U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

92–134 PDF 2005

S. HRG. 108–772

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

ON

H.R. 4754/S. 2809

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND FOR 

OTHER PURPOSES

Department of Commerce 

Department of Justice 

Department of State 

Nondepartmental Witnesses

Printed for the use of the Committee on Appropriations

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate
(II)

COMMITTEE ON APPROPRIATIONS 

TED STEVENS, Alaska, Chairman 

THAD COCHRAN, Mississippi 

ARLEN SPECTER, Pennsylvania 

PETE V. DOMENICI, New Mexico 

CHRISTOPHER S. BOND, Missouri 

MITCH MCCONNELL, Kentucky 

CONRAD BURNS, Montana 

RICHARD C. SHELBY, Alabama 

JUDD GREGG, New Hampshire 

ROBERT F. BENNETT, Utah 

BEN NIGHTHORSE CAMPBELL, Colorado 

LARRY CRAIG, Idaho 

KAY BAILEY HUTCHISON, Texas 

MIKE DEWINE, Ohio 

SAM BROWNBACK, Kansas 

ROBERT C. BYRD, West Virginia 

DANIEL K. INOUYE, Hawaii 

ERNEST F. HOLLINGS, South Carolina 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

HARRY REID, Nevada 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

BYRON L. DORGAN, North Dakota 

DIANNE FEINSTEIN, California 

RICHARD J. DURBIN, Illinois 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JAMES W. MORHARD, Staff Director 

LISA SUTHERLAND, Deputy Staff Director 

TERRENCE E. SAUVAIN, Minority Staff Director 

SUBCOMMITTEE ON COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED

AGENCIES

JUDD GREGG, New Hampshire, Chairman 

TED STEVENS, Alaska 

PETE V. DOMENICI, New Mexico 

MITCH MCCONNELL, Kentucky 

KAY BAILEY HUTCHISON, Texas 

BEN NIGHTHORSE CAMPBELL, Colorado 

SAM BROWNBACK, Kansas 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

BARBARA A. MIKULSKI, Maryland 

PATRICK J. LEAHY, Vermont 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

ROBERT C. BYRD, West Virginia 

(ex officio) 

Professional Staff 

SCOTT GUDES

KATHERINE HENNESSEY

DENNIS BALKHAM

JILL SHAPIRO LONG

SHANNON O’KEEFE

JESSICA ROBERTS

LILA HELMS (Minority) 

KATE ELTRICH (Minority) 

CHAD SCHULKEN (Minority) 
(III)

C O N T E N T S 

TUESDAY, MARCH 2, 2004

Page 

Department of Commerce: Office of the Secretary ............................................... 1

TUESDAY, MARCH 23, 2004

Department of Justice: Federal Bureau of Investigation ..................................... 53

THURSDAY, MARCH 25, 2004

Department of State: Office of the Secretary ........................................................ 119

Nondepartmental Witnesses ................................................................................... 167

(1)

DEPARTMENTS OF COMMERCE, JUSTICE, AND 

STATE, THE JUDICIARY, AND RELATED 

AGENCIES APPROPRIATIONS FOR FISCAL 

YEAR 2005

TUESDAY, MARCH 2, 2004

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. 

The subcommittee met at 10:03 a.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Judd Gregg (chairman) presiding. 

Present: Senators Gregg, Stevens, Hollings, Inouye, Leahy, and 

Kohl. 

DEPARTMENT OF COMMERCE 

OFFICE OF THE SECRETARY

STATEMENT OF HON. DONALD L. EVANS, SECRETARY 

OPENING REMARKS

Senator GREGG. We will begin the hearing of the Commerce, Justice and State Subcommittee of the Appropriations Committee. We 

are honored today to have with us the Secretary of Commerce, Secretary Don Evans. I don’t have an opening statement. Do you have 

an opening statement? 

Senator HOLLINGS. No, Mr. Chairman. 

Senator GREGG. We will proceed right to Secretary Evans. Make 

whatever statement you wish, Mr. Secretary, and we will proceed 

to questions. 

Senator LEAHY. Are there going to be no statements? 

Senator GREGG. I would rather get to the testimony, if you don’t 

mind. 

Senator LEAHY. I appreciate that. I would ask consent to put a 

statement in the record and I will use some of it in my questions. 

Senator GREGG. Absolutely. We will have plenty of time for questions and you can work it in there. 

Senator LEAHY. Thank you. 

[The statement follows:]

PREPARED STATEMENT OF SENATOR PATRICK J. LEAHY

Mr. Secretary, we thank you for coming to testify before this subcommittee today. 

It is good to see you again. You have an especially difficult job at the moment, and 

none of us envy you for it. 

Whether they have lost their jobs, or worry about losing their jobs, or feel frozen 

in place, so many American workers and their families have been hurting for the 
2

last three years, and they are still hurting in what has been called this ‘‘jobless recovery.’’ Job cuts have disrupted millions of households, and the effects have rippled 

through our entire economy. 

We have lost nearly three million manufacturing jobs in the past three years, and 

the economic outlook is less than encouraging. In fact, more than 2,400 employers 

reported laying off 50 or more workers in January, the third highest number of socalled mass layoffs since the government began tracking them a decade ago. Overall, 

the number of manufacturing jobs in the United States is now at its lowest level 

since 1950. 

At the same time our manufacturing numbers are tumbling, our trade deficit is 

spiraling. The Department recently announced that the U.S. trade deficit reached 

a record $489 billion in 2003. While the trade report shows strong domestic consumption, it also highlights serious problems with our economy’s productivity—particularly our lack of employment growth. 

Back in September, the Commerce Department announced a broad proposal to 

help the nation’s ailing manufacturers. Among other elements of that plan, the department proposed creating a new assistant secretary of commerce for manufacturing, forming an unfair-trade-practices team to track and confront unfair foreign 

competition, and supporting the Manufacturing Extension Partnership (MEP) program. 

I join many manufacturing and trade experts in being puzzled by that announcement. The Commerce Department already has hundreds of employees tasked with 

tracking unfair labor practices. And it seems that the creation of a new assistant 

secretary for manufacturing really may just be boiling down to changing the name 

and expanding the reach of the existing assistant secretary for trade development. 

On top of that, no one has yet been named to fill this new position. 

And then there’s the matter of the Manufacturing Extension Partnership Program, which offers technical assistance to manufacturing firms to improve their performance in production techniques, marketing and exports. It does not help the Administration’s credibility to cite the value of this program and to pledge resources 

for it, but then to repeatedly fail to actually support the MEP program—both in the 

President’s budget requests and in the White House’s final negotiations on this 

year’s appropriations bill. You have repeatedly asked that MEP receive around $13 million each year, but Congress has deemed it important enough to provide more than $106 million. It is 

disingenuous now for the Administration to say you support the MEP program by 

requesting a mere $39 million this year. And while I appreciate your announcement 

that MEP would be eligible to compete for up to $45.4 million in fiscal year 2005 

economic adjustment assistance, this effort will not provide the funds our MEP centers need to continue operations and services to small manufacturers, especially 

after July 1, when the majority of centers face contract renewal under the drastically reduced fiscal year 2004 funding. 

I am also concerned about a plan to identify federal rules that they believe impede 

competitiveness in the domestic manufacturing sector. Given the Administration’s 

record to date, it is no wonder that so many workers are concerned that this is just 

another Administration attempt to roll back health and safety standards that are 

designed to keep American workers safe. Many see this as a backhanded and backdoor attack on hardworking, dedicated workers. And I see their point. 

The Administration’s lack of follow-through and attention to the hemorrhaging of 

manufacturing jobs amounts to what could charitably be called a disconnect between 

rhetoric and reality. And after so much of this, the Administration’s credibility becomes a real problem and a real issue with the Congress and with the American 

people. 

Mr. Secretary, that brings us to the Trifecta of controversial sections of President 

Bush’s recently released annual ‘‘Economic Report of the President.’’

First, it suggested that the movement of U.S. jobs overseas—commonly referred 

to as offshoring—is beneficial to consumers. The President asserts that American 

customers will benefits from lower costs of the products and services they buy because of cheaper labor costs overseas. And the President’s top economist said that 

the migration of service jobs overseas ‘‘is just a new way of doing international 

trade.’’

That comment was tossed off with a flippancy that seems to take no account of 

the real pain American families are suffering as more and more companies close 

their U.S. facilities and send their work overseas, throwing hardworking Americans 

onto the unemployment lines. 

Second, the Report predicts that non-farm payroll employment will average 132.7 

million in 2004, reflecting a 2.6 million increase in jobs over its estimated average 

of 130.1 million in 2003. A joint analysis released by the Economic Policy Institute 
3

and the Center on Budget and Policy Priorities shows that to achieve the 2004 estimate, an average of 460,000 jobs a month would need to be created from February 

through December of 2004. In other words, about five million jobs will need to be 

created between now and the end of the year to hit that projection. 

Finally, and perhaps most unbelievably, the Report questions whether fast-food 

restaurants should continue to be counted as part of the service sector or should 

be reclassified as manufacturers. Specifically, the report asks: ‘‘When a fast-food restaurant sells a hamburger, for example, is it providing a ‘service’ or is it combining 

inputs to ‘manufacture’ a product?’’

Two decades ago, another administration wanted to start calling ketchup a vegetable for the purposes of the school lunch program. Redefining ketchup as a vegetable did nothing for the nutrition of our kids, and redefining every Taco Bell as 

a manufacturing factory would do nothing for American workers and real American 

manufacturers. If that is this Administration’s idea of thinking outside the bun, 

then this Administration has a lot more thinking to do. 

Mr. Secretary, for the past three years we have heard many predictions and forecasts from the Administration that have not been anywhere close to reality. We 

were told that the President’s tax cuts would stimulate the economy—and instead 

the economy has weakened and tax receipts are at some of their lowest levels ever. 

We were told that there would be 3.4 million more jobs in 2003 than there were 

in 2000—and instead the economy ended up losing 1.7 million jobs over that period. 

We were told that budget surpluses would continue on for as far as the eye could 

see—and instead we have gone from a record $239 billion surplus under President 

Clinton to a record $521 billion deficit under President Bush, and if the President’s 

budget were actually enacted, it’s those deficits that would proliferate as far as the 

eye can see. And we were told that the Iraq mission would be swift and easy—and 

instead it has dragged on with no end in sight and with costs that are so astronomical that the President did not even dare put the numbers in his budget. 

These are difficult times for American manufacturers and American workers, and 

the job of answering to them for this Administration’s policies is a tough one. I hope 

you take a serious look at the questions we pose because there are millions of American workers out there counting on you. 

Thank you very much, Mr. Chairman. I ask consent that my full statement and 

written questions be submitted for the record.

Secretary EVANS. Thank you, Mr. Chairman. I have a brief opening statement and I will ask for my written remarks to be submitted for the record please, sir. 

Senator GREGG. Absolutely. 

Secretary EVANS. Mr. Chairman, Senator Hollings, members of 

the subcommittee, it is a pleasure to have this opportunity to testify in support of the President’s budget request for the Department of Commerce for fiscal year 2005. 

Before I do that, let me just take a moment to thank Senator 

Hollings, who is retiring, for his service to this country for many, 

many years, in this body since 1966. I can’t——

Senator HOLLINGS. I want you to retire with me. 

Secretary EVANS. I have another plan. 

And that just goes to show you that we don’t agree on absolutely 

everything, but we agree on a lot and one thing we absolutely 

agree on is your love for America——

Senator HOLLINGS. Thank you, sir. 

Secretary Evans [continuing]. And your service to America, your 

integrity that you served this body with for so many years, and I 

just wanted to take a moment to say thank you on behalf of all 

Americans. 

I want to say thank you to your wife, as well, because as somebody that has just been in public service in Washington for 3 years, 

it is very clear to me that it is not just a sacrifice of those serving 

here. It is a sacrifice for the entire family, and for Peatsy and your 

entire family, I thank you. 

Senator HOLLINGS. That is mighty generous. Thank you, sir. 
4

Secretary EVANS. Yes, you bet. We appreciate and have benefitted from Senator Hollings’ focus on so many areas of the Commerce Department. You know, a lot of people said he put the ‘‘O’’ 

in NOAA, which is absolutely the truth. 

The central mission of the Department of Commerce is to promote American jobs and values by creating the conditions for longterm economic growth. To fulfill this essential charge, we are requesting a budget of $5.8 billion. This budget reflects the President’s commitment to advancing our Nation’s economic and homeland security. 

To help American industry and workers meet unprecedented 

global challenges, we are reorganizing the International Trade Administration. I want to thank Chairman Gregg and members of 

this committee for their assistance in moving this process forward. 

We are creating a new Manufacturing and Services Office, to be 

headed by an assistant secretary. This official will be charged with 

ensuring that these critical sectors get a full hearing when policies 

are formulated. We are establishing an Office of Investigations and 

Compliance to monitor enforcement of trade agreements, and we 

are also creating an Unfair Trade Practices Task Force. For the Census Bureau, we are requesting an increase of $217 

million to reengineer the decennial census and improve other data 

collection. 

For the Bureau of Economic Analysis, we are requesting an in- crease of $15 million for the improvements of GDP data and other 

economic indicators. 

The NIST budget includes $31 million to equip and operate a new advanced measurement laboratory and $25 million for continued renovation of the NIST laboratories in Boulder, Colorado. 

At this time, we are requesting level funding for the Manufacturing Extension Partnership. To leverage current funding and 

help small manufacturing firms, we are directing EDA to focus economic adjustment grants on areas experiencing job losses in the 

manufacturing sector. MEP centers serving these communities can 

compete for these grants. In the next fiscal year, MEP centers will 

be eligible to compete for up to $45.4 million of the EDA grants. 

We are also looking at establishing partnerships with other Federal 

programs and agencies to maintain and strengthen this national 

manufacturing network. 

In fiscal year 2005, the administration proposes giving the Patent and Trademark Office full access to its fees. An increase of over 

$310 million will allow the hiring of additional examiners and faster processing of applications. 

Our NOAA budget includes an increase of $56 million for nextgeneration weather satellites, $34 million to complete the third 

fisheries vessel, and $24 million to better assess climate change. 

Also included in this budget is funding to enhance the safety of 

Department personnel and visitors. Mr. Chairman, new challenges 

to our Nation’s security necessitate new responses. 

We have had to make some difficult choices. This includes discontinuing funding for the Advanced Technology Program, the 

Technology Opportunity Program, and for the Public Telecommunications Facilities Program. I am sure that there are members of 

this committee and other Members of Congress who would like to 
5

make other funding decisions. Please know that I respect those 

views and I look forward to working with all of you through the 

budget process. 

PREPARED STATEMENT

Mr. Chairman, I want to thank you and the members of this 

committee for your continued support of Commerce programs and 

initiatives. I welcome your comments and will be pleased to answer 

any questions that you may have. 

Senator GREGG. Thank you, Mr. Secretary. 

[The statement follows:]

PREPARED STATEMENT OF DONALD L. EVANS

Thank you for the opportunity to appear before you to present the Department 

of Commerce’s fiscal year 2005 budget request. In the fiscal year 2005 President’s 

Budget, the Department of Commerce request of $5.8 billion reflects its continuing 

commitment to creating conditions for economic growth and opportunity by 

strengthening American manufacturing and, promoting innovation, entrepreneurship, competitiveness, and stewardship. America’s manufactures provide our nation 

and our people good jobs, a better quality of life and inventions that have established our national identity. To that end, the Department has partnered with U.S. 

businesses to maintain a prosperous, productive America. We have a record of innovation in manufacturing, transportation, communications, and measurement that 

has helped sustain U.S. leadership of the international marketplace. 

Consistent with the President’s Management Agenda, for fiscal year 2005, the Department presents a performance integrated budget based upon the Department’s 

Strategic Plan. The plans goals fully reflect the Department’s mission and vision 

and its commitment to promoting ‘‘American Jobs and American Values.’’

Goal 1: Provide the information and tools to maximize U.S. competitiveness and enable economic growth for American industries, workers and consumers 

Economic growth is a central theme for the fiscal year 2005 President’s Budget 

and to the missions of the Department of Commerce’s bureaus. To enhance the competitiveness of U.S. businesses in the global economy, the President’s 2005 Budget 

focuses the International Trade Administration (ITA) on promoting U.S. exports, 

fighting unfair foreign trade barriers, and negotiating and implementing multilateral and bilateral trade agreements. ITA has created a new unit called Manufacturing and Services, focusing on the domestic and international aspects of U.S. industrial competitiveness; working with U.S. industry to evaluate the needs of American manufacturers; assessing the economic impact of new and existing government 

rules and regulations on U.S. manufacturers; and representing and advocating for 

the interests of the U.S. manufacturing and services sectors. 

For fiscal year 2005, ITA has three new initiatives. ITA requests an increase of 

$4.5 million for the Administration’s Capital Security Cost Sharing Program 

(CSCSP) to cover the State Department’s capital security costs associated with 

building new embassy compounds. CSCSP is scheduled to begin in fiscal year 2005 

and continue through fiscal year 2018 and all agencies represented in embassies 

will be charged on a worldwide per capita basis. ITA requests an increase of $0.5 

million for the Activity-Based Cost Accounting and Management System to allow for 

more precise management and planning of resources as well as a better understanding of ITA’s performance and commitment to priority activities. ITA has begun 

implementing this system with existing resources and requires these funds to complete the project. ITA also requests an increase of $0.2 million for the Free Trade 

Agreement Secretariats to enable ITA to meet a requirement under the Singapore 

and Chile Free Trade Agreements. 

The Minority Business Development Agency (MBDA) will continue to focus on accelerating the competitiveness and growth of minority-owned businesses by closing 

the gap in economic opportunities and capital access. The President’s 2005 Budget 

requests an increase of $3 million for MBDA to conduct an annual survey of minority owned business enterprises (SMOBE). The SMOBE will provide more timely, frequent and comprehensive statistical data about the minority business universe than 

the current 5-year SMOBE. The President’s 2005 Budget also requests an increase 

of $2.1 million for the Business Development Centers and Minority Business Opportunity Committees programs to improve opportunities for minority businesses in 
6

areas with the highest minority business density. Finally, the President’s 2005 

Budget requests an increase of $0.5 million for MBDA to establish trade activities 

in response to the President’s and the Secretary of Commerce’s initiative on trade 

promotion for U.S. minority businesses with Asian Americans and Pacific Islanders. 

This activity will increase the access of minority business enterprises to global markets. 

The President’s 2005 Budget request for Economic Development Administration 

(EDA) will help accelerate the Nation’s economic growth by promoting a favorable 

business environment to attract private capital investments and higher-skill, higher-wage jobs. The President’s 2005 Budget requests an increase of $5 million for 

EDA to assist areas that demonstrate a high level of economic distress from longterm economic deterioration or that are suffering from sudden and severe dislocation to their economies. 

The Bureau of Economic Analysis (BEA) seeks to strengthen the understanding 

of the United States economy and its competitive position. BEA accomplishes this 

task by providing accurate economic accounts data in a timely and cost-effective 

manner, and by supplying the Nation’s key economic statistics, including Gross Domestic Product (GDP). The President’s 2005 Budget requests an increase of $15 million for BEA over fiscal year 2004 for two initiatives. The first initiative will continue to generate more timely economic data, meet U.S. international obligations in 

complying with international standards for reporting statistics, and acquire realtime data to improve the quality of BEA measures. The second initiative will 

produce up-to-date annual estimates on business investment spending and employment and compensation data by industry. 

The President’s 2005 Budget requests an increase for the Bureau of the Census 

of $217 million over fiscal year 2004. These additional funds will be used in the Bureau’s multi-year effort to reengineer the Decennial Census by implementing the 

American Community Survey, modernizing its geographic database information, and 

developing plans for the Decennial Census in 2010 using only a short form. Census 

also plans initiatives to improve the quality and timeliness of trade statistics, to improve the measurement of services by expanding the number of industries covered, 

to develop a stronger presence in electronic government services by allowing businesses to file survey information electronically, and to strengthen its measurement 

of migration within the United States. 

As part of our ongoing efforts to improve the review and enforcement of export 

license conditions, the President’s 2005 Budget is requesting funding for the Bureau 

of Industry and Security (BIS) to develop a comprehensive export license condition, 

compliance and enforcement program. This program will enhance the enforcement 

of license conditions by working with exporters to ensure that they have in place 

appropriate export management systems and devoting dedicated resources to detect 

and prosecute violations of license conditions. The President’s 2005 Budget is also 

requesting funding for BIS to establish an Office of Technology Evaluation that will 

enable the Department to implement and maintain a more effective system of dualuse export controls that better protects U.S. national and economic security. The 

new Office’s duties will include identifying new technologies for potential inclusion 

on the Commerce Control List and the comprehensive review of items already on 

the list to ensure that items are appropriately controlled for the protection of U.S. 

national security. 

Goal 2: Foster science and technological leadership by protecting intellectual property, enhancing technical standards, and advancing measurement science 

Important priorities for the National Institute of Standards and Technology 

(NIST) in fiscal year 2005 are to upgrade facilities and laboratories, to protect critical research data from degradation, and to maintain employee safety and security. 

The President’s 2005 Budget provides increased funding to NIST laboratories for 

continuing construction projects and high priority research areas. The request includes $31 million to equip and operate the Advanced Measurement Laboratory and 

$25 million for continued renovations of NIST’s Boulder, Colorado facilities. Consistent with the Administration’s continuing emphasis on shifting resources to reflect changing needs, the fiscal year 2005 budget proposes to terminate the Advanced Technology Program and to commit stable funding for the Manufacturing 

Extension Partnership. 

The President’s 2005 Budget request for the U.S. Patent and Trademark Office 

(PTO) will support the third year of the PTO strategic plan to keep pace with workload growth and to enhance the quality of products and services. In fiscal year 2005, 

the Administration proposes giving PTO full access to its fees. An increase of $310.9 

million will allow the PTO to improve processing capacity by hiring additional patent examiners, deliver an operational electronic patent application processing sys-
7

tem, continue moving to an electronic trademark operation, expand quality reviews 

to all stages of patent and trademark examination, and cover the full accrual of retirement costs for its employees. 

The President’s 2005 Budget increase request of $7.1 million for the National 

Telecommunications and Information Administration (NTIA) will provide the resources necessary to improve dramatically the overall capabilities of NTIA to research, manage and represent internationally the government’s and industry’s spectrum usage. These funds will increase the efficiency of radio spectrum usage 

through a paperless system, explore alternative incentive systems, meet increasing 

demand for Federal wireless systems; improve our Nation’s preparation for and representation of U.S. interests at International spectrum usage conferences; and upgrade NTIA’s lab facilities used to support this important work. The fiscal year 2005 

Budget continues the proposal to terminate the Public Telecommunications Facilities, Planning and Construction and Technology Opportunity Program grants. 

Goal 3: Observe, protect and manage the earth’s resources to promote environmental 

stewardship 

This budget supports the core activities of the National Oceanic and Atmospheric 

Administration (NOAA), including fisheries and ocean programs, climate research 

activities, and weather forecasting capabilities, as well as the satellite infrastructure 

necessary to support these functions. In addition, the request continues to focus on 

maintenance and safety issues associated with NOAA facilities, vessels, and aircraft. 

The 2005 Budget makes investments in critical fisheries and ocean programs. The 

Department continues to work to improve the management and economic sustainability of the Nation’s marine fisheries with a continued focus on fisheries science 

and stock assessments. To this end, the Budget invests $34 million to complete 

NOAA’s third fisheries survey vessel. This vessel will meet international standards 

for research surveys and will substantially improve the quality of NOAA fisheries 

research. Additional investments are requested this year to maintain safe and efficient maritime commerce through enhanced electronic navigational charts and improved collection of data on coastal water levels. 

This budget continues the Administration’s focus on climate research and devotes 

$23.7 million of new funding to expand climate observing capabilities. This funding 

will allow NOAA to help fill critical knowledge gaps identified in the recently released Climate Change Science Program Strategic Plan, including research on 

aerosols, oceans and the natural carbon cycle. NOAA’s funding is one component of 

a government-wide initiative which will provide $103 million over two years to accelerate climate observations. The Administration will continue to work with the 

international community to develop a comprehensive, global earth observation system. 

Continuing to seek improvements in weather forecasting, the Administration requests funding to expand air quality forecasts nationwide. This program will help 

mitigate the estimated 40,000 deaths and $147 billion spent treating air pollutionrelated illnesses by providing advance warning of poor air quality. Also included are 

investments in improved long-range weather forecasting, as well as continued improvement of NOAA’s NEXRAD radar system, replacement of the communications 

gateway through which all weather-related data flows to local weather forecasters, 

and modernization of the cooperative observer network. 

