[Congressional Record (Bound Edition), Volume 151 (2005), Part 9]
[Senate]
[Pages 11710-11712]
[From the U.S. Government Publishing Office, www.gpo.gov]




        ADMINISTRATIVE SUBPOENAS AND PATRIOT ACT REAUTHORIZATION

  Mr. KYL. Mr. President, I understand that the senior Senator from 
Oregon, Mr. Wyden, spoke yesterday regarding the reauthorization of the 
USA PATRIOT Act. I look forward to the Senate acting later this year on 
PATRIOT Act reauthorization, but today I just want to address one 
aspect of the Senator's speech, his opposition to administrative 
subpoena power.
  In his speech, the Senator argued that any reauthorization should not 
extend those subpoena powers to FBI terrorism investigators. He 
correctly noted that Intelligence Committee Chairman Roberts has held 
hearings about extending this authority, which is common within the 
Government, to FBI agents investigating terrorism. I was happy to see 
Chairman Roberts do this because last year I cosponsored S. 2555, the 
Judicially Enforceable Terrorism Subpoenas Act. On June 22, 2004, I 
chaired a hearing in the Judiciary Subcommittee on Terrorism, 
Technology, and Homeland Security that examined this subpoena power and 
heard testimony regarding how the subpoenas work and how the government 
protects civil liberties when using them.
  One of the things that struck me as I learned about administrative 
subpoena power was how widespread it is in our Government and how 
unremarkable a law enforcement tool it really is. It was for that 
reason that I asked the Senate Republican Policy Committee, which I 
chair, to examine this issue in greater detail, to study the 
constitutional and civil liberties questions that critics have raised, 
and to identify the other contexts where the Federal Government has 
this power. The resulting report was consistent with my previous 
research and the testimony that I had heard during my subcommittee 
hearings. We give this subpoena power to postal investigators and Small 
Business Administration bank loan auditors and IRS agents, and we do 
not have a problem with Government abuse or deprivation of civil 
liberties. Shouldn't we also give it to those who are charged with 
rooting out terrorism before it strikes our neighborhoods?
  I look forward to the upcoming debate on PATRIOT Act reauthorization, 
and I certainly intend to support it. At the same time, I commend 
Chairman Roberts for his efforts and hope that we will have the 
opportunity to ensure that our FBI terrorism investigators are not 
hamstrung as they continue to work to protect our Nation.
  I ask unanimous consent that this policy paper, dated September 9, 
2004, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

    Should Postal Inspectors Have More Power Than Federal Terrorism 
                             Investigators?


                              Introduction

       Congress is undermining federal terrorism investigations by 
     failing to provide terrorism investigators the tools that are 
     commonly available to others who enforce the law. In 
     particular, in the three years after September 11th, Congress 
     has not updated the law to provide terrorism investigators 
     with administrative subpoena authority. Such authority is a 
     perfectly constitutional and efficient means to gather 
     information about terrorist suspects and their activities 
     from third parties without necessarily alerting the suspects 
     to the investigation. Congress has granted this authority to 
     government investigators in hundreds of other contexts, few 
     of which are as compelling or life-threatening as the war on 
     terror. These include investigations relating to everything 
     from tax or Medicare fraud to labor-law violations to Small 
     Business Administration inquiries into financial crimes. 
     Indeed, Congress has even granted administrative subpoena 
     authority to postal inspectors, but not to terrorism 
     investigators.
       This deficiency in the law must be corrected immediately. 
     Postal inspectors and bank loan auditors should not have 
     stronger tools to investigate the criminal acts in their 
     jurisdictions than do those who investigate terrorist acts. 
     The Senate can remedy this deficiency by passing legislation 
     like the Judicially Enforceable Terrorism Subpoenas (JETS) 
     Act, S. 2555. The JETS Act would update the law so that the 
     FBI has the authority to issue administrative subpoenas to 
     investigate possible terrorist cells before they attack the 
     innocent. The Act would ensure more efficient and speedy 
     investigations, while also guaranteeing that criminal 
     suspects will have the same civil liberties protections that 
     they do under current law.


