    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                 OVERSIGHT OF DEA'S CONFIDENTIAL SOURCE PROGRAM

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

                                    HEARING

                                   BEFORE THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               November 30, 2016

                                   __________

                               Serial No. 114-170

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

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             Available via the World Wide Web: http://www.fdsys.gov
                          http://www.house.gov/reform

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
    CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
    THOMAS MASSIE, Kentucky              BRENDA L. LAWRENCE, Michigan
    MARK MEADOWS, North Carolina         TED LIEU, California
    RON DeSANTIS, Florida                BONNIE WATSON COLEMAN, New Jersey
    MICK MULVANEY, South Carolina        STACEY E. PLASKETT, Virgin Islands
    KEN BUCK, Colorado                   MARK DeSAULNIER, California
    MARK WALKER, North Carolina          BRENDAN F. BOYLE, Pennsylvania
    ROD BLUM, Iowa                       PETER WELCH, Vermont
    JODY B. HICE, Georgia                MICHELLE LUJAN GRISHAM, New Mexico
    STEVE RUSSELL, Oklahoma
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                       Jennifer Hemingway, Staff Director
                        Andrew Dockham, General Counsel
                          Sean Brebbia, Senior Counsel
                        Sharon Casey, Deputy Chief Clerk
                     David Rapallo, Minority Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on November 30, 2016................................     1

                                   WITNESSES

    Mr. Robert W. Patterson, Chief Inspector, Assistant
      Administrator, Drug Enforcement Administration, U.S. Department
      of Justice
        Oral Statement...............................................     4
        Written Statement............................................     7
    The Hon. Michael E. Horowitz, Inspector General, U.S. Department
      of Justice
        Oral Statement...............................................    12
        Written Statement............................................    14

                                    APPENDIX

    Ranking Member Elijah E. Cummings Statement......................    50
    Representative Michelle Lujan Grisham Statement..................    52

                 OVERSIGHT OF DEA'S CONFIDENTIAL SOURCE PROGRAM

                                  ----------

                          Wednesday, November 30, 2016

                      House of Representatives,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:01 a.m., in Room
    2154, Rayburn House Office Building, Hon. Jason Chaffetz
    [chairman of the committee] presiding.
        Present: Representatives Chaffetz, Duncan, Jordan, Walberg,
    Amash, Gosar, Gowdy, Massie, Meadows, Mulvaney, Buck, Walker,
    Blum, Hice, Russell, Carter, Grothman, Hurd, Palmer, and Lynch.
        Chairman Chaffetz. The Committee on Oversight and
    Government Reform will come to order. And without objection,
    the chair is authorized to declare a recess at any time.
        We have an important hearing today. It should be noted that
    Democratic leadership races elections are going on right now.
    But through mutual agreement with Mr. Cummings and their staff,
    we've agreed to go ahead and start this hearing. And as soon as
    that election is done, they will come join us. But we did so
    with a mutual understanding that we would start.
        There are the requisite number of members here to start
    this, but I don't think I've ever started one without at least
    one member of the Democratic minority here, but we're starting
    it through mutual agreement.
        Today's hearing is about the oversight of the Drug
    Enforcement Agency's confidential source program. And one of
    the most important tasks that our government has is to keep us
    safe, and there are a number of ways, there are a number of
    agencies this is done. We employ a number of tools to gather
    information, including human intelligence, human sources. And
    the Drug Enforcement Agency is one agency that uses these human
    sources to gather information on the illegal drug trafficking.
        While the Nation is suffering through one of the deepest
    and most horrific opioid epidemics, the work done by the DEA is
    very important. There are thousands of really good men and
    women that put their lives on the line to do very important
    work, work that is furthered by confidential informants on a
    daily basis. Yet, the DEA has struggled with the management of
    its confidential source program. The American people, through
    Congress, have appropriated millions of dollars to help them do
    their jobs and get the information that they need.
        But back in 2005, the inspector general called for the DEA
    to improve its oversight by monitoring of its confidential
    sources in several areas. Specifically, the inspector general
    reported the agency failed to properly track its confidential
    sources resulting in paying sources well after they provided to
    be useful. So here we are about a decade later, and here's the
    big fear: The DEA wasn't listening, and they didn't implement.
    And if they did, at least based on this report, they did an
    exceptionally poor job.
        So according to the inspector general, between fiscal year
    2010 and 2015, the DEA had more than 18,000 confidential
    sources in the United States, but these aren't--these sources
    don't necessarily give up the goods for free. They want
    something in return.
        In 2010 and 2015, the DEA paid some $237 million to 9,000,
    or roughly half of, its confidential sources. The average
    payment per source is roughly $26,000. When an agency is
    spending taxpayer dollars, it must get the most bang for the
    buck. We ask these men and women to make decisions on what the
    costs of these types of informants might be.
        The DEA, according to the inspector general, paid $477,
    quote, ``limited use sources,'' end quote, that the DEA deemed
    as relatively low risk, an estimated $26.8 million, that's an
    average payment of more than $56,000, to sources who were
    supposed to be providing information to the DEA on a limited
    and voluntary basis without direction from the DEA.
        However, it turned out that many of these tipsters were
    actually working on behalf or in partnership with DEA agents.
    Other findings from the inspector general's report, this one
    just bugs me to no end, the DEA paid $1.5 million to Amtrak and
    TSA sources for information they could have gotten for free by
    going through the proper law enforcement channels.
        In fact, in one case the DEA paid one Amtrak employee, a
    United States Government employee, $854,460 over 20 years just
    for sending passenger name records along. $854,000 this person
    took, one person from Amtrak.
        The DEA's records were so bad that the inspector general
    couldn't determine whether the sources were paid were being
    reliable. The DEA paid more than $9 million to old informants
    that were no longer considered active, despite a policy against
    paying deactivated informants. The DEA provided Federal
    benefits, including Workers' Comp, to confidential sources with
    no process or controls on how these benefits were awarded.
        And, finally, the DEA was uncooperative with the inspector
    general throughout much of the investigation. Nothing but
    nothing will frustrate Congress more than limited access by the
    inspector general.
        You know, we--I say this almost every day now. We're
    different in the United States of America. We're different. We
    are self-critical. We do look under the hood. We do have people
    come in and audit things. We do it in the spirit of making
    things better. There is no reason, that I can think of, that
    the DEA should ever hold any information back from the
    Inspector General's Office. And I want to hear the answer to
    that. It's just terribly frustrating, and it's wrong.
        The Department of Justice Inspector General also pointed
    out another boondoggle by the DEA in a joint venture with the
    Department of Defense. The purpose of the 2008 program was to
    procure and modify an aircraft for surveillance operations in
    Afghanistan in 2012. After 8 years and millions of dollars
    wasted, the last report, the plane sits in Delaware, inoperable
    resting on jacks. The program has resulted in the government
    paying $86 million, four times what it was supposed to, for a
    plane that was supposed to be ready in 2012, and it's still not
    flying.
        In fact, it's projected to be ready in 2017 and will never
    fly the mission it was intended for originally in Afghanistan.
    Despite the program's delay and expanding budget, 14 senior
    managers--and this is, again, you are going to have to explain
    this to me--here we have a plane that's approaching $100
    million that isn't flying, wasn't used in Afghanistan, and the
    14 senior managers responsible for the program received a
    combined $1 million in bonuses.
        How can that be? How do you get a bonus when you screw up?
    How do you take $1 million out of the U.S. taxpayers' wallets
    and give it to 14 managers for a program that spent almost $100
    million and doesn't work?
        We love the men and women who work at the DEA. It is tough.
    I have but a few times gone out with agents like this and our
    local law enforcement and watched them go through this. It is
    dangerous. It is tough. It doesn't get enough patting on the
    back. But, ladies and gentlemen, we can't waste the American
    taxpayer dollars to this degree. Should we be paying for
    confidential informants? I think yes. Should we be giving one
    Amtrak employee $850,000-plus to hand offer a list of
    passengers? No. And that taints the entire agency, the
    reputation of the good men and women that work there, but we
    have to ask these questions and we want to get some answers to
    this so.
        I would now like to recognize, actually, Mr. Lynch, the
    gentleman from Massachusetts, for an opening statement.
        Mr. Lynch, you are now recognized.
        Mr. Lynch. Thank you very much, Mr. Chairman. And thank you
    so much. I had written a letter some time ago. I know we had a
    full schedule on this committee, but I want to look at the
    confidential informants. So I really am truly thankful for your
    willingness to take up this issue. It's an important one and
    not just for the DEA, but for the Department of Justice in
    general.
        So I have some legislation. We went through this quite a
    bit in the city of Boston in the investigation of organized
    crime in the Boston office of the FBI. We ended up with about
    19 murders committed by some folks who were informants and
    acting in conjunction with the Boston office of the FBI. Some
    of the agents went to jail. Special agent in charge Connolly
    went to jail, still there.
        So the use of confidential informants is in darkness right
    now. And my bill, and maybe we can incorporate it with some of
    the chairman's ideas, would be to require the Department of
    Justice to give us a list of all the confidential informants
    being used by the Department of Justice and agencies under its
    purview. So it would not only be DEA it also would be FBI.
        I had a conversation. We brought in Senator Grassley,
    myself, and some others, brought in the FBI to talk about their
    confidential informant program, and I asked for a list of all
    the confidential informants that the FBI was operating right
    now and the amount of money that they were spending in
    maintaining these confidential informants. And the special
    agent in charge who came in to talk to us, his draw dropped.
    And he said, sir, that would be thousands and thousands of
    reports.
        So all that money and all that activity out there, and
    you've got confidential informants that are committing serious
    crimes, and in our case we had--as I said before, we had 19
    murders. And that's not all. You got a situation down in New
    York and also another situation in New England that we've got
    confidential informants out there that are committing major
    crimes against innocent citizens while they are under the
    protection of the FBI. So we need to blow the lid off this.
        And we need to know what the taxpayer--and this is all
    happening sub rosa. There's not a whole lot going on out there.
    There are some guidelines. Janet Reno, former Attorney General,
    God bless her, had some guidelines for confidential informants.
    Those are being ignored, at least in the cases that we've
    looked at.
        So I think this is an area where Republicans and Democrats
    can work together, I really do. It's a good thing for America
    to have transparency around these issues, and I think we can
    really make some--a meaningful difference in the way law
    enforcement is using confidential informants in our society.
        With that, Mr. Chairman, thank you for your indulgence. We
    have a caucus election going on, so that's why there's nobody
    else here. We are we are all in caucus. But we'll try to jump
    back in periodically. Thank you for your indulgence, and I
    yield back the balance of my time.
        Chairman Chaffetz. I thank the gentleman. We'll hold the
    record open for 5 legislative days for any members who would
    like to submit a written statement.
        Chairman Chaffetz. We'll now recognize our one and only
    panel of witnesses. We are pleased to welcome Mr. Rob
    Patterson, who is the chief of inspections at the Drug
    Enforcement Agency.
        We also have the Honorable Michael Horowitz, inspector
    general at the Department of Justice, who we've had a number of
    times before the committee.
        We appreciate you two gentlemen joining us here today. As
    you know, it's committee rules that pursuant--that we--all
    witnesses are to be sworn before they testify. So if you'll
    please rise and raised your right hand.
        Do you solemnly swear or affirm that the testimony you are
    about to give will be the truth the whole truth and nothing but
    the truth?
        Thank you. Let the record reflect that the witnesses both
    answered in the affirmative. We appreciate you limiting your
    verbal comments to 5 minutes. Your entire written record will
    be made part of the record.
        Mr. Patterson, you are now recognized for 5 minutes.