To support NOAA’s weather and climate programs, the Administration requests 

an additional $56 million for the continued development of next-generation geosynchronous and polar-orbiting satellite programs. To support current and future 

satellite operations, the Administration requests funds to occupy and operate 

NOAA’s new satellite operations facility. This budget also includes investments to 

maintain and repair current NOAA facilities, for operations and maintenance of the 

OSCAR DYSON, NOAA’s first new fisheries research vessel, and for the 

HI’IALAKAI, a vessel acquired from the Coast Guard for research in the Hawaiian 

Islands. 

Management Integration Goal: Achieve organizational and management excellence 

The Administration places a high priority on the protection of our employees and 

guests. The Herbert C. Hoover Building (HCHB) is in close proximity to multiple 

high-profile locations in downtown Washington D.C., but lacks adequate protection 

against an explosive blast in the vicinity. This request proposes a blast mitigation 

project for the facility. The upgrades will reduce the degree of injury due to glass 

fragments and, in the event of a chemical/biological/radiological attack, will significantly reduce the air infiltration of toxic substances. This will provide the employees 

with precious minutes to escape the building or to enable them to ‘‘shelter-in-place,’’ 

if required. The funding request for the Security Management Application will pro-
8

vide for the development and integration of a new corporate management application system to enhance the Department’s personnel security management capabilities. 

The Department is also requesting an increase in resources for the Inspector General’s Office of Investigation to provide adequate coverage for all Commerce activities. This increase will allow the Office to strategically deploy its investigative resources, thereby enhancing its ability to detect and prevent fraud. The projected $11 

billion cost for the 2010 Census necessitates the OIG to increase its level of oversight to improve planning and lower risks, particularly in the areas of statistics and 

systems evaluations. 

The Department of Commerce has a rich history, and after traveling the country 

meeting with both the Commerce employees and the customers we serve I am confident it will have a rich future. I look forward to working with the committee to 

ensure that together we are providing the best services possible.

Senator GREGG. Again, we thank you for taking time to come. It 

was very nice of you to acknowledge Senator Hollings’ great service 

to this country, which we have done on a number of occasions in 

this committee. It is totally appropriate, especially relative to the 

Commerce Department, where he has played an extraordinary role. 

What is it, 33 years? 

Senator HOLLINGS. I’ve been on the subcommittee since 1971

Senator GREGG. And chairman or ranking member of this subcommittee, I think, for 27 years or something like that. 

Senator HOLLINGS. Yes, sir. 

NOAA’S N-PRIME SATELLITE

Senator GREGG. Nothing has happened at the Commerce Department that Senator Hollings hasn’t been involved in. One of the 

things that he can take a lot of credit for and which we think is 

appropriate is a strong NOAA program. We congratulate the Department for its efforts in this area but we are concerned about the 

funding levels in a number of accounts there. Overall, this committee is totally committed to the NOAA efforts and we will have 

some issues with our House members on that, but we enjoy that 

little tussle every year and we usually do pretty well in it. 

I did have a question about the satellite program. I understand 

one of the critical satellites was dropped on the floor. 

What is the status of that? Is it the N Prime? 

Secretary EVANS. Yes, N Prime, that is correct. 

Senator GREGG. And who is liable for what appears to have been 

some negligence possibly? 

Secretary EVANS. Mr. Chairman, we don’t have that complete report yet. We are in the process of working with Lockheed Martin, 

and NASA and NOAA are working together to look very carefully 

at the issues of cause and liability as well as what it is going to 

take to make sure we have the service needed to deliver the weather forecasts to this country in the out-years. 

We are close, they tell me, to having a final report that we will 

deliver to Congress, but we are not there yet. 

Senator GREGG. If we conclude that the cause was outside of 

NOAA and NASA but it was the responsibility of a private contractor, that the damage occurred as a result of their potential negligence, and I don’t know whether it was negligence or not——

Secretary EVANS. Right. 

Senator GREGG [continuing]. But potential negligence. When you 

drop a satellite on the floor, it does seem to lead to that concern. 
9

Are we going to pursue legal remedies to get recovery of, what is 

it, about $400 million? 

Secretary EVANS. I am certain that we will, Mr. Chairman. I am 

absolutely certain that we will. We have our lawyers looking at this 

very carefully and that is our conclusion. I am sure we will be pursuing the total recovery of the loss as well as, at the same time, 

we need to make sure we are putting a plan together to cover the 

gap that this might be creating as it relates to satellite coverage 

during the period that N Prime was scheduled to be launched. 

INTERNATIONAL TRADE ADMINISTRATION REORGANIZATION

Senator GREGG. You spent a lot of time on ITA’s reorganization. 

Could you tell us the status of that and how it is going? 

Secretary EVANS. Well, Mr. Chairman, it is going well, and we 

have spent a lot of time on it. I appreciate the support of this committee. We have been very focused on the manufacturing sector of 

this economy, spent 11⁄2 years on travel around America, across 

America, talking to manufacturers all across America, listening to 

their concerns, their challenges, something I know a fair amount 

about since I spent 30 years of my life in the manufacturing sector 

of this economy. So I am very familiar with many of the challenges 

that they deal with on a day-to-day basis. 

DOC MANUFACTURING REPORT

We have made significant progress. We presented to the country 

a manufacturing report in January. It laid out over 50 recommendations that we feel will help create an environment for our 

manufacturers to continue to succeed in the global economy. That 

is the goal. We need to continue to improve the conditions so it is 

easier for American manufacturers to succeed in this ever-changing 

economy. 

One of the central pieces of it is to establish a new Office of Manufacturing Services that will have an assistant secretary that is a 

Senate-confirmed position, of course. We hope to have a name up 

to the Senate within the next few weeks. We certainly have a candidate that we are very focused on. 

But we are not resting there. I mean, it is time to move on with 

the many recommendations that are a part of this report. One of 

the areas where we are going to spend a lot of energy, a lot of resources, and a lot of focus, is in the area of enforcement, not only 

when it comes to enforcing other trade agreements around the 

world, but just focusing on making sure that the countries are focused on enforcing their own laws. We are doing that through market access and compliance. We have beefed up the resources there. 

We beefed up the resources in the Import Administration within 

the International Trade Administration. We have done that. We 

have established what we call an Unfair Trade Practices Task 

Force. This is a task force that will be focused on being a proactive 

task force. In fact, part of their responsibility will be monitoring 30 

products that are coming in from China, just monitoring those 

products and making sure they are in compliance with our trade 

laws. 

So I would say we have made great progress. You don’t put a report out that is not the end, that is the start. That is the begin-
10

ning. I have traveled across America, continue to do that, letting 

all manufacturers know that they have one place they can go to express their concerns. They can provide their challenges. So we look 

forward to working with the manufacturing sector of our economy. 

We will continue to do so. 

I think one last thing I would say, Mr. Chairman, is, as I say, 

there are 50 recommendations, over 50, so there are lots of recommendations, but I will be responsible for a working group, an 

interagency working group, where we will bring all of the agencies 

together to stay focused on the manufacturing sector. This will ensure that we have ongoing communications across agencies and 

across departments, because, obviously, many of the agencies and 

departments within the administration have responsibilities that 

relate to creating an environment for manufacturers to succeed. 

And so we are going to make sure that there is very active communication among the agencies as well as setting up a President’s 

Manufacturing Council, Advisory Council, which will be individuals 

from the private sector, small, medium, and large manufacturers 

will have a seat at the table so that we can hear their views and 

hear their concerns as we continue to consider policy in this administration in this town. 

So we are making good progress. Thank you again for your support, but we have a lot more work to do. We know that. 

Senator GREGG. Thank you, Mr. Secretary. 

Senator Hollings? 

ASSISTANT SECRETARY FOR MANUFACTURING AND SERVICES

Senator HOLLINGS. I thank the distinguished Secretary and our 

chairman for their kind comments. It has been a privilege to work 

with both of you. 

With respect to manufacturing, when is this office of the manufacturing services, the gentleman or lady to be appointed? It was 

announced months ago. 

Secretary EVANS. It was. It was, Senator, but this is a Senateconfirmed position and we really didn’t have the authority to move 

forward on it until you passed the 2004 budget. The authorization 

is within that budget. The budget passed. We have been moving 

aggressively. We have an individual that we have selected. Now we 

are just going through the process and I believe that we will have 

that name to the Senate within the next couple of weeks. 

But in the meantime, Grant Aldonas, who is the Under Secretary 

of International Trade, it is his responsibility to make sure we are 

moving forward on these recommendations that are within the report within the Import Administration. We are moving forward 

with monitoring products coming in from China with the Market 

Access and Compliance Office. We are moving forward on putting 

a task force together to make sure that other countries are enforcing their laws. 

So we are not slowing down. We are not waiting for the confirmation of one individual. We have a report that has over 50 recommendations in it and I expect our Department to deliver. 
11

AMERICAN JOBS

Senator HOLLINGS. Do you think the Department should be leading efforts to export jobs, for the elimination of American jobs specifically, for sending jobs to, let us say, China? 

Secretary EVANS. I think we ought to lead for creating jobs in 

America. I want everybody——

Senator HOLLINGS. You and I agree on that, and that is why I 

was wondering about reading articles on Under Secretary Juster or 

Juster—how do you pronounce that? 

Secretary EVANS. Juster. 

Senator HOLLINGS. Juster. He has these innovation forums at the 

Ronald Reagan Building and last year with the United States-India 

Business Council and otherwise coming right on down all year long 

to December. I refer specifically to an article in the New York 

Times, December 10, and let me read just a couple of lines.

‘‘After the opening speeches, the 50 or so American executives gathered at the 

Hotel Pennsylvania in Manhattan were invited to divide up. Those interested in investing in China, putting an operation there and hiring Chinese workers were to 

go across the hall to the Penntop North Conference Room. Those who wanted help 

in exporting to China were to stay seated in Penntop South. Half or more went 

across the hall.’’

It was stated that across the hall, most of the speakers were Chinese promoting what Shen Liguo, Vice Governor of Heilongjiang 

Province in Northeastern China, described as, quote, ‘‘Northeast 

China’s beautiful prospects.’’ Quote, ‘‘We are going to absorb a lot 

of foreign investment to bring about development in this area.’’ A 

big blue banner over the thing says, ‘‘Go global.’’ The Commerce 

Department was described by the Chinese as a sponsor and its representative, Mr. Spencer Ross, acted as moderator. 

Now, there you go. You folks are working to get rid of the jobs 

and we here in the Congress are doing our best to hold on to the 

jobs. What is your comment about this? 

Secretary EVANS. Sure, Senator. I think, in fact, I know and I am 

very clear, that it is the responsibility of the Commercial Service, 

the Export Assistance Centers that we have across America, and 

the Foreign Commercial Service Offices that we have around the 

world to promote the export of American-made goods and products 

and services and that is——

Senator HOLLINGS. I agree with you on that. That is on exports 

of goods. But how about exports of jobs? You just said we are trying 

to maintain jobs and create them in the United States. 

Secretary EVANS. Right. I want everybody to hire American 

workers. I want foreign companies to hire American workers. I 

want small, medium, and large companies to hire American workers. I want to continue to create an environment in America where 

everybody wants to hire our workers and buy our products and——

Senator HOLLINGS. The Under Secretary Juster and Spencer 

Ross and all, are they carrying out the policy of the Department 

of Commerce? 

Secretary EVANS. Yes, sir, indeed, I believe that they are. They 

are continuing——

Senator HOLLINGS. Well, the policy is, then, to export the jobs, 

because I am just reading here where that is what they are doing. 
12

Secretary EVANS. Well, I would take issue with the article, Senator. I would say that we were there promoting the export of our 

goods and our products and our services. If there are people that 

want to export equipment to China from the United States, we 

want to be supportive of that. We have to be there to explain to 

them how it is that you go through customs and the procedures 

necessary to export equipment and goods and services around the 

world. 

Senator HOLLINGS. Well, the Commerce Department often sends, 

and I am quoting, its representatives to events like this one at the 

Hotel Pennsylvania last month, but it dulls their pro-export message by delivering it at conferences dominated by the Chinese delegations urging American companies to invest in China, not export. 

Secretary EVANS. Well, if they——

Senator HOLLINGS. You have been in the business 30 years. If 

you went to an oil conference to try and export your oil and all of 

a sudden foreign delegations were taking over the majority of the 

activities and the speakers and everything else, we are going to import the oil and put you out of business down in Texas, after 30 

years’ experience, you would do something about it, wouldn’t you? 

Secretary EVANS. Well, I would be there encouraging them to buy 

a Caterpillar engine and take it with them to drill the well. I would 

be there encouraging them to purchase equipment from the United 

States to use wherever they might be going. And so we are there 

in the capacity of American capital, and American capital does invest in other parts of the world. As we continue to work with the 

world, I want to encourage these American companies to take 

American equipment with them when they go, and that means 

more jobs here in America. 

Senator HOLLINGS. Mr. Secretary, just one other question and I 

will yield because I have got other questions relative to——

Senator GREGG. We can go around again. No, go ahead for your 

second question. 

MANUFACTURING EXTENSION PARTNERSHIP

Senator HOLLINGS. It is the National Institute of Standards and 

Technology. We reduced this some $177 million. Specifically, we 

just practically eliminate the Advanced Technology Program and 

the Manufacturing Extension Partnership Program. You just close 

out the MEP with only a recommended appropriation of $39.1 million. Just year before last, we had it up to $107 million. The Advanced Technology Program, there is no question that we have had 

200 new technologies commercialized as three-quarters of the ATP 

programs are awarded to small businesses, and I could go down the 

success story because it has won the Council on Competitiveness 

Award. 

It was really fashioned with caveats by myself, but Senator Danforth wanted to make sure it wasn’t a pork program and just giving 

out awards. So the application has to be vetted by the National 

Academy of Engineering. After it is found to be a unique kind of 

technology, then you have to bring 50 percent of the financing and 

then on a competitive basis over at the Department itself stand in 

line for that particular award. 
13

I have been on the Appropriations Subcommittee here for quite 

a while and we never have given out any pork projects. I don’t 

have—if I have one in South Carolina, I don’t know about it, but 

I do know about its success because the Council on Competitiveness and Young from Hewlett Packard and all have come and attested. 

But now you just red-line it and we are talking about getting 

jobs and helping manufacturing and we are going to appoint an Office of Manufacturing Services, and yet we are eliminating the 

services. 

Secretary EVANS. Well, Mr. Chairman, Senator, I would say to 

you that these are programs that have delivered an important service through the years. I would also say to you that we are at war 

and there are very tough choices that have to be made and priorities that have to be set. I would say to you that these have been 

two good programs that have been of good service, but given the 

current environment of making tough choices in the middle of a 

war, they are just not two that made the list for us. 

Senator HOLLINGS. You believe both should be eliminated? 

Secretary EVANS. No, I didn’t say that, because——

Senator HOLLINGS. But you are eliminating them. Are you supporting the budget or not? 

Secretary EVANS. No. What we are supporting is to fund MEP at 

the same level that it was funded in the current budget. We are 

supporting funding MEP in the year 2005 at the same $39.2 million that is in the 2004 budget. 

And also, Mr. Chairman, what I would say to you is we are looking for ways, as I mentioned earlier, to work across administration 

lines to make sure that all of the resources that are available to 

manufacturing are being delivered or they are aware of them. We 

will spend in the 2005 budget about $132 billion on research and 

development. We said that one of the areas that have additional 

funding possibly available to MEP programs is in the Economic Development Administration. There are some $45 million there that 

Manufacturing Extension Partnership Centers can compete for 

with others that might be competing for the same funds in an area 

of our country that is distressed because it has been hit hard by 

the downturn of manufacturing in that particular community. 

Senator HOLLINGS. Since you mentioned it, the $45 million of the 

EDA, $40 of that $45 million has already been committed and now 

EDA is distressed. You have got high unemployment and everything else like that. Over here, there is a highly technological program in the development of manufacturing and what you have 

done, having them compete for the same monies, it is like tying two 

cats by the tails and throwing them over the clothesline and saying, claw each other and see who can get the money, but that is 

about the way we are on that. Thank you. 

Senator GREGG. Senator Stevens? Traditionally, we recognize the 

chairman of the full committee whenever he arrives, and it was my 

error not to recognize you earlier. I should have recognized you before I recognized myself if I want to keep my job. 

Senator STEVENS. Mr. Secretary, they do this all the time. It is 

all right. 
14

I am happy to be here with you, Mr. Secretary. I have got just 

three questions I would like to ask. I would like to just submit 

some technical ones to you, if I may. 

Secretary EVANS. Sure. 

Senator STEVENS. The first is personal. Are you going to come up 

and go fishing with me this year? 

Secretary EVANS. You are trying to get me on the record, aren’t 

you? 

I sure hope to. 

ASSISTANCE TO ALASKA FISHERMEN

Senator STEVENS. In 2002, we put some amendments on the 

Trade Promotion Act that would assist the Alaska salmon fishermen who had been really harmed by the importation of farm salmon, particularly from Chile. It provided that for 5 years, there 

would be a $15 million item to assist these people to transition to 

other forms of employment, to develop other economic opportunities 

in their areas. 

So far, there has only been a portion of the first $15 million 

made available. Could you comment on that or tell me you will look 

into it and see what is happening? It should have been $15 million 

a year, and there are some growing opportunities now in tourism 

in particular and in small business development along the coastline 

that they might be able to move into if they had the kind of assistance that EDA could provide through that $15 million. 

Secretary EVANS. Yes, I know how important those areas are. We 

are supporting those areas, Mr. Chairman, and we obviously will 

continue to support them. I am familiar with the $15 million commitment. I know that it is not all in there yet. I will tell you that 

I will look into it further to see what it is we can do to make sure 

that we fund that at that level. 

Senator STEVENS. I hope you will, because with half the coastline 

of the United States, some of those villages and communities are 

located literally hundreds of miles from other communities. But we 

have found now with the advent of telecommunications and with 

the Internet capability, they can start businesses like answering 

the telephones for some motel chain. You would be surprised what 

is there if they have the funding to transition into sort of modern 

global commerce. So I think that $15 million is well spent if we can 

find some way to put the money up. I would hope you would help 

us find it. 

CRAB RATIONALIZATION PROGRAM

Second, I met with the Administrator of NOAA concerning the 

crab rationalization plan recently. I think Bill Hogarth is doing a 

marvelous job for you. This is a program that was enacted this year 

and we are trying to make certain that the regulations and actions 

that are necessary to implement this crab program are in effect by 

the crab fishery, which will take place in early 2005. This is a crab 

fishery that has had the highest death rate of any industrial activity in the country for a period of years. 

We have enacted a program which will take the race for that 

crab out of the system and allocate firm amounts of crab to a boat 

owner so he or she may harvest the crab when the weather is good. 
15

But if the regulations aren’t in effect come January, they will be 

back racing for the crab again and lose more boats. We lost one 

this January, a very sad loss. 

I would hope that you would help us find a way to implement 

this by the end of this year. Are you familiar with the program, Mr. 

Secretary? 

Secretary EVANS. I am, Senator. I am very familiar with it. I 

know Bill Hogarth, as you said, is very focused on the issue. He 

is working with the North Pacific Fishery Management Council to 

implement the regulations. I haven’t had anybody tell me that we 

won’t be able to be in full compliance of our charge of having those 

regulations in place by the end of the year, so we are hopeful that 

we are able to accomplish that. 

OCEANS POLICY COMMISSION

Senator STEVENS. Thank you. Last, Senator Hollings and I have 

been involved with carrying out the policies of the Stratton Commission that was a commission from the 1960s, really. We have 

now a new Oceans Policy Commission expected to release its report 

either this month or no later than next month. I wonder, are you 

keeping pace with them? Will you be able to appear before us and 

give us some recommendations based on that report for possible action this year? 

Secretary EVANS. I sure would be delighted to do that, Senator, 

if I am invited up to do that. We have been working very close with 

Admiral Watkins and Robert Ballard and others on the Commission. It is my understanding that the draft of the report will be out 

within the next few weeks and then there will be a chance for individuals to comment, give information back to the committee. 

I would say to you our best guess is we probably will have a completed report by mid-summer, and so I am looking forward to the 

report and I salute you and Senator Hollings both for really being 

instrumental in providing the framework for this Commission. I 

think it is going to be a very valuable resource for us to review and 

understand what there is to explore in the oceans. But I am hopeful that we will have this report presented to Congress, to the 

President, in its final form, by mid-summer. 

Senator STEVENS. My good friend from South Carolina is going 

to pursue other activities after this year, and since we have been 

partners in this for so long, I would hope we would have a chance 

to review it here in this committee and to make some recommendations to Congress to implement that report while he is still here. 

The Stratton Commission has been, as I said, our guiding light, 

but we are going to have a new series of recommendations that I 

think should be implemented as rapidly as possible and I am hopeful this committee, Mr. Chairman, will see fit to have a hearing as 

soon as we can after that final report is presented to us by you and 

the President. 

Secretary EVANS. Thank you, Senator. 

Senator STEVENS. Thank you very much, my friend. Thank you, 

Mr. Chairman. 

Senator GREGG. We will certainly do exactly that. It is a very important issue. 

Senator Leahy? 
16

Senator LEAHY. Thank you, Mr. Chairman. 

PATRIOTISM

Mr. Secretary, when you began your remarks here this morning, 

you commended Senator Hollings’ patriotism, and I think every one 

of us would agree with that. We should also commend yours. I 

know in your case coming into Government also involved your personal friendship with the President. It is not an easy task. Whether 

we agree or disagree with policies you might carry out, I don’t 

think there is anybody, Republican or Democrat, who disagrees 

with your own sense of patriotism and your own commitment to 

this country. 

Secretary EVANS. Thank you, Senator. Thank you very much. 

U.S. ECONOMY

Senator LEAHY. What I worry about, we have families that are 

hurting. They see a jobless recovery, 3 million manufacturing jobs 

lost in the past 3 years. Our manufacturing jobs in the United 

States are now at the lowest level since 1950 and I am worried 

about that, whether it is in my State or yours or any other State. 

This is such a major part of the economic engine of this country 

and probably one of the reasons why our trade deficit is so high. 

Our trade deficit was almost half-a-trillion dollars in 2003, $489 

billion to be exact. These things bother me. 

I look at the Commerce Department’s proposal to help the Nation’s ailing manufacturers, the proposal of a new Assistant Secretary of Commerce for Manufacturing, as we have talked about, 

supporting the MEP program that you and Senator Hollings just 

talked about. I am not sure how a new assistant secretary does 

anything. You already have hundreds of people doing this at Commerce, and they are supposed to be doing that job to begin with. 

Senator Hollings said on MEP, which I think is a very, very good 

program, it has gotten strong bipartisan support. The President’s 

budget doesn’t really match the rhetoric. The reality doesn’t match 

the rhetoric. The money is not in there. I was here with the final 

negotiations on the appropriations bill, where the rubber really 

reaches the road, and the White House was not pushing for the 

extra money on MEP. We are not going to have the money for our 

centers to continue operations and service our small manufacturers. And those small manufacturers are in every one of our States. 

So that is a bother. 

PRESIDENT’S ECONOMIC REPORT

I look at sort of the trifecta of sections in the recently released 

Economic Report of the President. First, it suggests that the movement of U.S. jobs overseas, commonly referred to as offshoring, is 

beneficial to consumers. The President’s top economist said this migration is just ‘‘a new way of doing international trade.’’ Well, that 

is kind of a flippant way for somebody to speak who has a job. 

If you know you have 2 months left on your job because you have 

to train somebody to do the same work in India or Indonesia, you 

don’t think this is a great, new way of doing jobs. If you worked 

hard going through school, you have learned the trade and sud-
17

denly it is leaving. The administration’s rhetoric is not going to do 

very much if you want to send your kids to school. 

The report also predicts that non-farm payroll employment will 

average 132.7 million workers in 2004. That would be a 2.6 million 

increase in jobs over the estimate in 2003. But then you have an 

analysis from the Economic Policy Institute and the Center for 

Budget and Policy Priorities that says that you would have to create something like 460,000 jobs a month to do this. You would have 

to have 5 million jobs between now and the end of the year added. 

That is not going to happen unless you do the other thing in the 

report, and that is the question they raised, whether fast food restaurants should continue to be counted as part of the service sector 

or part of the manufacturing sector. They say specifically, ‘‘When 

a fast food restaurant sells a hamburger, for example, is it providing a service or is it combining inputs to manufacture a product?’’

I remember about 20 years ago, and Senator Hollings, you were 

here, and Senator Stevens and Senator Inouye were too, I had 

taken a bunch of reports back to Vermont with me to read them 

over the weekend at my farmhouse. I also serve on the Agriculture 

Committee. And I am reading something in there and I remember 

calling one of the lawyers on the committee. I said, ‘‘Am I reading 

this right?’’ They hadn’t seen it. They read it and they called me 

back and said, you are absolutely right. The administration is reclassifying catsup as a vegetable. I do have a 5-year-old grandson 

who probably believes it is. He loves it. 

