illustrated by that recent attack, terrorist threats 
against the United States remain our top priority. Over the 
past few weeks we have seen an extraordinary effort by law 
enforcement, intelligence, and public safety agencies to find 
and hold accountable those responsible for the Boston bombings.
    As you know, one of the bombers is dead, a second suspect 
has been charged, and we continue our ongoing efforts to 
identify any others who may be responsible. The collaborative 
efforts of all of our partners, with the help and the 
cooperation of the public, have led to the results so far, and 
let me assure you there will be no pause in that effort.
    There are limits to what we can discuss publicly about the 
case today, as the investigation is active and ongoing. But as 
this case illustrates, we face a continuing threat from home-
grown violent extremists. These individuals present unique 
challenges because they do not share a typical profile. Their 
experiences and motives are often not distinct, which makes 
them very difficult to identify and to stop.
    Yet at the same time, foreign terrorists still seek to 
strike us at home and abroad. Terrorists today operate in more 
places and against a wider array of targets than they did a 
decade ago. We have seen an increase in cooperation among 
terrorist groups, and an evolution in their tactics and their 
communications. Core Al-Qaeda is weaker and more decentralized 
than it was 11 years ago, but it remains committed to attacks 
against the West.
    Al-Qaeda affiliates and surrogates, in particular Al-Qaeda 
in the Arabian Peninsula, pose a continuing and a growing 
threat. In light of the recent attacks in North Africa, we must 
focus on emerging extremist groups capable of carrying out such 
additional attacks.
    Next, let me turn for a second to discuss the cyber threat, 
which has evolved significantly over the past decade and cuts 
across all FBI programs. Cyber criminals have become 
increasingly adept at exploiting weaknesses in our computer 
networks, and once inside they can exfiltrate both state 
secrets and trade secrets. We also face persistent threats from 
hackers for profit, organized criminal cyber syndicates, and 
hacktivist groups. As I have said in the past, I believe that 
the cyber threat may well eclipse the terrorist threat in years 
to come.
    In response, we are strengthening our cyber capabilities in 
the same way we enhanced our intelligence and national security 
capabilities in the wake of the September 11 attacks. The Cyber 
Division is focused on computer intrusions and network attacks. 
FBI special agents work side by side with Federal, State, and 
local counterparts on cyber task forces in each of our 56 field 
offices, working to detect and disrupt computer intrusions.
    We have increased the size and the scope of the National 
Cyber Investigative Joint Task Force, which brings together 19 
law enforcement, military, and intelligence agencies to stop 
current attacks and prevent future attacks. Together with the 
Department of Homeland Security and the National Security 
Agency (NSA), we have clarified the lanes in the road for our 
collective response to significant cyber intrusions.
    Now, cyber crime, as many other crimes today, requires a 
global approach. In the cyber arena, through FBI legal attache 
offices, we are sharing information and coordinating 
investigations with our international counterparts. We have 
special agents embedded with police departments in Romania, 
Estonia, Ukraine, and the Netherlands to identify emerging 
trends and key players. At the same time, we fully recognize 
that the private sector is the essential partner to protect our 
criminal infrastructure and to share information, threat 
information in particular.
    Let me turn for a moment to the FBI's criminal programs. 
The FBI's responsibilities range from complex white collar 
fraud to transnational criminal enterprises and from violent 
crime to public corruption. Given limited resources, we must 
focus on those areas where we bring something unique to the 
table.
    For example, violent crime and gang activity continue to 
exact a high toll on our communities. Through Safe Streets and 
Safe Trails Task Forces, we identify and target the most 
dangerous of these criminal enterprises. To track and disrupt 
violence along the Southwest Border, we rely on our 
partnerships with the Drug Enforcement Administration led 
Special Operations Division, the Organized Crime Drug 
Enforcement Task Force Fusion Center, and the El Paso 
Intelligence Center.
    At the same time, we are required to and must remain 
vigilant in our efforts to find and to stop child predators. 
Our mission in that regard is threefold: first, to decrease the 
vulnerability of children to exploitation; second, to provide a 
rapid, effective response to crimes against children through 
programs such as the Child Abduction Rapid Deployment Teams; 
and third, to enhance the capabilities of State and local law 
enforcement through task force operations such as the Innocent 
Images and the Innocence Lost National Initiatives.
    Now, in closing I would like to turn to sequestration. The 
impact of sequestration on the FBI's ability to protect the 
Nation from terrorism and crime will be significant. In fiscal 
year 2013, the FBI's budget was cut by more than $550 million 
and in fiscal year 2014, proposed cuts will total more than 
$700 million. This does not include the rescission in fiscal 
year 2013 of approximately an additional $150 million.
    The ongoing hiring freeze will result in 2,220 vacancies at 
the FBI by the end of this fiscal year, with 1,300 additional 
vacancies in 2014. We also anticipate furloughs for our 
employees during the next fiscal year. I have long said that 
people are the FBI's greatest asset. Additional operational 
cuts and furloughs will impact the FBI's ability to prevent 
crime and terrorism, which in turn will impact the safety and 
security of our Nation.
    With regard to nonpersonnel resources, the FBI will have to 
forego or delay long-needed IT upgrades and additionally will 
be unable to obtain the technical surveillance tools needed to 
keep pace with our adversaries.
    We understand the need for budget reductions, but we would 
like to work with the subcommittee to mitigate the most 
significant impacts of those cuts.