                           WITNESS STATEMENTS

                    STATEMENT OF ROBERT W. PATTERSON

        Mr. Patterson. Thank you, sir.
        Chairman Chaffetz, Ranking Member Cummings, and the
    distinguished members of the committee, on behalf of the
    approximately 9,000 employees of the Drug Enforcement
    Administration, thank you for the opportunity to be here today
    to discuss DEA's confidential source program and the
    enhancements made to our policies as a result of reviews and
    recommendations by both the Office of the Inspector General and
    the U.S. Government Accountability Office.
        DEA's mission to identify, investigate, disrupt, and
    dismantle the world's most significant drug trafficking
    organizations responsible for the production and distribution
    of illicit drugs. To that end, we work closely with our law
    enforcement counterparts by following the evidence wherever it
    leads. Central to this mission is a worldwide confidential
    source network, which uniquely positions DEA to act quickly,
    effectively, and proactively to reach beyond our borders to
    identify and investigate those who threaten the safety and
    interest of our country's citizens both home and abroad.
        We recognize there can be inherent risks in using these
    sources, and these risks must be regularly and carefully
    balanced against their benefits.
        With the responsibility of running a CS program, it is
    critical to have a strong foundation of clear policies and
    procedures to ensure a complete understanding by our
    investigative workforce. Policy alone, however, is not enough
    to remedy the concerns raised by these reviews. Management at
    all level share a tremendous amount of responsibility and must
    provide significant and sufficient oversight. Senior field
    leadership must also create an environment that stresses
    compliance and properly assesses these inherent risks.
        DEA headquarters also shares responsibility for ensuring
    effective policy, processing and tracking of CS information and
    monitoring and auditing the use of CS' in the field.
    Collectively, we must always strive to do better. I am both
    pleased and proud to advise DEA has made and continues to make
    significant efforts in improving our program. We have agreed
    with all of OIG and GAO's recommendations for our CS program.
    We have acknowledged our shortfalls and are actively working
    with all appropriate parties to make improvements. We endeavor
    to faithfully execute our mission with excellence and
    integrity. Our culture is a healthy and a good one, and a vast
    majority of DEA employees perform their job to the highest
    standards.
        Under Acting Administrator Rosenberg's leadership, we have
    made tremendous strides in the manner in which we effectively
    and transparently address these issues and concerns about the
    conduct of our employees and the manner in which we carry out
    our mission. One of the largest hurdles that hindered DEA from
    that goal prior to his arrival was a lack of staffing in key
    leadership positions. This created a vacuum of senior
    leadership and fostered a culture of acting leaders. Among
    these vacant positions were the chief inspector, the deputy
    chief inspectors, in the Office of Professional Responsibility,
    the Office of Inspections, and Security Programs, which
    collectively made up the entire leadership of DEA's inspection
    division. These positions along with other SES positions have
    since been filled.
        I note the inspections division leadership, because the
    Office of Inspections plays a key role in ensuring the
    requirements of the CS program are carried out in accordance
    with established policy and procedure. Over the past year, we
    have made a concerted effort to revise the inspection process
    to take a deeper look at high-risk programs such as the CS
    program. These changes range from modifications as basic as the
    revision of inspection checklist to the more robust review of
    CS documentation to ensure the proper use, approvals, and sound
    justifications for payments.
        The Office of Inspections also works closely with DEA's new
    Office of Compliance, which was established earlier this year.
    The Office of Compliance includes a policy administration
    section, which is currently reviewing all of DEA's policy
    manuals, working with our chief counsel, and program offices,
    as well as fellow law enforcement agencies to review and revise
    existing policies governing DEA's operations.
        Finally, where misconduct is alleged, those instances must
    be thoroughly investigated. In CS-related issues, the Office of
    Professional Responsibility is charged with not only addressing
    the specific allegation against an employee but examining the
    roles of management and providing significant and sufficient
    oversight. OPR conducts these investigations in close
    coordination with and in deference to the OIG. As appropriate,
    where the managers have failed in their duties and properly
    supervised--properly not supervising their employees or have
    failed to ensure the necessary oversight in program areas, they
    are being held accountable.
        The DEA has always been committed to serving the public in
    fulfilling our mission. We are very proud of our
    accomplishments. Thus, it is never easy to hear about the
    weaknesses in our programs and see them identified or to hear
    about our past lack of cooperation during these reviews. The
    current administration has worked diligently to address policy
    gaps and programmatic shortcomings, fill leadership positions,
    implemented new training and place increased emphasis on our
    leaders for greater oversight. We fully believe these outside
    reviews by OIG and others make us better.
        From our previous discussions with your staff and today's
    conversation, I hope you will recognize DEA's commitment to
    positive change in our agency. I want to thank you for your
    time today, and I look forward to your questions.
        [Prepared statement of Mr. Patterson follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Chaffetz. Thank you.
        Inspector General Horowitz, you are now recognized for 5
    minutes.