I mean, the only way you are going to get some of these jobs, as 

I see it, is to do the catsup as a vegetable thing, to say if you work 

at Taco Bell, you really have a manufacturing job. 

These are just some thoughts of mine. I have a number of questions I will submit for the record. 

Mr. Secretary, I see good news and bad news in my own State 

as some areas were able to get jobs, but I just see so many manufacturing jobs fleeing. I see it in South Carolina, in Alaska, and in 

Hawaii, Wisconsin and everywhere else. I don’t think just reclassifying some of these things is going to do it, just my thought. 

FOCUS ON CREATING JOBS

Secretary EVANS. Senator, thank you for those comments and observations. Let me just begin by saying I think at the very center 

of America, the very center of the American experience is a job, because that is where people go to get a paycheck to put a roof over 

their family’s head, to feed their children, to educate their children, 

to provide health care for their children. 

I spent 30 years of my life in the private sector doing everything 

I could to create jobs. I measured the success of our company by 

are we creating jobs in our community? The most painful thing, the 

most painful thing I have ever done in my life is tell somebody they 

didn’t have a job, which I did. The best thing, the most enjoyable 

thing I ever did in my life was telling somebody they had a job. 

So I agree with you, when you put your focus on jobs and how 

important it is to create the environment for creating more jobs in 

America, because there is nothing more painful than somebody not 

having work to be able to provide for their families. That is where 
18

a lot of our focus should be, is on those individuals that are in transition from one job to another. 

And in the economy that we are going into as we move into the 

21st century, as we work more closely in the world in a growing 

global economy, it is going to be an ever-changing economy. We are 

going to be creating new industries in this country, as we have 

been for years. We are going to be creating new jobs in this country, as we have been for years. But we are also going to be losing 

them along the way, as we have been for years. 

As we move into the 21st century, we are going to see this rapidly-changing economy. Individuals that enter it today, instead of 

just having maybe four or five different jobs in their lifetime, they 

may have four or five different careers and——

Senator LEAHY. But Mr. Secretary, what are the kind of jobs we 

are going to create? I mean, I look at MEP, which is something 

that helps so many of our small businesses create jobs around this 

country. But that is being cut. I mean, where are these jobs going 

to be? We told kids over the past few years to get your math skills, 

get your work skills and all because we are going into this service 

area of computers and so on and that is the place to go. They did 

it, and now they are training people to do their jobs in Asia or in 

India. 

I understand some things change, but what are we doing? We 

have got a half-a-trillion dollar trade deficit. Doesn’t this ring 

alarm bells that we are not creating jobs, we are just importing everything? 

Secretary EVANS. Well, Senator, first of all, where are the jobs 

going to be created? As you mentioned, manufacturing jobs have 

been declining in this country and in this world for the last 40 

years because of the higher productivity in the manufacturing sector of the global economy. 

Today only 11 percent of the jobs in this country are manufacturing-specific jobs. So almost 90 percent of the jobs in America 

today, where people are going to get a paycheck, to feed their children, to put a roof over their family’s head, are jobs that are outside of the manufacturing sector of our economy, and we are going 

to continue to create new industries and new jobs. 

I have traveled all across America the last couple of years. I was 

in Portland, Oregon last week at Portland Community College, and 

I heard story after story after story of individuals that were there 

in their 30’s or 35 and changing, moving from one career to another, learning new skills, having the task to meet the ever-growing demand of jobs in America. 

So it is education and job training. We have 1,100 community 

colleges across the country, 11 million people in those community 

colleges developing these new skills and new talents that will meet 

the demands in these ever-new industries that we are creating in 

this country every year. It has been going on for years. 

In specific areas, you are obviously going to see a lot in the biotechnology area, in the whole technology area, in health care and 

services. You are going to see tremendous growth there in the 

years ahead. 

And so this is an economy that since its beginning has always 

shown a remarkable ability to create new industries and new jobs. 
19

You go back to 1900. About 70 percent of the jobs were in the agriculture community. Now, 2 percent. So it is just the economy, because it is so dynamic and because we allow the free markets to 

work——

TRADE DEFICIT

Senator LEAHY. Mr. Chairman, if I might, Mr. Secretary, and my 

time is up, I know, but half-a-trillion dollars in 1 year in trade deficit, we are still not doing something right. 

Secretary EVANS. Well——

Senator LEAHY. My time is up. You may want to respond to that 

for the record. 

Secretary EVANS. I will just respond real quick. I think it is the 

others in the world who are not doing something right in that their 

economies are not growing as they should be. And as we travel the 

world, we tell other countries, you need to implement the kind of 

policies, economic policies, fiscal policies, monetary policies, regulatory policies that provide the environment for growth in your own 

countries and so you can create more jobs and that will benefit 

American workers and American businesses. We need more global 

economic growth. We can’t be the only engine of growth in the 

world. 

Senator GREGG. Senator Kohl? 

Senator KOHL. Thank you very much, Mr. Chairman and Secretary Evans. 

MANUFACTURING EXTENSION PARTNERSHIP

I know the purpose of these hearings is to bring information to 

the table and hopefully to educate from one side to the other, from 

you to us and from us to you so that good things can happen. They 

are, as you know and I am sure you agree, not intended for just 

one side or the other to mouth previously held positions and both 

sides leave having learned nothing. That is the purpose of our 

hearings. We listen to each other and we hopefully learn and grow. 

It is in connection with that that I would like to come back at 

least once, perhaps finally at this hearing, to the MEP program. As 

you know, the MEP program is Manufacturing Extension Partnerships, a program which helps small and medium-size manufacturing firms around the country to streamline their operations, 

shorten production time, lower costs to enable them to better compete here and around the world, and as a result, increase their employment. 

And, as you know, and I don’t say this in any way less than complimentary fashion, in your best judgment, that program deserves 

to be cut. It is not fully funded. It is fully funded as of last year, 

but it is not fully funded as to where it was 2 and 3 and 4 years 

ago. So to say it is fully funded is not accurate. It is a program 

which your Department has made a decision deserves to be cut. 

To say that it can compete for other funds elsewhere is to rather 

obfuscate the fact that it is a program which does not deserve, in 

your Department’s judgment, does not deserve to be funded at its 

level of 2 years ago and 3 years ago and 4 years ago. It deserves 

to be cut by almost two-thirds, and then go out and compete for 

funds and probably not be very successful because the competition 
20

is really, really tough among many, many different well-qualified 

operations to compete for a limited amount of funding, and they 

are not going to get fully funded relative to where they were 2 and 

3 and 4 years ago. 

But it really is a good program, Secretary EVANS. You know, during this last break, I visited at least two programs around Wisconsin, MEP programs, and heard from many, many others, and I 

visited one program with James Haney, who is the President of the 

Wisconsin Manufacturers and Commerce Organization. It is Wisconsin’s preeminent organization of its kind. They have 4,300 members representing business around the State. It is really a good organization. It politically happens to be an organization which is totally supportive of Republicans in terms of political, but they are 

really not that. They try and be and they are an effective bipartisan organization. 

So I visited the Bernston International Company in Madison, 

Wisconsin, the manufacturing operation with him, and he wrote 

back to me. He said, ‘‘Senator Kohl, it was a pleasure to tour 

Bernston International with you last week in Madison. This company is just one example of many MEP successes that I have personally witnessed in Wisconsin. I completely agree with you that 

MEP is one of the best Government investments around and it 

should be fully supported at the State and at the Federal level.’’

He goes on to conclude that, ‘‘We need to prioritize our economic 

development initiatives and judiciously place taxpayer dollars in 

those investments that provide the best return for our State and 

our country and there are many programs that should not make 

this cut. However, MEP is one Government investment that ranks 

at the top when evaluated against criteria of national need, effectiveness, and results. We should not shortchange or undercut this 

excellent program.’’

‘‘I understand the Senate Commerce, Justice, and State Appropriations Subcommittee will be reviewing the manufacturing support program this week. Please urge the Secretary to do what he 

can to restore MEP funding at the level of $106 million,’’ where it 

was. This is from a longtime, experienced, highly respected businessman in Wisconsin. 

Tell us why you have concluded that MEP does not deserve to 

be funded at its previous level. Thirty-nine-point-six million dollars, which is its new level of funding, for a national program in 

terms of Federal support is virtually an evisceration. This is not for 

one State, this is for all 50 States, $39.6 million. It is not hard to 

imagine that this is a small, small level of support. 

Our opinion is it is for a really good program and there are thousands of businesses around the country that would attest to it. So 

one last time, explain to us why does this program deserve to be 

significantly minimized in terms of its direct Federal support? 

BUDGET CHOICES

Secretary EVANS. Senator, again, it is about tough choices. I 

agree with you in that it has served many small and medium manufacturers well over its period of existence. It will continue to serve 

many small and medium-size manufacturers well at a reduced 

level. 
21

I would say to you that while we have made the decision, the 

tough decision of saying we need to, because of the tough times 

that we are in and the priorities that must be set within our own 

Department, we are doing all we can to make sure that if there are 

other funding sources available to Manufacturing Extension Partnership Centers, we want to make sure they are conscious of those 

opportunities. 

I would just go back to my other remark, that we are spending 

about $132 billion on research and development. We are spending 

$20 billion on economic development. Within these two large pools 

of money, maybe there are opportunities for Manufacturing Extension Partnerships to compete. We have identified some already that 

I have referred to. We are talking to the Department of Defense. 

We are encouraged by some of the discussions that are going on 

there because of their interest in making sure that small manufacturers are participating in their programs. We don’t have anything 

definitive yet. We are just talking to them. 

We are doing the same thing with Homeland Security. Homeland 

Security has about, as I understand it, $800 million for research 

and development kinds of programs. Maybe there is opportunity 

there, so we are talking to them. 

We are trying to look across Government to see where there may 

be additional funding that these centers can compete for. I know 

the challenges these manufacturers face because I was in that business. I know that industry. I know the kind of challenges they deal 

with every day. 

So again, I continue to acknowledge that I think the program has 

functioned well, but it is time for tough choices and this is one of 

those very difficult choices that we made and acknowledge that 

doesn’t mean we are all going to agree with our two choices. I respect, obviously, your view on it, but we felt like this was one of 

those tough choices where we were going to—and saying fully funded, I would agree, it is what I meant to imply was funding in 2005 

at the same level that Congress approved for 2004, which is, and 

I acknowledge, below the funding of previous years. 

SUPPORT FOR MEP

Senator KOHL. All right. One of the companies I visited was the 

Risota Tool Company of Chippewa Falls, Wisconsin, and we toured 

the company, talked to the owners of the company and people who 

work there. MEP had been in and they had done a lot of scheduling 

and efficiency improvements and profit improvements in the company. Those people who worked there were totally complimentary, 

totally supportive of what MEP had done and they felt that MEP 

had contributed significantly to the company’s ability to continue to 

exist, employ, and compete. There are dozens and dozens of companies around Wisconsin that will attest to the same thing and I am 

certain that this is true around the country. 

Now, as I said at the outset, we all hope that these hearings 

serve to educate one another or else they have no purpose, and so 

I am finally suggesting to you that you take one last look. It is policy we are talking about, that is the most important thing, but it 

is also political. Everything we do here has a political aspect to it. 
22

Although not the most important, it is part of what we do here in 

Washington. 

I can assure you that in my State, and this goes back to when 

you were in the State several months ago touring the State, you 

visited Harley-Davidson, you remember that——

Secretary EVANS. You bet. 

Senator KOHL. I saw it on C-SPAN. And, of course, people at 

Harley-Davidson, many of them were very concerned and upset 

about their jobs. One individual stood up at that meeting that you 

had with the workers there and asked about MEP. I don’t know 

why or whether they did it out of their own knowledge or someone 

prompted them, I don’t know, but talked about MEP and how important MEP was. James Haney, who is the President of Wisconsin 

Manufacturers, talks about MEP. 

It would be very, very well received in Wisconsin, which is an important State in November, but it has nothing to do with policy—

I mean with politics. Policy is the most important thing we do. I 

recognize that and I am sure you do, too. People in Wisconsin are 

really concerned about the loss of manufacturing jobs and are looking for every shred of help they can get at the Federal level to assure them that we are doing everything in their power to help 

them maintain jobs at the manufacturing level in Wisconsin and 

MEP is a recognized and accepted part of that effort in our State. 

So I am asking you as well as Chairman Gregg, as we go through 

and figure out our funding levels for this year, and, of course, Senator Hollings, who I know is supportive of MEP, that we give it another look to see whether or not there is something in the interest 

of our country that we can do with a program which is small in 

terms of its funding, but very important in terms of what it does 

accomplish in many States throughout our great country. 

And with that, I am finished. 

Secretary EVANS. Thank you, Senator. 

Senator KOHL. Thank you. 

Senator GREGG. Your counsel is taken very seriously, Senator, 

and we will certainly be addressing it. The opinion has been expressed, obviously, by the committee. But as the Secretary said, he 

had to set priorities in his budget. We will maybe adjust and tweak 

those priorities a bit and send him back a budget he will be very 

comfortable with but will certainly address some of the concerns of 

the committee. 

Senator Inouye? 

CLIMATE CHANGE RESEARCH INITIATIVE

Senator INOUYE. Thank you very much, Mr. Chairman. 

I would like to discuss two matters with you, Mr. Secretary. In 

2001, the President of the United States launched the U.S. Climate 

Change Research Initiative and that was hailed by the people in 

the Pacific for obvious reasons. Climate is part of our way of life. 

More than ever, it is pleasant and beautiful, but there are times 

when it can be devastating. 

So the matter of climate change is very essential to our way of 

life, and I note that in this budget the President has suggested 

$24.7 million. But in analyzing this, we somehow feel that to make 
23

this up, there were cuts of $11 million from the same program. I 

would like to submit a few questions with that in mind, sir. 

TOURISM INDUSTRY

The other question I have, sir, is the tourism industry. Today, I think it employs about 1 million. It brings in about $83 billion. It 

has been declining, and especially since 9/11 it has gone further 

down. But the World Trade and Tourism Council just predicted 

that 2004 may be the year for tourism to start going up, provided 

Government took the initiative to be proactive and put out a hand 

to bring them in. 

My questions would be, what is Government doing, or what can 

Government do, or what can we do to increase this industry, because it is a good, clean, potentially productive industry. That is all 

I have, Mr. Chairman. Thank you very much. 

Senator GREGG. Thank you very much, Senator. 

Senator INOUYE. May I submit the questions? 

GLOBAL CLIMATE CHANGE

Secretary EVANS. I would like to respond. First of all, let me just 

touch on global climate change real quick, if you don’t mind. When 

I arrived here a little over 3 years ago, that was an issue that the 

President was very focused on, as was our Department, and we 

started to try and understand the scope of the global climate 

change commitment from Government, which is significant. 

First, I was told that on global climate change we spend about $800 million a year. And then we found some other money that 

really is focused on global climate change and it took us up to 

about $1.6 billion a year. And then as you looked around some 

more, you found some others that would, you know. The end of the 

story is that we commit about $4.5 billion a year to global climate 

change in this country, more than everybody else combined, global 

climate change science and research and technology. We put together an organizational structure to oversee that $4.5 

billion. Within the Department of Commerce is the responsibility 

of the oversight of the science portion of global climate change, 

which is about $1.8 billion across the Government. We have put 

out a report for the science community to review and consider. We 

did that last year a couple of times. We just recently put out a final 

report that focuses on the science side, the science research side of 

global climate change, which got some favorable comments, from 

the National Research Council. 

In June in Japan, we are going to bring together the global community. This will be for the third time, but it continues to expand. 

We will have the global community there to sign an accord, a 

framework that focuses on a global monitoring system, a global observation system for the climate so that we can develop the kind 

of data, kind of information we need in this world to understand 

the world, this Mother Earth that we all live on, but also make 

sure globally we are collecting the data to make good policy decisions. 

So just know that we are very focused on that very important 

issue, not only for the good people of the islands of Hawaii, but the 

entire world, and I feel the world coming together to say, you know 
24

what? That is a good idea. We ought to have a global observation 

and monitoring system. The reason we know so much about El 

Nin ̃ o and La Nin ̃ a is because we happen to have an observation 

system out there so we measure out there. So why don’t we measure the world and understand what is going on in the world. So 

that is my basic thoughts on global climate change. 

Your second question was on——

Senator INOUYE. Tourism. 

TOURISM

Secretary EVANS. Tourism. We had hoped that we were going to receive $50 million in the budget to promote tourism in America. 

We have put together a Tourism Council that is focused on promoting America around the world. As it turned out in the 2004 

budget, there was only $6 million allocated for that account, for 

that program, and so what we have made the determination that 

we will do, working with the Tourism Council, is to focus a pilot 

program on Great Britain and commit those $6 million to Great 

Britain and look at the results of that program, and based on the 

results of that program, we will make a determination as to what 

to ask for in subsequent budgets. 

But you are right. It is a vital part of our economy. Eighteen million people, when you count the entire travel and tourism industry, 

have a job there, and so it is a critical part of our economy and we 

will continue to do all we can to promote it. Thank you, Senator. 

Senator INOUYE. Thank you very much. 

PTO INCREASE

Senator GREGG. Mr. Secretary, there is a 25 percent increase 

here for the Patent and Trademark Office, which is basically taking 

all the patent fees and putting them into the Patent and Trademark Office, which is a legitimate philosophical position. In light 

of the Patent and Trademark Office’s track record, which is to say 

at the least spotty, do you think they can absorb that type of an 

increase? 

Secretary EVANS. Well, Mr. Chairman, I hope they can because 

I think it is critical to manufacturing in this country. What we certainly are learning in this ever-changing economy that we are moving into is that the manufacturing sector is growing or becoming 

less mechanical and more driven by biotechnology and electrical 

kinds of issues. It is much more complicated. It is much more complex. Patents just simply take longer, take more resources, take 

more hours, take more time to review and then make a judgment 

on. 

It is our determination, as we look at this important area that 

if we don’t hire additional examiners—in fact, in our plan right 

now, we talk about hiring an additional 900 examiners. That is on 

top of about 3,600 examiners. But if we don’t hire at that kind of 

level, which I agree, a 25 percent increase is a significant increase, 

but we see the prospects of the pendency continuing to climb. It 

was a little over 20 weeks in 2003. We estimate in 2004 it is going 

to be 21 weeks. We see it continuing to climb but for a plan that 

will indeed give us the examiners, and the training of the examiners that are needed in this ever-changing economy. 
25

So we believe we can absorb them. I have asked that same question. I realize that is a big management challenge, but I also understand how critical the Patent and Trademark Office is to this 

economy. As rapidly as it is changing and as it continues to move 

in highly technical areas and highly complicated areas that require 

examiners with skills in electronics and biotechnology and all the 

rest. It is a challenge, but it is an area we focused on very hard. 

Senator GREGG. Well, I think it is a challenge. It has been this 

committee’s experience that when we have put a lot of money into 

a Department to hire a large amount of expert staff, for example, 

we did it with the SEC, we did it with the FBI, we did it with the 

State Department, we have found that it has created real problems. 

We have ended up with some breakdowns in the hiring practices. 

We have ended up either not hiring up as quickly as we wanted 

or hiring up with real problems, like the Border Patrol. 

I have serious reservations about putting this much money, this 

quickly, into the Patent and Trademark Office. I readily acknowledge your premise, which is that there is a serious problem there, 

that we are not getting the patents approved fast enough. I think 

the problem is expertise and management, systems management. 

We would be interested in further information on how you really 

do plan to find 900 new people who have the expertise to do this 

job in one year’s cycle. I think it is——

Secretary EVANS. A good question. 

[The information follows:] 

PTO’S HIRING PLAN FOR 900 NEW STAFF

On a percentage basis, the USPTO has increased its staff by even more in the 

recent past. Hiring 900 examiners in fiscal year 2005 represents an increase of 

about 25 percent over end of fiscal year 2004 staff levels. In prior years, the Office 

has successfully hired similar numbers: In 1998, they hired 728 examiners, an increase of about 34 percent over the previous end-of-year staff; in 1999, they hired 

799 examiners, an increase of about 31 percent over the previous end-of-year staff; 

and in 2002, they hired 769 examiners, an increase of 25 percent over the previous 

end-of-year staff. 

The USPTO maintains an automated job application database to facilitate the hiring of patent examiners. The database currently contains about 3,700 applications. 

We have a strategic recruitment plan in place to build awareness of examiner job 

opportunities through a variety of print media that target high-demand technologies, and planned participation in about 60 recruiting events this fiscal year 

that are dedicated to engineering and science disciplines. 

The agency has had a special hiring unit in place for several years that is dedicated exclusively to bringing in patent examiners. In years when the agency had 

high-volume hiring, the unit has brought on board an average of 37 examiners per 

bi-week (962 per year), with the ability to process and train up to 60 examiners per 

bi-week (1,500 per year).

MANUFACTURING EXTENSION PARTNERSHIP

Senator GREGG. Senator Hollings? 

Senator HOLLINGS. On that particular point, that dovetails with 

the observation of the distinguished Secretary relative to Senator 

Kohl’s concern about the Manufacturing Extension Partnership. 

Specifically, the Secretary says there are hard choices. Respectfully, I think it is a very easy choice, not a hard choice at all. You 

want jobs, I want jobs, we all want jobs, and that Patent Office, 

$310 million, let us just say $210 million, give the $100 million to 
26

MEP and we would be back up to snuff with the Manufacturers 

Extension Partnership small business services. 

Senator GREGG. You only need $67 million. 

Senator HOLLINGS. Don’t start cutting me. Wait until we get to 

conference. 

BUDGET CHOICES

The Office of Manufacturing and Services, heck, we are going to 

get us a big super-duper secretary of services and we cut down the 

services, and when we get to a real service, as pointed out and emphasized by Senator Kohl, you say hard choice. That is not a hard 

choice, that is an easy choice. Give the money where it is producing 

jobs. 

Now, I don’t accuse you, Mr. Secretary, but I have been through 

a dozen Secretaries. Now, Census is a honey pot that doesn’t need 

as much funding as you propose because you are ramping up 7 to 

6 years ahead of time the 2010 census. So we can take $100 million 

of that and restore MEP, an easy choice. I could go through this 

budget and really get the things. 

I really am disturbed, and you mentioned technology. The Advanced Technology Program, that is one where all that high tech 

is really there and vetted by the National Academy of Engineering, 

and decisions are made on a competitive basis and they have to 

bring 50 percent of the money. 

Let me get to the point given our limited time here, because we 

are going to have a rollcall, you and I both agree that our job is 

to create, not to export jobs. Export products, but create jobs. 

Would you object to a provision under this particular appropriation 

that no monies be expended to encourage or expedite the export of 

jobs? You wouldn’t object to that provision in the budget? 

EXPORTING OF JOBS

Secretary EVANS. I am not for the exporting of jobs——

Senator HOLLINGS. That is what I mean. So you are not doing 

it, so it wouldn’t have any effect, then. 

Secretary EVANS. Right. 

Senator HOLLINGS. And that would include the pay of these staff 

cheerleaders that go to these Chinese conferences. We don’t want 

to pay those fellows, Ross and all the rest, the assistant secretaries 

who run around to these Chinese conferences in New York and 

elsewhere promoting the export of jobs. I am sure you and I agree 

on that. 

Secretary EVANS. Well, they are promoting the export of goods 

and services from America and equipment. 

Senator HOLLINGS. Good, and you and I agree on that. They 

ought to do that, but not the export of jobs. 

Secretary EVANS. No. It would be exporting the goods and services from America. 

Senator HOLLINGS. That is right, and so we don’t want to pay 

them to export jobs. 

Secretary EVANS. Just the export of goods and services and products from America. 

Senator HOLLINGS. And we don’t want to pay them to export 

jobs. 
27

Secretary EVANS. We want to pay them to export Caterpillar engines and John Deere tractors and——

Senator HOLLINGS. A 30-year outstanding business success and 

you keep saying export goods and services, which we all agree on. 

I am questioning on whether or not we can agree on the export of 

jobs. 

Secretary EVANS. No. We should not. We are not supporting the 

export of jobs. 

OCEAN PROGRAMS

Senator HOLLINGS. Now, with respect to the oceans program that 

Senator Stevens, our distinguished chairman, emphasizes we are 

going to have to get into those issues because we have an outstanding commission appointed by President Bush and they are reporting henceforth here, like you say, around mid-summer. 

Secretary, under the leadership of Chairman Gregg, we have 

been developing, and it has been a struggle in this Appropriations 

Subcommittee, in that we put in, generally speaking, about $15 

million for seven-tenths of the Earth’s surface, namely the oceans, 

and $15 billion for Mars and moons. We know way more about the 

surface of the Moon than we know about the surface of the Earth. 