                           PREPARED STATEMENT

    Chairman Mikulski and Ranking Member Shelby, I personally 
would like to thank you again for your support to the FBI over 
the years that I have been Director and for your support of our 
office. Our transformation over the past decade would not have 
been possible without not only your cooperation, but your 
support, and for that we in the Bureau thank you.
    Again, I look forward to any questions you may have.
    [The statement follows:]
           Prepared Statement of Hon. Robert S. Mueller, III
    Good morning Chairwoman Mikulski, Ranking Member Shelby, and 
members of the subcommittee. I look forward to discussing the Federal 
Bureau of Investigation's (FBI) efforts as a threat-driven, 
intelligence-led organization that is guided by clear operational 
strategies and priorities.
    The FBI has established strong practices for sharing intelligence, 
leveraged key technologies to help us be more efficient and productive, 
and hired some of the best to serve as Special Agents, Intelligence 
Analysts, and professional staff. We have built a workforce and 
leadership cadre that view change and transformation as a positive tool 
for keeping the FBI focused on the key threats facing our Nation.
    Just as our national security and criminal adversaries and threats 
constantly adapt and evolve, so must the FBI be able to quickly respond 
with new or revised strategies and operations to counter these threats. 
Looking forward, a key challenge facing the FBI will be maintaining its 
current capabilities and capacities to respond to these threats at a 
time when the budgetary environment remains constrained.
    We live now, and will for the foreseeable future, in a time of 
acute and persistent threats to our national security, economy, and 
community safety from terrorists, foreign adversaries, criminals and 
violent gangs, and cyber attackers. The attacks in Boston are vivid 
examples of the threat. This subcommittee understands these threats--
and the consequences of failing to address them. I look forward to 
working with the subcommittee to ensure that the FBI maintains the 
intelligence, investigative, and infrastructure capabilities and 
capacities needed to deal with these threats and crime problems within 
the current fiscal climate. One lesson we have learned is that those 
who would do harm to the Nation and its citizens will exploit any 
weakness they perceive in the ability and capacity of the U.S. 
Government to counter their activities. We must identify and fix those 
gaps while not allowing new weaknesses or opportunities for terrorists, 
cyber criminals, foreign agents, and criminals to exploit.
    The FBI's fiscal year 2014 budget request totals $8.4 billion in 
direct budget authority, including 34,787 permanent positions (13,082 
Special Agents, 3,026 Intelligence Analysts, and 18,679 Professional 
Staff). This funding level provides critical funding to address threats 
posed by terrorists, cyber attackers, and criminals.
    The threats facing the homeland, briefly outlined below, underscore 
the complexity and breadth of the FBI's mission to protect the Nation 
in a post-9/11 world. Let me briefly summarize the key national 
security threats and crime problems that this funding supports.
                       national security threats
    Terrorism.--We have pursued those who committed, or sought to 
commit, acts of terrorism against the United States. Along with our 
partners in the military and intelligence communities, we have taken 
the fight against terrorism to our adversaries' own sanctuaries in the 
far corners of the world--including Iraq, Afghanistan, Pakistan, Yemen, 
Southwest Asia, and the Horn of Africa. We have worked to uncover 
terrorist cells and supporters within the United States and disrupted 
terrorist financial, communications, and operational lifelines at home 
and abroad. We have built strong partnerships with law enforcement in 
countries around the world.
    The threat from terrorism remains complex and ever-changing. We are 
seeing more groups and individuals engaged in terrorism, a wider array 
of terrorist targets, greater cooperation among terrorist groups, and 
continued evolution and adaptation in tactics and communication.
    Threats from homegrown terrorists are also of great concern. These 
individuals are difficult to detect, able to connect with other 
extremists, and--in some instances--highly capable operationally. There 
is no typical profile of a homegrown terrorist; their experiences and 
motivating factors are distinct. Many questions remain as to the 
precise motivation, planning, and possible support to the attacks in 
Boston. However, it is increasingly likely that the Boston attacks may 
prove to be the latest example of homegrown extremism.
    Radicalization to violence remains an issue of great concern. Many 
factors appear to contribute to radicalization here at home, and those 
factors may explain why radicalization is more prevalent now than in 
the past. First, American extremists appear to be attracted to wars in 
foreign countries. We have already seen a number of Americans travel 
overseas to train and fight with extremist groups. The increase and 
availability of extremist propaganda in English perpetuate the problem.
    The Internet has had a profound impact on radicalization. It has 
become a key platform for spreading extremist propaganda and has been 
used as a tool for terrorist recruiting, training, and planning. It 
also serves as a means of communication for like-minded extremists.
    While we have had success both in disrupting plots and obtaining 
convictions against numerous terrorists, we have seen more groups 
engage in terrorism, an evolution in terrorist tactics and means of 
communication, and a wider array of terrorist targets here at home. All 
of this makes our mission that much more difficult. Therefore, the 
fiscal year 2014 budget request includes 28 positions (4 Special Agents 
and 24 Professional Staff) and $6 million for surveillance resources to 
help combat International Terrorism.
    Foreign Intelligence.--While foreign intelligence services continue 
traditional efforts to target political and military intelligence, 
counterintelligence threats now include efforts to obtain technologies 
and trade secrets from corporations and universities. The loss of 
critical research and development data, intellectual property, and 
insider information poses a significant threat to national security.
    Each year, foreign intelligence services and their collectors 
become more creative and more sophisticated in their methods to steal 
innovative technology, which is often the key to America's leading edge 
in business. Last year alone, the FBI estimates that economic espionage 
cases cost the American economy more than $13 billion. In the last 4 
years, the number of FBI arrests associated with economic espionage has 
doubled; indictments have increased five-fold; and convictions have 
risen eight-fold.
    As the FBI's economic espionage caseload is growing, the percentage 
of cases attributed to an insider threat has increased, meaning that 
individuals trusted as employees and contractors are a growing part of 
the problem. The insider threat is not new, but it is becoming more 
prevalent for a range of reasons, including that theft of company 
information is a low-cost route to avoid investment in research; the 
ease of stealing information that is stored electronically, especially 
when one has legitimate access to it; and the increasing exposure of 
businesses to foreign intelligence services as joint ventures grow and 
businesses become more global.
    To address the evolving insider threat, the FBI has become more 
proactive to prevent losses of information and technology. The FBI 
continues expanding outreach and liaison alliances to Government 
agencies, the defense industry, academic institutions, and, recently, 
to the general public, because of an increased targeting of 
unclassified trade secrets across all American industries and sectors.
    Through these relationships, the FBI and its counterintelligence 
partners must continue our efforts to identify and prevent the loss of 
sensitive American technology.
    Intelligence.--Since September 11, 2001, we have improved our 
intelligence collection and analytical capabilities. Today, we are 
collecting and analyzing intelligence to better understand all 
threats--those we know about and those that have not yet materialized. 
We recognize that we must always look for ways to refine our 
intelligence capabilities to stay ahead of these changing threats. The 
FBI recently restructured its Directorate of Intelligence to maximize 
organizational collaboration, identify and address emerging threats, 
and more effectively integrate intelligence and operations within the 
FBI. With this new structure, each office can better identify, assess, 
and attack emerging threats.
    Cyber.--As this subcommittee knows, the cyber arena has 
significantly changed over the last decade. Cyber attacks and crimes 
are becoming more commonplace, more sophisticated, and more dangerous. 
The scope and targets of these attacks and crimes encompass the full 
range and scope of the FBI's criminal investigative and national 
security missions. Traditional crime, from mortgage and health care 
fraud to child exploitation, has migrated online. Terrorists use the 
Internet to recruit, to communicate, to raise funds, to train and 
propagandize, and as a virtual town square, all in one. On a daily 
basis, we confront hacktivists, organized criminal syndicates, hostile 
foreign nations that seek our state secrets and our trade secrets, and 
for profit actors willing to hack for the right price.
    Since 2002, the FBI has seen an 84-percent increase in the number 
of computer intrusions investigations. Hackers--whether state 
sponsored, criminal enterprises, or individuals--constantly test and 
probe networks, computer software, and computers to identify and 
exploit vulnerabilities. We are working with our partners, both foreign 
and domestic, to develop innovative ways to identify and confront the 
threat as well as mitigate the damage. There is always more work to be 
done, but we have had some success, including the 2011 takedown of Rove 
Digital, a company founded by a ring of Estonian and Russian hackers to 
commit a massive Internet fraud scheme.
    The Rove Digital scheme infected more than four million computers 
located in more than 100 countries with malware. The malware secretly 
altered the settings on infected computers, enabling the hackers to 
digitally hijack Internet searches using rogue servers for Domain Name 
System (DNS) routers and re-routing computers to certain websites and 
ads. The company received fees each time these Web sites or ads were 
clicked on or viewed by users and generated $14 million in illegitimate 
income for the operators of Rove Digital.
    We were able to work with our law enforcement counterparts in 
Estonia and our private industry partners to take down this criminal 
organization. Following the arrest of several co-conspirators in 
Estonia, teams of FBI agents, linguists, and forensic examiners 
assisted Estonian authorities in retrieving and analyzing data that 
linked the co-conspirators to the Internet fraud scheme. At the same 
time, we obtained a court order in the United States to replace the 
rogue DNS servers with court-ordered clean servers.
    In this case, we not only took down the criminal organization, but 
we also worked with our partners in the Department of Homeland Security 
(DHS) and other agencies to mitigate the damage. Seven individuals have 
been indicted in the Southern District of New York in this case: six in 
Estonia and one in Russia. The United States has sought extradition of 
all six Estonian subjects. To date, two of them have been remanded to 
U.S. custody, and both have pleaded guilty.
    We have also worked against infrastructure we believe has been used 
in Distributed Denial of Service (DDOS) attacks, preventing it from 
being used for future attacks. Since October, the FBI and the 
Department of Homeland Security (DHS) have released nearly 168,000 
Internet Protocol (IP) addresses determined to be infected with DDOS 
malware. We have released this information through Joint Indicator 
Bulletins (JIBs) to 129 countries. Both the DHS' Computer Emergency 
Readiness Team (CERT) and FBI's Legal Attaches released JIBs to our 
foreign partners. These actions have enabled our foreign partners to 
take action and reduced the effectiveness of the botnets and the DDOS 
attacks.
    Just as the FBI has transformed its counterterrorism and 
intelligence programs to deal with an evolving and adapting threat, the 
Bureau is strengthening its cyber program and capabilities. Computer 
intrusions and network attacks are the greatest cyber threat to our 
national security. To better prioritize our cyber resources on the 
greatest cyber threats, last year we focused our Cyber Division on 
computer intrusions and moved all other cyber-facilitated crimes that 
are perpetrated over the Internet to our Criminal Investigative 
Division.
    The FBI has also focused on hiring specialized personnel to address 
this growing threat. The FBI now has more than 1,000 specially trained 
agents, analysts, and digital forensic examiners that run complex 
undercover operations and examine digital evidence. The FBI is also the 
executive agent of the National Cyber Investigative Joint Task Force, 
which includes representatives from 19 law enforcement and intelligence 
agency partners. The task force operates through Threat Focus Cells--
smaller groups of agents, officers, and analysts focused on particular 
threats.
    Both the Cyber Division and the NCIJTF are increasingly engaging 
the private sector in our effort to combat cyber threats. We distribute 
cyber threat information to victim companies, sometimes permitting them 
to stop cyber attacks before they happen. Appropriate two-way dialogue 
with the private sector is essential for the FBI to engage in time-
sensitive investigative and disruption activities, including 
determining whether the cyber threat poses a threat to national 
security.
    U.S. law enforcement and intelligence communities, along with our 
international and private sector partners, are making progress. 
Technological advancements and the Internet's expansion continue to 
provide malicious cyber actors the opportunity to harm U.S. national 
security and the economy. Given the consequences of such attacks, the 
FBI must be able to keep pace with this rapidly developing and diverse 
threat. Because of this, the fiscal year 2014 budget request includes 
an additional 152 positions (60 Special Agents, 1 Intelligence Analyst, 
and 91 Professional Staff) and $86.6 million to help address this 
threat.
    TEDAC.--The FBI established the Terrorist Explosive Devices 
Analytical Center, or TEDAC, in 2003. Over the past 10 years, it has 
proved to be a valuable tool supporting the military, homeland 
security, international partners, intelligence, and law enforcement 
communities. Prior to TEDAC, no single part of our Government was 
responsible for analyzing and exploiting intelligence related to 
terrorist Improvised Explosive Devices (IEDs). Today, TEDAC supports 
the efforts of our entire Government, from law enforcement to 
intelligence to the military, in developing and sharing intelligence 
about terrorist explosive devices.
    Nearly all IEDs of interest to the United States Government pass 
through TEDAC, allowing our technicians, examiners, scientists, and 
intelligence analysts to see the full spectrum of devices and to 
recognize trends in their construction and components. TEDAC was (and 
remains) responsible for analyzing the devices used in the recent 
Boston attacks. This, in turn, helps us to disarm or disrupt these 
devices; to link IEDs to their makers; to develop new countermeasures 
and most importantly, to prevent future attacks.
