[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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              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

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                                                                   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:]
    
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    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:]
    
    
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    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.]


                                APPENDIX

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               Material Submitted for the Hearing Record





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