And yet the Ocean Exploration Initiative, the Ocean Health Initiative, the Coastal Estuarine Land Acquisition Program, the 

Coastal Observation Initiative, NOAA’s infrastructure for the multiple lawsuits and all, you terminate or cut the funding. You cut 

NOAA as we are going into a wonderful venture and really find 

out, like you say, about the weather and the climate all the way 

around the world. 

I have been down to McMurdo Station in the South Pole. That 

is where the beginning of the hole in the ozone layer is. You can 

look up and see it. All of these initiatives are through NOAA, but 

their budget is being cut $308 million just as we are going to hear 

from the Watkins Commission. Please comment on that. 

Secretary EVANS. Senator, what I would say to you is I think we 

all share the same view that we are looking forward to the report 

that comes from the commission. I think it will provide a very important and valuable framework for us in determining what the 

priorities should be and what the funding level should be. I think 

these are some of the finest scientists and leaders we have in our 

country that are focused on this invaluable resource of the Earth 

and it will give us good guidance and some important guidelines 

as to what priorities should be and what funding levels should be 

in NOAA or as it relates to the oceans. 

You mentioned this is not a large sum of money, but when we 

showed up here 3 years ago, there was, I understand, zero dollars 

for ocean exploration. This last year, there was $25 million that included a one-time center in the Smithsonian. But now this year in 

our budget, I think there is $11.7 million for ocean exploration. 

I realize, I take your point, this is a small amount of money, but 

what I would say to you, when we showed up, it was zero and now 

it is $12 million. But I think it is a wise thing to wait for the Ocean 

Commission report and look at that and see what kind of priorities 

this country should place on funding levels for NOAA. 
28

Senator HOLLINGS. We want to work together to be able to implement that commission’s recommendations next year. Thank you, 

Mr. Chairman. 

Senator GREGG. Senator Kohl, do you have anything further? 

Senator KOHL. No. 

Senator GREGG. Senator Inouye? 

Senator INOUYE. No, Mr. Chairman. 

ADDITIONAL COMMITTEE QUESTIONS

Senator GREGG. Mr. Secretary, we certainly thank you for your 

time. You have been very generous with it this morning. 

[The following questions were not asked at the hearing, but were 

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR JUDD GREGG

NOAA SPACE INITIATIVES

Question. Mr. Secretary, since our hearing, you’ve had a chance to review the N 

Prime situation in further detail. First, could you explain/document how the N 

Prime satellite was damaged and the impact on NOAA’s satellite program? Second, 

would you provide an update on what the Department is doing to recover losses and 

get the program back on schedule. 

Answer. The NOAA-N Prime spacecraft fell from a turnover cart on September 

6, 2003 at the Lockheed Martin Sunnyvale, California plant as technicians rotated 

the satellite from vertical to horizontal to perform an alignment operation on one 

of the instruments onboard. The root cause of the accident was that the satellite 

was not properly secured to the turnover cart. The accident caused significant damage to the satellite structure and varying degrees of damage to the instruments, including three provided by International partners. Fortunately, many flight components were not on the satellite at the time of the accident. Spares are available for 

most of the spacecraft components and three of the five U.S. instruments. Two instruments will need to be repaired. 

The impact to NOAA’s Polar-orbiting satellite program is currently under review. 

NOAA has formed an interagency team with its partners at NASA and the Department of Defense to develop and recommend recovery options that will ensure 

NOAA’s responsibility to provide continuous global environmental measurements 

given the NOAA-N Prime accident. The Under Secretary of Commerce for Oceans 

and Atmosphere will make a final recommendation to me regarding the way forward 

from the NOAA-N Prime accident. I will render a final decision in the Spring 2004. 

The Department of Commerce and NOAA will brief Congress at that time. 

The Department of Commerce, NOAA and NASA legal staff are investigating the 

government’s options for recovering losses from Lockheed Martin. 

Question. Mr. Secretary, the President’s budget calls for major new space initiative to return to the moon and explore Mars. But, it is NOAA in your Department, 

not NASA, that is responsible for exploration here at home. Yet, the Budget proposes to cut or terminate ocean research, ocean exploration, undersea research and 

such programs here on our planet. Why such uneven treatment, Mr. Secretary? Why 

do NOAA’s oceanic and ecosystem programs fare so badly in this budget? 

Answer. The Administration recognizes the importance of both space and ocean 

exploration. Given the tight fiscal environment, the Administration is required to 

develop priorities and make difficult choices. The fiscal year 2005 President’s budget 

reflects these priorities. The Administration does place value in exploring the oceans 

and is continuing support for the ocean exploration program at a level of $11.2 million. We will continue to work hard to ensure the success of the ocean exploration 

program, and we thank the Congress for its continued interest in this area. 

Question. Mr. Secretary, as I look at your budget, it appears that the Commerce 

Department decided to cut NOAA and use the savings—over $300 million—to fund 

other bureaus like the Census Bureau, ESA and International Trade Administration. Many have argued that as a natural resource and science agency NOAA will 

never flourish inside the Commerce Department. Doesn’t your 2005 budget support 

their arguments? 

Answer. The $300 million net reduction to NOAA’s request reflects the elimination of one-time projects and programs added by Congress to the fiscal year 2004 
29

request. The fiscal year 2005 budget request is supportive of NOAA’s mission. The 

budget maintains current services and provides over $146.9 million in new program 

increases. 

ADVANCED TECHNOLOGY PROGRAM AND HOMELAND SECURITY TECHNOLOGIES

Question. Mr. Secretary, the fiscal year 2004 Conferees agreed that a focused competition on homeland security technologies should be held out of ATP’s funding provided for new awards. Will the Department of Commerce support ATP’s involvement 

in this type of R&D? Can you provide detail for the Committee on the design and 

implementation of this competition? 

Answer. The fiscal year 2004 solicitation process for ATP applications is currently 

being undertaken. It is expected that a significant number of the enabling technologies ATP will fund this year will have homeland security applications. In the 

recent seven-city ATP ‘‘Proposers Conferences’’ that are designed to attract potential 

applicants, the Director of the Program conveyed Congressional interest in funding 

homeland security technologies. 

After the fiscal year 2004 Omnibus Appropriations Bill became law on January 

23, 2004, the 2004 competition was initiated on February 11, 2004, with a Federal 

Register announcement stating the availability of funds in the amount of $60.7 million for new ATP awards. 

Given the compressed fiscal year 2004 budget calendar, ATP was unable to run 

an entirely separate competition that focused solely on homeland security technologies in addition to its general solicitation. Notwithstanding, ATP takes its obligation to follow the intent of Congress seriously, especially with regard to homeland 

security. ATP expects to receive a number of applications and fund a number of new 

awards for homeland security technologies. NIST has also offered to provide assistance and expertise to the Department of Homeland Security in conducting their own 

competitions that fund homeland security research. 

NIST/MANUFACTURING EXTENSION PARTNERSHIP

Question. Mr. Secretary, in the Administration’s manufacturing report there is a 

recommendation to ‘‘support a newly coordinated manufacturing extension partnership.’’ What is meant by ‘‘newly coordinated’’? Your budget doesn’t support this, does 

it? 

Answer. One of the recommendations in the DOC Manufacturing Report is to 

‘‘Support a Newly Coordinated MEP and Create a National Network of Centers of 

Manufacturing Excellence’’ by: coordinating MEP fully with other Commerce Department programs that are helping manufacturers to be more competitive and expand markets; focusing all MEP centers on effectiveness and cost efficiency; exploring the concept of receiving funding from private sector entities; encouraging applicants to identify areas of sector-specific expertise that could qualify them as a ‘‘center of excellence’’; and encouraging co-location with universities, community colleges, 

and ITA assistance centers to foster cooperation, knowledge transfer, greater efficiency, and manufacturing exports. 

All of these efforts comprise the ‘‘newly coordinated’’ MEP. The fiscal year 2005 

budget request supports this effort. 

Question. Mr. Secretary, there has been some discussion that MEP might be reduced to the network of regional centers. Are you aware that this past January another State decided that the New Hampshire MEP would close down due to lack 

of funding? Who made the decision? Can you inform the Committee what the process is for closing centers? 

Answer. Three years ago, the New Hampshire (NH) Center was experiencing 

management problems so the NH Board removed the director, reconstituted the 

board, and brought in the Maine-based MEP Management Services Incorporated 

(MSI) as managing agent. 

Since NH received about $420,000 in Federal cost share annually and only received about $150,000 from the state three years ago, the excess Maine cost share 

was used to cover the NH center. 

The Maine MSI’s excellent management team was able to bring the NH performance up and NH is now the highest performing MSI center. 

However, the NH center had approximately $300,000 in debt which the Maine 

MSI assumed as managing agent. The Maine MSI managed to reduce this debt 

down to $180,000. But as fiduciary agents, the Maine MSI and the NH board are 

responsible for the remaining debt. In light of the reductions to MEP funding in the 

fiscal year 2004 Consolidated Appropriations Act, the Maine MSI decided that, even 

in a best case scenario, they would not have enough cash flow to manage the NH 

debt. 
30

The Maine MSI will still provide a minimal level of service by keeping one NH 

staffer and assigning other staff from Massachusetts and Maine to serve NH companies. 

INFRASTRUCTURE PROTECTION

Question. Mr. Secretary, you have the sole responsibility to issue Federal Information Processing Standards which are standards developed by NIST and used by federal agencies and the commercial sector to protect their computer systems. As the 

Nation’s infrastructure is increasingly linked by the internet, its vulnerabilities are 

being subjected to daily attacks. Given this fact, is the Nation, and in particular the 

Department of Commerce, investing enough resources to protect our computer systems and networks? Does this portfolio of investment contain enough forward looking R&D to allow us to be proactive and not reactive to these threats? 

Answer. Information security is one of the most critical issues facing industry and 

government. The Department of Commerce and especially NIST, takes very seriously our responsibilities to strengthen information security in the Federal government and the Nation as legislatively mandated in the Federal Information Security 

Management Act (FISMA) of 2002 and other legislation. 

As a Nation, we have made progress in securing our legacy systems, but ‘‘bad 

guys’’ continue to find new ways around or through our defenses. While we focus 

on current implementations, new technology developments in IT systems and in 

other disciplines that increasingly rely on IT systems are coming on-line at an accelerating pace. Thus, in cyber security, we continue to be challenged. 

That is why the President’s fiscal year 2005 budget request includes a proposed increase of $6 million for NIST to address key National needs in cyber security. 

With this proposed increase to NIST’s base funding of approximately $10.9 million, 

NIST will be able to more effectively work with industry and government agencies 

to accelerate solutions to critical cyber security issues, including the development 

of security and critical infrastructure application protocols; expanding the NIST 

Cryptographic Toolkit to include developing technologies, such as limited power, 

small-sized computing environments, fixing insecure wireless security standards; 

and producing metrics to build secure networks and systems from individually understood components. 

PTFP GRANTS

Question. Mr. Secretary, can you tell us why the PTFP Construction account and 

the Information Infrastructure Grants are no longer needed and why the funding 

request is shifted to the Public Broadcasting budget? Since CPB funds cannot be 

used for repairs, where will rural stations turn for assistance? 

Answer. The Information Infrastructure Grant program was created as an awareness program to promote the widespread use and availability of telecommunications 

and information technology in the non-profit and public sector. The Department believes that this mission has been fulfilled and recommends redirecting the funds to 

new priorities. 

With the assistance of Federal funds appropriated to PTFP, the Corporation for 

Public Broadcasting (CPB), and the Rural Utilities Service (RUS), 90 percent of the 

Nation’s public television stations will be broadcasting in digital by the end of the 

year. As we near the end of the digital transition, the Administration proposes to 

continue funding the digital conversion of public television during fiscal year 2005 

through funds already appropriated to CPB. 

PTFP also does not pay for equipment repairs or other operating costs. PTFP, 

however, does pay for the replacement and installation of replacement equipment 

in circumstances of urgent need. We understand that these expenses could be supported through the equipment programs now in place at CPB and RUS. 

LONG-TERM PLAN FOR SPECTRUM MANAGEMENT

Question. Can you tell us what your overall long-term game plan is for spectrum 

management and how you will work with the FCC in this endeavor? What are your 

priorities and what are the most significant impacts on the commercial industry? 

Answer. On May 29, 2003, the President established the ‘‘Spectrum Policy Initiative’’ to develop and implement a U.S. spectrum policy for the 21st century. The Secretary of Commerce was directed to chair the initiative. The initiative involves an 

interagency task force to develop recommendations for improving spectrum management policies and procedures for the Federal Government, as well as an examination of ways to improve spectrum management for state, local, and private sector 

spectrum use. A report containing recommendations will be provided to the President in early summer. 
31

The National Telecommunications and Information Administration (NTIA) within 

the Department of Commerce is the President’s principal advisor on telecommunications and carries out the function of providing spectrum to the Federal agencies. 

NTIA works directly with the FCC regarding spectrum allocation and spectrum policy development and implementation. In addition, the NTIA and FCC have agreed 

via a memorandum of understanding to meet twice a year at the Chairman and Assistant Secretary level and monthly at the Bureau level to discuss plans and spectrum management issues. 

Our major priorities include: (a) foster economic growth; (b) ensure our National 

and homeland security; (c) maintain U.S. global leadership in communications technology development and services; and (d) satisfy other vital U.S. needs in areas such 

as public safety, scientific research, Federal transportation infrastructure, and law 

enforcement. 

In the fiscal year 2005 budget, the President requested funding for NTIA for the 

development of incentives to increase efficient use of spectrum; the continuance of 

a prior year initiative to make the spectrum management process more efficient and 

effective through the application of information technology; the expansion of our 

International radio-communication outreach program; and development of the necessary analytical engineering tools and methods that will improve spectrum efficiency. 

The Administration has strongly supported the creation of a ‘‘spectrum relocation 

fund,’’ which would have a significant impact on the commercial industry by substantially speeding the opening of spectrum to commercial use. Passage by the 

House of H.R. 1320, the Commercial Spectrum Enhancement Act, without amendment, would significantly improve spectrum management for both Government spectrum users and for commercial wireless users. The relocation fund legislation strikes 

a proper balance in three key policy objectives. First, the Bill fully funds Government spectrum relocation, providing certainty essential to Federal users including 

the Department of Defense. Second, the legislation will result in timelines that are 

workable for Government incumbents and commercial wireless users. Third, the legislation provides certainty and accountability in developing and adhering to relocation cost estimates and relocation timetables. 

Failure to enact this legislation this year could have an adverse impact on the 

timing of the Third Generation (3G) wireless auction and the deployment of new 3G 

wireless services. Industry and the Government are in strong agreement that the 

reimbursement fund mechanism would streamline the relocation of Government 

agencies. The President’s budget for fiscal years 2003, 2004 and 2005 contained a 

legislative proposal to create a spectrum relocation fund for Federal agencies required to relocate their communications systems to allow the spectrum to be auctioned by the Federal Communications Commission (FCC) for private sector uses. 

H.R. 1320 passed the House 408–10 on June 11, 2003. At the time, the Administration issued a Statement of Administration Position strongly supporting the bill as 

passed by the House. 

ITA REORGANIZATION AND COLLABORATION WITH USTR

Question. Mr. Secretary, at the hearing you gave us an overview of how the ITA 

reorganization is progressing. Will you now provide a more comprehensive status of 

this complex reorganization? Also, can you offer some insight on how the Commerce 

Department will leverage this new office in cooperation with the United States 

Trade Representative to protect U.S. interest? 

Answer. The Reprogramming was sent to the House and Senate Appropriations 

Committees on May 7th. In addition, the Department Organization Orders necessary to formally make the changes need to be signed by the Secretary. Once the 

orders are signed, the staff will be formally moved and the management processes 

(accounting, personnel and other logistics) will be completed. 

Our reorganization will provide increased attention to the problems, both domestic and international, facing the manufacturing sector through the creation of an Assistant Secretary for Manufacturing and Services. We will consolidate and strengthen our export promotion functions under the Assistant Secretary for Trade Promotion (and Director General of the U.S. and Foreign Commercial Service) and improve the operations of our Import Administration. 

The Department of Commerce will continue to work closely with the U.S. Trade 

Representative in fulfilling the requirements of U.S. law, assisting exporters in overcoming foreign trade barriers and ensuring foreign countries comply with their commitments to the United States. 
32

IRAQ RECONSTRUCTION

Question. Mr. Secretary, I would like to commend the dedication of the Senior 

Commercial Officers around the world. They are doing an outstanding job. With reference to the emerging need and increased workload in the Middle East, specifically 

related to Iraq reconstruction, can you tell us where Iraq is within the priorities of 

the Foreign Commercial Service? What is FCS’s basis for the resource allocation for 

the various locations around the world? Do you have a plan to increase the FCS 

presence in the areas serving as gateways into Iraq? When the government is 

turned over to the Iraqi provisional government on July 1, what is the plan for the 

FCS presence? 

Answer. ITA has conceived and developed several initiatives to facilitate and assist U.S. business interest in Iraq. 

Our Middle East-based Iraq Reconstruction Regional Initiative is a joint effort by 

Commercial Services posts in Egypt, Jordan, Kuwait, Saudi Arabia, Turkey and the 

UAE to assist interested U.S. companies by highlighting and supporting a series of 

specific events and activities such as conferences, seminars and training programs, 

webcasts, virtual (video) trade missions and videoconferences. 

As part of this initiative, we have undertaken an extensive series of activities, a 

schedule of which is attached. As a further complement to these activities, we plan 

to open a Middle East Business Information Center, which will showcase private 

sector development and serve as a one-stop shop for U.S. companies seeking opportunities in the region. 

Similarly, the Central and Eastern Europe Regional Initiative seeks to provide 

our Central and Eastern European Coalition allies with the necessary information 

required for their companies to compete for Iraq Reconstruction contracts on a level 

playing field. This initiative is a one time commitment to provide a delegation of 

experts to disseminate information and answer questions from the local business 

communities in Poland, Hungary, Czech Republic, Romania, Albania, Bulgaria, Slovakia and Ukraine. 

Commerce is also gearing up with a U.S.-based Iraq Reconstruction Project Team. 

This initiative builds on our successful ‘‘sector team’’ approach to assemble a small, 

highly focused group of sector specialists from around the country, each focused on 

a specific priority development sector in Iraq. Each sector specialist will be responsible for developing contacts with Iraq experts, handling questions from interested 

companies, and disseminating information on their particular sector. 

Since the end of official hostilities, we have had commercial service officers in Iraq 

assisting the Coalition Provisional Authority with private sector development and 

Iraq reconstruction efforts. We now are in the process of establishing a Commercial 

Service (CS) operation in Baghdad in the new Embassy scheduled to open by July 

1, 2004. CS Baghdad will be staffed by 2 commercial officers and 8 Foreign Service 

nationals. CS has begun hiring staff for the new Baghdad operation and has assigned a seasoned officer to arrive in Baghdad in advance of the July 1 opening. 

The CS overseas resource allocation model takes into consideration Administration priorities, as well as market potential and cost/benefit analysis. Historically, the 

U.S. and Foreign Commercial Service has responded to national crisis with all available resources. We are using existing resources for this effort. 

IRAQ RECONSTRUCTION REGIONAL INITIATIVE (IRRI) LIST OF TRADE PROMOTION EVENTS

(BY DATE)

January 2004

January 13–15—Iraqi Ministry of Trade training by the Government of Jordan on 

the Company Registration System. COMPLETED. 

January 5—Live Web Broadcast through the World Trade Center (WTC) in Ankara, Turkey. COMPLETED. 

January 6–8—Iraq Reconstruction Seminars in Ankara (Jan. 6), Izmir (Jan. 7) 

and Istanbul (Jan. 8). COMPLETED. 

January 11–13—‘‘Outreach 2004 Exhibition’’, Amman, Jordan on Iraq Reconstruction. Recruit an Iraqi delegation to attend the event. FCS Turkey to send Turkish 

delegation. COMPLETED. 

January 19–23—‘‘Rebuild Iraq’’, Exhibition in Kuwait City. Bring Iraqi delegation. 

CS Kuwait to host Iraqi Reconstruction Council Meeting. COMPLETED. 

January 18–22—‘‘Arab Health Exhibition’’, Dubai, U.A.E. Joint United States/

United Kingdom initiative to bring an Iraqi delegation. CS Baghdad staff to provide 

CPA/CS Baghdad briefing. COMPLETED. 

January—Proposed Ar’ar Border opening press event in Saudi Arabia. U.S. Embassy Saudi Arabia to highlight beneficial aspects of the opening for future Saudi-
33

Iraqi business relations. POSTPONED UNTIL CPA/GC HAND-OVER OF SOVEREIGNTY 6/30/2004. 

February 2004

February—Preparation of Arabic language quick reference sheet on ‘‘Doing Business in Iraq’’. COMPLETED. 

February 17—CS Kuwait and CS Riyadh supported and accompanied delegation 

from the American Business Council of Kuwait to Basra and Um Qasr for business 

meetings and briefings by the Basra Chamber of Commerce and CPA South. COMPLETED. 

February 17–20—Assistant Secretary Lash visits Baghdad to meet CPA officials, 

U.S. and Iraqi companies to discuss reconstruction and investment. COMPLETED. 

March 2004

March—Iraq Central Organizations for Standards and Quality Control (COSQC) 

delegation to Saudi Arabia for training in establishing industry standards, organized by NIST. POSTPONED DUE TO NIST FUNDING ISSUE. 

March 20—A/S Lash meets Iraqi and U.S. business groups in Abu Dhabi and 

Dubai regarding Iraqi Reconstruction and Investment. COMPLETED. 

March 21–22—‘‘Iraq-Arab Alliance Conference for Reconstruction, Trade and Investment in Iraq’’ to be held in Bahrain. Conference and exhibition focused on Iraq 

Reconstruction opportunities with participation from throughout the Gulf region. 

COMPLETED. 

April 2004

April 5–8—Conference and exhibition organized by Iraqi American Chamber of 

Commerce and Industry entitled ‘‘DBX: Destination Baghdad Expo’’ at Baghdad 

International Fairgrounds. POSTPONED. 

April 10—Iraq Conference by the Council of Saudi Chambers of Commerce & Industry in Riyadh. FCS to present business opportunities through Saudi-U.S. business relationships. USAID/CPA contractor and USG officials to participate as speakers. April 4—Iraq Reconstruction seminar at the American Turkish Council’s Annual 

Conference, Washington, D.C. COMPLETED. 

April 18–19—Oil and Gas Conference in Basra actively supported by CS Kuwait. 

POSTPONED. 

April 20—Dubai—Conference on Subcontracting Opportunities in Iraq with high 

level DOC and PMO participation. COMPLETED. 

April 25—Amman—Conference on Subcontracting Opportunities in Iraq with high 

level DOC and PMO participation. COMPLETED. 

April 29—Istanbul—Conference on Subcontracting Opportunities in Iraq with 

high level DOC and PMO participation. COMPLETED. 

June 2004

June 2–3—International Investment Conference in Basra, actively supported by 

CS Kuwait. POSTPONED. 

June 6–7—Conference on Iraq’s Oil and Gas Industry in Abu Dhabi. 

‘‘Doing Business in Iraq’’ Outreach Seminars 

Assistant Secretary Lash—February 24, Cleveland, OH; February 25, Kansas 

City, MO; March 23, Detroit, MI; March 24, Minneapolis, MN; March 25, New Orleans, LA; and May 6, Houston, TX. 

Senior Advisor on Iraq, Sue Hamrock—March 9, Los Angeles, CA; March 10, San 

Diego, CA; March 18, Boston, MA; March 19, New York, NY; April 13, Chicago, IL; 

and April 14, San Francisco, CA. 

2010 DECENNIAL CENSUS AND AMERICAN COMMUNITY SURVEY

Question. Mr. Secretary, this is an extraordinary request for funds with six years 

to go until the census. Could you give us a status overview of the preparation for 

the 2010 census and how the requested funds will be used? 

Answer. Things are going very well, thanks to the support of the Administration 

and Congress in these efforts. With these early investments in the 2010 census, we 

are well on our way to achieving our goals to improve the relevance and timeliness 

of census long-form-type data, reducing operational risk, improving the accuracy of 

census coverage, and containing costs over the 2010 decennial cycle. 

In the fourth quarter of fiscal year 2004, the American Community Survey (ACS) 

will expand to a sample of 250,000 addresses each month spread across every county in the United States and Puerto Rico. Fiscal year 2005 will be the first full year 

of data collection at this sample size. The successful implementation of the ACS 
34

serves as the replacement of the long-form component of the decennial census, providing the United States not only more timely data, but also the added efficiencies 

of administering a short-form only decennial census. 

