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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 

( 

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

http://www.house.gov/reform 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Iowa 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DESAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

JENNIFER HEMINGWAY, Staff Director 

ANDREW DOCKHAM, General Counsel 

SEAN BREBBIA, Senior Counsel 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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C O N T E N T S 

Page 

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

WITNESSES 

Mr. Robert W. Patterson, Chief Inspector, Assistant Administrator, Drug 

Enforcement Administration, U.S. Department of Justice 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 7 

The Hon. Michael E. Horowitz, Inspector General, U.S. Department of Justice 

Oral Statement ................................................................................................. 12 

Written Statement ............................................................................................ 14 

APPENDIX 

Ranking Member Elijah E. Cummings Statement ............................................... 50 

Representative Michelle Lujan Grisham Statement ............................................ 52 


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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 sevVerDate Nov 24 2008 13:05 Jul 21, 2017 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\26172.TXT APRIL

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eral 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 


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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 


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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 


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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 


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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. 


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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? 


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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 


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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. 


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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. 


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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. 


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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. 


KING-6430 with DISTILLER
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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 


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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 


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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 longterm 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 comVerDate Nov 24 2008 13:05 Jul 21, 2017 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 H:\26172.TXT APRIL

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plying 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 longterm 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. 


KING-6430 with DISTILLER
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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 funcVerDate Nov 24 2008 13:05 Jul 21, 2017 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 H:\26172.TXT APRIL

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tioning 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. 


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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 largescale 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 


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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 


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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 limiteduse 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? 


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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? 


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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 


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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. 


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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. 


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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 longterm sources, when they had committees get together to look at 


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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. 


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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 followup questions as we conclude here. 

And Mr. Patterson, I appreciate the commitment that you’re 

making on behalf of the DEA to be cooperative. 


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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 incamera 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 


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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. 


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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 enforceVerDate Nov 24 2008 13:05 Jul 21, 2017 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 H:\26172.TXT APRIL

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ment 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, potenVerDate Nov 24 2008 13:05 Jul 21, 2017 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 H:\26172.TXT APRIL

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tial 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. 


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And I think that’s incumbent upon us to continue to ask you about 

it, and make sure that the progress continues. 

But it’s also just the best practice to make sure that the future 

generation of people that are working at the DEA have the proper 

support, the resources, the policies to protect themselves, but also 

to make sure that the agencies, be the premier agency that we 

need it to be. 

So, again, to Inspector General, please know how much we appreciate your staff. And I know they beat their head on frustration 

trying to get things. But I am very pleased to hear, Mr. Patterson, 

about the progress and cooperation. That’s very, very encouraging, 

and very much appreciated. So we thank you both for the work and 

this hearing now stands adjourned. 

[Whereupon, at 11:48 a.m., the committee was adjourned.] 


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