       Terrorism Investigators' Subpoena Authority is Too Limited

       Federal investigators routinely need third-party 
     information when attempting to unravel a criminal enterprise. 
     In the context of a terrorism investigation, that information 
     could include: financial transaction records that show the 
     flow of terrorist financing; telephone records that could 
     identify other terrorist conspirators; or retail sales 
     receipts or credit card statements that could help 
     investigators uncover the plot at hand and capture the 
     suspects. When third parties holding that information decline 
     to cooperate, some form of subpoena demanding the information 
     be conveyed must be issued. The Supreme Court unanimously has 
     approved the use of subpoenas to gather information, 
     recognizing that they are necessary and wholly constitutional 
     tools in law enforcement investigations that do not offend 
     any protected civil liberties. [See unanimous decision 
     written by Justice Thurgood Marshall in SEC v. Jerry T. 
     O'Brien, Inc., 467 U.S. 735 (1984).]
       There are different kinds of subpoenas, however, and under 
     current law, the only way that a terrorism investigator 
     (typically, the FBI) can obtain that third-party information 
     is through a ``grand jury subpoena.'' If a grand jury has 
     been convened, investigators can usually obtain a grand jury 
     subpoena and get the information they need, but that process 
     takes time and is dependent on a number of factors. First, 
     investigators themselves cannot issue grand jury subpoenas; 
     instead, they must involve an assistant U.S. Attorney so that 
     he or she can issue the subpoena. This process can be 
     cumbersome, however, because assistant U.S. Attorneys are 
     burdened with their prosecutorial caseloads and are not 
     always immediately available when the investigators need the 
     subpoena. Second, a grand jury subpoena is limited by the 
     schedule of a grand jury itself, because the grand jury must 
     be ``sitting'' on the day that the subpoena demands that the 
     items or documents be returned. Grand juries do not sit at 
     all times; indeed, in smaller jurisdictions, the only 
     impaneled grand jury may meet as little as ``one to five 
     consecutive days per month.''

[[Page 11711]]

     [See United States Dept of Justice, Federal Grand Jury 
     Practice, at Sec. 1.6 (2000 ed.). For example, in Madison, 
     Wisc., the federal grand jury only meets a few days every 
     three weeks. See Clerk of the Court for the Western District 
     of Wisconsin, ``Grand Jury Service,'' revised April 15, 
     2004.]
       The following hypothetical illustrates the deficiency of 
     current law. Take the fact that Timothy McVeigh built the 
     bomb that destroyed the Oklahoma City Federal Building while 
     he was in Kansas; and take the fact that under current 
     practices, grand juries often are not sitting for 10-day 
     stretches in that state. If FBI agents had been tracking 
     McVeigh at that time and wanted information from non-
     cooperative third parties--perhaps the supplier of materials 
     used in the bomb--those agents would have been unable to move 
     quickly if forced to rely on grand jury subpoenas. McVeigh 
     could have continued his bomb-building activities, and the 
     FBI would have been powerless to gather that third-party 
     information until the grand jury returned--as many as 10 days 
     later. [Information on Kansas federal grand jury schedules 
     provided to Senate Republican Policy Committee by Department 
     of Justice. In addition, Department of Justice officials have 
     testified to another scenario: even where grand juries meet 
     more often (such as in New York City), an investigator 
     realizing she urgently needs third-party information on 
     Friday afternoon still could not get that information until 
     Monday, because the grand jury would have gone home for the 
     weekend. See Testimony of Principal Deputy Assistant Attorney 
     General Rachel Brand before the Senate Judiciary Subcommittee 
     on Terrorism, Technology and Homeland Security on June 22, 
     2004.]
       The current dependence on the availability of an assistant 
     U.S. Attorney and the schedule of a grand jury means that if 
     time is of the essence--as is often the case in terrorism 
     investigations--federal investigators, lacking the necessary 
     authority, could see a trail turn cold.