The MAF (Master Address File)/TIGER (geographic reference file) Enhancements 

Project is on schedule to be completed for all counties in the United States, Puerto 

Rico, and island areas by fiscal year 2008. 

Key mailout, field, and special purpose studies have been completed in developing 

a short-form census for 2010. Additional tests and development efforts are on track 

for conducting a dress rehearsal census in fiscal year 2008. 

Specifically: 

American Community Survey 

Ongoing support for the ACS will allow the Census Bureau to publish detailed 

social and economic data every year for all places with a population of 65,000 or 

more beginning in fiscal year 2006. 

The increased budget is for the annualization of the program that will have begun 

in the fourth quarter of fiscal year 2004. The largest cost drivers are questionnaire 

mailing and collection, following up on nonresponses, information technology and 

data processing/dissemination activities. 

After three years of data collection and every year thereafter, accumulated data 

can be used to make such annual estimates for all places of size 20,000 or more. 

After five years of data collection and every year thereafter, accumulated data can 

be used to make annual estimates for all places and tracts comparable in content 

and reliability to decennial long-form data. 

MAF/TIGER Enhancements Project (MTEP) 

By the end of fiscal year 2004, approximately 26 percent of the counties in the 

Master Address File (MAF) and geographic database (TIGER) will be brought into 

alignment with global positioning system (GPS) coordinates. 

In fiscal year 2005, improvements will be completed for an additional 700 counties. By the end of fiscal year 2005, this work will have been completed for nearly 

half of all counties in the United States, Puerto Rico, and the island areas. 

The MAF/TIGER enhancements project is on schedule to be completed for all 

counties in the United States, Puerto Rico, and the island areas by the end of fiscal 

year 2008. 

Work will continue on converting our MAF/TIGER processing environment to one 

based on commercial, off-the-shelf software. This effort began in fiscal year 2003 and 

is planned to be completed in fiscal year 2006. 

Short-Form Only 2010 Census 

The development and testing of a dramatically revised process for conducting the 

short form Census is key to the strategy for cost containment for the 2010 census. 

We will complete 2004 Census Test evaluations by the third quarter of fiscal year 

2005 and use the results to inform/revise planning, testing, and development for the 

rest of the decade. 

We will begin conducting the National Content Survey and the 2005 National 

Census Test in the fourth quarter of fiscal year 2005 and complete evaluations in 

the third quarter of fiscal year 2006. 

We will begin preparations, and conduct early operations, for the 2006 Census 

Test in fiscal year 2005. 

We will begin planning for the 2006 Overseas Test in fiscal year 2004 and prepare 

for the test during fiscal year 2005. 

We will continue other long-term planning, testing, and development for the 2008 

Dress Rehearsal and 2010 Census. 

Question. Mr. Secretary, in addition, as this is the first time you are implementing the American Community Survey, can you tell us how you expect the implementation to go? 

Answer. After almost a decade of research and testing, the American Community 

Survey (ACS) will begin Nationwide data collection in the fourth quarter of fiscal 

year 2004, at a sample size of 3 million addresses per year. We feel confident this 

program will be successful given the experience of the staff overseeing the project 

in headquarters, the processing center, the three telephone centers, and the 12 regional offices. The testing on the ACS from 1996 to the present supports our confidence. The ACS has exceeded our quality goals each year. We anticipate continuing this success into full implementation. 

There are three major challenges we anticipate and are monitoring closely: 

—Full implementation of the ACS requires a significant increase in sample size 

(from 800,000 to 3 million annually) and requires a significant increase in the 

overall ACS staff. The one-time classroom training and on the job observation 
35

will fully tax the regional office staff working on the ACS program during October through December. However, the experience of the regional office staff will 

ensure that the staff is well trained and ready to conduct the ACS successfully. 

—The American Community Survey is expanding into Puerto Rico as part of full 

implementation. We have limited experience in collecting survey data in Puerto 

Rico. Our Boston Regional Office will manage the personal visit data collection 

in Puerto Rico. We are working together to hire and train an adequate staff in 

October 2004 to ensure the data collection is a success. 

—Lastly, although the American Community Survey tested data collection of persons living in group quarters (prisons, college dormitories, nursing homes, etc.) 

in 1999 and 2001, the National level implementation of group quarters data collection is a major challenge. This operation will require separate training for 

the regional office field staff and close monitoring to ensure the quality of the 

data meet the ACS standards. 

While the start-up challenges are significant, the U.S. Census Bureau places high 

priority on the American Community Survey and we are confident the program will 

continue to be successful. 

FUNDING FOR CENSUS PROGRAMS

Question. Mr. Secretary, I am concerned about budget reductions in the areas of 

Economic Census, Census of Governments and the Intercensal Demographic Estimates. Can you explain how you plan to provide the same level of service the government has come to count on? 

Answer. The fiscal year 2005 Congressional request for the Intercensal Demographic Estimates is an increase of $1.2 million to improve the measurement of migration across U.S. borders. It is imperative to accurately assess the size, characteristics, and impact of International migration, as it is a critical factor in our population growth. 

Reduced funding levels for other programs reflect the cyclical nature of these programs. For example, 2005 is the final year of the 2002 Economic Census Cycle and 

the first year of the 2007 Economic Census. If fully funded, the Census Bureau will 

carry out all activities scheduled for fiscal year 2005 as originally planned. As the 

census programs transition from one phase of the cycle to another, activities in fiscal year 2005 are different in nature from fiscal year 2004. Given the differences 

in the nature and scope of the planned activities for fiscal year 2005, the Census 

Bureau can, at the requested funding level, continue to provide the high level of 

service our customers and stakeholders have come to expect. 

PTO FUNDING AND REDUCED PENDANCY

Question. Mr. Secretary, during the hearing we discussed the significant increases 

for PTO in your budget submission. In past years, the correlation between funding 

increases on the one hand and reduced patent pendancy and higher patent quality 

on the other has not been demonstrated. Will you provide a more detailed explanation on how such a large budget increase in fiscal year 2005 will help achieve 

these goals? Can the PTO actually execute such a large increase in one year? 

Answer. Although the USPTO has received significant budget increases, over the 

past 10 years patent applications filed, patent examiners and enacted budget—in 

constant dollars—have increased at about the same rate (applications at 81 percent 

and budget and patent examiners at about 90 percent). The primary reason for 

pendency increases over this period is that the Office has been confronted by an 

overwhelming shift in technology from the traditional chemical and mechanical applications to the significantly more complex applications in the computer, biotechnology and telecommunications areas. Ten to 15 years ago only 11–12 percent 

of the USPTO’s work was in the complex technologies; today almost 35 percent is. 

On the average, examiners have 18 hours to handle an application in the traditional 

chemical and mechanical areas as opposed to 31 hours in the high tech/emerging 

areas. This shift in technology and the corresponding increase in time needed translates to a need of over 600 examiners, before even addressing the high annual 

growth rates in applications received. A number of policy changes and International 

obligations have also shifted significant amounts of work to areas that do not reduce 

pendency. For example, from 1993 to 2003 filings pursuant to the Patent Cooperation Treaty increased by over 300 percent, from 13,310 to 44,282. Examiners must 

be given production credit for resolving these cases even though they grant no property rights. Since passage of the American Inventors Protection Act in 2000, examiners have been assigned classification duties related to pre-grant publication, a 

task that absorbed 36 examiner-FTEs in fiscal year 2003 but did not contribute to 

pendency reduction. 
36

In the recent past, many have urged the USPTO to stop trying to ‘‘hire its way 

out of this problem.’’ While the agency continues to work on ways to improve efficiency, there is simply no substitution for the human mind for making determinations of patentability. As a result, the Strategic Plan anticipates continued examiner 

hiring as a critical element of achieving targeted pendency improvements. It also 

proposes a number of efficiency gains, including taking advantage of searches of 

identical or similar applications submitted to other competent patent offices and introducing market competition for some of the tasks facing the Office. The Strategic 

Plan initiatives to use non-examiner resources to perform search and classification 

functions will enable the agency to focus more examiner attention on making patentability decisions and will contribute to pendency improvements. 

The USPTO’s fiscal year 2005 budget request includes an increase of $311 million 

over the fiscal year 2004 enacted level. Of this $311 million, $38 million is for adjustments to base (pay raises and other inflationary costs), and another $38 million 

would be transferred to the Office of Personnel Management for post-retirement 

benefits of USPTO employees. The remaining $233 million increase would be dedicated to implementing Strategic Plan by fully funding delayed initiatives, and continuing to fund those that were implemented at a reduced level, as follows: 

—$19 million would enable the USPTO to continue its high priority focus on quality initiatives and fully fund training to address the new electronic workplace. 

With primarily base resources, the USPTO has made positive progress in implementing key programs to improve quality, such as certification of patent examiners before promotion to grade 13, continuing legal education for all patent professionals, and an expanded, in-depth review of the work product of one-third 

of all senior patent professionals. 

—$39 million would be used to continue e-Government initiatives, including availability of automated systems and recovery in the event of catastrophic disaster. 

This funding is critical because IT has brought to the examiner’s fingertips capabilities not realized 15 years ago, such as: 

—Increased reliance on non-patent literature for prior art searches: Automation 

funding has provided access for examiners to the hundreds of non-patent literature databases that are needed to perform a quality search. 

—Internet searching: In some technologies, Internet searching is a mandatory 

primary search requirement. 

—Complexity of applications: Patent applications now include subject matter 

that requires IT solutions simply to examine them; for example, the newer 

technologies such as biotechnology applications with complex sequences, and 

proteins claimed by three dimensional spatial coordinates. Some applications 

come in on CDs with the equivalent of millions of pages of data. 

—Also included in this amount, and consistent with the fee bill passed by the 

House, are funds to test the concept of competitive sourcing for prior-art 

searches by conducting a limited scope proof of concept during fiscal year 

2005. The USPTO is analyzing the amendments in the fee bill to determine 

their implication on operations. 

—$61 million would address, among other things, patent application inventories 

and workload by hiring 900 new patent examiners. This represents 650 new positions, compared to new positions of 67 in fiscal year 2003 and a planned zero 

increase in fiscal year 2004. Funds also would be allocated to new Trademark 

examining attorney hires and changes needed to implement the Strategic Plan 

initiatives of multi-track and accelerated examination, and post-grant review in 

patents. 

—$106 million would be used to address workload increases by aligning funding 

needed for activities impacted by the growing examination workloads and the 

volume of application and search data. Included in this amount is $65 million 

for patent workload increases in initial examination review, pre-grant publication, patent publication, commercial data bases and examiner search support, 

and information technology support throughout examination; $35 million for IT 

upgrades, staff for responding to an increased number of customer assistance 

and issue resolution incidents, increase and enhancement of mass storage and 

infrastructure platforms; and $6 million for administrative support, such as 

mail center and warehousing, and related workload and human resources processing costs 

TAKING PTO OFF BUDGET

Question. Mr. Secretary, there is currently legislation moving through the House 

that would take PTO ‘‘off budget’’. Can you tell me what your position is on this 
37

legislation? Can you tell me some reasons why this might or might not be good for 

PTO? 

Answer. The fee revisions and related provisions included in the USPTO fee bill 

(H.R. 1561) were originally introduced at the request of the Administration and did 

not include a proposal to take the USPTO off-budget. When the off-budget language 

was added by amendment in subcommittee markup, the Administration indicated 

in a letter signed by Theodore W. Kassinger, General Counsel, on June 12, 2003, 

to the full Judiciary Committee that it could not support the bill as amended because, in part, it would have removed the USPTO from the appropriations process. 

The Administration has not yet developed a formal position on H.R. 1561, the 

‘‘United States Patent and Trademark Fee Modernization Act of 2004,’’ as passed 

by the House (on a 379–28 vote on March 3, 2004) and reported favorably by the 

Senate Judiciary Committee on April 29, 2004. 

BIS MISSION AND ACTIVITIES

Question. Mr. Secretary, it seems BIS has an expansive mission for a small agency. Can you explain how BIS plans to prioritize it many missions and how you plan 

to apply these few resources to accomplish that goal? Also, can you share with us 

how BIS works with other agencies outside of Commerce and any jurisdictional 

issues that affect your operations? 

Answer. The mission of the Bureau of Industry and Security (BIS) is to advance 

U.S. National security, foreign policy, and economic interests. BIS’s activities include regulating the export of sensitive goods and technologies in an effective and 

efficient manner; enforcing export control, antiboycott, and public safety laws; cooperating with and assisting other countries on export control and strategic trade 

issues; assisting U.S. industry to comply with International arms control agreements; and monitoring the viability of the U.S. defense industrial base. 

To assist the Bureau in fulfilling these critical missions, BIS published its Guiding Principles in October 2002. These Principles represent the philosophy of BIS in 

approaching its activities and fulfilling its responsibilities. A copy of these Principles 

is attached. 

BIS focuses its activities and resources on eight key areas: 

—Export control policy and regulation.—BIS ensures that controls on exports and 

reexports of U.S.-origin items meet U.S. National security objectives without 

unnecessarily burdening U.S. industry. 

—Export licensing.—BIS is continually streamlining and updating its processes to 

increase capacity and better serve exporters. 

—Enforcement.—BIS vigorously enforces U.S. export control, antiboycott, and public safety laws, while working to improve exporter and end-user compliance with 

export license conditions. 

—Multilateral regimes.—BIS plays a major role in the development, interpretation, and refining of control lists and operational guidelines for the four major 

nonproliferation regimes—the Nuclear Suppliers Group, the Australia Group, 

the Missile Technology Control Regime, and the Wassenaar Arrangement. 

—International Cooperation.—In coordination with other federal agencies, BIS 

participates in a number of International cooperation and enforcement programs to enhance compliance with and enforcement of U.S. export controls 

worldwide. BIS also assists in the development of effective indigenous infrastructures for export controls in other countries. 

—Treaty Compliance.—BIS assists U.S. industry in compliance with the Chemical 

Weapons Convention and will assist industry in compliance with the Additional 

Protocol to the United States-IAEA nuclear safeguards agreement. 

—U.S. defense industrial base.—BIS monitors and supports the U.S. defense industrial and technological base through advocacy for U.S. firms competing for 

foreign defense contracts. BIS also exercises its authority under the Defense 

Priorities and Allocations System to require preferential acceptance and performance of certain contracts supporting the U.S. military. 

—Outreach.—BIS keeps United States and foreign firms informed of U.S. export 

control regulations through an aggressive program of seminars, meetings, and 

other outreach activities. 

To accomplish its mission, BIS works cooperatively with other parts of the U.S. 

Government including the National Security Council, the Department of State, the 

Department of Defense, the Department of Energy, the Department of Homeland 

Security, and the Intelligence Community. In many cases, BIS circulates license applications to other agencies for review prior to a decision. In addition, BIS manages 

an extensive license application escalation process that enables senior U.S. Govern-
38

ment officials to consider particularly sensitive applications before a final decision 

is made. 

Most items on the Commerce Control List (CCL) are derived from the control lists 

of the multilateral regimes. BIS works closely with other U.S. Government agencies 

to strengthen these regimes and improve treaty compliance. BIS also works with the 

Departments of State, Defense, and other agencies to ensure that the CCL adequately captures all dual-use items that potentially could be used to harm the National security of the United States, and to clarify the allocation of commodity jurisdiction between the Department of Commerce and the Department of State, which 

has responsibility for licensing defense articles. 

In addition, BIS participates in a number of International cooperation and enforcement programs in coordination with other federal agencies. BIS leverages its 

capabilities by forming strong working relationships with other law enforcement 

agencies, including the Federal Bureau of Investigation (FBI), the Bureau of Immigration and Customs Enforcement (ICE), and the military law enforcement groups. 

BIS also has productive and cooperative relationships with the Central Intelligence 

Agency and the National Security Agency. 

These cooperative efforts with U.S. industry and other agencies in the U.S. Government have enabled BIS to achieve significant success in accomplishing our important mission. Our efforts are guided by the principle that protecting security and 

promoting trade are mutually reinforcing objectives. Indeed, legitimate trade is 

based on the foundation of sound security. We look forward to building on this success as we address new challenges in the years ahead. 

QUESTIONS SUBMITTED BY SENATOR TED STEVENS

ASSISTANCE TO ALASKA FISHERMEN

Question. Does the department intend to provide full funding of the $15 million 

in economic development assistance each of the five years to these fishermen? 

Answer. The Department of Commerce is very concerned about Alaska’s fishingdependent communities and is committed to ensuring that these communities are 

economically prosperous and remain viable communities with a strong economy. 

CRAB RATIONALIZATION PROGRAM AND OCEAN POLICY

Question. Do you perceive any problems with meeting the implementation date of 

January 1, 2005 for Bering Sea crab rationalization? 

Answer. Congressional language in the fiscal year 2004 Omnibus Act (Public Law 

108–199) requires Secretary of Commerce approval of a crab rationalization program by January 1, 2005. NOAA is committed to meeting this deadline, and it is 

one of NOAA’s top priorities. NOAA Fisheries is working with the North Pacific 

Fishery Management Council, the State of Alaska, and interested constituency 

groups to design an expedited process that would lead to Secretarial approval by 

the prescribed date. 

Question. Is the Department of Commerce prepared to receive and consider the 

findings of the Commission on Ocean Policy? 

Answer. The Administration is prepared to receive the report and looks forward 

to considering the Commission’s findings. The report of the U.S. Commission on 

Ocean Policy (USCOP) certainly has significant ramifications for the Department of 

Commerce, especially for the National Oceanic and Atmospheric Administration 

(NOAA). The Commission released its draft report on April 20, 2004. Following a 

44-day public and gubernatorial review, the Commission will amend the draft report 

as necessary and release its final report, probably sometime in the early-to-mid 

summer. The President then has 90 days to review the report and provide a report 

to Congress. The interagency effort being led by the Council on Environmental 

Quality (CEQ) in the Executive Office of the President is now reviewing the draft 

report and developing timely and appropriate responses to the recommendations. 

The Department will consider the findings of the Commission as part of the interagency effort being led by the Council on Environmental Quality (CEQ) in the Executive Office of the President. This interagency approach will ensure an integrated 

response consistent with the Oceans Act of 2000, which requires the President to 

provide a unified response to Congress. NOAA has been assisting CEQ in preparing 

for this review. 
39

NOAA FUNDING

Question. Mr. Secretary, do you believe the significant reductions in NOAA’s 

budget and specifically in fisheries and ocean research will allow for the necessary 

management of our Nation’s marine resources? 

Answer. The NOAA budget requests a total of $3,380.8 million in discretionary 

budget authority, a net decrease of $309.5 million, or 8.4 percent below the fiscal 

year 2004 enacted level. While this is a reduction from the fiscal year 2004 enacted 

level, the fiscal year 2005 NOAA budget ensures that we continue to sustain healthy 

marine habitats, ocean research, robust ecosystems, and coastal environments, and 

address safety and environmental compliance issues impacting NOAA. 

The reductions requested within the fiscal year 2005 budget request are included 

in order to support high priority increases for the NOAA Fisheries Program within 

a constrained budget environment. For example, the fiscal year 2005 budget request 

includes an increase of $6.0 million for a total of $20.9 million for fisheries stock 

assessments and surveys, $1.0 million for protected resources stock assessments, an 

increase of $1.2 million for a total of $5.2 million for socio-economic data collection 

and analysis, an increase of $0.5 million for a total of $2.0 million for research to 

understand and predict the effects of climate change on major marine and coastal 

ecosystems in the Bering Sea and Gulf of Alaska, $1.0 million to scientifically determine the population status of humpback and bowhead whales, and $1.0 million for 

fisheries oceanography which will analyze data to determine basin-wide changes in 

atmospheric and oceanic circulation and their effect on marine populations. 

The NOAA budget request provides funds to enhance our scientific understanding 

of the oceans and atmosphere. NOAA conducts research and gathers data about the 

global oceans, atmosphere, space and solar activities, and applies this knowledge to 

science and services. Specifically, the National Ocean Service (NOS) fiscal year 2005 

budget request will promote a wide range of research activities to create the strong 

science foundation required to sustain use of our coastal systems. Overall, the fiscal 

year 2005 request for NOS is $394.3 million. Specifically, the NOS fiscal year 2005 

budget requests an increase of $6.5 million (above the current program level) for a 

total of $47.9 million to continue conducting Harmful Algal Bloom and Pfiesteria research as mandated by the Harmful Algal Bloom and Hypoxia Research and Control 

Act (HABHRCA). In addition, the fiscal year 2005 NOS budget includes increases 

for navigation services, White Water to Blue Water. 

QUESTIONS SUBMITTED BY SENATOR PETE V. DOMENICI

ITA REORGANIZATION

Question. Mr. Secretary, Congress approved the restructuring of the International 

Trade Administration (ITA) as part of the fiscal year 2004 Consolidated Appropriations Act. I understand that this reorganization is now underway and that the Department will establish an Assistant Secretary for Manufacturing and Services. I 

am pleased that the Department of Commerce is renewing its focus on domestic 

manufacturing. An essential part of manufacturing is our ability to produce and obtain basic raw materials, such as refined metals, and semi-fabricated raw materials, 

such as copper and steel mill products and castings, at reasonable prices and in adequate quantities. I am concerned that under the reorganization the Metals Division 

is being eliminated. How does the Department plan to cover this important industrial sector? 

Answer. We fully recognize the importance of the metal sector to our manufacturing base. While we are planning to streamline management layers, we plan to 

provide full coverage of the metals sector as we have prior to the reorganization. 

Question. How does the Department plan to address the raw material sector 

issues? 

Answer. We will address these important issues as they arise and in the same 

manner as we have done in the past. Since the reorganization provides us a mandate to address many domestic issues of importance to manufacturing, we believe 

our support of the raw materials sector will be enhanced. 

Question. Will adequate staff and funding be allocated to this activity? 

Answer. We believe that we will be able to cover this sector on a basis comparable 

to our current level of support. 

PARTICIPATION IN COMMODITY PRICES

Question. Mr. Secretary, most raw materials are priced on International commodity exchanges and all are subject to International supply and demand factors. 
40

Our domestic metal industry is global in the classic sense. Organizations such as 

the International Copper Study Group have made significant progress in improving 

market transparency and statistics. A stated objective of the reorganization is to 

focus on domestic competitive issues. Will the Department of Commerce continue to 

participate in International commodity or raw material organizations? 

Answer. Yes. We intend to continue our active participation in the International 

Copper Study Group, as well as the UNCTAD negotiations on commodities, APEC 

Nonferrous Dialogue, OECD Steel Committee and other forums as appropriate. 

Question. Will the Department continue to address International issues directly 

affecting the materials industry? 

Answer. Yes. We will continue to cover these issues as in the past. 

Question. Under the ITA reorganization, what unit will cover these issues? 

Answer. The reorganization will not change unit responsibilities. ITA’s Import Administration will continue to cover dumping and countervailing duty issues, our 

Market Access and Compliance Unit will cover trade negotiations and our new Manufacturing and Services Unit will cover various International and domestic trade 

and competitive issues. 

Question. Is this unit adequately funded and staffed? What would those staffing 

and funding levels be for fiscal year 2004 and fiscal year 2005? 

Answer. We are currently in the process of allocating resources. Staffing and 

funding levels will not be reduced as a result of the reorganization. 

Question. Finally, Mr. Secretary, the raw material industry must address sustainable development and environmental issues on a domestic and International scale 

in order to be competitive in world markets. The Department of Commerce has 

hosted conferences to assist industry in meeting these challenges. Would the Department continue such efforts after the reorganization? 

Answer. The Department of Commerce will remain actively involved in sustainable development and environmental issues, domestically as well as internationally. 

These issues are relevant to the competitiveness of practically all sectors in the U.S. 

industry. 

Question. What unit within the Department would be involved in these activities? 

Answer. The Department’s activities in these area will involve the resources of 

several offices in the International Trade Administration’s (ITA) manufacturing and 

services units. These would include, for example, ITA’s offices dealing with energy, 

chemicals, metals and materials, and environmental technologies industries. In addition, the Department’s National Oceanic and Atmospheric Administration (NOAA) 

will continue its active involvement in environmental issues and work closely with 

ITA. 

QUESTIONS SUBMITTED BY SENATOR BEN NIGHTHORSE CAMPBELL

NOAA/NIST BOULDER CAMPUS

Question. I understand that NOAA has proposed to construct a fence around the 

NOAA/NIST facilities on South Broadway in Boulder. I have heard from a number 

of residents in Boulder that are opposed to the fence because it would (a) be an eyesore; (b) bicycle and foot traffic which currently crosses the campus would be restricted; and (c) the area surrounding the facilities is home to a wide variety of wildlife. The impacts of a fence on the wildlife habitat has not been addressed. 