    TEDAC has received more than 95,000 submissions since its creation. 
By forensically and technically exploiting IEDs and their components, 
scientists and engineers are able to make matches and connections 
between seemingly unrelated IEDs. These connections have supplied 
valuable information to our war fighters on the front lines, as well as 
law enforcement and intelligence personnel protecting the homeland. 
TEDAC's work has resulted in actionable intelligence and progress in 
the fight against increasingly sophisticated and deadly explosive 
devices.
    Thanks to the resources provided by this committee the FBI has 
begun construction of a new TEDAC facility at Redstone Arsenal in 
Huntsville, Alabama which is expected to be complete by February 2014. 
This new facility will allow TEDAC operations to be collocated at a 
single site, allowing for more efficient and integrated forensic and 
intelligence activities.
                            criminal threats
    The Nation faces many criminal threats, from complex white-collar 
fraud in the financial, health care, and housing sectors to 
transnational and regional organized criminal enterprises to violent 
gangs and crime to public corruption. These threats have also changed 
significantly since 2002. Criminal organizations--domestic and 
international--and individual criminal activity represent a significant 
threat to our security and safety in communities across the Nation. I 
would like to briefly highlight a number of these criminal threats and 
FBI capabilities for addressing these threats.
    Gangs and Violent Crime.--Violent crimes and gang activities exact 
a high toll on individuals and communities. There are approximately 
33,000 violent street gangs, motorcycle gangs, and prison gangs with 
about 1.4 million members active in the U.S. today. A number of these 
gangs are sophisticated and well organized; many use violence to 
control neighborhoods and boost their illegal money-making activities, 
which include robbery, drug and gun trafficking, fraud, extortion, and 
prostitution rings. Gangs do not limit their illegal activities to 
single jurisdictions or communities. FBI is able to work across such 
lines, which is valuable to the fight against violent crime in big 
cities and small towns across the Nation. Every day, FBI Special Agents 
work in partnership with State and local officers and deputies on joint 
task forces and individual investigations.
    FBI joint task forces--Violent Crime Safe Streets, Violent Gang 
Safe Streets, and Safe Trails Task Forces--focus on identifying and 
targeting major groups operating as criminal enterprises. Much of the 
Bureau's criminal intelligence is derived from our State, local, and 
tribal law enforcement partners, who know their communities inside and 
out. Joint task forces benefit from FBI surveillance assets and its 
sources track these gangs to identify emerging trends. Through these 
multi-subject and multi-jurisdictional investigations, the FBI 
concentrates its efforts on high-level groups engaged in patterns of 
racketeering. This investigative model enables us to target senior gang 
leadership and to develop enterprise-based prosecutions.
    Violence Along the Southwest Border.--Violence and corruption 
associated with drug trafficking in Mexico continues to be a 
significant issue--not only along the Southwest Border, but in many 
communities throughout the United States where Mexican drug traffickers 
have established a presence. In addressing this crime problem, the FBI 
relies on a multi-faceted approach for collecting and sharing 
intelligence--an approach made possible and enhanced through the 
Southwest Intelligence Group, the El Paso Intelligence Center, OCDETF 
Fusion Center, and the Intelligence Community. Guided by intelligence, 
the FBI and its Federal law enforcement partners are working 
diligently, in coordination with the government of Mexico, to counter 
violent crime and corruption that facilitates the flow of illicit drugs 
into the United States.
    Organized Crime.--Ten years ago, the image of organized crime was 
of hierarchical organizations, or families, that exerted influence over 
criminal activities in neighborhoods, cities, or States. But organized 
crime has changed dramatically. Today, international criminal 
enterprises run multi-national, multi-billion-dollar schemes from start 
to finish. These criminal enterprises are flat, fluid networks and have 
global reach. While still engaged in many of the ``traditional'' 
organized crime activities of loan-sharking, extortion, and murder, new 
criminal enterprises are targeting stock market fraud and manipulation, 
cyber-facilitated bank fraud and embezzlement, identify theft, 
trafficking of women and children, and other illegal activities. This 
transformation demands a concentrated effort by the FBI and Federal, 
State, local, and international partners to prevent and combat 
transnational organized crime.
    The FBI is expanding its focus to include West African and 
Southeast Asian organized crime groups. The Bureau continues to share 
intelligence about criminal groups with our partners, and to combine 
resources and expertise to gain a full understanding of each group. To 
further these efforts, the FBI participates in the International 
Organized Crime Intelligence Operations Center (IOC-2). This center 
serves as the primary coordinating mechanism for the efforts of nine 
Federal law enforcement agencies in combating non-drug transnational 
organized crime networks.
    Crimes Against Children.--The FBI remains vigilant in its efforts 
to remove predators from our communities and to keep our children safe. 
Ready response teams are stationed across the country to quickly 
respond to abductions. Investigators bring to this issue the full array 
of forensic tools such as DNA, trace evidence, impression evidence, and 
digital forensics. Through improved communications, law enforcement 
also has the ability to quickly share information with partners 
throughout the world and our outreach programs play an integral role in 
prevention.
    The FBI also has several programs in place to educate both parents 
and children about the dangers posed by violent predators and to 
recover missing and endangered children should they be taken. Through 
our Child Abduction Rapid Deployment teams, Innocence Lost National 
Initiative, Innocent Images National Initiative, Office of Victim 
Assistance, and numerous community outreach programs, the FBI and its 
partners are working to make our world a safer place for our children.
    Financial and Mortgage Fraud.--From foreclosure frauds to sub-prime 
scams, mortgage fraud is a serious problem. The FBI continues to 
develop new approaches and techniques for detecting, investigating, and 
combating mortgage-related fraud. Through the use of joint agency task 
forces and working groups, the FBI and its partners work to pinpoint 
the most egregious offenders and identify emerging trends before they 
flourish. In fiscal year 2012, these efforts translated into roughly 
2,265 pending mortgage fraud investigations--compared to approximately 
700 investigations in fiscal year 2005. More than 70 percent of FBI's 
pending investigations involve losses of more than $1 million. In 
addition, in fiscal year 2012, the FBI received more than 70,000 
Suspicious Activity Reports. The number of FBI Special Agents 
investigating mortgage fraud cases has also increased from 120 in 
fiscal year 2007 to 260 Special Agents in fiscal year 2012. The multi-
agency task force and working group model serves as a force-multiplier, 
providing an array of interagency resources and expertise to identify 
the source of the fraud, as well as finding the most effective way to 
prosecute each case, particularly in active markets where fraud is 
widespread.
    The FBI and its law enforcement partners also continue to uncover 
major frauds, insider trading activity, and Ponzi schemes. At the end 
of fiscal year 2012, the FBI had almost 2,500 active corporate and 
securities fraud investigations, representing a 35 percent increase 
since fiscal year 2008. Over the past 3 years, as a result of the FBI's 
efforts, the Department of Justice has obtained more than $20 billion 
in recoveries, fines, and restitutions in such programs, and during 
fiscal year 2012, the FBI obtained more than 600 convictions, just shy 
of the historic high obtained in fiscal year 2011. The FBI is pursuing 
those who commit fraud at every level and is working to ensure that 
those who played a role in the recent financial crisis are brought to 
justice.
    In fiscal year 2014, the FBI is requesting a program increase 
totaling $15 million and 44 positions (40 Special Agents and 4 Forensic 
Accountants) to further address financial and mortgage fraud at all 
levels of organizations--both senior executives and lower level 
employees. These resources will increase the FBI's ability to combat 
corporate fraud, securities and commodities fraud, and mortgage fraud, 
and they will enable the FBI to adapt as new fraud schemes emerge.
    National Instant Criminal Background Check System (NICS).--For over 
a decade, the FBI has been responsible for determining a person's 
eligibility to possess a firearm at the point of purchase from a 
Federal Firearms Licensees. The number of checks has grown over 200 
percent since NICS was implemented in 1998. Since the tragic shooting 
at Sandy Hook Elementary school on December 14, 2012, and subsequent 
discussions of potential changes in gun laws, the FBI's workload has 
skyrocketed. Before the shooting, the busiest week in NICS history was 
the week of December 3-9, 2012, when 527,095 firearms checks were 
initiated. The week following the shooting, December 17-23, 2012, NICS 
volumes approached 1 million transactions, and continue to exceed 
historical peak volume. In fact, the first 6 full weeks in 2013 are 
among the top ten busiest weeks in NICS history. Because of this 
increased workload, the FBI has required NICS personnel to cancel all 
leave, work mandatory overtime shifts, forego other critical tasks, 
such as appeals and audits, and has shifted personnel from other 
program areas to provide assistance. Without a permanent addition to 
personnel, facility space, and technology improvements, national 
security and public safety are at risk, as the current FBI staff will 
be unable to provide timely and accurate determination of a person's 
eligibility to possess firearms and/or explosives in accordance with 
Federal law. Therefore, the fiscal year 2014 budget requests 524 
positions and $100 million to increase the ability to process mandated 
background checks for firearm purchases.
                               technology
    As criminal and terrorist threats become more diverse and 
dangerous, the role of technology becomes increasingly important to our 
efforts. We are using technology to improve the way we collect, 
analyze, and share information. We have seen significant improvement in 
capabilities and capacities over the past decade; but technology 
remains a key concern for the future.
    For example, in 2011, we deployed new technology for the FBI's Next 
Generation Identification System. This technology enables us to process 
fingerprint transactions much faster and with more accuracy. The fiscal 
year 2014 budget includes $7.4 million for the facility built to 
partner with the Department of Defense's (DOD) Biometrics Fusion 
Center, which will advance centralized biometric storage, analysis, and 
sharing with State and local law enforcement, DOD, and others. In 
addition, throughout the Bureau, we are also integrating isolated 
stand-alone data sets so that we can search multiple databases more 
efficiently, and, in turn, pass along relevant information to our 
partners.
    The FBI shares information electronically with partners throughout 
the Intelligence Community, across the Federal Government, as well as 
with State and local agencies. For example, the FBI works closely with 
the nationwide suspicious activity reporting (SAR) initiative to 
implement technical and business processes that enable the eGuardian 
system and the Information Sharing Environment's Shared Space system to 
share SARs more quickly and efficiently. These efforts have worked to 
ensure that SARs entered into Shared Space are simultaneously shared 
with eGuardian, and in turn, delivered to the appropriate Law 
Enforcement and Intelligence Community partners.
    Sentinel, the FBI's next-generation information and case management 
system, was deployed to all employees on July 1, 2012. Sentinel moves 
the FBI from a paper-based case management system to a digital system 
of record. It enhances the FBI's ability to link cases with similar 
information through expanded search capabilities and to share new case 
information and intelligence more quickly among Special Agents and 
Intelligence Analysts. It also streamlines administrative processes 
through ``electronic workflow.'' The FBI will continue refining and 
deploying additional Sentinel features according to employee feedback 
and organizational requirements.
    The rapid pace of advances in mobile and other communication 
technologies continues to present a significant challenge to conducting 
court-ordered electronic surveillance of criminals and terrorists. 
These court-ordered surveillances are often critical in cyber cases 
where we are trying to identify those individuals responsible for 
attacks on networks, denial of services, and attempts to compromise 
protected information. However, there is a growing and dangerous gap 
between law enforcement's legal authority to conduct electronic 
surveillance, and its actual ability to conduct such surveillance. 
Because of this gap, law enforcement is increasingly unable to gain 
timely access to the information it needs to protect public safety and 
bring these criminals to justice. We are grateful for this 
subcommittee's support in funding the National Domestic Communications 
Assistance Center, which just opened its doors last month. The center 
will enable law enforcement to share tools, train one another in modern 
intercept solutions, and reach out to the communications industry with 
one voice.
    It is only by working together--within the law enforcement and 
intelligence communities, and with our private sector partners--that we 
will find a long-term solution to this growing problem.
                                offsets
    The FBI's fiscal year 2014 budget request proposes offsets totaling 
approximately $61 million. Proposed offsets include: elimination of the 
National Gang Intelligence Center; reduction of one training day and 
equipment provided for specialized response team training; reduction of 
contractor workforce funding; reductions in funding for permanent 
change of station transfers; reducing funding for information 
technology, facilities, and other administrative initiatives; reducing 
funding by converting contractor positions to Government employees; and 
reducing security clearance funding for State and local task force 
officers. We will work to minimize the impact of these proposed 
reductions.
                               conclusion
    Responding to this complex and ever-changing threat environment is 
not new to the FBI. The resources this subcommittee provides each year 
are critical for the FBI to be able to address existing and emerging 
national security and criminal threats.
    Chairwoman Mikulski, Ranking Member Shelby, and members of the 
subcommittee, I would like to close by thanking you for this 
opportunity to discuss the FBI's priorities. Madam Chairwoman, let me 
acknowledge the leadership that you and this subcommittee have provided 
to the FBI. The transformation the FBI has achieved would not have been 
possible without your support. Your investments in our workforce, our 
technology, and our infrastructure make a difference every day at FBI 
offices in the United States and around the world, and we thank you for 
that support.
    I look forward to any questions you may have.