             STATEMENT OF THE HONORABLE MICHAEL E. HOROWITZ

        Mr. Horowitz. Thank you, Mr. Chairman, Ranking Member
    Cummings, members of the committee. Thank you for inviting me
    to testify today.
        Proper oversight of the DEA's confidential sources program
    is critical given the amount of money paid to informants,
    approximately $237 million during a recent 5-year period, and
    the inherent risks associated with the program to the public
    safety, to privacy, and civil rights.
        My office recently issued two audits finding the DEA faces
    significant challenges in managing its confidential sources
    program. Our July 2015 report determined that DEA's policies
    allowed the use of high-risk sources without the review
    required by attorney general guidelines and that DEA failed to
    always review long-term sources consistent with its own
    policies.
        We also found that DEA paid certain sources substantial
    disability benefits without determining it had a clear legal
    basis to do so and without establishing any procedures or
    controls.
        We made seven recommendations to rectify these issues.
    Since our report, DEA has issued new policies, and we have
    closed five of those recommendations. We will continue to
    monitor closely DEA's efforts to address the two remaining open
    recommendations.
        In September 2016, we issued a second report and found that
    DEA needed to significantly improve the overall management and
    oversight of its confidential sources program. We determined
    that DEA did not adequately oversee payments to its sources,
    increasing the potential for waste, fraud, and abuse.
        For example, while DEA policy prohibits paying certain
    deactivated sources, we found two concerning instances of such
    payments. We further found that DEA failed to appropriately
    track all confidential source activity, did not document proper
    justifications for all source payments, and at times did not
    adequately safeguard travel alert information it was
    collecting. Additionally, we found that DEA condoned the use of
    subsources, yet had no controls, policies, or procedures in
    place to oversee them.
        Separately, we identified significant problems with DEA's
    use of what it calls limited use sources. DEA policy
    specifically specifies that limited use sources make
    information available to the DEA independently and without
    direction. However, we found that some DEA units were, in fact,
    instructing limited use sources about what information to
    provide and what actions to take.
        Among DEA's limited use sources were Amtrak and
    Transportation Security Administration employees. As the
    chairman mentioned, during the 5-year period covered in our
    audit, DEA used at least 33 Amtrak employees and eight TSA
    employees as sources, paying them a total of over $1.5 million.
    Yet, we determined that DEA was entitled to receive this
    information at no cost, thereby wasting government funds.
        We also found that DEA's intelligence division has
    conducted limited management, oversight, and tracking of source
    payments. For example, it does not independently validate the
    credibility of its sources or the accuracy of the information
    they provide. In addition, DEA was unable to provide us with an
    itemized list and overall total of payments to intelligence-
    related sources, who we determined were paid more than $30
    million.
        Our report made seven recommendations in our September 2016
    report, and we expect an update from DEA next month on the
    steps it has taken to address them.
        Finally, I want to acknowledge the serious commitment that
    current DEA management and program officials have made to
    improve the confidential source program and to implement
    appropriate controls.
        These problems did not happen overnight, and correcting
    them will require a dedicated and sustained effort. To date,
    senior DEA management has shown its willingness to do so, and
    we will, obviously, monitor their efforts in this regard.
        This concludes my prepared statement, and I would be
    pleased to answer any questions that you may have.
        [Prepared statement of Mr. Horowitz follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Chaffetz. Thank you. We'll now recognize the
    gentleman from Michigan, Mr. Walberg, for 5 minutes.
        Mr. Walberg. Thank you, Mr. Chairman. And thanks for the
    panel for being here and thanks for the work you do.
        Inspector General Horowitz, your report found, as you've
    indicated, that there was a relationship created with DEA
    agents and some limited use confidential sources that went
    beyond simply being a person who gives tips rather than being
    in a partnership on behalf of and part of the DEA process.
        What are the privacy concerns with DEA essentially treating
    these sources as independent contractors and asking them to
    perform specific tasks?
        Mr. Horowitz. Well, there are several, Congressman. One
    being that among what we found was the requests were for
    various traveller records, personal information, itineraries of
    travel for various transportation companies, collecting that
    information. Not only collecting the information generally by
    directing people to do so, that's the first question, the
    second being, how is that information then protected? We had
    serious concerns about that.
        The third being, little to no information being available
    on whether the collection of that information was useful in
    total.
        We can find evidence when DEA actually successfully
    interdicted drugs or what they believed was improper cash
    transportation, but they did not keep records on what the
    overall success rate was. We don't know, for example, whether
    they were batting a thousand or batting 0.50. And that's a
    concern, because if you're going to ask for the collection of
    large amounts of records, I think the public wants to know that
    there's some success associated with that. And I know that's a
    concern we've talked about in the asset seizure context, and
    that's precisely what is potentially presented here.
        Mr. Walberg. Beyond the evaluation of success or failure,
    what other dangers do you see with this process?
        Mr. Horowitz. Well, one that also comes up is the Fourth
    Amendment issue.
        Mr. Walberg. Okay.
        Mr. Horowitz. If individuals in the public act
    independently, and wanted to call their police, their DEA
    office, the FBI, whomever on their own, they are obviously,
    entitled to do that, and of course, I think, we would all hope
    they would do so if they saw illegal activity. It's a very
    different analysis if people are acting as the agent of the law
    enforcement agency.
        Mr. Walberg. And are incentivized to do that?
        Mr. Horowitz. And are incentivized to do that, and are
    incentiviced to do that in some cases quite substantially.
        Mr. Walberg. Okay. As you know, and you expressed, that
    I've had concern, longstanding concern, with civil asset
    forfeiture issue and asset forfeiture in general. It appears
    when I came across the fact that there was an individual, a
    confidential source, working in the parcel industry that had
    the ability to open packages, but it came to be that they
    opened packages but only reported not on drugs or anything else
    but simply on cash.
        Are you concerned that the DEA's policies are warping
    priorities by prioritizing asset forfeiture rather than seizure
    of drugs?
        Mr. Horowitz. That is a concern. And, in fact, we have an
    ongoing review of the department, and in particular, the DEA's
    use of assets seizures. And I'm looking forward to issuing that
    in the near future. And part of it grows out of some of the
    concerns that you have addressed and other members of the
    committee have mentioned on it.
        Mr. Walberg. Has the DEA taken any steps to remedy this
    problem that you are aware of?
        Mr. Horowitz. They have taken some steps, and we've gotten
    some updates about their intentions on collecting more
    information that would allow, for example, the DEA most
    importantly and us, as well in our oversight role, to determine
    what is occurring, how frequently it's occurring, the success
    or failures, the incentivization or not of folks. I think there
    are several steps that are----
        Mr. Walberg. Mr. Patterson, could you address that?
        Mr. Patterson. Absolutely, sir. So, certainly, we
    appreciate the OIG's review of this. It's an important area. I
    will say simply, we are working diligently on the limited use
    policy. It has now fallen under certain AG guidelines that it
    did not used to fall under the 6-year review. I share his
    concerns as well, related to Fourth Amendment violations or
    issues that may come up from such issues as the parcel
    interdiction.
        We have continued to look at training and making sure our
    employees are aware, and I think probably the most important
    issue that we're looking at is the changes to the limited use
    category to make it more robust and possibly moving that into a
    regular use and form as opposed to a limited use and form.
        Mr. Walberg. Okay. Thank you.
        I yield back.
        Chairman Chaffetz. Thank you.
        I now recognize the recognize the gentleman from North
    Carolina, Mr. Meadows, for 5 minutes.
        Mr. Meadows. Thank you, Mr. Chairman.
        Thank you both for being here. Mr. Horowitz, it's good to
    have you back with us. And as you can recall, some of our
    previous hearings have been rather illuminating I guess would
    be the best way to say that.
        And so I want to focus a little bit on access, because the
    inspector general and your ability to do your job is only
    commensurate with your ability to access information. We've had
    some problems. As you well know, we've had some problems not
    only with the DEA, but we've had some problems in other
    agencies with access. And it's something that this committee
    will not tolerate, as you know.
        So can you share with me where we are on access and with
    the DEA specifically, maybe where we've been and where we are
    today?
        Mr. Horowitz. Absolutely. And I very much appreciate, as I
    know the whole IG community does, this committee's commitment
    to ensuring that fix and passing the IG Empowerment Act, which
    would address these issues. And I'm hopeful in the next week or
    so we can get it through the Senate as well.
        Mr. Meadows. Well, that's where I was going. So you didn't
    swing in a miss with that softball that I teed up for you
    there. But I do believe that--and so maybe you can speak to
    that critical nature of that particular piece of legislation on
    how it could have helped in this situation and other similar
    situations.
        Mr. Horowitz. So we identified what I think it's fair to
    say, and DEA has also acknowledged in both of our reports, a
    very serious concerns in a lot of different areas. Our ability
    to find that information was delayed by about a year, because--
    we actually started this audit, or both of these audits, almost
    3 years ago. February will be 3 years. The first year my
    auditors can explain in great detail how little they had to do
    because of how many roadblocks were thrown up in front of them.
    That has changed, I am pleased to report, dramatically with the
    new leadership, the acting administrator, the leadership of
    OPR.
        Mr. Meadows. So what you're saying is the resignation of
    the previous administrator, who came under fire for a variety
    of issues, this new administrator is doing a better job?
        Mr. Horowitz. The new acting administrator has done a much
    better job, and we have gotten the materials that we needed to
    do these reports in the last almost 18 months now. But that
    first year was delayed seriously. And it demonstrates why we
    need the IG Empowerment Act. It shouldn't be up to who sits in
    the chair in the corner office, of the components we oversee,
    or any other IG oversees, as to whether we get access to
    records.
        Mr. Meadows. All right. So would you say--without
    disparaging the reputation of a previous administrator, would
    you say that there are typically conflicting priorities as it
    relates to access for administrators because they want to not
    share that they are doing a bad job in a particular area?
        Mr. Horowitz. That's certainly the risk. And it should
    never be up to the person whose being reviewed by us and
    whether their conduct was appropriate to decide what they think
    we should look at.
        Mr. Meadows. So it would be someone who was accused of a
    crime who would say that they could withhold evidence legally
    if we do not pass this act? Would you agree with that analogy?
        Mr. Horowitz. I can assure you, as an AUSA having--in my
    former life and working with agents, I can't imagine a
    circumstance where the agents would say to the subjects or
    targets of a criminal investigation, you decide what we should
    see so that we can figure out whether you committed a crime.
        Mr. Meadows. All right. So the IG Empowerment Act would
    give you most of the tools, you believe, to be able to make
    sure that we not only have a transparent and accountable
    government but empower the IGs to be able to better do their
    job not just at DOJ but across the spectrum of----
        Mr. Horowitz. Exactly correct. There are 73 IGs out there,
    and many of them have faced, unfortunately, the same issues we
    did.
        Mr. Meadows. All right. So, Mr. Patterson, let me come to
    you, because obviously, something has changed, and Mr. Horowitz
    is being complimentary in spite of the fact that we are here
    today over some very troubling concerns that the chairman has
    illuminated.
        What individual policies or rules have you changed or has
    the acting administrator changed to make sure that access is
    not an issue?
        Mr. Patterson. Well, certainly, our current acting
    administrator has made it very clear, and I feel in a similar
    fashion, that these reviews, whether it is OIG or any reviews
    from the Department, make us better. So we embrace that, and we
    will fully comply with that.
        I mean, I will say, we have worked with OIG, my first few
    months after taking over this job, to rebuild this relationship
    with the various components that fall under Mr. Horowitz. We
    put out guidance to the field in terms of--and we worked,
    again, to put that guidance out jointly to the field as to how
    they are to respond and provide information to the OIG at the
    properly informed----
        Mr. Meadows. So would you agree--and I'll yield back. Would
    you agree, then, at this particular point without the
    implementation of a legislative fix, the IG Empowerment Act,
    that it is up to the individual discretion of an administrator
    on how they comply and whether they comply, and you would agree
    that there should be some continuity there?
        And I'll yield back to the chairman.