What exactly is the nature of the security risk at this campus, what security 

measures are currently in place, and what additional security gain can be achieved 

with this fence given the assessed threats? Has DOC thoroughly examined other security measures short of a fence? Has DOC consulted with the City of Boulder and 

local law enforcement authorities on other alternatives? 

Is the entire site considered a high level security risk (Level 4) requiring all buildings and facilities to be enclosed by a fence? If not, why is the fence being proposed 

around buildings and facilities that do not possess this level of risk? 

Has DOC already decided that this fence is necessary? If so, who made this decision and what was the process by which it was made? Was a cost-benefit analysis 

conducted? How much will the fence cost, what funds are identified to pay for it, 

and what is the construction/installation timeline? 

Are other federal facilities across the country required to install fences? If not, 

why not? What is DOC’s legal position regarding the City of Boulder’s easement 

across the site? Can this easement be superceded by the fence? How will the fence 

provide the security envisioned if the City of Boulder refuses to allow the fence on 

its easement? 
41

Answer. A task team, headed by the Department of Commerce’s Office of Security, 

met in August 2003 to assess the security risk at the Boulder Labs facility. That 

task team concluded that: 

—The security risk will be mitigated with effective perimeter security. 

—The most effective and cost-efficient perimeter security countermeasure based 

on industry averages is the installation of a fence around the main facilities. 

—A Boulder site task force should lead the design and coordination of the perimeter security solution. 

A Boulder site task force was established under the leadership of the National Institute for Standards and Technology (NIST) Boulder Lab Director, Zelda Bailey. 

That task force continues to develop possible designs and options for the perimeter 

security solution. No final decision regarding the design of the perimeter security 

solution has been made. A creative design should effectively address the elements 

of the security risk—criticality, vulnerability and threat—while also preserving valuable attributes such as easements, protected areas, bike paths and open areas. The 

final design will likely combine several security options to provide a measured response to the security risk. 

In a meeting on February 26, 2004, between officials of the City of Boulder and 

the Department of Commerce, it was agreed that a representative from the City 

would be added to the task force, to ensure that local interests are considered. We 

are confident that we will be able to develop a final solution that will address the 

interests of both the City of Boulder and the Department of Commerce in providing 

a safe and secure working environment for our employees. 

QUESTIONS SUBMITTED BY SENATOR ERNEST F. HOLLINGS

PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Question. Secretary Evans, the Public Telecommunications Facilities Program, 

which is a longstanding part of the public television funding picture, plays a critical 

role in public television’s federally mandated digital conversion. PTFP is a relatively 

small investment that is paying tremendous dividends by unleashing millions of dollars in new services and products. Despite this, the President’s fiscal year 2005 

budget proposal terminates this critical program. What was the Department’s request to OMB with regard to this program? 

Answer. The Department’s request to OMB eliminated funding for PTFP and proposed to continue funding of the digital conversion of public television through funding already available from the Corporation for Public Broadcasting. 

Question. Secretary Evans, there is no doubt that we are in fiscal crisis at the 

moment—we face a deficit and we are at war. However, a strong Nation depends 

on strong infrastructure. PTFP is critical to the well being of our public broadcasting infrastructure—the only broadcast medium that reaches virtually every 

household in the United States. 

We discussed at length during the hearing the loss of jobs and the exporting of 

critical manufacturing jobs in particular to other Nations. You stated that those 

workers can be trained in new areas and for new industries. One proven entity in 

the area of education, including adult education, is public television. 

Why is the Administration cutting a program like PTFP that is so vital to the 

daily work of public television, especially at a time when public television’s role in 

adult education and workforce skills has never been more vital? 

Answer. The Administration appreciates public television’s contribution to education, especially adult education. The Administration believes, however, that during this period of steady economic growth, public broadcasting’s equipment needs 

can be met more efficiently through the funding already available through the Corporation for Public Broadcasting. 

QUESTIONS SUBMITTED BY SENATOR DANIEL K. INOUYE

CLIMATE CHANGE PROGRAMS

Question. The President launched his U.S. Climate Change Research Initiative in 

June of 2001 to improve the integration of science with policy and management decisions. The President’s budget claims that $23.7 million in new funds will be devoted to climate research in order to expand climate observing capabilities. However, the budget also calls for more than $11 million in cuts to the existing climate 

and global change programs that currently provide these very climate observing capabilities. 
42

I would appreciate receiving a breakdown of the reductions and increases of all 

climate specific programs within the National Oceanic and Atmospheric Administration (NOAA). Does the budget request actually call for $23.7 million in new funding, 

or will this ‘‘increased funding’’ come at the expense of programs? 

Answer. The $23.7 million increase for climate research relative to the fiscal year 

2005 base funding in the Climate Change Research Initiative activities has been reallocated from lower priority activities. It is being partially offset by reductions that 

were taken from to Climate and Global Change, NOAA’s National Environmental, 

Data, and Information Service (NESDIS) Environmental Data Systems Modernization program, and other internal programs, which includes $1 million from the baseline observatories as well as reductions from the weather-climate connection. 

Funding has been directed towards activities that will contribute to reducing scientific uncertainty in three key areas identified in the Climate Change Science Strategic Plan: (1) aerosols-climate interaction; (2) ocean climate observations; and (3) 

carbon sources and sinks.

OAR CLIMATE PROGRAM BUDGET SUMMARY 

[In millions of dollars] 

Budget Summary Total 

Laboratories & Joint Institutes ............................................................................................................................ ∂623 

Climate & Global Change .................................................................................................................................... ¥9,152 

Climate Obs. & Services: 

Other Programs ........................................................................................................................................... ¥1,870 

CCRI ............................................................................................................................................................ ∂23,735 

NESDIS-EDSM ....................................................................................................................................................... ¥2,191

Total ........................................................................................................................................................ 11,145 

Question. I would also appreciate receiving a geographically specific breakdown of 

the research and observation projects in the President’s fiscal year 2005 climate 

budget for the Pacific Ocean. 

Answer. Tropical Atmosphere Ocean (TAO) array: $2.6 million funded through 

NOAA Research. The array provides real-time data from moored ocean buoys for improved detection, understanding and prediction of El Nin ̃ o and La Nin ̃ a. The Japan 

Marine Science and Technology Center, in Yolsutia, Japan, operates the western 

TRITON portion of the array. NOAA Research’s Pacific Marine Environmental Laboratory in Seattle operates the eastern TAO portion of the array. 

Pacific Regional Integrated Sciences and Assessment (RISA) Program: about $0.15 

million funded through the NOAA Research Climate & Global Change and Climate 

Observations & Services budget lines. The program assists fisheries, agriculture, 

and tourism in enhancing resilience in the face of climate-related extreme events, 

such as droughts, floods, and hurricanes. The Pacific RISA is operated out of the 

East-West Center in Honolulu, HI. 

Mauna Loa and Samoa Baseline Observatories: $2.0 million funded through the 

NOAA Research Climate Observations & Services budget line. The baseline observatories provide valuable time series data on various atmospheric and solar radiation 

measurements that are critical to NOAA’s monitoring of climate. The observatories, 

though located in the South Pacific, are operated by NOAA Research’s Climate Monitoring and Diagnostics Laboratory in Boulder. 

North Pacific Climate Regimes and Ecosystem Productivity: $2.0 million funded 

through the National Marine Fisheries Service. A growing component of NOAA’s climate program, this Climate and Ecosystems project seeks to link NOAA climate information with NOAA models, observations and new ecosystem indicators, resulting 

in better resource management by NOAA. These efforts will include projections of 

the status of living marine resources under future climate scenarios. This project 

is operated out of the NOAA/NMFS Alaska Fisheries Science Center in Seattle. 

University of Hawaii Sea Level Center (UHSLC): about $0.5 million funded 

through the NOAA Research Climate Observations & Services budget line. The Center is operated out of the University of Hawaii/NOAA Joint Institute for Marine and 

Atmospheric Research (JIMAR) within the School of Ocean and Earth Science and 

Technology (SOEST). The UHSLC operates 37 tide gauge stations in the global sea 

level network and collaborates with host countries in the operation of 7 more stations. The measurements are used for the evaluation of numerical models (e.g., 

those in operation at the National Centers for Environmental Prediction (NCEP), 

joint analyses with satellite altimeter datasets, the calibration of altimeter data, the 
43

production of oceanographic products through the World Meteorological Organization Sea Level Program in the Pacific (SLP-Pac) program, and research on inter-annual to decadal climate fluctuations. 

Question. Is the Commerce Department researching the economic impacts of climate change on Pacific island and Pacific Rim Nations? Do you believe that the research effort commensurate with the economic stakes of climate change in the Pacific region? 

Answer. The Department of Commerce is working to better understand the economic impacts of climate change and helping to manage climate risks for the Pacific 

Islands. The following are some examples of the Department’s efforts. In a recent 

press release, VADM Conrad C. Lautenbacher, Under Secretary for Oceans and Atmosphere and NOAA Administrator recognized the dependence of Pacific island 

economies on accurate climate information. He stated that, ‘‘Understanding and effectively responding to changes in climate are critical elements of planning and economic development in Hawaii and other Pacific Islands. Their economies are dependent on climate-sensitive sectors like agriculture, tourism and fisheries, and the 

region is home to some of the world’s most valuable marine resources such as coral 

reefs.’’

The press release highlights a new program that begins development of climate 

services for the Pacific Islands. NOAA’s Office of Global Programs recently awarded 

a three-year grant of $535,487 to the East-West Center in Honolulu, Hawaii, an 

educational and research organization, for a project entitled ‘‘Managing Climate 

Risks in the Pacific: A Pacific Islands Regional Integrated Sciences and Assessment 

(Pacific RISA) Program.’’

The Pacific RISA program assists key economic sectors (e.g. fisheries, agriculture, 

and tourism) in enhancing their resilience in the face of climate-related extreme 

events such as droughts, floods, and hurricanes. The project represents a significant 

step towards the creation of a new program of climate information services designed 

to meet the needs of decision makers and policy officials in the American Flag Pacific Islands (Hawaii, American Samoa, Guam, Commonwealth of the Northern Mariana Islands) and the United States-Affiliated Pacific Islands of the Federated 

States of Micronesia, the Republic of the Marshall Islands and the Republic of 

Palau. 

NOAA’s Coastal Services Center is complementing the work of the Pacific RISA 

with a climate assessment outreach and education program. 

NOAA has also supported studies of the socio-economic impacts of El Nin ̃ o events 

in the Pacific through the work of the Pacific ENSO Applications Center and related 

socio-economic research funded through NOAA’s Office of Global Programs. 

Through these types of research efforts, NOAA’s expansion and development of 

climate services in the Pacific Islands is working to address the rising economic 

stakes of climate change in the Pacific region. 

INTERNATIONAL TRAVEL TO THE UNITED STATES

Question. International travel to the United States is a vital component of our Nation’s economy. International visitors account for one million jobs and $83 billion in 

spending annually. Visitation levels have declined by some twenty percent during 

the past two years. U.S. market share of global travel had already been declining 

since 1998 and was only exacerbated by the September 11, 2001, terrorist attacks. 

Since September 11, many necessary changes have been made to make U.S. ports 

of entry safe and secure, but little or no measures have been taken to reach out 

to legitimate International travelers. 

Although the World Travel and Tourism Council recently predicted that tourism 

to the United States will rise in 2004, the Council warned that relying on excellent 

products and service alone will not be sufficient to guarantee the future growth of 

tourism to the United States. To remain competitive, the Council recommended that 

we be proactive and work with government authorities to ensure that our tourism 

industry is protected and nurtured. 

What steps are being taken by your department to reach out to International 

travelers and work with government authorities to encourage travel to the United 

States? What do you believe the federal role should be in promoting travel to the 

United States? 

Answer. The Department is launching a $6 million promotional campaign in the 

United Kingdom, our largest overseas market to increase market share. We are 

working with the Department of Homeland Security and the Department of State 

to encourage the development of visa policies and travel security systems that facilitate travel while providing for the safety of the traveler and security for our Nation. 

I believe that the role of the federal government is three fold: (1) to assist in ensur-
44

ing competitiveness in this sector; (2) to measure the industry through collection 

and dissemination of statistical data on the volume, flow and characteristics of travelers, through assessments on the economic benefits and impact of travel and tourism industries on the U.S. economy, and through production of the balance of trade 

in travel and tourism; and (3) to advocate for the United States’ tourism interests 

in International service sector trade agreements and represent the U.S. tourism policy positions in International tourism development and intergovernmental fora. 

Question. The Visa Waiver Program allows International travelers to visit the 

United States for up to 90 days without going through the time consuming and 

often costly process of obtaining a nonimmigrant visitor visa. There are currently 

27 countries in the program. Current rules require that by October, 2004, International visitors entering the United States on the Visa Waiver Program possess a 

machine-readable passport. In addition, all Visa Waiver countries must certify that 

the new passports they are issuing contain biometric identifiers, to help ensure that 

the person seeking entry into the United States is the same person documented in 

the passport. 

There is great concern in the visitor industry that only a few of the 27 Visa Waiver countries will be able to meet the October, 2004, deadline, and that this will result in major disruptions in inbound travel to the United States from key markets 

in Europe and Asia. 

Do you have any suggestions on how we can encourage foreign countries to expend the resources necessary to produce passports in compliance with U.S. requirements for the Visa Waiver Program? 

Answer. The issue, I believe, is not a lack of willingness by Visa Waiver Program 

countries to comply by the October, 2004 deadline, but their ability to do so. Legislated requirements specify that the biometric passport identifiers must meet International Civil Aviation Association standards. These standards were not established 

until May of 2003. Therefore, technologies are not yet fully developed. The United 

States will also not issue passports that meet these standards by the current deadline. 

Sixty-five percent of our overseas visitors come from Visa Waiver Program (VWP) 

countries. All but two VWP countries have indicated to the Department of State 

that they will not be able to meet the deadline. If nothing is done to alter the situation, the Department of State estimates that there will be approximately five million 

additional visa applicants, of which they have the capacity to process only six percent, which may create substantial disruptions in travel to the United States. Economic losses across sectors could be substantial, and our relationships with our allies could be damaged. 

A legislative remedy is the only option to postpone this deadline. Should a legislative postponement be approved, the Department of Homeland Security and the Department of State could provide for safety and security in keeping with the intent 

of the legislation through existing biometric systems to ensure that travel documents and visitors match. During this period, the United States could work with 

other Nations to establish agreement on interoperable systems to produce and read 

passports with biometric identifiers. 

QUESTIONS SUBMITTED BY SENATOR PATRICK J. LEAHY

MANUFACTURING EXTENSION PARTNERSHIP

Question. With last week’s announcement that MEP will be eligible to apply for 

EDA funds, I am greatly concerned that we are nearly half way through the fiscal 

year and it is still unclear how the program will be funded and re-competed. Will 

there be funds set aside for MEP Centers to compete for? Will each MEP Center 

be responsible for applying for these funds? How will this help ‘‘leverage’’ the limited funds available to MEP in fiscal year 2004? 

Answer. EDA is ready, willing and able to assist eligible MEP Centers with resources as NIST develops its plans for the MEP going forward. Secretary Evans has 

directed EDA to focus its remaining fiscal year 2004 Economic Adjustment program 

funds on manufacturing-related communities and initiatives. EDA will welcome 

MEP Centers to apply for EDA funds. These EDA funds will augment funds provided to the MEP from NIST and will be focused on highest performing Centers. 

These funds will be administered in accordance with EDA’s competitive grant program guidelines. In addition, EDA staff is prepared to work with MEPs in developing EDA applications in order to make the process as streamlined as possible. 

Question. Given the immediate need for MEP services, what other mechanisms 

would the Administration consider to increase MEP funding in fiscal year 2004 and 
45

2005, so small manufacturers can continue to receive the assistance they so desperately need? 

Answer. We are doing all we can to make sure that the MEP centers are fully 

aware of any funding opportunities that may exist across the Federal government. 

We have identified some possible sources already and are in discussions with others 

to determine if there are additional opportunities for MEP centers to compete for 

available funding from other Federal programs that support U.S. manufacturing. 

Also, MEP has considered foundation-type funding which is typically raised as principal to be kept intact, while the earnings from the principal are used to capitalize 

activities. For MEP to develop a steady stream of funding of any significance to substitute for some of the Federal funding, the foundation would need to be capitalized 

at $400 to $500 million. Otherwise, the capital would be rapidly depleted and the 

foundation would need to be in a continuous fundraising mode. However, the actual 

level of funding that could be generated would depend in large part on the support 

of Administration officials, Congress, and industry leaders. This is particularly true 

given these tight economic times during which it will be even more difficult to garner significant contributions. 

Question. Why ‘‘improve’’ MEP and cut its budget when we clearly see its effectiveness in building stronger companies that retain high-skill, high-pay American 

workers and repay our relatively small federal investment with a healthier tax 

base? 

Answer. Budget constraints have forced the Administration to make some tough 

budget decisions this year. The fiscal year 2005 budget request reflects the Administration’s policy and funding priorities to address the Nation’s most pressing needs. 

Support for MEP is maintained at the fiscal year 2004 enacted level. 

Question. The manufacturing strategy, budget documents, and comments by Commerce officials suggest ITA and other federal agencies can take over functions of 

MEP. Do you really think that Trade experts can discuss, sell, and deliver the technical engineering services that MEP provides to manufacturers? 

Answer. It makes sense for all bureaus in the Department engaged in improving 

our Nation’s manufacturing to work together. The MEP and ITA programs are complementary, and MEP and ITA staff are working together to increase coordination. 

This coordination will link the technical and business staff employed by the MEP 

centers located around the country with ITA trade promotion specialists who are 

working with ITA on behalf of the future Assistant Secretary for Manufacturing and 

Services. 

ITA has experts with in-depth knowledge of and connections with various sectors 

of industry including the automotive, textiles and apparel, energy, aerospace, machinery, metals, and microelectronics, industries. 

The direct teaming of MEP field agents with the ITA sector experts will make the 

program a more effective National resource to help small manufacturers compete 

and succeed in the global marketplace. 

MEP and EDA are also exploring mutual opportunities to coordinate their support 

of small manufacturers through the local economic development infrastructure. 

Question. In the manufacturing strategy, you suggest that savings can be found 

by enhanced partnering. Yet OMB’s PART analysis gives MEP high marks for collaboration. Tell me how you plan to get significant savings from synergies they have 

already accomplished. 

Answer. The principal purpose of effective partnering is to better serve America’s 

manufacturers and provide them with the wide range of assistance that the Federal 

government can provide through its many assistance and support activities. Although the MEP is performing well it still had room for improvements. Efforts are 

being made to expand on existing partnerships and enhance the benefit to MEP participants. 

Question. How will you ensure that small manufacturers will continue to receive 

the services they need when your ‘‘improvements’’ will actually cut the availability 

of MEP services? 

Answer. The MEP program will continue to serve as many manufacturers as possible and will continue to explore every avenue possible to find new and innovative 

ways to maximize whatever level of Federal investment is made in this program. 

Improving the effectiveness and efficiency of the MEP National manufacturing network is the primary goal. In addition to the MEP program, NIST laboratories also 

support manufacturers both large and small by providing the measurements and 

standards needed to improve quality, productivity, and reduce manufacturing costs. 

The NIST Advanced Technology Program (ATP) has provided cost-sharing support 

of improved manufacturing in many U.S. industries. NIST laboratories provide calibration standards that ensure quality of manufactured products and improve efficiencies. The NIST fiscal year 2005 budget proposal includes a request for budget 
46

increases to support advances in manufacturing. The work proposed in the fiscal 

year 2005 budget initiative will help overcome technical barriers facing U.S. industry that will enable it to thrive in nano-manufacturing, particularly in the key areas 

of electronics and semiconductor manufacturing, and advanced medical technologies. 

It will also promote access to global markets by ensuring that the measurements 

and standards that U.S. manufacturers rely upon are internationally accepted. 

Question. Has the Department of Commerce done any studies to determine what 

impact re-competing the entire MEP network would have on its ability to serve 

small manufacturers? 

Answer. The series of manufacturing round tables conducted over the past year, 

while not specifically focusing on the MEP, gave the Administration a real sense of 

what manufacturers want and need. There has not been a formal study of the possible impact of a re-competition, but such a competition is expected to result in excellent service to small manufacturers in the region served by the selected centers. 

Question. One of the strengths of MEP is its partnership with state governments 

and local service providers. Have the state agencies and other partners been informed of your re-competition plans and will they continue to provide roughly a 

third of the funding support to the MEP system? 

Answer. Additionally, the MEP Director has had preliminary discussions with the 

Centers about the impacts of the funding level. Those Centers with agreements that 

are expiring have been informed that their renewals will be on a month-to-month 

basis. Until the individual Centers give us specific information, it is hard to determine which states will continue to provide a third of the funding support to the 

MEP system. 

Question. Do you really want to hamstring this program by pushing each and 

every Center to spend its time developing a proposal during a time of urgent need 

for this type of hands-on assistance for our small manufacturers? 

Answer. For fiscal year 2004, MEP is exploring the options for providing some 

funding to all Centers in the network through the end of the fiscal year. 

Question. Many groups, such as Harvard’s Kennedy School, the National Academy 

of Public Administration, NAM and National business publications commend the 

program for its effectiveness and efficiency. Doesn’t it make better sense to re-compete only those Centers that do not meet minimum performance standards? Why 

should we consider re-competition for a system that is not broken? 

Answer. The vast majority of MEP centers perform admirably, so only isolating 

those few relatively poorer performers recognizes no significant cost savings. Each 

of those few, poorer performers have been addressing their weaknesses. 

NATIONAL SEA GRANT PROGRAM

Question. In the President’s request for the National Sea Grant Program, how 

much of the funding would be allocated to new programs? If we set a goal of bringing all the programs up to $1.2 million in base funding a year in $250,000 increments over the next several fiscal years, how much additional funding would be 

needed in fiscal year 2005 and which Sea Grant programs would receive funds to 

increase their base level? 

Answer. The fiscal year 2005 President’s Budget request includes $57.5 million for 

Sea Grant, this amount does not include any funding for new programs. The National Sea Grant program currently funds 30 established college and institutional 

programs and 4 developing institutional programs. Of these 34 programs, 19 currently have a base funding level of less than $1,200,000. The Sea Grant Program 

authorization requires that amounts appropriated over the fiscal year 2003 level be 

allocated by merit and competition. To bring these 19 programs up to $1.2 million 

in base funding in $250,000 increments over the next five years would cost a total 

of $7,723,000 and would require additional funding in the amount of $3,759,000 in 

fiscal year 2005, the first year:

Year Amount 

1st Year ................................................................................................................................................................ $3,759,000 

2nd Year ............................................................................................................................................................... 2,041,000 

3rd Year ............................................................................................................................................................... 1,000,000 

4th Year ............................................................................................................................................................... 723,000 

5th Year ............................................................................................................................................................... 200,000

The 19 Sea Grant colleges, institutions, and developing institutions that currently 

have a base funding level of less than $1,200,000 would receive the additional funds. 

These programs are: Connecticut, Delaware, Georgia, Illinois/Indiana, Maine, Michigan, Minnesota, Mississippi/Alabama, New Hampshire, New Jersey, Ohio, Puerto 
47

Rico, South Carolina, California (University of S. California), Massachusetts (Woods 

Hole Oceanographic Institution), Vermont, Pennsylvania, Guam, and Western Pacific. 

QUESTIONS SUBMITTED BY SENATOR HERB KOHL

MEP FUNDING AND RECOMPETITION

Question. Mr. Secretary, in addition to the drastic cuts to the MEP program, it appears only $29.6 million or 75 percent of the funding is going directly to grants 

to help small and medium sized manufacturers. The remaining $10 million is going 

to administration. When the MEP centers were funded at $106.5 million, $90 million or 85 percent of the funding was directed to MEP programs. 

It appears that there is a loss of efficiency coinciding with cuts: When the pro- gram was funded at $106.5 million, administrative costs were $16.5 million, as opposed to $10 million in administrative costs for a $39.6 million program. Can you 

provide me a breakdown on where the requested funding will be directed? 

Answer. By the end of fiscal year 2004, MEP staff will be reduced by 24 positions, 

from 51 to 27 while maintaining its function of overseeing the National manufacturing network. In addition, NIST institutional support activities previously supported by MEP will also be reduced, including an institutional support staff reduction of an additional 24 positions by the end of fiscal year 2004 (from 38 to 14). 

These staff reductions are expected to be accomplished through a combination of 

resignations, Voluntary Early Retirement Authority (VERA), buyouts, and Reduction-In Force (RIF). Remaining MEP staff will focus on center operations and center 

support. Center operations will focus on stewardship issues, such as panel and annual reviews, cost share approvals, and other compliance-related issues. This unit 

will also conduct a more limited level of program data collection and program evaluation. Staff conducting center support will focus on essential system-level functions, National accounts, partnership development, and a minimal manufacturing 

research component. All product development, marketing support, and most IT support will be discontinued. Manufacturing research, center and client impact evaluation, corporate university training of the system, and National sales are all being 

significantly scaled back. 