    Chairwoman Mikulski. Thank you very much, Director, for 
your testimony. I anticipate that other members will be joining 
the subcommittee, but all of our appropriations subcommittees 
are holding hearings today, so everybody's spread a bit thin.

                             SEQUESTRATION

    I want to go to the impact of the reduction that the FBI 
had to spend from fiscal year 2013, a reduction to $8.1 
billion, and then with sequester even more. Let me go to both 
the consequences of sequester--your request--then the 
consequences of sequester in fiscal years 2013 and 2014. We 
were already in a tight budget before sequester.
    Mr. Mueller. Yes.
    Chairwoman Mikulski. You already faced a reduction.
    Mr. Mueller. But--yes.
    Chairwoman Mikulski. Go ahead.
    Mr. Mueller. I was going to say, yes, but in response to 
one or more of the comments that Senator Shelby made in terms 
of being a nimble FBI and to continuously reprioritize, I would 
say that early on, we recognized the necessity for doing that. 
We moved from a system where our metrics were how many arrests, 
indictments, and convictions we had to what is the threat out 
there and what has been the impact on that particular threat, 
and if that threat has been addressed, then let's move on to 
something else.
    The fact of the matter is that we've got two components 
where we cut. One is our people, which is a last resort. We're 
not like the military with aircraft carriers and ships and all 
the rest of that stuff. We have our people.
    The other part of it is the infrastructure that gives us 
the ability to work as an intelligence and a law enforcement 
agency. We protect our people. When the cuts come, it comes in 
other areas that are tremendously important to us, but are 
second to our people. So, as we address the cuts in fiscal 
years 2013 and 2014, we will have to reprioritize to meet the 
cuts. But there will be things, as I pointed out in my 
statement, that we will not be able to do that would keep us on 
track with what we've been able to accomplish the last 11 
years.

                           IT INFRASTRUCTURE

    Chairwoman Mikulski. Let's go to that. It says that, first, 
the tools of technology, whether it's cyber, biometrics aspects 
we support. The technology that goes on in the great 
laboratories you have at Quantico of course are one thing. But 
the FBI is known through its agents and it's literally the 
agents on the ground, also working with State and local law 
enforcement.
    So what will be the impact of the hiring freeze and what do 
you anticipate that you will not be able to do as you 
prioritize? In other words, what falls off?
    Mr. Mueller. There are a number of things that fall off the 
list, one of them being the National Gang Intelligence Center, 
which has been in operation for a number of years. They 
centralize gang intelligence, which is critically important 
around the country. We will have to centralize that, disband 
that initiative, and try to replicate many of its attributes 
with personnel assigned from headquarters.
    We will be losing several million dollars in the Critical 
Incident Response Group, specifically the hostage rescue team 
(HRT). They have been very active recently not only in Boston, 
but in Alabama, with the boy who was taken off a bus and kept 
underground. It was the hostage rescue team that was the 
entity, along with the State and local authorities, that were 
able to resolve that particular situation.
    And we'll have to cut back on Critical Incident Response 
Group training and capabilities. We'd also have to cut down on 
personnel transfers. We also have facilities reductions. We 
have 400 resident agencies around the country and we're going 
to have to look at reducing those and seeing if we can combine 
some of them. But those resident agencies give us the 
capabilities of responding anyplace in the country to a 
substantial Federal crime.
    Those are just some of the things that will be impacted by 
these budget cuts.
    Chairwoman Mikulski. Well, it seems to me, with the 
challenges you're facing and the management endeavors to deal 
with the consequences, that the threats and the needs don't go 
away, and we're going to make do, but this is not like 
deferring maintenance on a dorm somewhere. This is actually 
primarily personnel. Personnel needs the most up-to-date IT, 
what we've already been talking about, the watch list. We can 
go into detail about that in another setting.
    But my concern is that, yes, the people are the greatest 
asset, exactly what Senator Shelby and I feel, our high regard 
for the agents. I can just tell you how highly regarded the FBI 
is in Maryland. We're home to premier programs like Innocent 
Images that protect children on the Internet. But also the day 
to day work of the FBI and the way they work with the Joint 
Task Force, the way they work with our U.S. Attorney. We have 
this integrated effort to protect the people of Maryland 
against everything from mortgage fraud to counterfeit drugs 
that are coming in, where you're working with the Customs 
people, local law enforcement. Again, these joint task forces 
seem so crucial, and the threats come in at the local level, 
except where you're talking about the big international stuff.
    My concern is that this will have a chilling effect on 
morale. I know your agents, many of them personally, are very 
duty driven, very duty driven, but still it will have an 
effect. And it has an effect on our effectiveness at the State 
and local level. Do you concur with that?
    Mr. Mueller. I concur, absolutely, and particularly if we 
have to go to furloughs. There's nothing more--how do you want 
to put it? ``Devastating'' is perhaps too strong a word, but 
``demoralizing'' is the word I'm looking at--as demoralizing, 
when you are faced with furloughs, unable to pay your bills, 
working hard, but the Government has to furlough you because 
there is insufficient money to keep you on in the position that 
you hold.
    We take cuts elsewhere, but the furloughs is the last 
resort.
    Chairwoman Mikulski. Would you anticipate that agents would 
be furloughed?
    Mr. Mueller. Yes. My belief is that it's very difficult 
to----
    Chairwoman Mikulski. That's shocking. I've got to tell you, 
this is shocking, and it is incumbent--this is a self-inflicted 
wound. I'm going to turn to Senator Shelby in a second. This is 
a self-inflicted wound on us. This is not what an external 
threat from a foreign country or organized crime is doing to 
us. It's what we're doing to ourselves.
    I think we have to find a solution to canceling sequester, 
not better managing sequester, for both this year and the next 
ten, because I think that's really the ultimate corrosive 
effect.
    Let me turn to Senator Shelby.