        Mr. Patterson. I would.
        Chairman Chaffetz. So to follow up on Mr. Meadows'
    question, what do you believe you don't have to share with the
    inspector general?
        Mr. Patterson. Sir, nothing. I mean, there is--there is--at
    this point, I don't believe there is anything. I mean, there
    are safeguards on sharing information with them that's
    sensitive that they then must uphold and protect.
        Chairman Chaffetz. Sure.
        Mr. Patterson. So at this point, under the current
    administration of DEA, there is nothing that we will not share
    with them.
        Chairman Chaffetz. Very well. Mr. Horowitz, is that the way
    you're finding it right now?
        Mr. Horowitz. That's correct. In fact, we're going to have
    a follow-up report that this committee will get and others on
    the classified use of informants, and we've been getting access
    to the classified information.
        Chairman Chaffetz. Very good.
        Mr. Horowitz. So it has been a very significant change. But
    the impact and why the IG Empowerment Actis needed, is clear,
    this was delayed a year. We could have been here a year ago
    trying to fix these problems.
        Chairman Chaffetz. Right.
        Mr. Horowitz. What happened in that one-year period, there
    were some additional payments, by the way, which we've
    highlighted.
        Chairman Chaffetz. Good. I appreciate Mr. Patterson.
        We recognize the gentleman from Georgia, Mr. Hice, for 5
    minutes.
        Mr. Hice. Thank you, Mr. Chairman.
        Let me just follow up on this. It sounds like there's some
    progress being made, certainly, and that's good news.
        Mr. Horowitz, by the way, thank you for being back with us.
    The last time you were here, you expressed very serious concern
    and frustration over the employees of the DEA who were
    withholding information. And some of those individuals, it
    appears, had actually been told to not share information. And,
    in fact, I recall asking then Administrator Leonhart about
    this, and she had no satisfactory answer about that.
        So are you saying today, a year later, that that issue has
    been resolved? Is there any shape, form, or fashion in which
    you're still experiencing this problem?
        Mr. Horowitz. We don't have anything currently. There was
    in the last year plus one slight blip I can recall that I had
    to reach out to the acting administrator or to Mr. Patterson,
    and it was fixed immediately. But I think the message has
    gotten through from what my staff tells me, that we're getting
    compliance.
        And my folks know, in light of the battles we fought over
    the last 5 years, that if there's the slightest hesitation on a
    component to give us what we need, they need to let me know so
    I can let you all know.
        Mr. Hice. How much of this would you attribute to new
    leadership?
        Mr. Horowitz. It's a substantial amount, and that's, again,
    going back to the issues. That should not be deciding what we
    get. I can't imagine anybody would want to see that be the
    deciding factor is, who's the administrator, or the attorney
    general or you can pick whatever department agency you want.
        Mr. Hice. Okay.
        Well, Mr. Patterson, how would you now describe the
    communication between DEA and the inspector general?
        Mr. Patterson. I view it as outstanding. Again, you know,
    not----
        Mr. Hice. Would you speak a little more--yeah. Bring it up.
        Mr. Patterson. Not that we have, you know, a relationship
    out of friendship. I mean, there is a relationship out of
    necessity for the efforts they do. But I frequently have
    conversations with all of his staff. Our people on both the
    inspections division and OPR enjoy a good relationship with
    their folks. They're communicating well.
        Again, and I think I probably recall the instance. We had a
    personality issue some time ago. It should never be that Mr.
    Horowitz even has to reach out to anybody at DEA. It should be
    dealt with at the appropriate level. It was, and it was fixed.
        Mr. Hice. Oh, I think it was more than a personality issue.
    There were actually people who were instructed not to pass on
    information.
        Has there anyone--at the DEA, has anyone been disciplined
    for directing employees to withhold information from the
    inspector general?
        Mr. Patterson. Not--honestly, sir, I haven't looked into
    that. I'm not aware. I would--if you would want, I can go----
        Mr. Hice. I would want, because that's--that should never
    take place for obstruction to be directed to employees, and
    yet, obviously, that was taking place, and those who were
    involved ought to be disciplined in one way or another.
        All right. With the confidential source program, Mr.
    Horowitz, you brought this up a little while ago, are you
    satisfied that the recommendations that you have made have been
    fulfilled?
        Mr. Horowitz. I'm satisfied that there's been progress
    made. We still have--we've closed some, but there are still----
        Mr. Hice. You sad five out of seven?
        Mr. Horowitz. Five out of seven on our first report, and
    we're waiting for the update, which we're supposed to get next
    month, from DEA on the status of our most recent
    recommendations.
        Mr. Hice. All right. Supposed to get next month.
        Mr. Patterson, when can we expect to have those new
    procedures implemented?
        Mr. Patterson. Well, so we are implementing them as we can
    essentially get the fix. And I'll go back to the comment that
    Mr. Horowitz made in his opening. You know, this took us a
    while to get us to the point that we have found ourselves in.
    We need to properly unwind those issues.
        One of the concerns we always have is that, you know,
    policy made in situations where you're doing it as a reaction
    as opposed to looking at the entire process generally doesn't
    fix those issues. So I think we're being thoughtful as we look
    at this and trying to come to the right and proper solutions.
        Again, the issues that they've pointed out, we share those
    concerns. Our own inspections division is looking much harder
    at this program and certain areas at this point. And with that,
    we will come to, I think, a much better program.
        Mr. Hice. Well, I commend you for the steps you're taking.
    But again, timeframe, when is a general--can you give us a
    general timeframe when you think it would be implemented?
        Mr. Patterson. So some pieces are already being
    implemented. Right? Certain policies are being revised. Certain
    educational programs like with the----
        Mr. Hice. So the full compliance, are we talking 3 months?
    6 months?
        Mr. Patterson. I would hope, you know, a 6-month time frame
    is an acceptable window.
        Mr. Hice. Is that acceptable to you, Mr. Horowitz?
        Mr. Horowitz. We get an update 90 days after, and we'll
    continue to get regular updates afterwards. Obviously, it will
    depend on what we're being told is--if there is a delay, why
    and on what issues. But I would say the first part would be to
    correct the policies, but then, of course, education, training
    is going to be critical to making sure that it's not just a
    paper program, but it's actually being implemented in the
    culture.
        Mr. Hice. Well, thank you, gentlemen.
        And thank you, Mr. Chairman. I yield back.
        Chairman Chaffetz. I thank the gentleman.
        We now recognize the gentleman from Oklahoma, Mr. Russell,
    for 5 minutes.
        Mr. Russell. Thank you, Mr. Chairman.
        And thanks to both of our panelists today for the important
    work that you do in digging into fraud with the taxpayer's
    dollars. I do know that you have the best interest in heart as
    you discover these issues.
        Mr. Patterson, can you, please, describe the global
    discovery program?
        Mr. Patterson. So, sir, I have limited knowledge on this
    program in my current role. And I know that I believe our
    administrator has met with members already to discuss this, and
    I think is scheduled back for additional meetings. The latest
    issue on this is we continue to work with the Department of
    Defense and FAA on getting the proper permits to get this plane
    from its current location down to DEA's Fort Worth location to
    essentially determine the future usage of this plane.
        Mr. Russell. I guess a couple of follow-on questions with
    that. You know, this French-built ATR 42-500 aircraft, there's
    a lot of other twin turbo crop aircraft that could be used for
    surveillance other than a 45-passenger plane that's often used
    in commercial aviation. Do you have any idea why a French-built
    aircraft was selected being on average millions of dollars more
    expensive than some other platform?
        Mr. Patterson. To give you the most candid answer, I can. I
    have absolutely no idea why.
        Mr. Russell. That might be worth investigating. And while
    we're going on that loop, in 2008 this aircraft cost, I
    believe, somewhere in the neighborhood of $8.5 million. Today
    they cost around $12 million.
        We've currently spent, going on now, what, $86 million. How
    many aircraft could you buy, ten, at the 2008 rate? Were you
    also aware that there was $6 million worth of damage done to
    the aircraft as they are trying to install the different radars
    and cameras that they are not going to be able to install now?
        Mr. Patterson. I am aware that there was damage. Again, I
    have limited----
        Mr. Russell. How was the damage caused?
        Mr. Patterson. I don't know, sir. I have limited
    visibility. I certainly would like to take this back and have
    the right people----
        Mr. Russell. Yeah. You know, the FAA, I mean, they kind of
    certify mechanics and things to install and look at things. We
    might want to look at that before we go destroying an $8
    million aircraft and turning them into $86 million
    expenditures.
        Two million dollars from the DEA, as I understand it, spent
    on a hangar that will not be used in collaboration with the
    Department of Defense for this aircraft that will not fly and
    now will not be used in Afghanistan. And in addition, there
    were modifications made to existing hangars in Afghanistan. Can
    you speak to some of that?
        Mr. Patterson. Obviously, with the downsizing of our
    workforce in Afghanistan, the usage of the plane there wouldn't
    make practical sense, so----
        Mr. Russell. Has anyone considered the downsizing of the
    airplane? Maybe it's elimination where it's selling and cutting
    losses.
        What would be the benefit of having this nonflyable,
    noncamera operating, nonradar-capable $6 million worth of
    damage with installation? You see where we're going here? What
    could possibly--we're talking about 800,000 for an informant
    here, and, you know, maybe an abuse of $300,000--this is $86
    million. Does anyone see a comparison that maybe this might be
    something that ought to have a lot more investigation other
    than Amtrak, you know, manifest list?
        Mr. Patterson. Look, I agree with you, and I believe--and
    Mr. Horowitz may know better than I do, that the DOD is also
    looking into these issues, but I'm not familiar with their
    investigation or what they're doing.
        Mr. Russell. You know, I----
        Mr. Chairman, this is one of the most outrageous things
    that we have.
        And, look, I know you guys, you are like us, you go pick up
    the rocks and look at the creepy-crawlies underneath them, and
    we certainly appreciate that, and that's how we find so much of
    what we find. So this is not a denigration of your important
    work, but this is what exasperates the American people.
        U.S. dollars--I love the French. Great people, great
    allies. They are always there on our endeavors, great foreign
    policy partner. We make aircraft in the United States as well,
    probably a lot cheaper than what we've done.
        These are things that we really have to dig into. Because
    of all of the items that we've looked at, and what you
    presented to us this morning, none is as egregious as this. And
    just the $6 million worth of damage, you know, could go for a
    lot of--pay an Amtrak manifest, you know, to people that don't
    deserve it that you could get in other ways.
        So I would hope that as you pick up the rocks and look at
    the creepy-crawlies, there are a lot more rocks on this
    aircraft issue, and I don't know how we recover from it other
    than we just cut the losses, and we move on. But there's a lot
    more answers that we would like to get regarding the airplane.
        And thank you, Mr. Chairman, for your indulgence.
        Chairman Chaffetz. Thank you.
        I'll now recognize myself for 5 minutes.
        Following up on Mr. Russell's questions, so Jack Riley,
    when he was chief of operations--what does that mean, chief of
    operations?
        Mr. Patterson. He would oversee our operations division.
        Chairman Chaffetz. Well I get that. Come on, put some meat
    on the bones. What----
        Mr. Patterson. All of our enforcement priorities, which
    would include air wing and other areas.
        Chairman Chaffetz. So were things going well with the air
    wing or not going well with the air wing?
        Mr. Patterson. I don't have personal knowledge, sir, of how
    things were or weren't working with the air wing at the time
    that he was chief of operations.
        Chairman Chaffetz. I mean, we just detailed an $86 million
    boondoggle. A lot of this responsibility goes to the Department
    of Defense. I did have a briefing on it, and I do buy that.
        But I just struggle in figuring out how this person in 2015
    got a $36,000 bonus. You know, the American people--we're $19
    trillion in debt, and I'm sure he's a good, capable person, but
    it's just unimaginable that we can somehow justify handing out
    bonuses by the tens of thousands of dollars. I don't think the
    American people, the people we were hired to do this job for, I
    don't think they can look anybody in the eye and say, tell me
    why this person should have gotten a $36,000 bonus? Because I
    tell you what, most of the people in our districts, they aren't
    getting $36,000 bonuses. They may not be getting $3,600 of
    bonuses.
        So when you have a problem that's approaching $100 million,
    and the thing is sitting in the hangar, and you're the chief of
    operations, why should you get a $36,000 bonus? He then also
    got promoted, right? Now he's the acting deputy--principal
    deputy administrator. So what do you tell the American people
    about that?
        Mr. Patterson. I mean, sir, I obviously know Mr. Riley
    well. I think he's an honorable man. I don't know at what point
    this rose to his level, the issue with the aircraft.
        Chairman Chaffetz. He was chief of operations.
        Mr. Patterson. Right. But again, I don't know at what point
    this came from our aviation division into the chief of
    operations.
        Chairman Chaffetz. If it didn't, that would be a problem,
    right?
        Mr. Patterson. And that is possible, sir.