Question. In my state of Wisconsin, we lost 13,000 manufacturing jobs last year 

and, just last week, two more Milwaukee companies announced plans to send jobs 

overseas. We must fund initiatives that yield tangible results now, programs that 

help small- and medium-sized manufacturing firms, boosting productivity and increasing competitiveness as these firms face increasing pressure from global markets. We need to fund programs like MEP. Through MEP efforts, more than 35,000 

manufacturing jobs were created or retained during the last fiscal year. MEP was 

recently selected by Harvard’s Institute of Government Innovation as one of the Nation’s ‘‘most creative, forward thinking, results-driven government program.’’ MEP 

has also just been named one of the 100 best resources for small businesses under 

the category of Operations by the BIZBEST 100 publication. 

MEP has worked, and worked well due to its decentralized but well coordinated 

networks. Offices are conveniently located such that business owners can take advantage of services without drastically increasing precious time away from their 

business. The local nature of the offices allows for flexibility and an ability to respond quickly to changing needs in different communities. 

I understand the Commerce Department is about to launch a major recompetition 

of the entire MEP program at a time when this program is sorely needed. I am concerned that a national recompete could bring serious harm to this critical program. 

In the interest of saving time, energy, and scarce resources, is it necessary that the 

recompete occur across all 400 MEP offices? Why not just focus on those centers 

that have not lived up to expectations? Should a nationwide recompete go forward, 

is it expected that MEP will continue to have a physical presence in all 50 states? 

Answer. Maintaining the National manufacturing network is a priority. Just as 

the 21st Century manufacturing needs are continuing to evolve, a recompetition of 

the network will allow MEP to effectively meet those new challenges with whatever 

funding levels Congress provides. Understanding the possible effect of a recompetition upon the Centers, for fiscal year 2004, MEP is exploring options for providing 

funding to all Centers in the network through the end of the fiscal year. 

JOB LOSSES IN WISCONSIN

Question. Most of the job losses in my state have been experienced in small- and 

medium-sized enterprises. Nationally, small- and medium-sized manufacturers ac-
48

count for 68 percent of all manufacturing jobs. These firms are the best source for 

manufacturing job creation—and these are good jobs—and these firms are far less 

likely to outsource jobs. I have heard from many constituents who are concerned 

that the Administration is focusing its efforts on large firms, leaving small- and medium-sized firms behind. 

There is a tension here between small and medium-sized manufacturers and large 

manufacturers. For example, there are well-respected critics of the ‘‘Manufacturing 

in America’’ report who say that this plan does not substantially make a difference 

for small and medium-sized firms. Do you agree that you have had to balance the 

interests of these two groups as you pursue initiatives to respond to the crisis facing 

our manufacturing sector? 

Answer. From the very beginning of the Manufacturing Initiative through today, 

the Department of Commerce has kept the interests of small- and medium-sized 

manufacturers (SMMs) foremost in developing policy recommendations for the challenges confronting U.S. manufacturing. 

As you may be aware, as an initial step, we organized roundtable outreach meetings to hear directly from U.S. manufacturers and manufacturing workers. The 

manufacturers attending these open meetings represented a broad mix of small- and 

medium-sized manufacturers, as well as minority-owned and women-owned enterprises. During these two-hour meetings, we had in-depth conversations with many 

such manufacturers and workers about their particular challenges and issues as distinct from larger manufacturers. In addition, as we developed the list of panelists 

for these roundtables, we took great care to balance the panel members by size of 

companies and manufacturing sectors. A majority of the panels were formed by 

SMMs. 

The views of SMMs are strongly represented in the ‘‘Manufacturing in America’’ 

report we developed. Chapter Two of this report is representative of the detailed 

input we received from SMMs as well as larger companies. The discussion of issues 

is representative of the diversity in sectors, size of companies and regions. 

The recommendations that we put forward in Chapter Three of our report continue this commitment. For example, we are creating an advocate for U.S. manufacturers in the Department of Commerce who can ensure that the voices of SMMs are 

reflected in USG policy-making. Moreover, we created a Manufacturing Council on 

April 4, 2004, which will be representative of small-, medium- and large-manufacturers. The Chairman and Vice Chairman have been selected, appointed, and announced. We anticipate completing selection and appointment of the members the 

week of May 24, 2004, or shortly thereafter. We expect to hold the inaugural meeting of the Council by the end of June. We hope this important body representing 

the interests of manufacturers institutionally in U.S. policy-making will enjoy longevity and maintain an established voice particularly for SMMs. Many other recommendations in the report are also of particular benefit to SMMs. For example, 

tax relief will be particularly helpful for our SMMs that operate as S-corporations 

and partnerships. Also, the establishment of Association Health Plans will afford 

small manufacturers greater leverage in negotiating the cost of health insurance 

with providers. 

Two programs of particular benefit to SMMs are the Small Business Innovation 

Research (SBIR) and the Small Business Technology Transfer (SBTT). We call attention to these programs and recommend that SBIR and SBTT place a higher priority on manufacturing R&D topics that would greatly leverage innovation in 

SMMs. We also focus on the MEP program and recommend ways in which that program can deliver greater benefits to SMMs by strengthening partnerships with 

other government programs. 

An owner of a small manufacturing company told us at our Milwaukee, Wisconsin 

roundtable that he, like other SMMs, does not have the resources to hire the lawyers to bring forward a dumping/countervailing duty case. Pursuant to the manufacturing initiative, we have created at the Department of Commerce an Unfair Trade 

Practices Task Force within the Import Administration. This team will take on the 

burden of proactively seeking out and addressing unfair trade practices. To help 

SMMs identify potential customers, we are also developing a Global Supply Chain 

Initiative. Through this initiative, we will help SMMs expand their reach and identify new customers they may not otherwise be aware of. 

As you can see, we focused significantly on the needs of small- and medium-sized 

manufacturers and will continue to bring resources to bear on their needs and challenges. I look forward to continuing this dialogue with you on such an important 

matter. 
49

NEW ASSISTANT SECRETARY OF MANUFACTURING

Question. While I have praised the Administration’s efforts to organize a President’s Manufacturing Council and appoint a new Assistant Secretary of Manufacturing, I am concerned that is taking so long to get these efforts off the ground. 

These initiatives were announced last September and I understand your staff has 

said not to expect anything before June—at the earliest. My constituents are understandably skeptical. 

Given the problems already facing the new Assistant Secretary of Manufacturing 

and the expected lag time, are there plans to place MEP under the jurisdiction of 

the Assistant Secretary of Manufacturing? 

Answer. There are synergies between ITA and MEP that we should use to provide 

better support to MEP’s private sector clients. MEP and ITA staff are already working together to increase coordination. For example, our sectoral experts in the new 

Manufacturing and Services unit will benefit from enhanced coordination with 

NIST’s technical experts. Similarly, our Commercial Service staff across the United 

States can help in marketing MEP’s programs to the business community, particularly small and medium-sized business. 

PATENT AND TRADE COMPLAINTS AND BACKLOG

Question. I have had complaints from constituents about the backlog of manufacturers’ complaints in both the Patent Office and the International Trade Administration concerning both patents and trade violations. We have heard stories from 

constituents regarding American manufactured products that have been copied, 

sometimes down to a stamped company emblem, and then produced overseas, undercutting the price of the original American producer. What is the Department 

doing to respond to these complaints? How soon can we expect reductions in the current backlog? 

Answer. The USPTO supports ITA in providing expert advice on trade dispute 

matters. Trade disputes are principally handled within ITA itself. The USPTO also 

responds proactively to trade issues through support of bilateral efforts undertaken 

by ITA, USTR, Customs, USDOJ, State and other agencies involved in IPR matters. 

We also provide support to training programs, which are intended to support foreign 

government’s efforts to achieve WTO compliance. Through our participation in the 

National Intellectual Property Law Enforcement Coordination Council, we provide 

guidance on law enforcement matters involving intellectual property issues, including encouraging enhanced criminal enforcement. In certain instances, piracy and 

counterfeiting issues are attributable in part to delays and procedures by foreign 

patent and trademark offices themselves. Through office-to-office discussions as well 

as meetings in multilateral fora, such as the World Intellectual Property Organization, APEC/Intellectual Property Experts Group, and the United Nations Economic 

Commission for Europe, the USPTO encourages additional compliance with International standards. 

QUESTIONS SUBMITTED BY SENATOR ROBERT C. BYRD

EMERGENCY STEEL GUARANTEE LOAN PROGRAM

Question. President Bush’s fiscal year 2005 budget proposes to rescind $35 million 

from the Emergency Steel Guarantee Loan Program. This rescission will effectively 

kill the program, despite the fact that Congress has extended the program for two 

more years, through December 31, 2005. In recent testimony before the Senate 

Budget Committee, OMB Director Bolten stated that the Department of Commerce 

was ‘‘not planning to pursue rescissions from the steel loan guarantee fund.’’ How 

does the Department reconcile this statement with the proposed rescission contained 

in the President’s fiscal year 2005 budget? How does the President reconcile this 

statement with its numerous prior pledges to support the U.S. steel industry? 

Answer. The Administration has supported a number of initiatives that have 

strengthened the steel industry, and will continue to do so. The statement of Director Bolten, to which you refer was made with regard to a rescission contained in 

the fiscal year 2004 omnibus appropriations bill. For fiscal year 2005, the Administration has proposed to fund the Emergency Steel Loan Guarantee Program 

(ESLGP) at a level of $17 million. Enactment of the Administration’s proposal would 

provide sufficient money in the ESLGP’s account to accommodate current and anticipated demand while also permitting funds to be utilized for other priorities. Nevertheless, we remain concerned regarding the effectiveness of the ESLGP. There has 
50

been a very low level of utilization of the program; during its existence, only three 

loans have closed with the benefit of a guarantee, and one of those has defaulted. 

WTO RULING ON CONTINUED DUMPING AND SUBSIDY OFFSET ACT

Question. Congress included language in the fiscal year 2004 omnibus appropriations bill, which directs the Administration to negotiate a solution to the World 

Trade Organization’s (WTO) ruling against the Continued Dumping and Subsidy 

Offset Act. When will the United States present its negotiating position on this matter to the WTO? In report language accompanying the fiscal year 2004 omnibus appropriations bill, Congress directed the Administration to report to the Senate Appropriations Committee every 60 days on the progress of these negotiations. Given 

the Congressional directive to negotiate a solution to this matter, what is the Administration doing to initiate these negotiations? Can you confirm that the first update will be provided to the Appropriations Committee 60 days from enactment of 

the omnibus appropriations bill, which would be on or about March 23, 2004? 

Answer. The Administration has defended the Continued Dumping and Subsidy 

Offset Act of 2000 (CDSOA) throughout a long WTO dispute settlement process. The 

Administration has raised this issue in the context of the WTO’s ongoing Doha 

Round of multilateral trade negotiations. Within WTO Rules Negotiations Group, 

we have raised the issue of WTO member’s authority to distribute Anti-Dumping 

and Countervailing Duties. Consultations with the Congress on these and other 

trade negotiations are led by the Office of the U.S. Trade Representative and are 

ongoing. 

As required in Senate Report language, the Department of Commerce and the Office of the U.S. Trade Representative are consulting for the purpose of ensuring 

proper implementation of the requirements of U.S. law regarding negotiations over 

the distribution of antidumping and countervailing duties. The Administration intends to comply with all such requirements, including reporting requirements. The 

Administration will complete these consultations as soon as possible and will continue to work to advance Congressional objectives in the Doha Round negotiations. 

SECTION 201 DUTIES AND STEEL IMPORTS

Question. It is my understanding that the U.S. Commerce Department is considering whether to adopt a policy that would deduct import duties imposed under Section 201–203 of the Trade Act of 1974 (‘‘Section 201 duties’’) from the U.S. price that 

is calculated in determining the margin of dumping in U.S. antidumping cases. 

This is an important issue that is critical to the future of many U.S. companies 

and workers who rely on the effective enforcement of the U.S. trade laws. Several 

of my constituents and other interested parties submitted comments to the U.S. 

Commerce Department in support of this deduction of 201 duties last year. I understand that Commerce currently has a large number of administrative reviews pending in which this issue has been raised. 

Is there any additional information that would assist the Department in deciding 

to endorse this policy of deducting 201 duties in antidumping duty cases? What will 

be the first case in which the Department will deduct 201 duties when calculating 

an antidumping duty margin? 

Answer. On April 6, Import Administration announced its decision not to treat 

safeguard tariffs (201 duties) as a cost in the dumping margin calculations. 

The issue was raised in several cases, including the ongoing administrative review 

of the antidumping duty order on stainless steel wire rod from South Korea. In this 

case, the U.S. importer, whose price to an unaffiliated U.S. buyer was used to calculate export price, was required to pay 201 duties. The petitioner argued that these 

tariffs constituted a cost that should be deducted from the U.S. price. 

In September 2003, the Department published a Federal Register notice requesting public comment on the treatment of 201 duties (and the related issue of whether 

to deduct countervailing duties) in the antidumping duty calculations. The Department received extensive comments from a variety of parties, including domestic producers, U.S. importers, U.S. consumers, and foreign producers. 

After fully and carefully reviewing the legal and policy questions involved in this 

issue, the Department concluded that the U.S. antidumping law does not intend for 

the deduction of safeguard tariffs from U.S. prices in calculating dumping margins. 

Although the law clearly requires the deduction of normal import duties for dumping calculations, the Department believes that safeguard tariffs cannot be considered import duties. These tariffs are imposed only under special circumstances for 

the express purpose of providing relief from serious injury due to increased imports. 

Deducting safeguard tariffs from the export price in calculating dumping margins 

would effectively increase the safeguard remedy; in some cases providing a double 
51

remedy. Further, it would create a situation where fairly traded imports could become liable for antidumping duties simply due to the imposition of safeguard tariffs. 

The Department’s decision on this issue is articulated in our Notice of Final Results of Administrative Review/Decision Memorandum, which may be found on Import Administration’s website: www.ia.ita.doc.gov. 

Question. On December 4, 2003, the White House Office of Communications 

issued ‘‘The President’s Determination on Steel,’’ which stated that President Bush 

‘‘is committed to America’s steel workers and to the health of our steel industry.’’ 

It also stated that, ‘‘[s]teel import licensing, established when the safeguard measures were imposed, will continue to provide WTO-consistent data collection and 

monitoring of steel imports. This will enable the Administration to quickly respond 

to future import surges that could unfairly damage the industry.’’

The President’s Proclamation of the same date similarly stated that ‘‘the licensing 

and monitoring of imports of certain steel products remains in effect and shall not 

terminate until the earlier of March 21, 2005, or such time as the Secretary of Commerce establishes a replacement program.’’

Secretary Evans, you made several comments to the media on December 4, 2003, 

regarding your commitment to the U.S. steel import monitoring and licensing system and indicated that it would be expanded to include steel products that were not 

subject to 201 tariffs and quotas. I want to be certain that you remain fully committed to this effort. Could you please advise me as to whether the Commerce Department has a plan to expedite the adoption of these expanded regulations? Could 

you also please advise me as to when the Commerce Department intends to request 

public comment with respect to its new import monitoring and licensing system? 

When would you estimate that it will be up and running? What assurances can you 

provide that the system will be operational by that date? 

Answer. The Commerce Department is continuing to monitor closely the imports 

of those steel products for which the President implemented import relief pursuant 

to Section 201, as well as general market conditions. As a result, accurate information regarding such imports is being made available to the public on an expedited 

basis. We have been meeting with representatives of the steel industry and other 

stakeholders to get their input on improvements to the current system. The Administration is continuing to evaluate possible modifications to the current system and 

will ensure that it remains an effective monitoring tool. 

Question. The U.S. Commerce Department currently does not pursue trade remedies under our countervailing duty law against non-market economies like China 

even though: (1) the U.S. negotiated subsidy disciplines with China as part of its 

accession to the WTO; (2) the United States has worked to see that China participates in the ongoing OECD steel subsidy negotiations; and (3) USTR reports various 

agricultural industries are experiencing ongoing export subsidies by China. Can you 

tell me whether the Commerce Department is reexamining this issue? If not, why 

not? 

Answer. Commerce does not currently apply the CVD law to non-market economies, and this practice has been upheld in the courts in Georgetown Steel Corp. v. 

United States. In that case, the court affirmed Commerce’s view of NME’s as devoid 

of the kinds of market benchmarks necessary to identify a subsidy. Congress enacted substantial amendments to the CVD law in 1988 and 1994 without disturbing 

Commerce’s practice in this area. 

The Department recognizes that the reasoning underlying the Georgetown decision may not apply to China today to the extent that it did 20 years ago. However, 

applying the CVD law to non-market economies would raise complex issues of policy 

and methodology that the Department has not fully considered, including implications for antidumping policy and practice. Any such shift away from 20 years of 

trade practice should therefore only be implemented after careful consideration and 

review. 

U.S. DUMPING LAWS

Question. Concerns exist about the adequacy of existing practices in administering 

the U.S. antidumping duty law against imports from NMEs, but particularly China. 

With the extraordinary trade deficit that the United States is running with China, 

can you provide details of what changes in the administration of the U.S. dumping 

law are being considered for NME cases and when the agency will be implementing 

such changes? 

Answer. The Department will be giving priority attention to issues related to 

trade with China, which has been the object of a significant number of trade complaints. In fact, during the last three years, we have initiated more antidumping investigations and issued more antidumping duty orders against products from China 
52

than any other country, more than twice as many as the next leading country. In 

2003, more than 50 percent of all new antidumping orders put in place were against 

China (8 of 15 total orders). 

The Department will soon establish an office that will focus on cases involving 

Chinese imports, further cultivating the expertise necessary to address the unique 

problems encountered in that market. 

We have developed practices that allow us to more rigorously examine requests 

for new shipper reviews before initiation, and to continue to scrutinize eligibility for 

the reviews after initiation. As a result of these practices, in 2003, we declined to 

initiate approximately one-third of all new shipper requests, and we rescinded the 

initiation of several new shipper reviews. We have also increased our scrutiny of 

fraud and circumvention issues in the context of new shipper reviews. In addition, 

we are working closely with U.S. Customs and Border Protection to ensure that adequate financial security is provided in connection with merchandise imported during 

new shipper reviews and that—if our initiation of a new shipper review is ultimately rescinded—we will be able to require in appropriate cases that interest be 

assessed on merchandise imported during the review. 

Single DAS for AD/CVD Operations: By placing all antidumping and countervailing duty case work under a single Deputy Assistant Secretary for Operations, 

we will facilitate case specialization. 

Unfair Trade Practices Team: A new Unfair Trade Practices team will report to 

the DAS for Antidumping/Countervailing Duty Policy & Negotiations. This new unit 

will strengthen the Department’s ability to advance U.S. trade policies and negotiations and address the root causes of unfair trade. 

Efforts to Address Possible Fraudulent Activity: We have been developing more 

expertise within the Department on how to uncover potentially fraudulent activities, 

and through the Bilateral Task Force with the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement, we are developing new procedures for sharing information that will help us identify problems 

earlier and deal with them more effectively. For example, we now regularly request 

samples of actual entry documentation from Customs to compare with the documentation submitted by the foreign respondent or obtained at verification to ensure 

that the same documentation is provided to both agencies. We also conduct independent research into the foreign respondent’s ownership, as well as the U.S. importer’s ownership, to determine whether the information about affiliations is accurately reported in the questionnaire responses.

SUBCOMMITTEE RECESS

Senator GREGG. This subcommittee will convene next Tuesday, to 

hear from the Attorney General. We are recessed. 

[Whereupon, at 11:19 a.m., Tuesday, March 2, the subcommittee 

was recessed, to reconvene subject to the call of the Chair.]
(53)

DEPARTMENTS OF COMMERCE, JUSTICE, AND 

STATE, THE JUDICIARY, AND RELATED 

AGENCIES APPROPRIATIONS FOR FISCAL 

YEAR 2005

TUESDAY, MARCH 23, 2004

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. 

The subcommittee met at 10:28 a.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Judd Gregg (chairman) presiding. 

Present: Senators Gregg and Kohl. 

DEPARTMENT OF JUSTICE 

FEDERAL BUREAU OF INVESTIGATION

STATEMENT OF ROBERT S. MUELLER, III, DIRECTOR 

OPENING REMARKS OF SENATOR JUDD GREGG

Senator GREGG. We will begin the hearing. It is my understanding that, unfortunately, Senator Hollings had a close friend 

pass away and so he is not going to be able to be in attendance 

today. No other members are planning to be here. 

This hearing will have two panels. The first will involve the Federal Bureau of Investigation (FBI) Director and the second will include the Inspector General of the Department of Justice and also 

two members of the GAO who have spent a considerable amount 

of time working on issues that are related to national security and 

counterterrorism and the Bureau specifically. 

We very much appreciate your coming here today, Director, and 

we congratulate you for the effort you have made and the successes 

you have had. America has not been attacked since 9/11, almost 2 

years, and that is an impressive record. In part, a lot of it is due 

to the efforts of the FBI’s counterterrorism capabilities and your 

focus on this issue. Having arrived a week before 9/11, you had a 

lot on your plate very quickly and you have certainly tried to address it in a very aggressive way. 

The FBI has always been a law enforcement agency, a reaction 

agency by definition, one which sees a crime and then solves it. 

Yet, the role of the FBI has changed fundamentally. Instead of 

being a reactionary agency, it is now a preemptive agency which 

has to anticipate an event, find out when the event and who the 

perpetrators of the event might be, and stop the event before it occurs, which is extremely difficult. It involves counterterrorism and 
54

counterintelligence at a level that has never been exercised before 

domestically, maybe during World War II, but certainly not at this 

level. 

So there has been a huge adjustment for the FBI and we all recognize that. This committee has tried to be of assistance as the FBI 

has gone through the adjustment in changing the culture, changing 

the structure, changing the technology, and we want to continue to 

be of assistance. 

But we do have concerns, which I know you are familiar with, 

and today’s hearing is going to address the areas where those concerns take priority. The first is the issue of the FBI adjusting from 

being a police agency, a reactive agency, to being a proactive intelligence agency and the change of the culture, whether or not the 

manpower adjustments have resulted—have accomplished what 

you thought. It is a concern of this committee that there are still 

too many people who are only temporarily assigned to 

counterterrorism who come out of different divisions of the FBI and 

the numbers that you hope to meet haven’t yet been fulfilled in the 

area of getting the Counterterrorism Division up and running. 

The second area is the issue of technology, very serious issues 

which we recognize with the operational aspects, especially bringing online Trilogy. It is $200 million over budget right now. Unfortunately, the hardware and the software do not appear to have 

been made operable. We are also concerned about the delay, whether there is a plan for the future and enterprise architecture that 

works, and also, obviously, the cost. 

Trilogy is one area. Another area is the IAFIS interrelationship 

with the IDENT program at the Department of Homeland Security 

and the question of how people coming into the country are identified and whether the database that we paid for can be adequately 

used by people coming into the country. 

And the third major area is this issue of communications between different agencies which have responsibility for 

counterterrorism, the relationship with Homeland Security, the relationship with CIA, the relationship with the Defense Department. 

The setting up of these various cross-agency initiatives and how 

they are working and where they can be improved is a major concern and has been for many years, long before 9/11, ironically, of 

this committee. 

I would, just for the sake of refreshing people’s recollection, and 

I am sorry Senator Hollings isn’t here because he has been on this 

committee now for over 30 years and he has overseen this agency, 

the Bureau, for over 30 years and played a major role in trying to 

get the issue of how we address the Justice Department question 

of terrorism and fighting terrorism up and coming long before 9/11. 

This committee was the initial energizer for trying to get an orchestrated approach toward fighting terrorism in the Justice Department. We were resisted, regrettably, by the prior administration in that effort when we tried to set up the National Domestic 

Preparedness Office (NDPO) and a number of other initiatives. 

But the bottom line which we always were stressing was lack of 

communication between various agencies and the inability of people who have concerns, the first responders, to get the information 

they need quickly. We continue to be concerned about that. 
55

With that as a background, Director, your statement will be 

made part of the record. I would be happy to get your input and 

then we can go on to questions. 

Mr. MUELLER. Thank you, Mr. Chairman. I know you asked for 

it and you will get a brief statement. I do want to start before giving my opening remarks, I do want to thank you for your leadership in this committee, for the leadership of Senator Hollings and 

for the strong support that you have accorded the FBI, certainly 

during my tenure and even before that time. 