       The Better Alternative: Administrative Subpoena Authority

       The deficiency of grand jury subpoenas described above can 
     be remedied if Congress provides ``administrative subpoena'' 
     authority for specific terrorism-related contexts. Congress 
     has authorized administrative subpoenas in no fewer than 335 
     different areas of federal law, as discussed below. [See U.S. 
     Department of Justice, Office of Legal Policy, Report to 
     Congress on the Use of Administrative Subpoena Authorities by 
     Executive Branch Agencies and Entities, May 13, 2002, at p. 5 
     (hereinafter ``DOJ Report'').] Where administrative subpoena 
     authority already exists, government officials can make an 
     independent determination that the records are needed to aid 
     a pending investigation and then issue and serve the third 
     party with the subpoena. This authority allows the federal 
     investigator to obtain information quickly without being 
     forced to conform to the timing of grand jury sittings and 
     without requiring the help of an assistant U.S. Attorney. 
     And, as simply another type of subpoena, the Supreme Court 
     has made clear that it is wholly constitutional. [See Jerry 
     T. O'Brien, 467 U.S. at 747-50.]
       The advantages of updating this authority are substantial. 
     The most important advantage is speed: terrorism 
     investigations can be fast-moving, and terrorist suspects are 
     trained to move quickly when the FBI is on their trail. The 
     FBI needs the ability to request third-party information and 
     obtain it immediately, not when a grand jury convenes. 
     Moreover, this subpoena power will help with third-party 
     compliance. As Assistant Attorney General Christopher Wray 
     stated in testimony before the Senate Judiciary Committee, 
     ``Granting [the] FBI the use of [administrative subpoena 
     authority] would speed those terrorism investigations in 
     which subpoena recipients are not inclined to contest the 
     subpoena in court and are willing to comply. Avoiding delays 
     in these situations would allow agents to track and disrupt 
     terrorist activity more effectively.'' [Assistant Attorney 
     General Christopher Wray, in testimony before the Senate 
     Judiciary Committee, October 21, 2003.] Thus, Congress will 
     provide protection for a legitimate business owner who is 
     more than willing to comply with law enforcement, but who 
     would prefer to do so pursuant to a subpoena rather than 
     through an informal FBI request.