        Chairman Chaffetz. How do you excuse yourself from this
    one?
        Mr. Patterson. Again, I don't have a sufficient answer for
    you.
        Chairman Chaffetz. That's right. And I think that's a very
    candid answer. I think it's a very accurate answer. It's a
    question we're asking. And we've got to figure out how to
    figure this out. Because this whole page of people are making
    tens of thousands of dollars in bonuses, and we have an
    inspector general report come out. It's not too rosy, and it's
    just terribly frustrating.
        The two recommendations that are outstanding, Inspector
    General, can you, please, articulate the two recommendations
    that haven't been agreed to or implemented, and why is there a
    conflict?
        Mr. Horowitz. In the report that we received from DEA, they
    had made some steps towards implementing some of the actions
    they had presented to us.
        Chairman Chaffetz. Explain to me what the two are, and then
    maybe Mr. Patterson can say why the DEA doesn't want to do
    that.
        Mr. Horowitz. If you could give me one moment.
        Chairman Chaffetz. Sure. Sure.
        Mr. Horowitz. Sorry. The two that we still have--we have
    as, by the way, resolved in that they have acknowledged the
    steps that they are going to take and need to take----
        Chairman Chaffetz. So there's no outstanding--when I heard
    your testimony, I thought you said five of the seven have been
    implemented. But the remaining two, are they in the clear now?
        Mr. Horowitz. Correct.
        They are closed--the five are closed. What we call resolved
    are when a component, here, the DEA, agrees to take the steps
    we have----
        Chairman Chaffetz. Right. Are there any outstanding issues?
        Mr. Horowitz. And there are some as to those.
        And what they involve are the recommendations about the
    long-term confidential sources review, and they have taken some
    steps to implement policies that would ensure the long-term
    reviews.
        The issue there that we've identified or what we're waiting
    to see is, if in fact, there's a clear system in place for the
    timely review of those. Because one of the concerns we found in
    the 2015 review, and that's what we're talking about right now,
    was the DEA wasn't following its own policy that then existed.
    It certainly wasn't complying with the AGguidelines that were
    in place, and it wasn't clear to us, still, that they had a
    measurable timeline in place for how they were going to review
    long-term CIs and what the process was. That was one.
        Chairman Chaffetz. Okay. And the other issue?
        Mr. Horowitz. The second one was in looking at the FECA
    issue, the disability payment issue, two informants, which we
    had serious concern about whether there was a legal basis to do
    that, we--our recommendation was for the DEA to go back and
    evaluate whether there was a legal basis to do that. And our
    understanding is the DEA is still working on that issue.
        Chairman Chaffetz. Can you illuminate--my time has gone
    over here, but why is a confidential informant getting
    benefits?
        Mr. Patterson. So, absolutely, sir, on the FECA payments
    issue, a policy has been posed in extraordinary circumstances
    where an informant is performing a role as an informant and
    doing government work, they may be entitled to Department of
    Labor review for FECA payments.
        Chairman Chaffetz. How many people are we talking about?
        Mr. Patterson. A handful. I mean, I don't think actually
    we've had any in the last number of years. I think these go
    back some time. The issues were that we did not have a policy
    in terms of--you know, what the employees leave and know what
    had to be presented to the Department of Labor. That policy has
    been posted in our human resources site. The issue related to
    the question of legality has been worked with the department.
    We owe responses back, and I think it was essentially providing
    the proof of both of these things to the IG.
        Chairman Chaffetz. Okay. Thank you. My time has expired.
        I now recognize the gentleman from Alabama, Mr. Palmer, for
    5 minutes.
        Mr. Palmer. Thank you, Mr. Chairman. I appreciate the
    witnesses being here, and good to see you Mr. Horowitz, always.
        Your September 2016 audit highlighted widespread issues
    with the DEA's tracking and oversight of payments, lack of
    receipts, a lack of information, justifying payments to
    sources. These are issues that have been going on for a long
    time and were noted in a, I think, 2005 report. Can you tell us
    how long these issues have been around and why they've been so
    persistent?
        Mr. Horowitz. Well, it's clearly been from our review a
    long-term problem, because we found analogous problems in our
    2005 audit, and now we were seeing the same in 2015 and 2016.
        Why it's occurring? It's, in the first instance, a system
    that isn't being implemented effectively. So, for example,
    mandatory fields that you are supposed to enter, an agent can
    just skip over them. There's no point at which, like when we
    all fill out forms online, and it comes back as a sorry you
    can't go forward because this mandatory field needs to be
    filled in. There was no such stop gap with the DEA's files. So
    you had situations where sources were being input data, but key
    data, like occupation, wasn't being always entered.
        The system wasn't being accurately reported in terms of
    dollar payments we found in many instances. And so these are
    systemic failures of the system.
        And then separately, we found that DEA hadn't put in place
    policies, procedures, or practices that allowed headquarters
    based oversight such that they could watch for these issues,
    supervise these issues, and make sure change was occurring. It
    was being left to the field offices to handle these.
        And some field offices we found were doing a good job, and
    some field offices were doing something very different.
        Mr. Palmer. Well, you had some specific recommendations in
    your July 2015 report, and I think in your testimony said the
    DEA had only implemented five of seven of those. Is that--it
    begs the question why the recommendations haven't been
    implemented yet? Does that in any way reflect a resistance on
    the part of the DEA? I mean, why haven't they implemented all
    of them?
        Mr. Horowitz. I don't think it reflects a resistance to
    them, because certainly, our communications have reflected an
    interest and willingness to do so. I think, frankly, these have
    happened, as I said in my opening statement, for such a long
    period of time, and you just mentioned as well.
        They will require, and we expect not just paper policies,
    but we'll close recommendations when we see effective policies
    being actually implemented. So step one is the commitment to
    put the policies in place. Step two is are they now being
    followed? Can we go in and look at them and say, yes, these are
    working; yes, these are being followed?
        Mr. Palmer. The reason I ask that about the resistance is
    that in Mr. Patterson's testimony he said that all the
    recommendations had been implemented. From that report and your
    testimony indicates that five of seven have been. So I'm just
    trying to determine----
        Mr. Horowitz. I think there's an error in terms of the
    terminology.
        Mr. Patterson. So as we put our testimony together, DEA has
    implemented those fixes. It doesn't mean that the IG has agreed
    with our implementation of those two being sufficient.
        So I apologize for that oversight. I did not mean to make
    the reference that they were closed by the OIG, but that in
    fact DEA--and as I just explained to the chairman on the FECA
    matter, the other matter is the 6-year review of the
    informants. There is still additional work that we can do on
    that. However, we're now in conformity with the AG guidelines
    in terms of those reviews.
        Mr. Palmer. I hope you can understand the frustration that
    some of us and maybe most of us on the committee feel and
    particularly in dealing with the DEA. It goes back to the issue
    of the sex parties in Colombia and the fact that the agents and
    many of our opinions were not punished severely enough.
        In fact, I think Mr. Horowitz, your report from March 2015
    indicated that they received bonuses, which is in conflict with
    DEA policy. The chairman has brought up the bonus paid to the
    person who has responsibility for the aircraft. And it's just
    hard to understand how an organization can operate and violate
    its own policies and do things that create so much bad
    publicity toward the agency and not impose any discipline.
        So I think, you know, in regard to what we're trying to do
    here, we are trying to get the DEA in a position where they're
    functioning with proper oversight where there's accountability
    and transparency in the agency. And I really want to see the
    agency implement the recommendations of the OIG.
        I yield back.
        Chairman Chaffetz. I thank the gentleman.
        We'll now recognize the gentleman from Tennessee, Mr.
    Duncan, for 5 minutes.
        Mr. Duncan. Well, thank you, Mr. Chairman.
        Mr. Patterson, the staff, the committee staff has provided
    us with information that says, DEA intelligence division cannot
    provide DOJ OIG with an accounting of its sources or the total
    amounts paid to CS. And it says that OIG identified nine
    confidential sources, eight of which were paid $25 million
    between fiscal year 2011 and 2015.
        One source has received $30 million over 30 years. Could
    that be accurate that the DEA has been paying one confidential
    source what averages out to $1 million a year?
        Mr. Patterson. It is, sir.
        Mr. Duncan. And I guess a lot of people are wondering how
    they can qualify for that kind of a job. That seems so
    ridiculously excessive to me to reward a drug dealer $1 million
    a year. But then there were payments of over $800,000 to an
    Amtrak employee, who over 20 years, 40 something thousand a
    year, and then he was later fired for violating Amtrak ethics
    rules, and he's being investigated by the IRS for not paying
    taxes. Are you familiar with that case?
        Mr. Patterson. I am, sir.
        Mr. Patterson. I am, sir.
        Mr. Duncan. Did you hear Mr. Horowitz when he said a while
    ago that they didn't feel that there was adequate information
    to determine the success and failure rate, and that he couldn't
    tell whether you were batting 1,000 or batting 0.50. Did you
    hear that?
        Mr. Patterson. I absolutely did.
        Mr. Duncan. And what would be your response to that?
        Mr. Patterson. Again, I agree with their assessment of that
    and we are working to fix those issues.
        Mr. Duncan. Do you anticipate that this $237 million that's
    been paid over the last 5 years is going to--that you are going
    to continue those types of payments at that type of level or
    increase it or decrease it?
        Mr. Patterson. I mean, obviously, those numbers have the
    ability to change. That funding is not all appropriated, sir. I
    will simply say this, that related to fundings of informants,
    we have to have good accountability and oversight on what these
    people are paid. We have to be good stewards of how we spend
    this money, and we are going to do a better job of ensuring
    that that, in fact, is happening, both in the field division,
    with our headquarters elements, and through the inspections
    process.
        We have already put that word out to the employees that
    this is not a kind of voluntary change that we are doing. We
    are going to look much harder at these programs and inspect
    them more thoroughly.
        Mr. Duncan. Well, would you be willing to give the
    committee detailed information as to people who are receiving
    payments like $1 million a year?
        Mr. Patterson. Sir, I'd, absolutely--in fact, on those
    programs, and I have already informed staff, there are
    briefings that we could provide outside of the public forum
    with proper clearances on those programs. So they have been
    done in the past. I recognize that people have changed over and
    staff and Members. I would be more than happy to come back and
    brief you on those programs.
        Mr. Duncan. I was a lawyer and a judge. I was a judge for
    7-1/2 years before I came to Congress trying the felony
    criminal cases. And I have dealt with many, many cases
    involving large-scale drug dealers. And I can tell you, I think
    that paying any confidential informant at the rate of $1
    million a year, is ridiculous. It's very excessive. And I'm--I
    am very disturbed that that type of thing is going on. I just
    don't see how that could be justified or worthwhile in any
    respect. Thank you very much.
        Chairman Chaffetz. I thank the gentleman. I will now
    recognize the gentleman from South Carolina, Mr. Gowdy, for 5
    minutes.
        Mr. Gowdy. Thank you, Mr. Chairman. Inspector General
    Horowitz, I want to see if I can get you to help me a little
    bit. You have a background as a very distinguished prosecutor,
    if my memory serves me correctly?
        Mr. Horowitz. I was a prosecutor. I will leave it to others
    to decide how distinguished.
        Mr. Gowdy. I think you were very distinguished. Why does
    law enforcement need informants?
        Mr. Horowitz. They are critical to the effort to get into
    organized crime, drug rings, other organized criminal activity
    because the best information is gathered from the inside of the
    crime families, or structures.
        Mr. Gowdy. Yeah, I remember trying to get some first grade
    and kindergarten teachers to help me in some of my drug
    prosecutions, but they didn't know anything about the drug
    ring, so sometimes you have to use people who are actually part
    of it. But there's a difference between someone working off
    charges and someone working for money.
        Mr. Horowitz. Correct.
        Mr. Gowdy. Help the jury understand why you would--why you
    need both, and what the difference between the two is?
        Mr. Horowitz. Well, on a defendant who has been arrested
    who wants to cooperate, the law, the sentencing guidelines and
    policies in place, incentivize cooperation as a way to work off
    a potential sentence. So judges are informed, and judges then
    decide what benefit value to give to the individual who
    cooperates, and that is in the form of a reduced sentence, or,
    in some instances, no jail sentence that they might otherwise
    have faced.
        For a non-defendant, whether it's a citizen who has not
    engaged in wrongdoing, or someone who may be involved in
    wrongdoing but has never been charged, the payments are
    designed to incentivize them to report on information, provide
    information that there is no--oftentimes, no other leverage to
    get, although as I said earlier, for most individuals if they
    see wrongdoing and it's public, the hope would be that they