                        BOSTON MARATHON BOMBING

    Senator Shelby. Thank you, Madam Chairman.
    Director Mueller, last month Boston, as you well know, was 
the target of a terrorist attack that killed three people and 
wounded more than 260. I want to first of all commend the work 
of the FBI and the people of the FBI and the State and local 
law enforcement for the response to that incident. They did an 
exemplary job, I thought.
    I'm troubled, however, by reports--and a lot of people have 
been--that the danger posed--and I hope I get his name right--
Tamerlan Tsarnaev is close to it, I guess--was not identified 
because the Government again was unable to connect the dots. 
We've talked about this before in the intelligence area.
    It's disappointing sometimes that, after 12 years and 
hundreds of billions of dollars in investments, we're still 
discussing the Government's inability at times to connect the 
dots when it's very important. Would you walk us through what 
you can here what the FBI knew about Tsarnaev and what action 
it took and why it did not take further action after learning 
that he had traveled to Russia?
    And while I understand the FBI contends that it was not 
aware that he left the country, the Boston Globe has reported 
that the watch list system generated an automatic notification 
to an officer in the Joint Terrorism Task Force (JTTF) in 
Boston. Are you aware of that report?
    Mr. Mueller. Yes, Sir.
    Senator Shelby. Do you agree or disagree with the report?
    Mr. Mueller. If you're talking about the Boston Globe 
report----
    Senator Shelby. Yes.
    Mr. Mueller [continuing]. I'm not specifically aware of the 
Boston Globe report. I understand what they are addressing in 
terms of the text notification that went out on the travel.
    Senator Shelby. Well, what about, if the JTTF--and they 
didn't--had received this information, what action could they 
have taken based on the FBI's previous inquiry regarding this 
subject? I know it's----
    Mr. Mueller. Let me start, if I can----
    Senator Shelby. Yes, walk us through it, if you can.
    Mr. Mueller. To a certain extent, I can walk you through 
maybe 75 percent of it in open session.
    Senator Shelby. What you can.
    Mr. Mueller. But the balance we can cover in closed 
session.
    In approximately March 2011, we received notification from 
the Russian authorities that an individual who I'll call 
Tamerlan--who is the older brother--and his mother had appeared 
to be very religious and, at least as far as the older brother 
was concerned, intent on returning and perhaps participating in 
jihad in Russia. They passed this information on to us to 
follow up on.
    We initiated an assessment. An agent was assigned and the 
agent, a very good agent, I might add, undertook efforts to 
look into the background of Tamerlan. He visited the college 
where he had been registered for a period of time; did a 
thorough background on him; interviewed the parents; and 
finally interviewed Tamerlan himself.
    As a result of this, I would say we conducted a thorough 
investigation based on the leads that we got from the Russians, 
and we found no ties to terrorism. Later that summer, in 
August, we got back to the Russians and indicated we did not 
find any ties.
    Then in October, I think it was, we also went back to the 
Russians--on three occasions we went back to the Russians and 
asked them if they had any further information that would 
educate us or elaborate for us their concerns about this 
individual, but we got no response. So that assessment was 
closed without any further information.
    But what you referred to is the travel that Tamerlan took 
in January through July 2012, where the Russians had asked to 
be notified if he was traveling. A what they call a tecs notice 
had gone to a very good Customs agent on the Joint Terrorism 
Task Force. We do not have any action that was taken on that 
particular notification.
    Likewise, when he returned to the United States, there was 
an automatic message that was pushed out, and that also came to 
the task force in that way. There was no additional action 
taken on that. It may well have been because of the numerous 
inquiries that we handle. That particular JTTF, in any given 
year, handles hundreds of similar assessments, leads, and the 
like. To the extent that we go back and review what we could 
have done better, this is an area where we are looking at it, 
scrubbing and doing better.
    I will tell you, on the other hand, that I do think that we 
have improved our systems tremendously since September 11. You 
can almost be assured that in any event there is somebody, that 
may have participated, had discussions, or what have you, about 
terrorist events, they may well have come across our radar 
screens. We may not have had sufficient information from a 
variety of sources to be able to confirm that through.
    You also have occasions where persons who at one point in 
time appear not to be radicalized, but very quickly thereafter, 
after they're off your radar screen, become radicalized, and 
you could not have anticipated that they would undertake an 
attack such as we saw in Boston.
    Senator Shelby. Of course, we don't know because some 
people fall through the cracks. No system is perfect, yours or 
ours, anything. But some people point that out as a lost 
opportunity. Maybe we'll learn from it. Maybe the Bureau will.
    Mr. Mueller. Yes.
    Senator Shelby. In April, the Boston Herald reported that 
the Commonwealth Fusion Center was unaware that the FBI 
interviewed Tamerlan Tsarnaev as part of an investigation after 
the Russian agents that you talked about alerted United States 
officials to his increasing radicalization. It's my 
understanding, Mr. Director, that these entities are supposed 
to serve as clearinghouses for information about potential 
threats, and that the fusion centers content that they are 
charged with helping to connect the dots.
    Given that the FBI is responsible for the oversight of 
fusion centers, how would you characterize their role with 
respect to intelligence-gathering, analysis, and dissemination? 
And is it their responsibility, the fusion centers, to connect 
the dots, and if so how? In other words, you're sharing 
information here, and I know it's difficult.
    Mr. Mueller. Let me start by saying we do not supervise the 
fusion centers.
    Senator Shelby. You don't. Who does?
    Mr. Mueller. The Department of Homeland Security.
    Senator Shelby. Okay.
    Mr. Mueller. But we work very--even though we do not have--
--
    Senator Shelby. You work with them, but you don't--you're 
not their supervisor.
    Mr. Mueller. We are not.
    Senator Shelby. Okay.
    Mr. Mueller. We work very closely with them. I will tell 
you that in Boston we have the JTTF, the fusion centers, and 
the various State entities with whom we have a very close 
sharing relationship. If you talk to the persons who are 
participating in these, they would be very vocal in terms of 
how well we work together, which was exemplified in the 
response to the bombing on April 15.
    There was a question raised in testimony by one of the 
chiefs of police in Boston about his knowledge of the interview 
with Tamerlan. The fact of the matter is that the JTTF has 
State and local law enforcement personnel on every one of those 
task forces. I think it's something close to----
    Senator Shelby. It makes a lot of sense to have that, 
doesn't it?
    Mr. Mueller. It does, and that's exactly what we want. I 
would say perhaps 40 percent, maybe more, of task force 
personnel around the country are State and local law 
enforcement.
    Now, what that JTTF and fusion center does is take in 
myriad threats--hundreds over a period of time--and goes 
through them in the same way we went through this particular 
threat. Others on the task force may participate in some way or 
shape, but because it was closed, it was not serious enough to 
be taken up to the leadership. In other words, you wouldn't 
take it up to the chief of police or the head of the FBI office 
when it has been closed with a finding of no association with 
terrorism.
    So to the extent that this is pushed up as being indicative 
of broken relationships, to the contrary. I think if you talk 
to anybody in the Boston Task Force, fusion center, State 
police, or Boston police, I think they would say that the 
relationship and the sharing is excellent.
    Senator Shelby. But we still have to continue to work on 
sharing of information with our law enforcement people, don't 
we?
    Mr. Mueller. Absolutely.
    Senator Shelby. We've come a long way in the last--since 
you've been the Director. We've gone through that on the 
Intelligence Committee and in this subcommittee for years and 
years, and I know it's a challenge for you. It's a challenge 
for the CIA. It's a challenge for NSA, and Homeland Security. 
But the more you can work, fuse, and share, the safer we're 
going to be; aren't we?
    Mr. Mueller. Absolutely. I will tell you that in every one 
of these incidents we go back and look and say, what could we 
have done better? In this particular incident, handling the 
tecs notice is an area that we're going to do better on the 
next time.

                      IMPROVISED EXPLOSIVE DEVICES

    Senator Shelby. Let me get into another area, because this 
is in the Boston area, but it's highlighted. That's improvised 
explosive devices (IEDs), which we all see so much of because 
of our troops and so forth. But they've come to America now.
    The Boston bombing highlighted what our troops have been 
encountering for years overseas, the devastation caused by 
improvised explosive devices, or IEDs. The threat from IEDs 
here, Mr. Director--you've talked about this here before--is 
widely recognized and in February the White House released a 
report on the threat and established a new task force.
    In spite of the spotlight the administration placed on 
understanding and countering IEDs, we know it's very 
complicated and challenging. This budget request before us 
fails to prioritize funding for the terrorist explosive device, 
we call it TEDAC. However, I believe TEDAC is essential to our 
understanding of IEDs and the overall war, which is coming to 
this country. It certainly proved important immediately 
following the bombings in Boston.
    Does the fiscal year 2014 budget request ensure that TEDAC 
has sufficient resources necessary to complete its new facility 
and make substantial progress on the existing backlog? And how 
will the $150 million rescission requested in the FBI's budget 
impact TEDAC, if it does at all, and could you detail that for 
us?
    Is that too much?
    Mr. Mueller. No.
    Senator Shelby. Not for you, it isn't too much.
    Mr. Mueller. No. I think I can break it down.
    Let me first talk about TEDAC and its relationship and its 
utility during the Boston crisis. Immediately upon the 
explosions, we had in Boston our bomb techs out there with the 
bomb techs from State police and the others. We thereafter flew 
fragments of the bombs to our laboratory in Quantico, where 
they were analyzed by TEDAC.
    Very quickly, and by ``very quickly'' I mean within 24 to 
48 hours, we had identified the mechanisms, the containers, the 
kind of black powder and the like that were utilized, and were 
then tracing the various components, such as the pressure 
cookers, to determine who had purchased them where.
    The TEDAC bomb technicians served three roles during this 
period of time. A number of them were on scene--I think there 
were about five that were on scene--helping pull together the 
fragments. They then put together intelligence bulletins to 
provide the intelligence to others around the country as to 
what was seen, in hopes that we would not see another one, but 
that if we did, someone would have an understanding of the 
device that was used.
    The third area was the examination and tracing of the 
particular components. This was done by TEDAC staff.
    Now, the future of TEDAC, as you well know, is the facility 
down on Redstone Arsenal which is fully financed through next 
year. At the end of 2014, it should house TEDAC. The issues 
that are outstanding relate to operation and maintenance and 
the necessity for maintaining this capability.
    Let me address one last thing you mentioned. That is the 
backlog of reviewing the IEDs that have been forwarded to us 
from Iraq and Afghanistan. We have a very large database of 
such IEDs that provide intelligence to the military day in and 
day out, as well as law enforcement and the intelligence 
community around the world.
    We have used that backlog to identify individuals--by 
fingerprints, DNA, or the method of construction of the bombs--
who may have been trying to get into the United States or 
appear to be terrorists trying to get into other countries, 
whether it be in Europe or elsewhere. But we have a backlog of 
devices that we picked up over the years that we're trying to 
run through.
    In order to continue that process, we need additional funds 
to run through that backlog. Again this is one of the things 
where we prioritize. With sequestration and the fiscal year 
2014 budget, we'll have to cut back substantially in terms of 
our ability to address that backlog.
    Senator Shelby. But TEDAC should be a priority, considering 
the threat in this country.
    Mr. Mueller. Yes.
    Senator Shelby. Should it?
    Mr. Mueller. Yes.
    Senator Shelby. Thank you, Madam Chairman, for your 
indulgence.

                             FBI FURLOUGHS

    Chairwoman Mikulski. Picking up on what Senator Shelby was 
asking, because my first line of questions was about what we 
would call the focusing on the local law enforcement, the 
criminal aspects, work locally, but these are national crimes, 
like mortgage fraud.
    But turning to the issues related to terrorism and 
counterterrorism, and this goes to what you need. For the 
Boston bombing, the first thing was to catch the bad guys, so 
there had to be a tremendous mobilization of law enforcement, 
which meant the FBI was involved, because my first questions, 
I'm sure your first questions, the agents on the ground and the 
Boston law enforcement, was, number one, is this it? Are they 
planning more attacks around Boston? Who are these people? Are 
they part of a larger conspiracy, perhaps connected to Al-Qaeda 
or Al-Qaeda-inspired? And is the conspiracy in Boston? Is it 
going to occur in other parts of the United States? There were 
other marathons coming up, international events. I believe it 
was the London Marathon.
    So the FBI had a major role because of what had happened. 
One, all the resources, technical as well as law enforcement, 
but also your role I'm sure was called up to function 
internationally about--first of all nationally, was this going 
to be part of a larger threat? And we don't want to go around 
canceling events and canceling marathons, etcetera.
    So my question was, everything had to be--you can't dial up 
an agent. In other words, in order to be effective you have to 
have the right agents in the right place doing the right thing 
with the right relationships; am I correct?
    Mr. Mueller. Yes.
    Chairwoman Mikulski. And aren't relationships developed 
over time, and if these agents are furloughed, if there is a 
hiring freeze, it would have an impact on that, am I correct?
    Mr. Mueller. Absolutely, absolutely.
    Chairwoman Mikulski. What would have happened in Boston if 
we had been under furloughs? I mean, there were many things 
that worked very well in Boston and there are areas that are 
going to require revisiting and reform. I think you would agree 
with that.
    Mr. Mueller. I can tell you that, furlough or no furlough, 
everybody would have been there immediately, even if they 
didn't get paid, on something like that.
    But the point that you make in terms of getting the right 
people in the right place is not accurate just for the FBI, but 
for the relationships with State and local law enforcement. 
You're familiar with the incident down in Alabama. It's having 
our hostage negotiators working with the sheriff and the 
district attorney down there. The hostage rescue team brings 
those elements that are important to that particular case which 
is not one we could have prepared for.
    Regarding the shooting in Aurora, Colorado, when I went out 
afterwards and talked to the chief and our special agent in 
charge, the one thing they told me is: We did so well on this 
particular case because we trained for this before.
    In Boston, if you talk to individuals such as the chief of 
police of the Lawson Police Department, the Cambridge Police 
Department, the Massachusetts State Patrol, or State Police, 
they will tell you that it is the collegiality, the working 
together on the JTTF and other areas that kicked into place 
when that happened on that Monday. And kudos to the first 
responders from Boston, the Boston Police and the others, who 
were responsible for security. They ran toward the danger, did 
not run away, and together were remarkable in the capabilities 
and the success they had in saving lives.
    It is developing those relationships before something like 
this happens that is absolutely instrumental. When you have 
sequestration and the budget cuts that we do, what gets cut 
often is training. Training develops relationships that enable 
you to respond effectively and efficiently to something like 
Boston.
    Chairwoman Mikulski. Well--and then this is going to take 
me to the prevention part of it. But I recall really when we 
were facing the sniper situation here in the North Capital 
Region, and the work of the FBI and Bureau of Alcohol, Tobacco, 
Firearms then with local law enforcement, and the fantastic job 
that was done. And we didn't have to ``nationalize'' it, though 
it involved two States and multiple counties within those 
States; and the way everybody worked together.
    I had the chance, along with then-Senator Sarbanes, to 
observe it very up close and personal. It was an amazing effort 
of coordination, where everybody was best at what they were 
best at, best at what they were needed for. But ultimately it 
was our Federal agencies that had the resources both 
nationally, technically through laboratories, etcetera, that we 
could identify it.
    Now let's go to--and this will be something we'll also go 
into in our classified hearing, which is the resources to 
prevent these. I think we'll save those for the classified 
hearing.
    But before we recess, when we think about where the FBI was 
on September 10, 2001, and where we are today, it has been a 
remarkable transformation. And it's occurred under your 
leadership, organizationally a phenomenal feat, and under your 
stewardship. You are to be commended.
    My question is that, since 9-11 could you estimate how many 
terrorist attacks the FBI has thwarted?
    Mr. Mueller. Well, I would say over the last 3 to 4 years, 
it's probably close to 100 terrorist attacks, individuals who 
were contemplating, were involved with, or otherwise. That's 
just over the last 4 years. People talk about several hundred. 
It really depends on your definition of a terrorist attack, but 
I'm comfortable saying that in the last 3 to 4 years at least, 
we've disrupted anywhere from 90 to 100 attacks.
    Chairwoman Mikulski. Each one of those attacks would have 
caused casualties, would have had a massive impact on the 
economy.
    Mr. Mueller. I'd say for a majority of them that is 
accurate. There are others that I couldn't go so far as to say 
that, because some of those are persons who provide material 
support to a terrorist attack--it's not going to be the person 
who punches the button.
    Chairwoman Mikulski. You mean the enabler, the facilitator?
    Mr. Mueller. I'm sorry. Those figures are fairly accurate.
    Chairwoman Mikulski. I note that Senator Boozman is here. 
Senator, we were about to recess and go into our closed 
hearing.
    Senator Boozman. Yes, ma'am. I'll ask my questions there, 
then. I just want to thank you for your service again, 
Director, for all that you've done. I know that you've worked 
really hard to keep us safe, so we appreciate it.
    Mr. Mueller. Thank you, Sir.