                       Constitutional Protections

       It is important to note that nothing in the administrative 
     subpoena process offends constitutionally protected civil 
     liberties, as has been repeatedly recognized by the federal 
     courts.
       First, the government cannot seek an administrative 
     subpoena unless the authorized federal investigator has found 
     the information relevant to an ongoing investigation. [See S. 
     2555, Sec. 2(a) (proposed 18 U.S.C. Sec. 2332g(a)(1)). The 
     Attorney General has the authority to delegate this power to 
     subordinates within the Department of Justice. See 28 U.S.C. 
     Sec. 510.] The executive branch--whether Republican or 
     Democrat--carefully monitors its agents to ensure that civil 
     liberties are being protected and that authorities are not 
     being abused. [See, for example, Executive Order Establishing 
     the President's Board on Safeguarding Americans' Civil 
     Liberties (August 27, 2004), detailing extensive interagency 
     oversight of civil liberties protections for Americans.]
       Second, the administrative subpoena is not self-enforcing. 
     There is no fine or penalty to the recipient if he refuses to 
     comply. Thus, if the recipient of an administrative subpoena 
     believes that the documents or items should not be turned 
     over, he can file a petition in federal court to quash the 
     subpoena, or he can simply refuse to comply with the subpoena 
     and force the government to seek a court order enforcing the 
     subpoena. And, as one federal court has emphasized, the 
     district court's ``role is not that of a mere rubber stamp.'' 
     [Wearly v. Federal Trade Comm'n, 616 F.2d 662, 665 (3rd Cir. 
     1980).] Just as a grand jury subpoena cannot be unreasonable 
     or oppressive in scope [Federal Grand Jury Practice, at 
     Sec. 5.40], an administrative subpoena must not overreach by 
     asking for irrelevant or otherwise-protected information.
       The Supreme Court has addressed the standards for enforcing 
     administrative subpoenas.
       In United States v. Powell, the Supreme Court held that an 
     administrative subpoena will be enforced where (1) the 
     investigation is ``conducted pursuant to a legitimate 
     purpose,'' (2) the subpoenaed information ``may be relevant 
     to that purpose,'' (3) the information sought is not already 
     in the government's possession, and (4) the requesting 
     agency's internal procedures have been followed. [379 U.S. 
     48, 57-58 (1964); see also EEOC v. Shell Oil, 466 U.S. 54, 73 
     n.26 (1984) (citing Powell in EEOC context and adding that 
     the request for information cannot be ``too indefinite'' or 
     made for an ``illegitimate purpose''); Jerry T. O'Brien, 467 
     U.S. at 747-48 (reaffirming Powell in context of SEC 
     administrative subpoena).] In addition, the Supreme Court has 
     stated that the recipient may challenge the subpoena on ``any 
     appropriate ground'' [Reisman v. Caplin, 375 U.S. 440, 449 
     (1964)]. which could include a privilege against self-
     incrimination, religious freedom, freedom of association, 
     attorney-client privilege, or other grounds for resisting 
     subpoenas in the grand jury context. [See cases collected in 
     Graham Hughes, Administrative Subpoenas and the Grand Jury: 
     Converging Streams of Civil and Compulsory Process, 47 Vand. 
     L. Rev. 573, 589 (1994), cited in DOJ Report, at p. 9 n.19.] 
     This ``bifurcation of power, on the one hand of the agency to 
     issue subpoenas and on the other hand of the courts to 
     enforce them, is an inherent protection against abuse of 
     subpoena power.'' [United States v. Security Bank and Trust, 
     473 F.2d 638, 641 (5th Cir. 1973).]
       Third, where the authorized agent has not specifically 
     ordered the administrative subpoena recipient not to disclose 
     the existence of the subpoena to a third party, the recipient 
     can notify the relevant individual and that individual may 
     have the right to block enforcement of the subpoena himself. 
     [In Jerry T. O'Brien, the Supreme Court noted that a ``target 
     may seek permissive intervention in an enforcement action 
     brought by the [Securities & Exchange] Commission against the 
     subpoena recipient'' or may seek to restrain enforcement of 
     the administrative subpoena. 467 U.S. at 748.] In many cases 
     the ``target'' (as opposed to the recipient) will have full 
     knowledge of the subpoena.
       However, this is not always the case; sometimes the 
     administrative subpoena authority includes a provision 
     prohibiting the recipient from discussing the subpoena with 
     anyone other than his or her attorney. Some critics have 
     argued that federal investigators should not be able to 
     gather information related to an individual without notifying 
     that individual, and that every person has an inherent right 
     to know about those investigations. [See generally Jerry T. 
     O'Brien, 467 U.S. at 749-50 (rejecting demand that SEC must 
     notify any potential defendant of existence of pending 
     administrative subpoena).] But, as the Supreme Court has 
     held, there is no constitutional requirement that the subject 
     of an investigation receive notice that the administrative 
     subpoena has been served on a third party. Justice Thurgood 
     Marshall wrote for a unanimous Court that a blanket rule 
     requiring notification to all individuals would set an unwise 
     standard. [Id. at 749-51. The issue in that case was the 
     nondisclosure provisions of the administrative subpoena 
     authority used by the SEC when investigating securities 
     fraud.] He explained that investigators use administrative 
     subpoenas to investigate suspicious activities without any 
     prior government knowledge of who the wrongdoers are, so 
     requiring notice often would be impossible. [Id. at 749.] 
     Moreover, granting notice to individuals being investigated 
     would ``have the effect of laying bare the state of the 
     [government's] knowledge and intentions midway through 
     investigations'' and would ``significantly hamper'' law 
     enforcement. [Id. at 750 n.23.] Providing notice to the 
     potential target would ``enable an unscrupulous target to 
     destroy or alter documents, intimidate witnesses,'' or 
     otherwise obstruct the investigation. [Id. at 750.] The Court 
     further emphasized that where ``speed in locating and halting 
     violations of the law is so important,'' it would be 
     foolhardy to provide notice of the government's 
     administrative subpoenas. [Id. at 751.]