    would come forward and report on it rather than need to be paid
    to do that.
        Mr. Gowdy. Can you think of an example where you would use
    a paid informant to gather information that would be available
    via subpoena or search warrant?
        Mr. Horowitz. Not off the top of my head as I sit here.
        Mr. Gowdy. Do you recall the line of cases beginning with
    Giglio?
        Mr. Horowitz. I do.
        Mr. Gowdy. What's Giglio?
        Mr. Horowitz. So Giglio when its progeny require
    prosecutors, the government, Federal or State, to provide
    defendants with information that would tend to exculpate them,
    to allow the defense to argue they are not guilty, but also
    separately, to impeach the credibility of government witnesses
    at trial proceedings or other court proceedings.
        Mr. Gowdy. For instance, if we were to confer a benefit on
    a source, a confidential source, that would need to be
    disclosed to the defense attorney, the defense team?
        Mr. Horowitz. Correct.
        Mr. Gowdy. How do you do that with subsources?
        Mr. Horowitz. That was our very serious concern,
    particularly if you don't even know who they are, and you have
    no policies or controls in place to identify them or understand
    what their--conduct they are engaged in.
        Mr. Gowdy. It strikes me as a serious issue, or, or, I
    mean, you have that issue, or if there's no expectation of
    litigation, no expectation that a charge is ever going to be
    leveled, or a prosecution is ever going to be undertaken, then
    maybe you don't have to worry about Giglio.
        Do you have a sense, in looking at this, whether or not
    arrest and prosecution were the ultimate objectives of the
    employment of some of these informants, or was it just simply
    information gathering?
        Mr. Horowitz. Based on what we were told, our understanding
    was these were for the purposes of advancing criminal
    investigations. We did not go down the road and see who
    ultimately was arrested and what cases were about. But it was
    very clear to us that these were to advance criminal drug
    investigations.
        Mr. Gowdy. So, if the objective is to one day wind up in a
    courtroom with charges, and hopefully a conviction, then how do
    you get around the use of subsources where you cannot meet your
    obligations under Giglio?
        Mr. Horowitz. That was precisely our concern.
        Mr. Gowdy. Do you still have that concern?
        Mr. Horowitz. We do.
        Mr. Gowdy. If you shared it with DEA, what did they do to
    assuage your conscience?
        Mr. Horowitz. Well, that's one of the things we're waiting
    to hear back from next month in their first report following
    our September audit.
        Mr. Gowdy. Would you let Chairman Chaffetz know what you--I
    have a world of respect for law enforcement as I know you do,
    too, but if the objective is an arrest and a successful
    prosecution and you have constitutional requirements under
    Brady and Giglio, I don't know how do you that with the use of
    subsources where the prosecutor either doesn't know or doesn't
    know enough. I don't know how you do that.
        Mr. Horowitz. Right. That's precisely our concern and there
    are, I might add, several other areas where we were concerned
    as to whether the--what was going on in practice impacted, and
    how it impacted, the necessary constitutional disclosures that
    needed to be made to the defense about a wide variety of
    activity we talked about, the disability payments.
        It's not clear to us, in fact, it appears to us that that
    information--if those individuals ever ended up in court--
    wasn't widely known, and therefore, in almost all likelihood,
    wouldn't have been fully disseminated. Other activities of
    tipsters and other limited-use sources that resulted in
    criminal cases may or may not, unclear, but may be relevant to
    that decision and there didn't seem to be a system in place for
    anybody to, in fact, make that assessment.
        Mr. Gowdy. Well, I know I'm out of time, but in addition to
    making life very uncomfortable for prosecutors who have to
    appear before judges and explain why they didn't turn over
    certain information, you also run the risk of whatever
    convictions you gather being overturned because of a discovery
    abuse. So I hope that you get the answers to your questions,
    and that if you're able to, you will share the results with
    Chairman Chaffetz.
        Chairman Chaffetz. Before the gentleman yields back, could
    the gentleman yield?
        Mr. Gowdy. To the chairman, yes.
        Chairman Chaffetz. Following up on Mr. Gowdy's question, of
    the $230-plus million over 5 years that was paid, do you have a
    sense or precision on what percentage, or which dollars went to
    these so-called sub-informants?
        And the second part of that is, what did the American
    taxpayers get? Do we have--are there any metrics on
    convictions, drug seizures? Like, what did we get for $237
    million?
        Mr. Horowitz. Taking that last question first, that was, in
    fact, one of the challenges that we faced in looking at these
    payments. It wasn't clear to us, and you couldn't connect, and,
    in fact, the database oftentimes wasn't accurate, to figure out
    where those payments went and what they resulted in. It's an
    issue we are looking at actually right now on the asset seizure
    review that we are doing. It's--a similar question has been
    raised, similar issues have been raised about interdictions.
    Yes, we know about the successful seizures, but where did that
    lead? What--did that lead to furthering a criminal
    investigation? Did it lead to an arrest? How many unsuccessful
    interdictions were there?
        In other words, how much was the public's privacy being
    impacted, or civilians who are being asked questions at train
    stations, bus stations, airports, that don't ultimately have
    drugs, or cash; how many of those events occurred? And I think
    all of those are weaknesses in the data collection effort
    that's going on.
        Chairman Chaffetz. Mr. Patterson, how do you answer those
    questions?
        Mr. Patterson. Again, I agree with Mr. Horowitz' concerns.
    We are working on properly staffing and reviewing a number of
    these issues at the headquarters level, making sure that the
    data that is getting into our system is proper. Related to the
    other Member's question related to the subsources, we are
    working with our other Federal partners to find out how they
    are dealing with those specific issues and subsource-related
    cases.
        So, again, we're----
        Chairman Chaffetz. So do you or do you not have a database?
    If you get $50,000 to pay off some informants, you can't tell
    me there is a database, I can go to line whatever 237, and say,
    well, this is what happened?
        Mr. Patterson. Sir, we do have a headquarters database, a
    centralized database in which we track this. As Mr. Horowitz--
    --
        Chairman Chaffetz. So what are the metrics? Where is this--
    --
        Mr. Patterson. I think it's the absence of the negative,
    right, in terms of we would have to go to specific case files
    in the field if it's available to see, you know, we made three
    other attempts at looking at information and saw nothing. That
    is essentially guidance that we are putting out to the field
    that we have to collect this information as well.
        Chairman Chaffetz. So you have no--I'm still confused. Do
    you have data or not have data on how many convictions,
    seizures, those types of things? You don't--can't produce a sum
    total of that?
        Mr. Patterson. Related to the specific payments?
        Chairman Chaffetz. Yeah.
        Mr. Patterson. There needs to be a proper justification for
    why those payments were made. That doesn't necessarily capture
    the totality of the circumstances, and I think that's the issue
    that they have presented. And that's something that we are
    working on.
        Chairman Chaffetz. When you say you are working on it, come
    on, you are the senior management. You are the senior
    management. So how long have you been working on it and when
    are you going to have it?
        Mr. Patterson. Well, we started to have these discussions,
    I think, probably over the summer. We started doing immediate
    work on the limited-use issues because, quite frankly to me,
    they are more important than capturing this data. And I'm not
    trying to say that anything is, you know, one thing outweighs
    the other, but I think there's some significant issues in the
    limited use, especially when it comes to Fourth Amendment
    issues that raised to get those issues addressed in front of
    this. But, again, we are working--I know the administrator is
    committed to doing this, is to getting this right in terms of
    making sure that we have the data because we also need to
    evaluate, and as I said earlier, to be good stewards of how we
    pay this money.
        So we need to be able to balance those out internally as
    well. As I said, we have the Office of Inspections now going
    out, and to me, it's really about accountability and oversight
    both in field managers and from headquarters.
        Chairman Chaffetz. Well, look, law enforcement is usually
    pretty good about bragging when they get a big seizure, arrest
    or conviction. We just don't have any metrics to compare a
    quarter of a billion dollars to what?
        Mr. Patterson. Well, I mean, I think the issue that I was
    trying to refer to wasn't--look, we are seizing more than we
    are spending. Right? I mean, that's----
        Chairman Chaffetz. I don't know that. How do I know that?
        Mr. Patterson. Well, we have statistics on----
        Chairman Chaffetz. Well, where are they? Can I get them?
        Mr. Patterson. Yeah. I mean, I have no concerns about
    providing those to the committee. I will take them back and ask
    to get that provided to you.
        Chairman Chaffetz. Okay.
        Mr. Horowitz. You know, from our standpoint, I think our--I
    think the information shows that the seizures exceed the
    quarter of a billion dollars in informant payments, although I
    think there's a challenge in matching the payments to the
    seizures, and so macro numbers don't completely answer the
    question.
        The other issue that's, of course, of significant concern
    is, if you incentivize an Amtrak employee or an airplane
    employee or a cargo company employee, if you seize money, we
    will give you a reward, how many boxes are they opening? How
    many passenger manifests are they providing? How many people
    are getting pulled out of line to find the person or persons
    that a seizure results in an award?
        As I said earlier, is it, they are very good at it and so
    they are batting close to 1,000, or is it they are just picking
    as many people as they think fit a generalized profile such
    that they are batting near zero. But they are finding a few, so
    they are getting good cash awards.
        Chairman Chaffetz. Right. We have gone way past. Let's
    recognize the gentleman from Wisconsin, Mr. Grothman, for 5
    minutes.
        Mr. Grothman. Okay, for Mr. Horowitz, you reported that the
    relationships created by the DEA with limited use confidential
    sources went beyond that of a person who provides tips, but,
    rather, that people were acting almost on behalf of or in
    partnership with DEA, giving them real-time information. In
    some cases, the DEA compensation was greater than they were
    getting in their regular job.
        What privacy concerns would DEA essentially treating these
    sources as independent contractors, and asking them to perform
    specific tasks do you see?
        Mr. Horowitz. Well, the most significant one is the
    potential Fourth Amendment issue, and the privacy interests
    that are at stake, given what they are--what--having been
    categorized as limited use, they are supposed to be individuals
    who are simply on their own voluntarily tipping the DEA to
    information, when what we see here are multiple payment and
    even direction being given to those individuals on what
    information to provide, who to provide it on, et cetera, that
    it could easily be seen that they are, in fact, an arm of DEA
    and an agent of DEA, as opposed to a pure voluntary tipster, as
    what I think the limited-use category was intended to be, at
    least as we understood it.
        Mr. Grothman. Yeah. I will give you a more specific
    example. It appears that DEA had one confidential source
    working in the parcel industry and they were opening up
    packages and if they found cash, they were alerting DEA. Now, I
    assume if you were a DEA employee, you couldn't sit there and,
    you know, without a warrant or something, just opening up
    packages. Furthermore, and this was kind of interesting. In
    this specific instance, they'd call if they found cash, but
    they never happened to find drugs, which seemed a little bit
    suspicious. So I wanted your comment on that.
        Mr. Horowitz. It's a serious concern for the--precisely for
    the reason you indicated. I think there are two competing
    issues here. Right? The public wants two things to be
    occurring. They want--they don't want to see drugs, or
    illegally transmitted currency being transmitted through these
    processes, but they also want to make sure that people are
    following the constitutional rules, laws, and procedures and
    that everybody's privacy and expectations, when they send a
    package through the mail, aren't invaded simply in a rummage or
    search by someone who is looking for a cash reward with little
    control over them.
        And that's the problem that we saw here.
        Mr. Grothman. So as a practical matter, they are hiring
    people, or they are giving payment, sometimes payments more
    than a person's salary, to do something that would be
    unconstitutional if their own employees did it?
        Mr. Horowitz. They are potentially incentivizing
    individuals to essentially act as their arm raising that Fourth
    Amendment issue as you indicated.
        Mr. Grothman. Okay. Switch gears a little bit. Your
    September 2016 audit highlighted widespread issues with DEA's
    tracking and oversight of payments. A lot of these issues have
    been going back--are similar to those that were happening in a
    report that was issued in 2005. So we've had an 11-year period
    here, and we are still finding the same issues. Could you
    comment on that?
        Mr. Horowitz. Yeah, that was a concern to us, and
    obviously, something that should have been long ago addressed.
    And it cascades into a whole series of issues. It limits, as
    Mr. Patterson said, the ability of management at headquarters
    to understand how their program is working and whether it's
    working well. It prevents or affects the ability of the DEA and
    the agents to provide accurate and full information to
    prosecutors so they can fulfill their constitutional
    responsibilities if they are prosecuting somebody. It limits
    the ability of the public and through reports to Congress and