                     ADDITIONAL COMMITTEE QUESTIONS

    Chairwoman Mikulski. We note that there are other Senators 
that are on their way. We're going to encourage them to go to 
the other meeting.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
           Questions Submitted to Hon. Robert S. Mueller, III
            Questions Submitted by Senator Richard C. Shelby
                           closed case files
    Question. With respect to closed case files on a previously 
investigated individual, I am interested in whether there is a process 
for prompting a re-investigation of that individual if they engage in 
any future suspicious activity--such as traveling to a region known for 
Islamic extremism?
    If so, why did that process not occur in the case of Tsarnaev?
    Answer. The FBI considers the totality of the available 
information, both newly acquired and within our holdings, when making 
the decision to initiate or re-open an investigation. Travel records 
are one source of information, but may not be sufficient by themselves 
to initiate or re-open an investigation. Due to the ongoing 
investigation, the FBI is unable to provide additional information 
specific to the Tsarnaev case.
                            database search
    Question. In the immediate aftermath of the bombings, the FBI 
appealed to the public for video footage and still photos to identify a 
suspect. Did the FBI also return to its databases to discern whether 
there were any individuals in the area that had been flagged as a 
potential terrorist threat?
    If so, did Tsarnaev turn up in that search or did he continue to 
elude you because the case had been closed?
    Answer. The FBI has many active and closed cases involving national 
security. Whether a case is open or closed, the information, such as 
identifying information for subjects, witness statements, intelligence 
gathered pertaining to the case, is maintained in the FBI's databases. 
In the aftermath of the Boston bombings, the FBI took every step 
possible to identify potential subjects. However, searching FBI and 
Intelligence Community databases is only one tool in identifying 
subjects, and absent additional identifying information for the 
potential subjects (i.e., names, dates of birth), the decision was made 
in the Boston investigation to ask the public to help identify and 
locate the potential subjects. Due to the ongoing investigation, the 
FBI is unable to provide additional information specific to the 
Tsarnaev case.
            big picture analysis versus case file mentality
    Question. The findings of the Joint Inquiry on September 11th, of 
which I was a part, identified the FBI's weaknesses with respect to 
intelligence analysis. They specifically noted that the FBI's 
``casefile mentality . . . does not generally incentivize attention to 
big-picture, preventive analysis and strategy.'' In the additional 
views I submitted to accompany those findings, I noted that law 
enforcement organizations handle information, reach conclusions, and 
ultimately just think differently than intelligence organizations.
    In light of the Boston bombing and the gaps in intelligence that 
are coming to light--particularly with respect to the FBI's ``closed 
case files'', do you believe that the FBI still operates with this 
mentality?
    Answer. No. The FBI operates as an intelligence-driven 
organization, with a dual national security and law enforcement 
mission, which is focused on stopping terrorist attacks and protecting 
the American public from other threats.
    Question. If not, please explain the specific actions that have 
been taken to ensure that ``big picture'' capability and culture are 
fostered? In other words, what is the FBI doing to transition from an 
investigatory body to one that looks at the information as a whole, 
analyzes it, and uses it to close the gaps?
    Answer. In response to events of 9/11 and the 9/11 Commission 
recommendations, the FBI transitioned from a traditional law 
enforcement organization to an intelligence-driven organization. As 
part of this transition, the FBI added hundreds of ``big picture'' 
intelligence analysts to its ranks; stood-up numerous Joint Terrorism 
Task Forces (JTTFs) with our Federal, State, and local partners; 
restructured its national security programs to attempt to ensure all 
the dots are connected; enhanced its human intelligence collections 
capabilities; worked with Intelligence Community and law enforcement 
partners to facilitate information sharing; furthered its foreign 
language and translation capabilities; and streamlined and standardized 
processes throughout the organization.
    As an intelligence-driven organization with a dual national 
security and law enforcement mission, the FBI is more efficiently and 
effectively using intelligence to drive operations. Significant 
advancements have been made in many areas over the past year to ensure 
the FBI is positioned to meet its missions within the constraints of 
budgetary reductions.
    In 2012, the FBI's efforts to advance its intelligence capabilities 
focused on streamlining and optimizing the organization's intelligence 
components while simultaneously positioning the Bureau to carry out its 
responsibilities as the lead domestic intelligence agency. In addition 
to streamlining core functions and organizational structure, the FBI 
transferred a variety of functions including domain management, 
collection management, targeting, tactical analysis, strategic 
analysis, and finished intelligence production from the Directorate of 
Intelligence (DI) to intelligence personnel embedded within the FBI 
Headquarters (FBIHQ's) operational divisions. Realigning intelligence 
functions and associated resources into the operational divisions has 
enabled the FBI to more effectively use intelligence to drive 
operations.
    Additionally, within the operational divisions, threat-based fusion 
cells serve as intelligence teams to integrate all aspects of the 
intelligence cycle, providing a more strategic and nimble approach to 
identifying and mitigating current and emerging threats. The 
implementation of the fusion cell model within the operational 
divisions also facilitates a more seamless collaboration between 
Intelligence Analysts and Special Agents so the organization can focus 
on threats and better address its priorities.
    As the U.S. Government's lead domestic intelligence agency, the FBI 
is required to identify, prioritize, and mitigate a variety of threats 
impacting national interests and public safety. The FBI has developed a 
standardized methodology for prioritizing these threats at the national 
and field levels, developing a national threat picture, and effectively 
directing work to mitigate those threats. This process highlights 
emerging threats and their distribution across the Nation, which 
provides FBIHQ with a national threat picture.
    The FBI also details numerous employees to other Intelligence 
Community (IC) entities and hosts detailees from many other Government 
agencies to foster understanding of how the Bureau contributes to the 
national security mission and to increase collaboration. IC detailees 
work alongside FBI employees and build relationships that last long 
after the assignment has ended.
               terrorist explosive device analytic center
    Question. The Terrorist Explosive Device Analytic Center or TEDAC 
(Tea-Dak) has worked diligently since its inception to fully analyze, 
and exploit all terrorist improvised explosive devices, or improvised 
explosive devices (IEDs), found both in theater and at home. TEDAC is 
responsible for gathering and sharing intelligence throughout the 
Federal Government about these devices--helping to disarm and disrupt 
IEDs, link them to their makers, and most importantly, to prevent 
future attacks.
    Given the mission of the TEDAC could you explain what role it 
played following the bombing in Boston? How was law enforcement able to 
use that information to locate those responsible for the bombing?
    Answer. The FBI's Terrorist Explosive Device Analytical Center 
(TEDAC) deployed a team to Boston and developed a significant amount of 
information regarding the explosives used. Because the investigation 
progressed so quickly, it was not the TEDAC's efforts that led to the 
location of the Tsarnaev brothers. However, TEDAC is continuing to 
collect and process evidence from the explosions.
    Question. What other benefits does the TEDAC provide to the United 
States in its fight against terrorism?
    Answer. The Terrorist Explosive Device Analytical Center (TEDAC) 
was established in 2004 to serve as the single interagency organization 
to receive, analyze, and exploit terrorist improvised explosive devices 
(IEDs) of interest to the United States. TEDAC coordinates U.S. 
Government efforts, including law enforcement, intelligence, and 
military efforts, to gather and share intelligence about these devices. 
These efforts are designed to disarm and disrupt IEDs, link them to 
their makers, and prevent future attacks.
    TEDAC has received tens of thousands of IEDs and related 
submissions, and has identified bomb makers and networks through 
biometrics and scientific analysis. For example, since 2003, TEDAC has 
shared tens of thousands of prints with its partners and has identified 
hundreds of individuals with potential ties to terrorism. Several 
individuals whose identity matched latent prints recovered from IEDs in 
Iraq and Afghanistan have applied for and been denied refugee status in 
the United States. TEDAC has also provided prosecution support to Iraq 
and Afghanistan in hundreds of cases and has shared thousands of boxes 
of IED parts and related items with other Government agencies for their 
own informational purposes and research.
    Since April 2009, TEDAC has assisted in disrupting 31 
counterterrorism plots through its explosives substitution program. The 
substitution program uses the surreptitious substitution of explosives, 
munitions/military ordnance, and blasting accessories in ongoing FBI 
investigations. For example, in one investigation in which TEDAC 
assisted, four individuals were convicted of a 2009 plot to detonate 
explosives near a Bronx synagogue and to attack an Air National Guard 
Base in Newburgh, New York. The subjects were charged with conspiring 
to use weapons of mass destruction within the U.S. and conspiring to 
acquire and use anti-aircraft missiles.
                                 ______
                                 