    most government agencies have administrative subpoena authority

       Given these extensive constitutional protections, it is 
     unsurprising that Congress has

[[Page 11712]]

     extended administrative subpoena authority so widely. Current 
     provisions of federal law grant this authority to most 
     government departments and agencies. [DOJ Report, at p. 5. 
     See appendices A-C to DOJ Report that describe and provide 
     the legal authorization for each of these administrative 
     subpoena powers.] These authorities are not restricted to 
     high-profile agencies conducting life-or-death 
     investigations. To the contrary, Congress has granted 
     administrative subpoena authority in far less important 
     contexts. For example, 18 US.C. Sec. 3061 authorizes postal 
     inspectors to issue administrative subpoenas when 
     investigating any ``criminal matters related to the Postal 
     Service and the mails.'' One can hardly contend that federal 
     investigators should be able to issue administrative 
     subpoenas to investigate Mohammed Atta if they suspect he 
     broke into a mailbox but should not have the same authority 
     if they suspect he is plotting to fly airplanes into 
     buildings.
       It is not just postal inspectors who have more powerful 
     investigative tools than terrorism investigators. Congress 
     has granted administrative subpoena authorities for a wide 
     variety of other criminal investigations. A partial list 
     follows:
       Small Business Administration investigations of criminal 
     activities under the Small Business Investment Act, such as 
     embezzlement and fraud. [Congress granted administrative 
     subpoena authority to the Small Business Administration 
     through section 310 of the Small Business Investment Act of 
     1958. Delegation to investigators and other officials is 
     authorized by 15 U.S.C. Sec. 634(b). Relevant criminal 
     provisions also include the offer of loan or gratuity to bank 
     examiner (18 U.S.C. Sec. 212), acceptance of a loan or 
     gratuity by bank examiner (18 U.S.C. Sec. 213), and receipt 
     of commissions or gifts for procuring loans (18 U.S.C. 
     Sec. 215).]
       Internal Revenue Service investigations of such crimes as 
     tax evasion. [Congress granted administrative subpoena 
     authority to the Small Business Administration through 
     section 310 of the Small Business Investment Act of 1958. 
     Delegation to investigators and other officials is authorized 
     by 15 U.S.C. Sec. 634(b). Relevant criminal provisions also 
     include the offer of loan or gratuity to bank examiner (18 
     U.S.C. Sec. 212), acceptance of a loan or gratuity by bank 
     examiner (18 U.S.C. Sec. 213), and receipt of commissions or 
     gifts for procuring loans (18 U.S.C. Sec. 215).]
       The Bureau of Immigration and Customs Enforcement 
     investigations of violations of immigration law. [See 8 
     U.S.C. Sec. 1225(d)(4) (granting administrative subpoena 
     power to ``any immigration officer'' seeking to enforce the 
     Immigration and Naturalization Act).]
       Federal Communications Commission investigations of 
     criminal activities, including obscene, harassing, and 
     wrongful use of telecommunications facilities. [See 47 U.S.C. 
     409(e) (granting subpoena authority to FCC); 47 U.S.C. 
     Sec. 155(c)(1) (granting broad delegation power so that 
     investigators and other officials can issue administrative 
     subpoenas); 47 U.S.C. Sec. 223 (identifying criminal 
     provision for use of telecommunications system to harass).]
       Nuclear Regulatory Commission investigations of criminal 
     activities under the Atomic Energy Act. [See 42 U.S.C. 
     Sec. 220l(c) (providing subpoena authority to Nuclear 
     Regulatory Commission); 42 U.S.C. Sec. 2201(n) (empowering 
     the Commission to delegate authority to General Manager or 
     ``other officers'' of the Commission).]
       Department of Labor investigations of criminal activities 
     under the Employee Retirement Income Security Act (ERISA). 
     [See 29 U.S.C. Sec. 1134(c) (authorizing administrative 
     subpoenas); Labor Secretary's Order 1-87 (April 13, 1987) 
     (allowing for delegation of administrative subpoena authority 
     to regional directors).]
       Criminal investigations under the Export Administration 
     Act, such as the dissemination or discussion of export-
     controlled information to foreign nationals or 
     representatives of a foreign entity, without first obtaining 
     approval or license. [See 50 App. U.S.C. Sec. 2411 (granting 
     administrative subpoena authority for criminal 
     investigations).]
       Corporation of Foreign Security Holders investigations of 
     criminal activities relating to securities laws. [See 15 
     U.S.C. Sec. 77t(b) (granting administrative subpoena 
     authority in pursuit of criminal investigations).]
       Department of Justice investigations into health care fraud 
     [See 18 U.S.C. Sec. 3486(a)(1)(A)(i)(I) (granting 
     administrative subpoena authority).] and any offense 
     involving the sexual exploitation or abuse of children. [See 
     18 U.S.C. Sec. 3486(a) (granting administrative subpoena 
     authority).]
       Moreover, Congress has authorized the use of administrative 
     subpoenas in a great number of purely civil and regulatory 
     contexts--where the stakes to the public are even lower than 
     in the criminal contexts above. Those include enforcement in 
     major regulatory areas such as securities and antitrust, but 
     also enforcement for laws such as the Farm Credit Act, the 
     Shore Protection Act, the Land Remote Sensing Policy Act, and 
     the Federal Credit Union Act. [DOJ Report, App. A1 & A2.]
       Nor are these authorities dormant. The Department of 
     Justice reports, for example, that federal investigators in 
     2001 issued more than 2,100 administrative subpoenas in 
     connection with investigations to combat health care fraud, 
     arid more than 1,800 administrative subpoenas in child 
     exploitation investigations. [DOJ Report, at p. 41.] These 
     authorities are common and pervasive in government--just not 
     where it arguably counts most, in terrorism investigations.