    the work that we do, to understand whether its money is being
    used wisely and consistent with the parameters of what is
    permissible and not permissible.
        Mr. Grothman. Okay. We will ask Mr. Patterson, kind of
    going off the same line of questioning, what your comments are
    that we seem to have the same problems in 2016 as we identified
    10 years ago, 11 years ago.
        Mr. Patterson. That's correct, sir. So we have a
    computerized database that is about 5 years old that did not
    exist back in 2005 that resides at headquarters. During their
    review, and, frankly, during our current reviews, we are seeing
    that not all information is filled in. We now have the
    headquarters review by individuals that work in operations
    management to ensure all those fields are, in fact, filled in.
    It seems like a relatively simple thing. Again, it needs to be
    done better and we need to ensure that it's happening.
        Mr. Grothman. Thank you very much. I see my time has
    expired.
        Chairman Chaffetz. I thank the gentleman. We will now go to
    the gentleman from Texas, Mr. Hurd, for 5 minutes.
        Mr. Hurd. Thank you, Chairman. I would like to pick up on
    Mr. Grothman's line of questioning. And let me preface by, I
    spent the majority of my adult life managing sources in the
    CIA. Now it's different. It was foreigners and it was overseas.
    And my question is, how do you not have a receipt for a
    payment? And let's start with you, Mr. Patterson.
        Mr. Patterson. So the issues--and I don't have a full
    understanding of the actual, the missing receipts for payments.
    I think it was the accounting. I don't know if it was actually
    missing receipts, but the accounting that they were able to
    look at, I would like to follow up, certainly, with my
    counterpart to come across that. It shouldn't be possible. The
    question is, is it physically a missing form? I don't believe
    that it would be possible to----
        Mr. Hurd. Mr. Horowitz, do you have any perspective on
    that?
        Mr. Horowitz. Yeah, I think from our standpoint, it was
    missing data, missing information that we couldn't confirm
    because of the absence of the document. Doesn't mean the
    document wasn't, perhaps, created earlier and lost, but we
    don't know--I think it's fair to say the challenge we had in
    working through the system and understanding what was missing
    and how did we--how do we learn what is going on here.
        Mr. Hurd. So do you, Mr. Horowitz, do you feel that within
    the DEA, that there is a clearly-established criteria to be
    used to determine whether money being paid to a confidential
    source was valuable or worth it?
        Mr. Horowitz. No. I don't think that that was going on,
    that that was one of the issues, that there were success
    payments for successes, but beyond that, there weren't
    evaluations going on of how many misses there were, how many
    times were packages opened, how many times were people pulled
    out of line that resulted in----
        Mr. Hurd. And when you use those examples, pulled out of
    line, going into a package, is that because we are talking
    specifically about limited use, or is this the payments to
    people that are trying to infiltrate some of these gangs and
    these criminal organizations?
        Mr. Horowitz. Many of these issues we found were in the
    limited-use category. So that's where we saw, over and over
    again, our area of concern on this issue, in particular.
    Separately, the subsources may have been in a different
    category, much more like what you're suggesting, which were
    more traditional criminal use of those individuals that present
    a slightly different issue.
        Mr. Hurd. Mr. Patterson, do you feel that DEA has a clear
    criteria on what is a successful use of a limited-use
    confidential source?
        Mr. Patterson. Just specific to limited use?
        Mr. Hurd. Yeah.
        Mr. Patterson. So look, there's a number of issues related
    to limited use. One is, obviously, direction. That is a
    definition that we are working with our chief counsel to get
    out to the employees. It has got to be a one-way flow of
    information. We have made our employees aware of that, but
    again, we need to get the policy correct on this.
        In terms of payments to the individuals, you know, that is
    directed, and although limited use requires a lower level of
    oversight for establishment, those now informants fall under
    the same policy as all informants.
        Mr. Hurd. So the DEA officer that is involved in the
    recruitment of limited source, are promotions based on the
    number of sources you recruit, whether it's any limited use or
    not?
        Mr. Patterson. No, sir.
        Mr. Hurd. What is the criteria for moving up the chain?
        Mr. Patterson. For promotion within DEA?
        Mr. Hurd. Yes.
        Mr. Patterson. Promotion is, obviously, based on
    performance and depending at what levels that they are done,
    there is also additional testing that's done.
        Mr. Hurd. So is it number of arrests, the amount of dope
    you get off the streets, or are there any issues like----
        Mr. Patterson. No. I mean, the current administrator has
    made it very clear that we do not use a metrics-type system for
    promotions; that our mandate is to essentially work the biggest
    and best cases.
        Mr. Hurd. So how does headquarters evaluate the approval
    process to go forward with the recruitment of a source, whether
    it's limited or not?
        Mr. Patterson. How does headquarters validate that?
        Mr. Hurd. Uh-huh.
        Mr. Patterson. So in the field when they essentially
    complete the--not the request, the establishment paperwork,
    that is reviewed at the headquarters level and then is assigned
    a number back to the field.
        Mr. Hurd. And are these criterias not used? What criteria
    are being used to determine whether money should be spent in
    order to run that source?
        Mr. Patterson. So that is, again, administered at the field
    level up to a certain dollar amount. And, again, as I started
    to explain on the limited use, although there is less oversight
    in the establishments of these individuals, the financial
    pieces of this all have the same regulations.
        Mr. Hurd. Right.
        Mr. Patterson. There are certain approval levels that are
    able to happen in the field. And once they exceed a certain
    amount----
        Mr. Hurd. And there's not--so the problem, Mr. Horowitz,
    that you're seeing is that there is not a connection between
    when there's a payment back to what the criteria that was
    originally used to authorize that payment?
        Mr. Horowitz. I think we have a couple of concerns based on
    what we see is that there is really no measurement beyond, did
    you make a seizure, and did you get an award, beyond--or are
    you sending us leads that never panned out? Right? Does this
    informant send us 1,000 leads and one pans out, or 10 leads and
    10 pan out.
        Mr. Hurd. Yeah.
        Mr. Horowitz. Another part of it is, we are concerned that
    when they did their--in the past, at least when they did
    reviews of long-term sources, when they had committees get
    together to look at these individuals who got large dollar
    amounts, or were in place for long periods of time, we saw that
    they were spending less than a minute per source per review,
    which, obviously, is not a serious review of that.
        Now, we've seen changes that have occurred since we issued
    our audit in the last 2 years in that regard. That was several
    years ago. But that was indicative, I think, of a significant
    concern for precisely the reason you indicated.
        Mr. Hurd. Thank you, Mr. Chairman.
        Chairman Chaffetz. Thank you. And to now recognize the
    gentleman from Georgia, Mr. Carter.
        Ms. Carter. Thank you, Mr. Chairman, and thank both of you
    for being here. Gentlemen, I'm a lifelong healthcare
    professional, a pharmacist. I've practiced pharmacy for over 30
    years, and have owned and operated my own pharmacy. So I know
    about the laws and the regulations that pharmacists must comply
    with in order to handle or dispense controlled substances. And
    this includes licensing and it includes inspections of
    pharmacies that are conducted by the DEA.
        Without a proper license, and without a DEA number, a
    pharmacist can't practice. We can't dispense controlled
    substances. And I certainly understand that and certainly have
    experienced that.
        Mr. Horowitz, I'll start with you. Would you agree that
    there's a potential for a conflict of interest whenever there's
    a licensee of the DEA, such as a pharmacist?
        Mr. Horowitz. Absolutely.
        Ms. Carter. And also, acting as a confidential source for
    that same agency?
        Mr. Horowitz. That's correct.
        Ms. Carter. You would agree that's a conflict of interest?
        Mr. Horowitz. And in fact, it presents certainly a
    potential for that conflict, and in fact, that was one of the
    concerns we found in our 2015 audit, that DEA didn't have those
    procedures in place. And, actually, going back 4 years to our
    Fast and Furious report, we made that precise point with ATF
    because they were using FFLs as sources of information and
    presenting in a different context, but precisely the same issue
    that you've identified, Congressman.
        Ms. Carter. I can tell you, it puts us in a precarious
    position. For someone who controls my license, for someone who,
    you know, controls my practice, and here I am, and all of a
    sudden I'm a confidential source, that puts me in a very sticky
    situation. And as you pointed out, there was an audit in July
    of 2015 that the DEA did not have the proper controls and
    policies in place to ensure that there was no conflict of
    interest when a license holder, such as a pharmacist, was also
    a confidential source. The DOJ previously issued guidance to
    address this issue. Is that right?
        Mr. Horowitz. That's correct.
        Ms. Carter. Okay. Is--and it was after the ATF, as you
    mentioned, in Fast and Furious that was after that happened. So
    has the DEA used the guidance issued by DOJ to develop policies
    and help control this potential conflict of interest?
        Mr. Horowitz. Our understanding is that since our report,
    they have now moved forward with those procedures.
        Ms. Carter. Did you see the recommendations, Mr. Horowitz?
    Did you think that they were applicable and would offer, for
    lack of a better term, protection to the licensee?
        Mr. Horowitz. Absolutely. It's particularly important that
    that be done for the reasons you indicated and what we saw
    before with ATF as well.
        Ms. Carter. Okay. Also, it's my understanding in this audit
    that DEA didn't have a special category to designate a
    confidential source to have a dual relationship as both a
    source and a licensee. Is that important? Is it important to
    have a designation like that?
        Mr. Horowitz. It's critical because you want to make sure
    that supervisors all along the chain of command, including at
    headquarters, have the ability to make that assessment as they
    are first approving the source, and then secondly, as they are
    reviewing the use of the source. In both ways, you need that
    information or else you may not know who falls into that
    category.
        Ms. Carter. Right. So Mr. Patterson, can you tell me the
    status of these concerns that were raised by the July 2015
    audit of licensees, such as pharmacists acting as confidential
    sources?
        Mr. Patterson. As Mr. Horowitz just stated, so we have both
    issues addressed and placed in policy. I would be more than
    happy to get that policy to you if you'd like to look at it
    yourself.
        Ms. Carter. Has it been implemented?
        Mr. Patterson. It has been, sir.
        Ms. Carter. Okay. I would--if you don't mind, if you could
    get that to us. I hope you all can appreciate the precarious
    position this puts us in. Let me tell you, you know, the
    pharmacies that my wife now owns, since I became a Member of
    Congress, you know, we don't--we love the DEA. And we love
    seeing the DEA, but we'd just as soon them not be in our
    stores, if you understand what I'm saying.
        I mean, not that we have anything to hide. We don't. But at
    the same time, we have a great respect for someone who holds
    our license, and it is just a difficult situation if we are
    going to be put in that situation to be a confidential source
    like that. I mean, and we want to help. We want to do
    everything we can to cooperate. And, you know, more so than
    anyone, we want the bad guys caught too. So, but, it's just a
    very precarious situation, as I said before.
        Just very briefly, if you could, just how can the policy be
    enforced? Can it be enforced?
        Mr. Patterson. The policies?
        Ms. Carter. The policies.
        Mr. Patterson. Yes, certainly, in terms of our oversight
    internally to make sure that it's being applied appropriately,
    absolutely. And we'll do that with our Office of Diversion
    Control and with our operations manager to make sure that's the
    case.
        Ms. Carter. Okay. Well, thank you again. Thank you both for
    this. And if you could get me those policies, I'd appreciate it
    very much.
        Mr. Patterson. Absolutely.
        Chairman Chaffetz. I thank the gentleman. I have a few
    follow-up questions as we conclude here.
        And Mr. Patterson, I appreciate the commitment that you're
    making on behalf of the DEA to be cooperative.
        On June 22 of this year in the Senate Judiciary Committee,
    Chairman Grassley, who has done exceptional work on this topic,
    he asked, when will the DEA confidential source policy be fully
    implemented? And he asked a few follow-ups directly on that
    same question.
        Mr. Rosenberg said that it had been finalized. I'm quoting,
    ``It has been finalized. It's been approved by the Department.
    I'm more than happy to provide a copy to this committee and to
    your staff, sir,'' end quote. He went on and extrapolated on
    this. But my understanding from Senator Grassley is they have
    not been given a copy of that policy and we have not been able
    to see a copy of that policy.
        Is that something you are or are not able to provide to the
    committee?
        Mr. Patterson. Yes, sir. I just asked--I mean, we have done
    in-camera reviews with staff and I don't know what staff, but
    I'd be happy to let you know who it's been done with and follow
    up with you on that piece of information.
        Chairman Chaffetz. And why was the justification for not
    allowing us, giving us a copy of that policy?
        Mr. Patterson. That I don't know, sir, but I'd be happy to
    find out what the justification is and also get that.
        Chairman Chaffetz. What do you believe Congress should not
    be able to see?
        Mr. Patterson. I don't--I don't have any idea why that
    would have been done. So I'd like to find out the proper answer
    to give to you as opposed to guessing.
        Chairman Chaffetz. When you have the acting director