            Questions Submitted by Senator Susan M. Collins
    Question. I am particularly concerned about fraud against our 
seniors. I'm the ranking member of the Aging Committee and we held a 
hearing (March 13) on a particularly troubling scam targeting our 
seniors--the Jamaican Lottery scam.
    Sophisticated scammers from Jamaica call and tell a victim that 
they've just won millions in a lottery, but they just have to pay some 
fees or taxes to collect their winnings. Of course, there are no 
winnings. These criminals are sophisticated and use various techniques 
to convince or threaten their victims into sending money to pay fees or 
taxes with the promise of lottery winnings. They spend hours on the 
phone with vulnerable seniors and when the victims don't cooperate, 
these criminals threaten their victims. In some cases, these criminals 
in Jamaica use satellite maps to locate and describe victims' homes in 
the United States to make threats. Sometimes these criminals adopt 
different identities to steal more money. They often pose as Federal 
law enforcement, including the FBI, and ask for personal information so 
that they ``solve the crime'' when the winnings do not appear and then 
they steal more money from these victims with this information.
    Fraud against the elderly is a nation-wide problem. The FTC 
reported complaints from U.S. citizens regarding Jamaican lottery fraud 
have increased exponentially from 1,867 in 2007 to an estimated 30,000 
in 2011. However, this is a seriously under-reported crime and these 
complaints do not accurately reflect the extent of the problem. 
According to a New England phone company (Fairpoint), this Jamaican 
lottery scam has cost Americans an estimated $300 million annually.
    Some of my constituents have lost more than a hundred-thousand 
dollars to this scam. Others have lost their homes, their cars, and 
their financial independence, not to mention their security and their 
dignity.
    I know the Jamaican Government (after years of ignoring this 
problem) has finally focused its attention on this problem, 
particularly since the U.S media began reporting on the scam late last 
year. I remain concerned that there is a lack of coordination by U.S. 
law enforcement to address this crime. Chairman Nelson and I wrote 
Attorney General Holder (March 15) expressing our concerns about the 
lack of coordination by Federal law enforcement and the need to focus 
on extradition of these criminals from Jamaica.
    I have a constituent (Kim Nichols) whose father was a victim of 
these criminals. Her father lost over $85,000 to this scam from 
December 2001 until June 2012--when his daughter had to disconnect and 
change his phone number. He had been receiving 85 to 100 phone calls a 
day, often threatening calls. My constituent told us that she made over 
100 phone calls to various law enforcement entities, including the FBI, 
but nobody (except the York County Maine Sheriff's Office) would help. 
She did tell us that she was eventually able to schedule a meeting with 
an FBI agent, but the agent never showed up.
    My question is twofold: (1) What is the FBI doing to focus 
investigative resources on this scam and protect our seniors from these 
criminals?
    Answer. The Jamaican Lottery scam is one of many Mass Marketing 
Fraud schemes targeting our Nation's citizens. Mass Marketing Frauds 
target individuals of all ages and walks of life. Victims are lured 
with false promises of significant cash prizes, goods, services or good 
works, in exchange for up-front fees, taxes or donations. Mass 
Marketing Fraud schemes victimize millions of Americans each year and 
generate losses in the hundreds of millions of dollars.
    The FBI shares your concerns and works aggressively to investigate 
these types of fraud. The FBI does not have the resources to 
investigate every instance of fraud; however, at the local and national 
level, we participate in a number of working groups and task forces 
dedicated to combating significant frauds against our Nation's 
citizens. In an effort to optimize efficiency and effectiveness, the 
FBI works closely with various governmental and private entities to 
investigate and prevent fraudulent activity. The FBI's law enforcement 
and regulatory partners include the Securities and Exchange Commission, 
United States Attorney's Offices, United States Commodity Futures 
Trading Commission (CFTC), Financial Industry Regulatory Authority 
(FINRA), Federal Trade Commission (FTC), United States Postal 
Inspection Service (USPIS), Consumer Financial Protection Bureau 
(CFPB), Social Security Administration (SSA), and the Internal Revenue 
Service, among others. The FBI's participation in interagency working 
groups ensures training and intelligence sharing with our 
international, Federal, State, and local law enforcement partners.
    Specifically as it relates to fraud targeting seniors, the FBI 
participates in the Elder Justice Interagency Working Group, a national 
group that focuses on preventing, detecting, and combating frauds that 
harm our senior citizens. The FBI also participates in the 
International Mass Marketing Fraud Working Group (IMMFWG) which 
consists of law enforcement, regulatory, and consumer protection 
agencies from Australia, Belgium, Canada, EUROPOL, the Netherlands, 
Nigeria, the United Kingdom, and the United States. The IMMFWG seeks to 
facilitate a multinational exchange of information and intelligence; 
the coordination of cross-border operations to detect, disrupt and 
apprehend individuals and organizations engaged in Mass Marketing 
Fraud; and the enhancement of public awareness and public education 
measures concerning international Mass Marketing Fraud schemes.
    Question [continuing]. (2) Where do these victims and their 
families go for help?
    Answer. There are several resources that fraud victims and their 
families can use to seek assistance. To report a Mass Marketing Fraud, 
individuals and State or local law enforcement can visit the FBI tip 
page at www.fbi.gov or contact the nearest FBI field office. The FBI 
provides victim assistance and referrals to additional resources, 
including information about crime victims' rights, the investigative 
process, and ways to recover financial loss and address credit 
problems, through its victim specialists and at www.fbi.gov/stats-
services/victim_assistance/fincrime_vic.
    To combat the numerous individuals and organizations engaged in 
fraud who would do our citizens harm, the Federal Bureau of 
Investigation (FBI) and the National White Collar Crime Center (NW3C) 
established the Internet Crime Complaint Center (IC3). IC3 
(www.ic3.gov) serves as a means to receive Internet crime complaints.
    The IC3's mission is to serve as a vehicle to receive, develop, and 
refer criminal complaints regarding the rapidly expanding arena of 
cyber crime. The IC3 gives the victims of cyber crime a convenient and 
easy-to-use reporting mechanism that alerts authorities of suspected 
criminal or civil violations. For law enforcement and regulatory 
agencies at the Federal, State, local, and international level, the IC3 
provides a central referral mechanism for complaints involving Internet 
related crimes. Significant and supplemental to partnering with law 
enforcement and regulatory agencies, it will remain a priority 
objective of the IC3 to establish effective alliances with industry. 
Such alliances will enable the IC3 to leverage both intelligence and 
subject matter expert resources, pivotal in identifying and in crafting 
an aggressive, proactive approach to combating cyber crime.
    To help combat the targeting of seniors by fraudulent 
telemarketers, individuals are encouraged to enroll in the Federal 
Trade Commission's (FTC) National Do Not Call Registry. The FTC, also 
collects complaints about companies and business practices. The FTC 
enters all complaints received into Consumer Sentinel, a secure online 
database used by thousands of civil and criminal law enforcement 
authorities worldwide. A complaint can be submitted at 
www.ftccomplaintassistant.gov or through a toll-free Consumer Help 
Line, 1-877-FTC-HELP (1-877-382-4357). Fraud complaints submitted to 
IC3 are automatically submitted to the FTC's Consumer Sentinel.
    Information related to common white-collar scams and tips to help 
prevent individuals from being victimized can be found on the FBI 
website at www.fbi.gov. For additional tips on how to spot investor 
scams and for more information on investor fraud in general, please 
visit www.stopfraud.gov or www.lookstoogoodtobetrue.com.
    Question. Director Mueller, I would like to ask you a question 
about the role the Bureau is expected to play in the investigation of 
the emerging IRS scandal.
    A report released by the Treasury Inspector General for Tax 
Administration (TIGTA) shows that the IRS targeted groups critical of 
the Government or that worked to educate the American people about the 
Constitution and the Bill of Rights. Also troubling are reports that 
the IRS sought to compel the targeted groups to divulge their 
membership lists. Lois Lerner, the director of exempt organizations 
division, has admitted that there was no reason for the IRS to have 
sought this type of information, and that it was not appropriate for 
the IRS to have done so. Thus, the fact that the IRS chose to press 
these organizations for their membership lists suggests an effort to 
chill the constitutional rights of speech and association by groups 
that hold conservative views and that were seeking tax-exempt status.
    The FBI is the lead Federal agency for investigating color of law 
abuses, which include acts carried out by Government officials 
operating both within and beyond the limits of their lawful authority. 
Preventing the abuse of that power is essential to the health of our 
democracy. Federal law contains several provisions making clear that 
Federal officials who act under ``color of law'' to willfully deprive 
or conspire to deprive a person of a right protected by the 
Constitution or U.S. law would be committing a crime, including title 
18, sections 241 and 242.
    Do you believe that ``color of law'' statutes in the U.S. Code 
apply to the Internal Revenue Service?
    Answer. As the Attorney General has previously stated, DOJ and FBI 
are reviewing IRS's actions to determine if there was a violation of 
Federal criminal law, including whether there has been any violation of 
title 18 U.S.C. section 241 (conspiracy to injure, oppress, threaten, 
or intimidate the free exercise of any right secured by the 
Constitution or Federal law) and/or section 242 (deprivation of rights 
under color of law).
    Question. Will the Bureau participate in the investigation of the 
IRS?
    Answer. Yes. As the Attorney General has previously stated, DOJ and 
FBI are reviewing IRS's actions to determine if there was a violation 
of Federal criminal law.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
    Question. Chicago currently has the highest per capita of gang 
violence in the country. I am extremely concerned about the loss of 
life we are experiencing and the violence on the streets of Chicago.
    How much money in your fiscal year 2014 budget request is devoted 
to fighting gangs nationwide? And how to do you make decisions on the 
regional allocation of the money?
    Answer. The fiscal year 2014 request to Congress includes 497 
positions (420 Agents) and $102 million to investigate gang related 
crime. The regional allocation of funding is assessed throughout the 
year and is based on open investigations in each field office.
    Question. Your fiscal year 2014 budget justification seems to 
indicate that the FBI will target ``dismantling'' significantly fewer 
gangs than in previous years, down to 99 in fiscal year 2014 from 163 
in fiscal year 2012. Is this correct? Why are you targeting almost 40 
percent fewer gangs than you dismantled in fiscal year 2012 and fiscal 
year 2011?
    Answer. The target number for gang dismantlements set by the FBI 
does not stop the FBI from dismantling additional gangs during the 
fiscal year once the target is met, as evidenced by the number of 
dismantlements in fiscal year 2012. In that year, the target was also 
99 dismantlements and the actual number of dismantlements was much 
higher, at 163. The FBI did not revise is fiscal year 2014 target 
downward from prior years.
    Question. What Federal resources are available to assist our State 
and local law enforcement to fight gangs?
    Answer. The Department of Justice has a variety of tools to assist 
our State, local, and tribal law enforcement partners in fighting 
violent gangs. The Department recognizes violent gangs as among the 
most significant criminal threats that we face, and that it is vital to 
partner with Federal, State, local, and tribal law enforcement to 
leverage resources to combat the threat.
    As part of this effort, the FBI's Safe Streets Violent Crime 
Initiative was created in 1992 to establish FBI sponsored, long-term, 
proactive task forces focusing on violent gangs, crimes of violence, 
and the apprehension of violent fugitives. These Violent Gang Safe 
Street Task Forces (VGSSTFs) expand cooperation and communication 
amongst Federal, State, and local law enforcement agencies, increasing 
productivity and avoiding duplication of investigative efforts. There 
are approximately 160 VGSSTFs nationwide, staffed by 839 FBI agents, 
1,588 State and local law enforcement personnel (1,411 full-time and 
177 part-time task force officers), and 92 other Federal law 
enforcement agents. ATF, DEA, and USMS also participate in task forces 
with State and local law enforcement throughout the country to help 
fight gang-related crime. Through these task forces, DOJ agencies share 
with State and local law enforcement their unique expertise and 
leverage Federal resources such as the National Integrated Ballistic 
Information Network (NIBIN) and firearms tracing to help link shooters 
to violent crimes and their firearms sources.
    One example of the success the FBI has had working with State and 
local partners regarding violent gangs is the Save Our Streets efforts 
in Chicago, which the FBI participated in from September 2012 to 
January 2013. This effort was in response to the high rate of 
homicides, shootings and gang violence taking place in Chicago, and was 
coordinated with the Chicago Police Department. FBI Chicago's efforts 
resulted in the initiation of at least 16 new FBI cases, the 
development of 11 new Confidential Human Sources, 68 arrests, 30 
violent crime matters solved or advanced through investigation, the 
seizure of 61 firearms, the prevention of seven violent incident 
crimes, and seizures of marijuana, crack cocaine and heroin.
    The centerpiece of the Office of Justice Programs (OJP's) efforts 
to address youth violence is the National Forum for Youth Violence 
Prevention (Forum). This program creates a context for participating 
localities to share challenges and promising strategies with each other 
and to explore how Federal agencies can better support local efforts. 
It brings together groups across the spectrum, including, local and 
Federal leaders, law enforcement, educators, public health providers, 
community and faith-based representatives, parents, and young people to 
share ideas about effective and affordable ways to prevent youth and 
gang violence. In fiscal year 2010 and fiscal year 2011, the Forum 
sites developed comprehensive, multi-strategy plans to address youth 
violence in their cities. Boston, Chicago, Detroit, Memphis, Salinas, 
and San Jose have come together with national and local leaders to more 
effectively identify needs, and target scarce resources in the most 
violent areas in their cities. The Department of Justice and the 
Department of Education have supported this initiative by forging a 
relationship with numerous Federal agencies and through coordinated 
technical assistance to the sites. For example, this technical 
assistance has come in the form of: training on how best to collect and 
analyze data; best practices for addressing truancy; coalition 
building; strategic planning to address serious violence; addressing 
youth gangs; developing coordinated management information systems; and 
a ``toolkit'' to assist any interested locality in developing and 
implementing comprehensive youth violence prevention plans on their 
own. In fiscal year 2012, the Forum expanded from six sites to ten. 
Camden, New Jersey, Minneapolis, Philadelphia, and New Orleans were 
competitively selected to join the Forum and will complete their 
comprehensive youth violence prevention plans in the summer of 2013. 
These additional resources will be utilized in support of the existing 
sites and as a means to share the experiences of the Forum cities with 
other communities across the nation that are struggling with the issue 
of youth violence.
    Finally, OJP's Community-Based Violence Prevention Initiative funds 
programs that adopt a comprehensive public health approach to 
investigate the causes of youth violence and implement a community-
based strategy to prevent youth violence by addressing both the 
symptoms and causes of neighborhood violence. The Community-Based 
Violence Prevention Initiative assists localities, and/or State 
programs that support a coordinated and multi-disciplinary approach to 
gang prevention, intervention, suppression, and reentry in targeted 
communities. This initiative aims to enhance and support evidence-based 
direct service programs that target both youth at-risk of gang 
membership, as well as, gang involved youth. Additionally, this 
initiative will support programs that reduce and prevent other forms of 
youth violence through a wide variety of activities such as street-
level outreach, conflict mediation, and the changing of community norms 
to reduce violence, particularly shootings.
    Question. I am aware of various task forces that exist to fight 
gangs, including the Violent Gang Safe Streets Task Forces. How much 
money is being requested in this budget for these types of task forces? 
How are you working to ensure that these task forces are not 
duplicating the work of other agencies such as DEA?
    Answer. Funding for the VGSSTFs is primarily derived from the 
Department's Assets Forfeiture Fund (AFF). Typically, the AFF provides 
approximately $25 million to support 160 VGSSTFs throughout the 
country. When VGSSTFs Task Force Officer costs (such as overtime, fuel, 
vehicles) exceed the AFF allotment in any given year, the FBI utilizes 
its direct budget to cover these costs. In fiscal year 2012, FBI used 
an additional $5.5 million from its direct appropriation, to complement 
the $22 million provided in AFF funding. We anticipate a similar 
funding requirement in fiscal year 2014.
    The FBI works diligently to ensure our VGSSTFs are not duplicating 
efforts of other Federal agencies, and utilizes existing national, 
regional and local deconfliction centers to foster collaboration 
between law enforcement entities. These centers are used to deconflict 
investigative data and target information, which permits agents to 
identify potentially overlapping investigative efforts. These platforms 
also permit for the deconfliction of law enforcement events, which 
enhances officer safety by preventing the occurrence of ``blue-on-
blue'' episodes. Presently, the Department is exploring the 
implementation of a single platform point of access to these 
deconfliction systems, the DICE/DART platform, for all Department law 
enforcement agencies, which will facilitate the usage of these 
deconfliction methods. While the technical aspects of a single platform 
point of access are being considered, the Attorney General Anti-Gang 
Coordination Committee (AGCC) continues to ensure that task forces are 
not duplicating one another. Department policy requires all new task 
forces proposed by DOJ components to first be considered and approved 
through the AGCC, which considers, among other factors, whether the 
threat to be addressed is already being addressed by another law 
enforcement task force or initiative in the same area. Finally, the 
Department calls upon its United States Attorneys to convene regular 
forums with their Federal, State, and local law enforcement partners to 
foster and enhance coordination and information sharing on a more 
localized level. By bringing together high-level commanders with 
decisionmaking authority (e.g., Special Agents-in-Charge, Assistant 
Special Agents-in-Charge, U.S. Marshals and Chief Deputy Marshals, and 
State and Local Police Chiefs, Commanders, and Captains) for those 
areas most in need, and by providing an environment that encourages an 
open exchange of information and ideas, United States Attorneys can 
assist the collective group to develop and design a sustainable anti-
violence strategy, and provide a valuable mechanism for deconfliction 
and elimination of duplicated efforts. The Department reiterated this 
message and strongly encouraged its United States Attorneys to convene 
such forums in a memorandum to all United States Attorneys dated August 
12, 2013.
    Question. The FBI's fiscal year 2014 budget proposes eliminating 
the National Gang Intelligence Center (NGIC). How to you propose to 
handle the work that is currently performed by the NGIC if it is 
eliminated? Your budget request states, ``the FBI will continue to 
produce intelligence products in support of Federal, State, and local 
investigations.'' Will additional funds be needed in other accounts to 
produce these products? If not, how will they be paid for?
    Answer. Given budget constraints, the FBI must prioritize its 
programs. If the NGIC program is eliminated in fiscal year 2014, the 
FBI will adjust its remaining resources to ensure continued 
intelligence sharing on gang-related matters.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
    Question. While full details of the attacks are not yet known, the 
recent bombings in Boston have highlighted dangerous loopholes in our 
explosives laws. Today, anyone can buy up to 50 pounds of black powder 
and unlimited quantities of smokeless and black powder substitute 
without a background check or permit.
    Do you think these loopholes in our explosives laws put Americans' 
safety in danger?
    Answer. The Department's focus is enforcing current laws and 
investigating the misuse of explosives purchased legally and the use of 
explosives procured illegally. Nevertheless, the Department is open to 
discussions regarding ways to potentially strengthen existing law to 
better prevent the criminal or terrorist use of explosives.
    Question. In June 2011, Adam Gadahn, an American-born Al Qaeda 
member, urged terrorists in a video to exploit weaknesses in U.S. gun 
laws to carry out terrorist attacks. Gadahn said, ``America is 
absolutely awash with easily obtainable firearms. You can go down to a 
gun show at the local convention center and come away with a fully 
automatic assault rifle, without a background check, and most likely, 
without having to show an identification card. So what are you waiting 
for?''
    Do you believe there are loopholes in our gun laws that put our 
national security at risk?
    If so, please identify those loopholes.
    Answer. The FBI's focus is on enforcing current laws. The 
Department of Justice fully supports the President's gun safety 
initiatives announced in January, including expanding the number of 
firearms transactions subject to a background check to prevent firearms 
reaching persons prohibited from obtaining them. The Department looks 
forward to continuing a dialogue with Congress on this proposal and 
other ways to strengthen gun safety legislation.
    Question. Even when a background check is conducted, being a known 
or suspected terrorist does not disqualify a person from purchasing a 
gun or acquiring an explosives permit/license. While we don't yet know 
how the Boston bombing suspects acquired a firearm, reports indicate 
that Tamerlan Tsarnaev was added to at least one terror watch list/
database at the request of the Central Intelligence Agency.
    What terror watch databases/lists, if any, was Tamerlan Tsarnaev 
on?
    Answer. The response to this inquiry is classified.
    Question. Please identify the various databases/lists that identify 
known or suspected terrorists.
    Answer. The Terrorist Screening Database (TSDB) is the U.S. 
Government's consolidated terrorist watchlist on Known or Suspected 
Terrorists (KSTs). Once accepted into TSDB, records are, as 
appropriate, exported to screening agency systems for use in their 
operations. The most common screening systems are:
  --Department of Homeland Security TECS;
  --Department of State Consular Lookout And Support System (CLASS);
  --National Crime Information Center (NCIC) Known and Suspected 
        Terrorist File (KSTF);
  --Transportation Security Administration (TSA) Secure Flight; and
  --Select Foreign Partners.
    Question. Of these lists, which ones are queried during a firearm 
sale conducted by a Federal Firearms Licensee and during the 
application for an explosives permit/license?
    Answer. TSDB data exported to NCIC-KSTF is used to screen firearms 
purchases through the National Instant Criminal Background Check System 
(NICS).
    Question. Would the Attorney General having the discretionary 
authority to deny the sale of a firearm to a known or suspected 
terrorist help the FBI prevent terrorist attacks?
    Answer. Under current Federal law, there is no basis to 
automatically prohibit a person from possessing firearms or explosives, 
for being a known or appropriately suspected terrorist. If legislation 
should be proposed in this regard, we would be pleased to provide our 
views to the Department of Justice (DOJ) pursuant to DOJ's role in 
assisting in the development of the Administration's position.
    Question. A recent Department of Justice statutory ruling 
determined that individuals who come to the United States under the 
Visa Waiver Program are legally permitted to purchase guns in this 
country.
    Are foreign fugitives or foreign felony and domestic violence 
misdemeanor convictions identified during a background check conducted 
during a firearm sale by a Federal Firearms Licensee?
    Answer. The NICS responds to each background check query with all 
available information matched (by name and descriptor) to records 
available in the following three national databases:
  --The Interstate Identification Index (III), which contains criminal 
        history records provided by local, State, tribal, and Federal 
        agencies;
  --The National Crime Information Center (NCIC), which provides 
        records such as foreign fugitives, criminal warrants, 
        protection orders, etc.; and,
  --The NICS Index, which houses firearm-prohibiting information 
        provided by state and Federal agencies. These records contain 
        information about persons who are prohibited from the purchase/
        possession of firearms of which the prohibiting information is 
        not maintained in the III or the NCIC, e.g., a felony 
        indictment/information, disqualifying mental health record, 
        etc.
    Some foreign conviction information is contained in III and NCIC. 
However, foreign convictions do not qualify as Federal firearms 
prohibitions. Several States have State prohibitions for foreign 
convictions. Due to this, foreign convictions are eligible for entry 
into the NICS Index. Foreign conviction records in the NICS Index would 
only be returned during a firearms background check if specific State 
prohibiting criteria exists.
    Also, a search of the applicable databases of the Department of 
Homeland Security's U.S. Immigration and Customs Enforcement is 
requested by the NICS, and is conducted for all prospective firearm 
transferees who claim non-U.S. citizenship on the ATF Form 4473. 
Foreign criminal history records not available in the aforementioned 
databases are not checked.
    Question. Similarly, does a NICS background check identify mental 
illness adjudications conducted in foreign countries?
    Answer. The NICS does not have access to mental health 
adjudications from other countries.
    Question. As you know, I have long advocated for restricting the 
size of high-capacity magazines. Also, the President's plan to reduce 
gun violence called for limiting high-capacity gun magazines to 10 
rounds.
    Does a criminal having to reload his firearm slow down a shooter?
    If so, does a criminal reloading allow victims a greater 
opportunity to escape and make it easier for law enforcement to 
intervene?
    Answer. Any disruption in a shooter's firing might help victims to 
flee and help victims and law enforcement officials to intervene. The 
degree to which this is helpful will depend on the length of the 
disruption and the other circumstances involved.
    Question. Do you think banning the manufacture, sale, importation, 
and transfer of magazines carrying more than 10 rounds is in the best 
interest of the public?
    Answer. The FBI works to enforce the laws passed by Congress. The 
Department of Justice supports the President's gun safety initiatives, 
including reinstating the prohibition on ammunition magazines holding 
more than 10 rounds.
    Question. According to the FBI, New Jersey is home to the most at-
risk area for a terrorist attack in the United States. An attack on 
this area could have an impact on 12 million people who live nearby. 
Last year, you assured me that the FBI continues to dedicate critical 
investigative resources to New Jersey's high-risk areas.
    What specific items in this budget request will help the FBI 
protect this area?
    Answer. The FBI has a Field Office in Newark, New Jersey and five 
Resident Agencies throughout New Jersey that are responsible for 18 of 
New Jersey's 21 counties. Camden, Gloucester, and Salem counties fall 
within the territory of the Philadelphia Field Office.