       s. 2555 would update the administrative subpoena authority

       S. 2555, the Judicially Enforceable Terrorism Subpoenas Act 
     of 2004 (the ``JETS Act''), would enable terrorism 
     investigators to subpoena documents and records in any 
     investigation concerning a federal crime of terrorism--
     whether before or after an incident. As is customary with 
     administrative subpoena authorities, the recipient of a JET 
     subpoena could petition a federal district court to modify or 
     quash the subpoena. Conversely, if the JET subpoena recipient 
     simply refused to comply, the Department of Justice would 
     have to petition a federal district court to enforce the 
     subpoena. In each case, civil liberties would be respected, 
     just as they are in the typical administrative subpoena 
     process discussed above.
       The JETS Act also would allow the Department of Justice to 
     temporarily bar the recipient of an administrative subpoena 
     from disclosing to anyone other than his lawyer that he has 
     received it, therefore protecting the integrity of the 
     investigation. However, the bill imposes certain safeguards 
     on this non-disclosure provision: disclosure would be 
     prohibited only if the Attorney General certifies that 
     ``there may result a danger to the national security of the 
     United States'' if any other person were told of the 
     subpoena's existence. [S. 2555, Sec. 2(a) (proposed 18 U.S.C. 
     Sec. 2332g(c)).] Moreover, the JET subpoena recipient would 
     have the right to go to court to challenge the nondisclosure 
     order, and the Act would protect the recipient from any civil 
     liability that might otherwise result from his good-faith 
     compliance with such a subpoena.
       Given the protections for civil liberties built into the 
     authority and its widespread availability in other contexts, 
     there is little excuse for failing to extend it to the FBI 
     agents who are tracking down terrorists among us.


                               Conclusion

       Congress is hamstringing law enforcement in the war on 
     terror in failing to provide a proven tool--administrative 
     subpoena authority--for immediate use for the common good. 
     Federal investigators should have the same tools available to 
     fight terrorism as do investigators of mail theft, Small 
     Business Administration loan fraud, income-tax evasion, and 
     employee-pension violations. S. 2555 provides a means to 
     update the law and accomplish that worthy goal.

                          ____________________