    committing to the Senate Judiciary chairman that he can have
    it, and then he's not given it, you see where that's a problem?
        Mr. Patterson. Understood.
        Chairman Chaffetz. Do you see--understand why I'm going to
    have a problem if you don't give it to us?
        Mr. Patterson. Understood.
        Chairman Chaffetz. Have you seen it, Mr. Horowitz?
        Mr. Horowitz. One second. I have not personally seen it. We
    have seen it.
        Chairman Chaffetz. Okay. So you give it to the inspector
    general. That's good.
        Mr. Horowitz. Right.
        Chairman Chaffetz. When will I--when will you get me that
    answer?
        Mr. Patterson. I will get you that answer as quickly as
    possible after returning to the office.
        Chairman Chaffetz. Do you understand that in camera is
    different than giving us a copy of that policy?
        Mr. Patterson. I do understand that.
        Chairman Chaffetz. And you understand we are not going to
    be satisfied with an in-camera review?
        Mr. Patterson. You are making that very clear.
        Chairman Chaffetz. Okay. Thank you.
        Mr. Horowitz, give us perspective here. You know, within
    the Department of Justice, there are other law enforcement
    agencies who do deal with confidential informants; the FBI, for
    instance. Are there totally different policies, procedures and
    implementations between these agencies, even though they are
    all within the Department of Justice? And why are they not
    taking best practices and making them uniform across agencies?
        Mr. Horowitz. That's an excellent question, Mr. Chairman,
    and one----
        Chairman Chaffetz. Just a little closer.
        Mr. Horowitz. Sorry. That's an excellent question and one
    that we have asked repeatedly, because you're right. If you
    look at the three components that deal the most with informants
    which is FBI, DEA and ATF, they have varying policies, even
    though there are the attorney general guidelines on the use of
    informants, and in just the 4-1/2 years I have been the IG, we
    have now issued two reports finding that two of those three
    components were not in compliance with the attorney general
    guidelines.
        As you well know, 4 years ago when the Fast and Furious
    report, we made that finding with regard to ATF. And in last
    year's July 2015 report, we made that clear as to DEA as to the
    categories we were looking at.
        And, obviously, that's of concern, and while there should
    be supplemental and differences in the policies given some of
    the unique uses of informants for each of those agencies, for
    example, the FBI has a very robust intelligence program, and
    other needs. The DEA, obviously, has much more foreign uses and
    international reach and other issues. ATF, obviously, again,
    many localized issues. So each should be particularized. But it
    has been a question we have and will continue to raise exactly
    what you just indicated, which is why aren't there consistent
    overarching principles and procedures and policies all across
    the multiple components?
        Now, we are seeing that in response to our reports, our
    first Fast and Furious report, the follow-up Fast and Furious
    report, the two audits we have done here. We are seeing more of
    a centralization, but that is something that we continue to
    push forward, actually not only in this area, but in several
    other areas as well.
        Chairman Chaffetz. Yeah. And I guess that's part of the
    point, Mr. Patterson, to carry back to the DEA as a whole. This
    is not a start-from-scratch project, you know, this is--you are
    not necessarily blazing new trails and ground that has already
    been tilled here. You can actually, you know, learn. And
    somehow, we need the Department of Justice to kind of
    coordinate. That's why they are all within one--we have one
    attorney general who can say, look, here are--you can solve 80,
    90 percent of this with best practices and these are the tools
    and the mechanisms and the software, quite frankly, in order to
    track and do these types of things. And I don't expect you to
    respond to that other than to say it would be encouraging to
    know that we are getting some economies within the Department
    of Justice.
        Mr. Patterson. If I could actually respond to it.
        Chairman Chaffetz. Sure, sure.
        Mr. Patterson. I mean, and hopefully this will be a piece
    of good news. We are actively working with both the Bureau and
    other components right now to look at those best practices,
    especially when it comes to subsources and other categories
    that we have struggled with.
        Chairman Chaffetz. Okay. Great.
        Mr. Patterson. So that process is already underway.
        Chairman Chaffetz. Very good. Let's go back to the $1.5
    million, I believe the number is, that was paid to TSA
    employees and Amtrak. I don't know if it's employees, or
    employee. Let's first go to Amtrak. What were we paying off--
    what were we getting for that money? I believe it was $800-plus
    thousand went to one Amtrak employee over a course of 20 years.
    What did we get for that? What was he giving you or she giving
    you on a monthly, daily, whatever basis it was?
        Mr. Patterson. The individual was providing information
    related to suspicious travel, last-minute purchases of tickets,
    other things that would raise to that level over the course of
    that 20 years.
        Chairman Chaffetz. But why do you have to pay for that to
    an individual? Why not go to Amtrak and say, look----
        Mr. Patterson. So I don't have the good answer for why this
    started back in the 1990s. What I can tell you is that this
    practice has been stopped. We have clear guidance that this is
    not permitted for both quasi-government, and government
    employees; that there is no payments to be made if they are
    performing as an individual providing information that they
    should be doing in their daily job.
        So it is fixed moving forward. I don't feel like I have a
    satisfactory answer. I know we have engaged with Amtrak to try
    and acquire this information. That is still a work in progress.
    You know, I don't think it's as simple as, you know, having
    access to information. I think it's knowing more about that,
    and like I said, we are working on that currently with Amtrak.
        Chairman Chaffetz. Let's go to the TSA. What--how many TSA
    employees were you paying off?
        Mr. Patterson. I believe it--I think it was a total of
    eight had been established at some point. I think two or three
    of those individuals ultimately received payments. I know there
    is an ongoing investigation by the OIG, which I don't believe
    we can comment on.
        Chairman Chaffetz. That's a significant amount of money to
    TSA, right? How much money went out the door to TSA employees?
        Mr. Patterson. I think it was--I don't know the exact
    figure, sir. It's in the $50,000 to $100,000 range, I believe.
        Chairman Chaffetz. Inspector General Horowitz, can you
    illuminate this anymore?
        Mr. Horowitz. I'm just looking for the precise number.
        Chairman Chaffetz. Sir, I guess staff is telling me the
    number is about $84,000 paid to three different people.
        Mr. Horowitz. Yeah.
        Chairman Chaffetz. What were the TSA employees providing to
    DEA, surreptitiously?
        Mr. Patterson. I believe it was information related to
    seizures of currency.
        Chairman Chaffetz. Seizures of currency?
        Mr. Patterson. Information related to passengers. These
    were screeners with TSA, not law enforcement personnel. That
    was the weakness in our policy, quite frankly, is it dealt with
    law enforcement individuals? And I said, again, that that
    practice has been stopped and it's clear in policy.
        Chairman Chaffetz. Okay. So since it's stopped, we can talk
    about what happened. So when they were finding currency, they
    would go to the DEA and say, hey, I found some currency. Give
    me some cash?
        Mr. Horowitz. My understanding, they were being asked if
    they saw currency as you went through an x-ray, to tip the DEA
    to that, so they could follow up on it afterwards. And of
    course, that's a potentially--depending on how it's arranged--
    wholly inappropriate use of the entire screening system that's
    been put in place in this country and raises, again, Fourth
    Amendment issues as to who they worked for, did those
    individuals, were they incentivized through the payments to be
    DEA, arms of DEA and be supporting criminal investigations, or
    were they there in a public safety role to protect the flying
    public?
        Chairman Chaffetz. So where is this?
        Mr. Patterson. The reason why I hesitate is because I know
    there is an ongoing OIG investigation and that's why I didn't,
    you know, I'm not familiar with their investigation. We'll
    obviously look at any administrative impacts that come at the
    completion of that investigation.
        Chairman Chaffetz. So is it fair to say, Inspector General,
    that there's an ongoing OIG investigation into this?
        Mr. Horowitz. We are continuing to review that and through
    our investigations.
        Chairman Chaffetz. And is the inspector general for
    Homeland Security involved in that, or is this just coming
    through DOJ?
        Mr. Horowitz. He is aware of that and we have been in
    communication, as have our teams on all of these issues.
        Chairman Chaffetz. So I'm trying to figure out who did
    something wrong and whose going to be held accountable for
    that. And what were the implications?
        Mr. Horowitz. Well we, you know, we certainly, for example,
    on the Amtrak matter, we worked closely with the Amtrak OIG to
    move forward and look at that matter. And we are doing the same
    on the Homeland Security side with our counterpart at OIG
    there. And will hold accountable, as we always do, our--the
    individuals that we find engaged in wrongdoing, whether
    criminal or noncriminal. Criminal, obviously, goes through the
    judicial process, administrative noncriminal, we would report
    back to DEA for their handling on administrative matters.
        Chairman Chaffetz. To Mr. Patterson, I want to ask you
    here. The Atlanta Journal Constitution had an article by Alan
    Judd of November 28th, ``Sex Drugs, and the DEA. Atlanta Agent
    Accused of Improper Conduct.'' An Atlanta-based supervisor
    allegedly having a sexual relationship with two DEA
    confidential informants, and arranged for the agency to pay one
    of them some $212,000. Senator Grassley, again, has been
    leading out on this, and hats off to his good work and him and
    his staff.
        Where is this investigation and what's being done about
    this?
        Mr. Patterson. Again, this was an investigation in which we
    had gone to OIG and it had come back to DEA. We began the
    investigation. As we did, we found issues that rose to
    criminal, potential criminal charges. We went back to OIG. They
    had been handling that part. I will tell you though, sir, and
    outside of that and I'll leave that to Mr. Horowitz to discuss
    if he can, we have held managers accountable as well as people
    below them in this particular instance.
        Chairman Chaffetz. You've done what with them?
        Mr. Patterson. We have investigated and held managers
    accountable.
        Chairman Chaffetz. When you said held them accountable, how
    did you hold them accountable?
        Mr. Patterson. Well, ultimately they resigned, but they
    were being investigated by the Office of Professional
    Responsibility for their role in oversight of----
        Chairman Chaffetz. How many people resigned?
        Mr. Patterson. --the individual. We had an agent task force
    officer return to his department, and then a grade 15 retire
    from DEA.
        Chairman Chaffetz. So he gets full benefits. He's not
    prosecuted. So you just let him go? You didn't--no prosecution?
        Mr. Patterson. It's not criminal in nature for him. I will
    also say, one of the things, the employee was put out on
    suspension without pay during the course of the investigation.
        Chairman Chaffetz. How long had he worked for the DEA, if
    you had to guess?
        Mr. Patterson. Yeah, I think it's about 15 years. But
    again, I can find that out for you.
        Chairman Chaffetz. Well, look, again, this is a tough thing
    because the men and women--9,000-plus employees, did I get that
    right--they do a good, hard, decent patriotic job. They put
    their lives on the line, and we are immensely grateful. But you
    do have bad apples as we do in every department and agency,
    quite frankly. The bigger the agency, this is going to happen.
    I mean, just human nature. The odds are that the bigger the
    department or agency, you are going to have more and more bad
    apples. It's just the reality of it. But it is important that--
    I feel very strongly and passionately of the idea that you need
    to hold people accountable and you do--they do need to have
    consequences. And I worry that it is all too often in the
    Federal Government, they just walk away, you know, go ahead and
    retire, get your full benefits. Pat you on the back on the way
    out when you have done something really dramatically wrong. And
    in some cases, it is criminal. Other parts, it's not. But I
    want people to be held accountable and I want the other 9,000
    people who do it by the book and do do it right, to know that
    when somebody does step over the line, there are consequences.
    And not just, Hey, you know, go ahead and retire, and, you
    know, move on.
        That's--that seems to fall far short of the proper justice
    that should be required. So listen, we appreciate, again,
    please carry back the--how much we do appreciate the DEA and
    the tough work that they do to the inspector general. You have
    got a wonderful staff. They do hard work over in this case,
    close to 3 years, but let's also make sure that, you know, this
    was done 10 years ago. And we didn't learn the lessons and
    implement that. I don't want to come back again only to find
    out that with a change of administration, or a change of
    personnel, that this gets forgotten about. And I think that's
    incumbent upon us to continue to ask you about it, and make
    sure that the progress continues.
        But it's also just the best practice to make sure that the
    future generation of people that are working at the DEA have
    the proper support, the resources, the policies to protect
    themselves, but also to make sure that the agencies, be the
    premier agency that we need it to be.
        So, again, to Inspector General, please know how much we
    appreciate your staff. And I know they beat their head on
    frustration trying to get things. But I am very pleased to
    hear, Mr. Patterson, about the progress and cooperation. That's
    very, very encouraging, and very much appreciated. So we thank
    you both for the work and this hearing now stands adjourned.
        [Whereupon, at 11:48 a.m., the committee was adjourned.]

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