    Resources:

  --Fiscal year 2012 actuals: 658 employees (353 Agents, 54 
        Intelligence Analysts, 251 Professional Staff) and $89,564,000 
        (personnel and non-personnel)
  --Anticipated fiscal year 2013 investment: 660 employees (353 Agents, 
        54 Intelligence Analysts, 253 Professional Staff) and 
        $89,381,000 (personnel and non-personnel)
  --The fiscal year 2014 President's budget supports a comparable level 
        of investment.

    Recent Operational Outcomes: The following represents a sample of 
the operational outcomes that the Newark Field Office contributed to 
between June 2012 and June 2013.

  --On June 5, 2013, U.S. Attorney Paul Fishman announced that Duy Hai 
        Truong, one of the leaders of an international data theft ring, 
        was charged with his alleged role in a scheme which caused 
        approximately $200 million in fraudulent charges to credit 
        cards issued in the U.S. and Europe.
         Duy Hai Truong, 23, of Ho Chi Minh City, Vietnam, was charged 
            by criminal complaint with conspiracy to commit bank fraud. 
            From 2007 until his arrest, Truong allegedly defrauded 
            financial institutions as part of the massive scheme, in 
            which personal identifying information relating to more 
            than 1.1 million credit cards was stolen and resold to 
            criminal customers worldwide.
         Global law enforcement efforts by the FBI, the United 
            Kingdom's Serious Organized Crime Agency (SOCA) and 
            Vietnamese authorities disbanded the ring following a 
            worldwide investigation into Truong and his conspirators. 
            Truong was charged in the United States in conjunction with 
            charges and arrests made in the United Kingdom, Vietnam, 
            Italy, Germany and elsewhere.
  --On May 13, 2013, the central organizer of a worldwide conspiracy to 
        manipulate stock prices through a ``botnet'' network of virus-
        controlled computers was sentenced in Trenton Federal court to 
        71 months in prison.
         Christopher Rad, 44, of Cedar Park, Texas, was previously 
            convicted, following a 9-day jury trial, of six counts 
            arising from the fraud scheme: conspiring to further 
            securities fraud using spam; conspiring to transmit spam 
            through unauthorized access to computers; and four counts 
            of transmission of spam by unauthorized computers.
         This investigation was part of efforts underway by President 
            Obama's Financial Fraud Enforcement Task Force (FFETF), 
            which was created in November 2009 to wage an aggressive, 
            coordinated and proactive effort to investigate and 
            prosecute financial crimes. With more than 20 Federal 
            agencies, 94 U.S. Attorneys' offices and State and local 
            partners, it is the broadest coalition of law enforcement, 
            investigatory and regulatory agencies ever assembled to 
            combat fraud. Since its formation, the task force has made 
            great strides in facilitating increased investigation and 
            prosecution of financial crimes; enhancing coordination and 
            cooperation among Federal, State and local authorities; 
            addressing discrimination in the lending and financial 
            markets and conducting outreach to the public, victims, 
            financial institutions and other organizations.
  --On March 25, 2013, a former New Jersey-based defense contractor 
        employee who was convicted by a Federal jury for exporting 
        sensitive U.S. military technology to the People's Republic of 
        China (PRC), stealing trade secrets and lying to Federal agents 
        was sentenced to 70 months in prison.
         In 2010, Sixing Liu, aka, ``Steve Liu,'' 49, a PRC citizen who 
            had recently lived in Flanders, New Jersey, and Deerfield, 
            Illinois, stole thousands of electronic files from his 
            employer, L-3 Communications, Space and Navigation 
            Division, located in Budd Lake, New Jersey. The stolen 
            files detailed the performance and design of guidance 
            systems for missiles, rockets, target locators and unmanned 
            aerial vehicles. Liu stole the files to position and 
            prepare himself for future employment in the PRC.
  --On January 7, 2013, Michael Rumore, an attorney formerly licensed 
        in New Jersey, was arrested in connection with a long-running, 
        large-scale mortgage fraud scheme which caused losses of more 
        than $30 million.
         From September 2006 to May 2008, Rumore and the other 
            defendants engaged in a long-running, large-scale mortgage 
            fraud conspiracy through a mortgage company called Premier 
            Mortgage Services (``PMS''). The conspirators targeted 
            properties in low-income areas of New Jersey (the ``subject 
            properties''). After recruiting ``straw buyers,'' the 
            defendants used a variety of fraudulent documents to make 
            it appear as though the straw buyers possessed far more 
            assets, and earned far more income, than they actually did. 
            The defendants then submitted these fraudulent documents as 
            part of mortgage loan applications to financial 
            institutions.
         Relying on these fraudulent documents, financial institutions 
            provided mortgage loans for the subject properties. The 
            defendants then split the proceeds from the mortgages among 
            themselves and others by using fraudulent settlement 
            statements (``HUD-1s''), which hid the true sources and 
            destinations of the mortgage funds provided by financial 
            institutions.
  --On November 16, 2012, an associate of two lead defendants in a 
        racketeering case was sentenced to 6 months in prison for 
        providing them with ammunition despite knowing they were both 
        convicted felons.
  --On September 6, 2012, a Newark, New Jersey man was sentenced to 66 
        months in prison for his role in a $40.8 million mortgage fraud 
        conspiracy, recruiting ``straw buyers'' to purchase real estate 
        properties in New Jersey, South Carolina, and Georgia and 
        causing lenders to release more than $18 million based on 
        fraudulent mortgage loan applications.
  --On August 10, 2012, a former Newark resident, who earlier in the 
        year was extradited from Nigeria, admitted his role in a scheme 
        to use stolen identities to loot retirement accounts.
         Rasheed Mustapha, 35, who used to live in Newark, and his 
            conspirators gained access to seven different 401(k) 
            retirement accounts using confidential customer identity 
            information. Mustapha stole this information through his 
            employment as a customer service representative at a Little 
            Falls, New Jersey, call center for the retirement accounts. 
            After taking over the accounts, Mustapha and others tried 
            to clean them out by having rollover checks issued, mailed 
            to members of the conspiracy, and deposited into bank 
            accounts they controlled under various aliases in New 
            Jersey, Pennsylvania, Georgia and Arizona.
  --On August 2, 2012, an executive with global pharmaceuticals giant 
        Bristol-Myers Squibb Co. was arrested on insider trading 
        charges related to illegal trades he made based on information 
        concerning three BMS acquisition targets.
  --On June 20, 2012, a Passaic County man who is a member of the 
        Bloods street gang was sentenced to 89 months in prison for his 
        role in a racketeering conspiracy that included violent crimes 
        and narcotics distribution.
         Michael McCloud, a/k/a ``Ike Brim,'' 26, of Paterson, a member 
            of the Fruit Town Brims (FTB) set of the Bloods, admitted 
            to selling crack cocaine to an undercover officer on August 
            30, 2006, together with two other members of the gang. 
            McCloud also admitted to participating in two robberies in 
            Paterson in 2006. McCloud was involved in the robbery of a 
            dice game in Paterson, in which a co-conspirator used an 
            AK-47 and the gang members took controlled substances, cell 
            phones, and money. He also conspired with other FTB members 
            to commit a robbery, also involving a gun, in retaliation 
            for the shooting of an FTB member by a member of a rival 
            gang.
    Question. Crime onboard cruise ships continues to be a serious 
problem. Outside of U.S. waters, passengers onboard cruise ships do not 
have the same protections as on land in the U.S. The FBI plays an 
important role in protecting passengers by investigating crimes and 
reporting the number of crimes that occur. Frequently, the FBI is the 
only investigative entity that victims have access to.
    Are all serious crimes onboard cruise ships reported to the FBI?
    Answer. The Cruise Vessel Security and Safety Act of 2010 (CVSSA) 
requires cruise lines to report allegations of all serious crimes 
(sexual assault, kidnapping, tampering with the vessel, homicide, 
suspicious death, theft greater than $10,000, missing U.S. National) to 
the FBI if they meet the reportable criteria under the law. The cruise 
lines send a written report of the serious allegation to FBI 
Headquarters and contact the nearest FBI field office or Legal Attach 
by email or telephone.
    Question. In what instances would the FBI not find out about a 
serious crime onboard a cruise ship?
    Answer. The CVSSA requires serious crimes to be reported if they 
meet one of the following requirements: (1) the vessel is owned, in 
whole or in part, by a U.S. person and the incident occurs when the 
vessel is within the admiralty and maritime jurisdiction of the U.S. 
and outside the jurisdiction of any other country; (2) the incident 
concerns an offense by or against a U.S. person committed outside the 
jurisdiction of any nation; (3) the incident occurs in U.S. territorial 
waters; or (4) the incident concerns a victim or subject who is a U.S. 
national on a vessel that departed from or will arrive at a U.S. port.
    Based on the above criteria, one example of a scenario that would 
not require FBI notification would be: a foreign national subject 
allegedly sexually assaults a foreign national victim on a cruise 
departing/returning to Barcelona, Spain and the incident occurs in non-
U.S. territorial waters.
    Question. How does the FBI determine which cases to investigate?
    Answer. The FBI reviews the facts of all alleged serious crimes by 
conducting interviews of the victim and alleged subject(s), and 
collecting physical evidence. The relevant U.S. Attorney's Office 
(USAO) determines if there is sufficient evidence to seek a prosecution 
of the subject(s). Examples where prosecution may be declined by the 
USAO include, but are not limited to, circumstances in which there is 
late notification to the FBI and evidence has been substantially 
compromised by the delay.
    Question. What happens to the cases that are not investigated?
    Answer. Cases that are not investigated by the FBI may be referred 
to a State or local law enforcement agency if venue is established and 
a violation of State or local law has occurred. Cases that are not 
referred are closed.
    Question. Does the FBI analyze cruise crime data to determine which 
vessels or cruise lines have patterns of crimes onboard?
    If so, what recourse does the FBI have to address those patterns?
    Answer. The FBI does not analyze cruise crime data to determine 
which vessel or cruise lines have patterns of crimes onboard.
    Question. In the instances where the FBI has access to video 
surveillance onboard cruise ships, is it able to provide that 
surveillance to victims of crime?
    Answer. Any video surveillance of a crime would be considered 
evidence of that crime. Typically, a victim of a crime will not be 
shown video surveillance of the crime so as not to influence the 
victim's recollection of the crime.
    Question. Since 2001, terrorist attacks against mass transit, 
buses, and passenger rail have resulted in 3,900 deaths and 14,000 
injuries worldwide. Rail and transit systems in the U.S. have received 
heightened attention, as several terrorists' plots have been uncovered, 
including attempts to attack systems in the New York City and 
Washington, D.C. areas. Most recently, on April 22, 2013, a plot to 
attack the Canadian Via transit agency with service into New York City 
was uncovered, and the FBI was the lead U.S. agency investigating this 
plot with the Canadian Government.
    Given the FBI's role in investigating transit and passenger rail 
security threats, what additional steps could be taken to secure these 
systems against future attacks?
    Answer. The FBI has investigated and will continue to investigate 
threats related to transit and passenger rail security. However, the 
Department of Homeland Security (DHS) is the agency responsible for 
protection of transportation infrastructure in the United States. The 
FBI will continue to convey threat information to partners, including 
DHS, so adequate steps can be implemented to thwart and mitigate 
threats.
    Question. Only one person has ever been convicted in connection 
with the Pan Am 103 bombing, and that person has since been released 
from prison. On February 28, 2012, then Secretary of State Hillary 
Clinton testified that the U.S.'s ongoing investigation into the 
bombing is primarily the responsibility of the FBI and the Department 
of Justice. However, the FBI and DOJ have refused to provide any 
updates on the investigation.
    Does the FBI still consider the investigation into the bombing of 
Pan Am 103 to be active?
    Answer. The FBI continues to work diligently with intelligence and 
law enforcement partners in order to bring each of the Pam Am Flight 
103 Bombing suspects to justice. However, the Department of Justice and 
FBI have long-standing policies not to release information of an 
ongoing investigation. These policies have existed for a number of 
years and serve to protect the rights of all parties involved. The FBI 
appreciates your concern in this matter and regrets that we are unable 
to provide any additional information.
    Question. What progress has been made on this bombing 
investigation?
    Answer. The FBI continues to work diligently with intelligence and 
law enforcement partners in order to bring each of the Pam Am Flight 
103 Bombing suspects to justice. However, the Department of Justice and 
FBI have long-standing policies not to release information of an 
ongoing investigation. These policies have existed for a number of 
years and serve to protect the rights of all parties involved. The FBI 
appreciates your concern in this matter and regrets that we are unable 
to provide any additional information.
    Question. What resources, including personnel, has the FBI 
committed to investigating the Pan Am 103 bombing?
    Answer. The FBI continues to work diligently with intelligence and 
law enforcement partners in order to bring each of the Pam Am Flight 
103 Bombing suspects to justice. However, the Department of Justice and 
FBI have long-standing policies not to release information of an 
ongoing investigation. These policies have existed for a number of 
years and serve to protect the rights of all parties involved. The FBI 
appreciates your concern in this matter and regrets that we are unable 
to provide any additional information.
    Question. What challenges has the FBI faced in its investigation of 
this terror attack?
    Answer. The FBI continues to work diligently with intelligence and 
law enforcement partners in order to bring each of the Pam Am Flight 
103 Bombing suspects to justice. However, the Department of Justice and 
FBI have long-standing policies not to release information of an 
ongoing investigation. These policies have existed for a number of 
years and serve to protect the rights of all parties involved. The FBI 
appreciates your concern in this matter and regrets that we are unable 
to provide any additional information.
    Question. Super Bowl XLVIII will be held on February 2, 2014 in New 
Jersey. While the investigation into the April 15, 2013 bombings at the 
Boston Marathon continues, these attacks highlight the terrorist threat 
posed to large sporting events. For many years, the FBI, in conjunction 
with the Department of Homeland Security, has noted that mass 
gatherings continue to remain attractive terrorist targets. The ability 
to inflict mass casualties and cause massive economic damage at an 
event of national importance has made high-profile sporting events a 
target around the globe for terrorist attacks.
    How is the FBI working with the Department of Homeland Security, 
the National Football League, and State and local law enforcement 
officials to coordinate security for Super Bowl XLVIII?
    Answer. The FBI, through the Critical Incident Response Group, 
Special Events Management Unit (SEMU) has been engaged in the 
deliberate Counterterrorism/Domestic Preparedness planning effort for 
Super Bowl XLVIII since March of 2012. The Chief of SEMU is a Co-Chair 
of the Special Events Working Group, a United States Government 
interagency group, managed by the Department of Homeland Security, 
which provides Federal level oversight and policy for the planning and 
support to major events domestically. These events range from locally 
managed events where limited Federal support is required to major 
events drawing significant international media coverage such as the 
Super Bowl and where the full support of the Federal Government is 
applied in support of our state, local and private sector partners.
    The initial step taken to ensure the FBI was fully engaged and 
supporting this high profile event was to deliver comprehensive 
briefings to the local Newark and New York offices of the FBI which 
addressed the FBI's responsibilities for Counterterrorism, Domestic 
Intelligence Collection, Crisis Management, Bomb Management, Weapons of 
Mass Destruction and Hostage Rescue/Tactical response. These briefings 
were followed by interagency briefings with State, local and private 
sector stakeholders (NFL) associated with the safe delivery of the 
games to discuss roles, responsibilities and obligations across the 
various echelons of government. The FBI also provided operational 
briefings concerning the establishment of an Executive Steering 
Committee, the functional Sub-Committees, and the planning structures, 
templates, timelines and best practices developed from prior Super 
Bowls.
    Since these initial briefings, SEMU has assigned two Special Events 
Planners from the unit to work full time with the Newark and New York 
FBI field offices to assess capabilities, identify short falls, and to 
coordinate Federal support to fill these identified gaps. This planning 
effort will result in a formal Operations Order issued by the Special 
Agent in Charge of the Newark Field Office and will also be 
incorporated into the DHS Integrated Federal Support Overview for Super 
Bowl XLVIII.
    SEMU has also assessed the internal capabilities of the local FBI 
offices and is currently working with the Newark FBI office to design, 
build, and equip an interagency Intelligence Operations Center and 
Joint Operations Center which will be used as a multi-agency command 
and control platform during the event. These centers will provide 
situational awareness at the local and national command level and will 
address threat related issues, or in the event of a critical incident, 
operate as the focal point for all case related activity.

                          SUBCOMMITTEE RECESS

    Senator Mikulski. This subcommittee will recess and we'll 
reconvene in the Capitol Visitors Center, where we can proceed 
with the security brief, and then some of the other questions 
that Senators--Senator Collins, we're about to go over to our 
classified briefing. Did you want to ask a question here or can 
it wait until we go over there?
    Senator Collins. It can wait if you would prefer.
    Chairwoman Mikulski. Let's recess, go over there, and you 
have--your time will be reserved, along with Senator Boozman. 
We know that there were many hearings.
    The subcommittee is in recess. We'll reassemble in CVC 217.
    [Whereupon, at 10:53 a.m., Thursday, May 16, the 
subcommittee was recessed, to reconvene in closed session.]
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