I will tell you that the funding that you have committed to the 

Bureau has been critical to our mission and to our efforts to transform the FBI in the wake of September 11. As you have indicated, 

our mission has changed dramatically since September 11 and our 

budget figures reflect this change. 

As you, I believe, have requested, I am going to focus on three 

areas in my short remarks. I want to talk for a moment about 

training, second, about management, and third, about information 

technology. 

TRAINING

Turning first to the training, for us to go through a period of 

transformation such as we have and to continue to go through that 

transformation, we need relevant and timely and effective training. 

Since the terrorist attacks of September 11, the new agents’ curriculum has been completely revised. Counterterrorism and counterintelligence training is now woven into every facet of our new 

agents’ training. Indeed, an additional week of training has been 

added in order to accommodate the expanded curriculum. 

Our counterterrorism modules now include financial investigative techniques, source development strategies, terrorist groups and 

domestic terrorism. We have also developed a number of practical 

problems that have greatly enhanced our counterterrorism training. For example, we have developed a white collar practical set of 

problems focusing on terrorist fundraising. This enables new agent 

trainees to experience one of the areas, means, and techniques of 

identifying and dismantling terrorist networks before they can 

strike. 

Of course, we also include practical problems where the trainees 

must respond to terrorist events, such as an anthrax attack or an 

attack involving a substance such as cyanide. In the past, our practical exercises have focused primarily on criminal applications, 

such as bank robberies and kidnappings, and while these remain 

an important part of our program, we have refocused our training 

efforts to address our number one priority of protecting the United 

States against a terrorist attack. 

We also have expanded our legal instruction to include application of the PATRIOT Act, the Attorney General guidelines, the Foreign Intelligence Surveillance Act law, as well as the impact of the 

Fourth and Fifth Amendments, particularly in the context of overseas investigations. 

As well, we now provide cultural diversity training, including a 

block of instruction on Middle Eastern culture and values to our 

new agents. 
56

Working with our partners in the intelligence community, we 

have developed a curriculum to provide relevant training for our 

analysts. In fiscal year 2003, the FBI’s new College of Analytical 

Studies provided training to 880 analysts during 89 analytical 

training sessions, a substantial increase from the 193 analysts and 

10 courses provided in fiscal year 2002. 

And last, in the past year, working with the Kellogg School of 

Management at Northwestern University, we educated our executive staff on the FBI’s intelligence mission, and to date, approximately 250 FBI executives and senior managers have received 

management training at the Kellogg School. 

MANAGEMENT

Let me turn to the second piece, and that is the questions and 

concerns you have about the ability of the FBI to adapt to change. 

The FBI has always risen to the challenge and adjusted to meet 

the intelligence and law enforcement needs of the American people. 

From organized crime to civil rights, from the savings and loan crisis to espionage, from the war on drugs to the war on terror, the 

men and women of the FBI have demonstrated the strength, demonstrated the flexibility, and demonstrated the enthusiasm to get 

the job done. 

The September 11 terrorist attacks further defined the need for 

the FBI to remain flexible, agile, and mobile in the face of the 

threats to the homeland. As a result, we refocused our mission and 

shifted priorities. We realigned our workforce to address our new 

priorities. We restructured management responsibilities at headquarters. And we developed projects to re-engineer our internal 

business practices and processes. 

Mr. Chairman, the FBI’s commitment to hard work, integrity, 

and dedication to protecting the United States is precisely the attribute a workforce needs to embrace and implement the transformation demanded of it. This is especially true in today’s FBI, 

where crimes as diverse as terrorism, corporate fraud, identity 

theft, human trafficking, trafficking in illegal weapons, and money 

laundering reach across global boundaries. 

INFORMATION TECHNOLOGY

Last, let me return for a moment to the challenge of information 

technology. As this subcommittee is well aware, providing appropriate training and workforce flexibility is only part of the solution. 

Today, more than ever, the FBI’s successes rely upon having integrated information technology systems. This past year, we improved our data warehousing technology to dramatically reduce 

stovepiping and cut down on man-hours that used to be devoted to 

manual searches. 

As an example, during the Super Bowl earlier this year, data 

warehousing tools were used to conduct over 65,000 queries in 3 

days. In the past, an analyst would have worked 3 months to accomplish this task. We have made strides in information technology, but as I am sure we will discuss, we have a ways to go. 

We have not been able to fully implement all aspects of Trilogy 

because of delays with the Government contractor regarding the 

deployment of Full Site Network Capability. This, in turn, has de-
57

layed our ability to deploy the Virtual Case File. And no one is 

more disappointed about this than I am. However, we are working 

closely with the contractor to ensure that we have the network Full 

Site Capability by this summer and the program is ongoing now 

and it is promising, but I know the subcommittee has questions regarding the Trilogy program. 

In the interest of time, I will conclude at this point and be happy 

to respond to any questions that you may have, Mr. Chairman. 

PREPARED STATEMENT

Senator GREGG. Thank you. Thank you for being concise and giving us a chance to ask you some questions. 

[The statement follows:]

PREPARED STATEMENT OF ROBERT S. MUELLER, III 

INTRODUCTION

Good morning Mr. Chairman, Senator Hollings, and members of the Subcommittee. Before I begin, I want to take a moment to thank you for your leadership 

and strong support of the FBI. The funding you have provided has been critical to 

our mission and our efforts to transform the FBI. Over the past two and a half 

years, we have moved from an organization that was primarily focused on traditional criminal investigations to one that is actively investigating and disrupting 

terrorist operations. I welcome the opportunity to come before you today to discuss 

this transformation and specifically address three areas that have been key to it—

information technology, management, and training. 

TRAINING

Training is essential for the FBI to achieve its strategic goals. It is the basis for 

the success of each individual employee, from Special Agents to analysts, and for 

the FBI as a whole. As threats based on terrorism and technology increase, the FBI 

must prepare its employees to meet these threats by providing high-quality training. 

The cornerstone of this training is the FBI Academy at Quantico, Virginia. As you 

know, new agents complete a 17-week training program at the FBI Academy. All 

analysts receive training at the College of Analytical Studies, also located at 

Quantico. In addition, the FBI provides training to state, local, and international 

law enforcement officials at the National Academy and hosts numerous training conferences. 

Over the past few years, the FBI has made significant progress in improving the 

training we provide to agents, support personnel, and our law enforcement partners. 

To prepare Special Agents to meet our highest priority—terrorism prevention—

our Counterterrorism modules now include financial investigative techniques, source 

development strategies, terrorist groups, and domestic terrorism. We have also developed a number of practical problems that have greatly enhanced our counterintelligence and counterterrorism training. For example, we have developed white-collar 

practical problems focusing on terrorist fundraising that enables New Agent trainees to experience one of the means of identifying and dismantling terrorist networks 

before they strike. Of course, we also include practical problems where the trainees 

must respond to a terrorist event such as the release of cyanide or anthrax. In the 

past, our practical exercises focused exclusively on criminal applications, such as 

bank robberies and kidnappings. While these remain an important part of our program, we have refocused our training efforts to address our number one priority of 

protecting the United States against terrorist attack. 

We established the College of Analytical Studies (CAS) in October 2001 to provide 

analysts with a formal training program in support of our counterterrorism mission. 

The CAS includes a basic course of six weeks for FBI analysts, as well as Joint Terrorism Task Force (JTTF) analysts, who may be Department of Justice (DOJ) employees, state and local law enforcement officials, or analysts from other federal 

agencies. The CAS trained 880 students in fiscal year 2003—a four-fold increase 

over the 193 students in fiscal year 2002. 

The FBI also provides training to its state, local, and international partners 

through the National Academy, the National Executive Institute, and the Law Enforcement Executive Development Seminar. In addition, we have partnered with the 
58

Department of Justice to provide a comprehensive ‘‘Train the Trainer’’ program, at 

the FBI Academy, to teams of agents from each FBI field office. After completing 

their training, these teams will train state and local police officers in their territory 

on pre-incident awareness, preparation, and prevention in the areas of antiterrorism 

and extremist criminal activity. The goal is for each FBI field office to train 120 police officers per quarter, resulting in the annual training of at least 26,800 first responders in basic CT. As of March 9, 2004, one ‘‘Train the Trainer’’ course had been 

taught, and a second was offered last week, resulting in certification of approximately 55 trainers. Through the University Education Program (UEP), we are providing funding for employees to pursue advanced degrees in critical skills areas as 

identified by the FBI’s list of priorities. This will allow FBI employees to readily 

adapt to changes in mission and keep pace with rapid advances in technology. In 

fiscal year 2004, 147 employees were approved to work toward their degrees. 

Eighty-four are pursuing master degrees or Ph.D.’s. We have also invested in executive management and leadership training, developed by the Kellogg School of Management in Chicago. Approximately 250 Senior Executive Service (SES) managers 

have already received training at the Kellogg School. 

Although the FBI Academy at Quantico supports a tremendous amount of the 

training the FBI provides, it is over 30 years old and not in a condition conducive 

to 21st century training. It has become clear that a substantial investment is needed in our infrastructure now in order to prevent further deterioration. The fiscal 

year 2005 President’s budget request includes $21.3 million in nonpersonnel funding 

in order to renovate the FBI Academy and provide for operations and maintenance 

of the facility, so we can ensure the future of law enforcement has the best possible 

training environment. 

INFORMATION TECHNOLOGY

We have made substantial progress in the information technology (IT) area since 

I arrived at the FBI in September 2001, eight days before the terrorist attacks of 

September 11th. At that time, the FBI’s technology systems were several generations behind industry standards, existing legacy systems were approaching 30 years 

old. IT equipment was inadequate. For example, our personnel were working on 

hand-me down computers from other federal agencies. We had little to no Internet 

connections in our field offices, and our networks could not do something as simple 

as transmit a digital photo. 

Much of the progress the FBI has made on the investigative front rests upon a 

strong foundation of information technology. Nearly 500 counterterrorism and counterintelligence FBI Headquarters employees have been provided with access to Top 

Secret/Sensitive Compartmented Information (TS/SCI) at their desks. We implemented the Wide Area Network on schedule in March 2003. We improved data 

warehousing technology to dramatically reduce stove piping and cut down on manhours that used to be devoted to manual searches. We have deployed nearly 30,000 

new computers for FBI Headquarters and field offices. 

Following the September 11th terrorist attacks, we were required to make an indepth assessment of our information technology systems. This assessment determined that we needed to address some key areas including the lack of databases 

that contained current information, limited analytical tools, continual dependency 

on Automated Case Support (ACS), and outdated equipment. 

I have taken specific steps to address our deficiencies in information technology. 

I made it a top priority that we establish required databases and develop analytical 

tools. In a post-Robert Hanssen environment, it was critical that we implement new 

security protocols. I also completely replaced the management team responsible for 

Trilogy. I brought onboard a new Chief Information Officer (CIO), as well as a 

project manager from the IT community to monitor the progress of the project. 

As you know, during the past year we encountered some setbacks regarding the 

deployment of Full Site Capability (FSC) and the Virtual Case File, and we are 

moving quickly to address them. We are working to resolve each issue, and will continue deployment throughout the country. 

I believe that we are now on the right track, and we are closing in on the goal 

of completion. We are being diligent in our efforts to complete this project within 

the resources available, and I am committed to ensuring the successful completion 

of this project. 

For fiscal year 2005, the FBI requests increases of $20 million in technology investments to continue moving forward. A portion of these resources will allow the 

FBI to install the TS/SCI Operational Network in up to 10 field offices and add 

users to the Headquarters TS/SCI Local Area Network (LAN). Expanding the TS/

SCI network will provide every agent and analyst with classified e-mail and mes-
59

sage delivery, as well as an electronically searchable archive on their desktop. I will 

continue to seek your help and support as the FBI moves forward into an increasingly high-tech future. 

FBI CULTURE

The culture of the FBI is now—and always has been—a culture of hard work, integrity, and dedication to protecting the United States, no matter what challenges 

we face. The FBI was created 96 years ago to fight the spread of traditional crime 

across county and state lines. Today’s FBI faces a world in which crimes as diverse 

as terrorism, corporate fraud, identity theft, human trafficking, illegal weapons 

trade, and money laundering traverse easily back and forth across international 

boundaries. Today, we are dealing with organized crime groups that launder money 

for drug groups, which sell weapons to terrorists, who commit white-collar crime to 

fund their operations. In the wake of the September 11, 2001, attacks, it became 

clear that the FBI must be more flexible, agile, and mobile in the face of these new 

threats. As a result, the FBI has: refocused its mission and revised its priorities; 

realigned its workforce to address these priorities; shifted its management and operational environment to strengthen flexibility, agility, and accountability; restructured FBI Headquarters; and undertaken dozens of projects aimed at reengineering 

our internal business practices and processes. 

We are building a workforce for the future by: expanding the FBI’s applicant base 

for critical skills and diversity; updating new agent training to reflect our revised 

priorities; establishing new career tracks for counterterrorism, counterintelligence, 

cyber, security, and for analysts; and improving management and leadership development. 

We are modernizing FBI technology by implementing Trilogy and developing cutting-edge technology. We have opened and strengthened lines of communication between the FBI and our partners in the federal, state, local, and international law 

enforcement and intelligence communities. We amended our original core values to 

accountability for our actions and leadership through example—both at work and 

in our communities. 

In short, we have overhauled the FBI, transforming it into a stronger, more flexible, more proactive, and more modern organization, better equipped to confront the 

myriad of threats we face in a post-September 11th world. We will continue to 

evolve and make comprehensive changes in the overall structure, organization, and 

business practices of the FBI to ensure that we remain the very best law enforcement and intelligence agency in the world. 

CONCLUSION

We have made great progress, but our work is not yet finished. The FBI has a 

duty to protect the United States, secure freedom, and preserve justice for all Americans. The FBI has always answered—and will always answer—this call with fidelity, bravery, and integrity. The men and women of the FBI work tirelessly each and 

every day to fulfill the FBI’s mandate to protect the United States. With the support 

of this Subcommittee, we can give the men and women of the FBI the resources 

they need to carry out their mission. 

Thank you.

TRILOGY PROGRAM

Senator GREGG. Let us start where you ended, which is a tangible item. Some of the other issues of culture and interchange between various agencies of information are less tangible, but let us 

begin with the Trilogy program and the problem. 

This committee has dedicated a massive amount of dollars and 

a huge amount of time to trying to assist the Bureau in getting this 

right, and yet it continues to not work. It is $200 million over 

budget, months, literally years, really, out of sync on its timetable. 

The problem, as you mentioned, is that the onsite capability hardware didn’t work, and hasn’t been brought online on time and the 

software, Virtual Case File, first round, I guess, was declared to be 

ineffective. 

Now we have got a new time line and a new date to have the 

onsite capability up and running. Virtual Case File appears to be 
60

still very much a question. And there doesn’t appear to be an enterprise architecture plan, something that looks into the future and 

says, this is where we are going with all this technology. 

I guess the first question is, give us specifics as to when you expect this to work. Second, I understand that one of our problems 

is that we basically have had contracts which haven’t put penalties 

in place and now there is some penalty language. Tell us what the 

penalty language is and how it is going to create an enforcement 

of both the Virtual Case File and the onsite capability language 

and what the game plan is for an enterprise architecture plan. 

Mr. MUELLER. If I could, Mr. Chairman, reflect a bit on the history of the program, and I understand this committee’s concern. 

But by way of history, the——

Senator GREGG. I think we should start by making it clear to 

those who may be listening that the purpose here was to give the 

agent, all agents, the ability to have access to the database in real 

time that would be extremely usable and user friendly and would 

be almost an off-the-shelf capability to allow them to have a computer at their desk where they could communicate with each other 

and we wouldn’t have things happen like happened prior to 9/11. 

Mr. MUELLER. Absolutely. And if I can, let me just start with a 

history. Then I will focus on the specific questions you asked, not 

the least of which, what is the bottom line? When do you expect 

this to go online? 

But going back a little bit of the history. As, Mr. Chairman, you 

pointed out, contracts were entered into early on speedily without 

the language that perhaps we would have liked in retrospect and 

there were two contracts. One was for basically the hardware side 

of the house and the other was for the software side of it. These 

were let in the year 2001, prior to September 11. 

After September 11—and the contracts proposed a certain revamping of the archaic, and I have to say archaic, information 

technology infrastructure of the FBI. But what was proposed in the 

contracts prior to September 11 was not what the Bureau needed 

in the wake of September 11. 

And when we did a review in the wake of September 11 as to 

what we would get as a Bureau from these two contracts, we realized they were lacking in a number of ways, the principal area of 

which was a tremendous concern to me was that given what Trilogy proposed, we were to retain exactly the same database structure that we had had before but put a graphical user interface or 

a web-based interface on it, and retaining that database would preclude us from doing exactly what you have intimated, having a 

database that would be accessible to all and upon which would sit 

the search tools that would help not just our analysts, but all our 

agents and support staff. 

So we made changes to Trilogy in the wake of September 11. I 

think you are aware of those changes. They cost substantial additional sums of money, but they are, I believe, well spent. 

Over a period of time, you could look at Trilogy and the four 

areas of upgrade. The first is the hardware deployment. Before 

September 11, the computers that were on the desks of many 

agents were, 486s, rejects from the Department of Defense. Part of 

the contract was to replace all of these computers. In the last 2 
61

years, we have replaced anywhere from 28,000 to 30,000 computers 

for all of our agents and our support staff. So the first part was 

the hardware, replacing the computers, the printers, scanners, and 

the like. 

The second part was the Local Area Networks and Wide Area 

Networks. We have 622 sites around the United States, everything 

from a one- or two-person resident agency to the New York Field 

Office. Part of the program was to replace the Local Area Networks 

and the Wide Area Networks. The same contractor that had the responsibility for the upgrades, which I will talk about in a moment, 

had the responsibility for completing, or not completing, that on 

schedule and that was completed on schedule March 28, in fact, a 

couple days before schedule, last year. That is the backbone, the 

Local Area Networks and the Wide Area Networks. 

The third piece was the upgrade of those computer operating systems, what we call a full site capability, which was to be completed 

in October of last year. We came to find out that the contractor 

could not do it. We are in the process of doing it now. My expectation is that that will be done by May of this year. We have migrated over 25,000 users from the old operating system to the 

newer operating system on which you can place the Virtual Case 

File. 

And last, Virtual Case File. We are now negotiating with the 

contractor who has the responsibility for Virtual Case File on the 

date of completion of that and changes that we had wanted to improve its capability. My expectation is that sometime, and I can’t 

get a firm date, after we finish with the full site upgrade at the 

end of April, beginning of May of this year, it will take another 2 

months probably to go and get Virtual Case File on board. 

Let me, if I could, just make another point about where we will 

be when we do get Virtual Case File. I had a very real concern 

when I looked at where the Bureau was going in the wake of September 11 as to what would be the appropriate mechanism for the 

Bureau to upgrade its capabilities, its investigative capabilities for 

all agents, and there basically were two options. One is, take something off the shelf and modify it. Another one is to develop our own 

set of procedures or our own software using contractors and the 

like, but adopt and build a software capability that would be usable, user friendly, and transform the Bureau. 

I have had a number of persons outside the Bureau look at the 

decision to develop our own, persons, I call them the gray beards, 

who are from a number of private concerns who would look at the 

choice we have made and the product we have come up with. I 

think the reviews are very good for the product we have come up 

with. 

The last point I would make, Mr. Chairman, is that in transforming the upgrade to Virtual Case File, while it absolutely has 

its risks, as we complete this process, we will upgrade not only the 

computers, and our investigative capability, but also will change 

the way we have done business for 95 years of our existence, going 

from a paper-driven organization to a digital organization. 

It has cost money. There have been delays. There have been mistakes that I have made. There have been areas where I could have 

moved faster and there are areas where I urged people to move 
62

faster that have rebounded and tended to produce a delay as opposed to the speed that I had requested. But I do believe we are 

on track. I do believe that we will have a state-of-the-art system 

when we are through. 

Senator GREGG. What penalties do you have in place to enforce 

the April 30 deadline on Full Site Capability? 

Mr. MUELLER. If either the costs or the schedule are missed, 

there will be no award fee, which is in the sum of $5 million, and 

the FBI and the contractor will pay 50 percent each of any cost 

overruns past that date. 

Senator GREGG. And how about with the Virtual Case File, if it 

doesn’t work? The first Virtual Case File just didn’t work. 

Mr. MUELLER. Well, there were glitches in it. I wouldn’t go so far 

as to say it didn’t work. 

Senator GREGG. Well, the GAO said it. The Inspector General 

said it didn’t. 

Mr. MUELLER. Yes. We are negotiating with the contractor right 

now. We are in the course of negotiations with the contractor on 

the date and the cost. 

Senator GREGG. I hope there will be some sort of an enforcement 

mechanism in that contract, too, because I think one of the things 

we have learned is that without penalties and without enforcement 

mechanisms, we just end up with the taxpayers paying huge cost 

overruns here. 

Mr. MUELLER. I am in hearty agreement. 

Senator GREGG. The enterprise architecture concept of a plan for 

the future, you didn’t address that. That was part of my question. 

Mr. MUELLER. Yes, and I apologize for not having embraced that 

in my remarks. As I believe you are aware, I had my Chief Information Officer (CIO), a very experienced individual, from July 2002 

through May 2003. Quite obviously, one of the challenges for him 

was the enterprise architecture. I understand the necessity for it, 

the need for it. He left in May 2003. I hired Zalmai Al Azmi, who 

is here today in November 2003, after an extensive search. One of 

the first things on his plate was the architecture. We have just in 

the last few days entered into a contract to have the architecture 

developed and we expect that by the end of the year, the first 

phase of that will be done. 

In the meantime, I have given Zalmai Al Azmi the responsibility 

for approving any IT project as well as the funding for any IT 

project. As anybody who has reviewed the FBI has known, we have 

been stovepiped over the many years. We have had any number of 

IT projects grow up to meet a particular need and there has not 

been an overarching architecture. By placing the responsibility for 

both the funding as well as the development of projects in his shop, 

as well as developing or contracting to have the architecture developed on a very short timeframe, I think we are moving to address 

that. 

Senator GREGG. I have a number of other questions, but I want 

to yield to the Senator from Wisconsin. 

Senator KOHL. Thank you, Senator Gregg. 

Director Mueller——

Mr. MUELLER. Senator. 
63

TRANSPORTATION SECURITY

Senator KOHL [continuing]. In lieu of the recent terrorist attacks 

at four train stations in Madrid, the security of our own mass 

transportation system has been called into question. Yesterday, 

Secretary Ridge announced a new plan to secure our rail system. 

This effort would include rapid deployment teams, which could be 

deployed to vulnerable rail systems and stations with bomb sniffing 

dogs. In addition, the Department of Homeland Security will accelerate a pilot program to test equipment for screening passengers 

and luggage for explosives. 

How much confidence do you have in the effectiveness of this 

proposal to protect against terrorist attacks? How long do you believe it will take to get this program up and running? And what 

role will the FBI be playing to help protect the transportation infrastructure, Director Mueller? 

Mr. MUELLER. The plan proposed by the Department of Homeland Security will go some ways in hardening our transportation, 

the rail transportation. I will tell you that in the past, even prior 

to the announcement of the new initiative yesterday from the Department of Homeland Security, the Department of Homeland Security, ourselves, and others have worked closely with both the 

railroads, but most particularly with the subway systems, particularly New York, Washington, DC, Boston, Los Angeles, and Chicago, to assure heightened protection of those particular targets. 

So as to the first part of the question, yes, the new initiative yesterday will go some ways again to deterring terrorists from attacking the rail systems because of the heightened security. We have 

learned, both from our experience from gathering information from 

around the world and more particularly from our discussions with 

detainees who are familiar with al Qaeda’s thinking that enhanced 

deterrence deters terrorist attacks and they look for the softer targets, so yes. Yesterday is yet another step in protecting the rail 

systems as well as the subways, but the fact of the matter is, while 

it goes some substantial ways, one cannot have a failsafe system, 

as we saw in Madrid 2 weeks ago. 

So yes, we are protecting the subways in the various cities I 

mentioned in conjunction with the transit authorities and the local 

police, but it is not a failsafe system. As we develop these proposals, we work with the Department of Homeland Security to assure that we have the integrated response to assure that whatever 

threat information we have is immediately passed on to not only 

the Department of Homeland Security, but to the transit authorities or the police departments in the cities that may be threatened. 

If there is a more general threat, that also is basically provided 

through two means of communication. The one means is through 

the Department of Homeland Security advisors throughout the 

United States and in each of our major cities, and the second is 

through the FBI and law enforcement to each of our joint terrorism 

task forces, of which there are 84 around the country. 

EXPLOSIVES

Senator KOHL. Thank you. Director Mueller, current law requires 

all domestic manufacturers of explosives to mark their products 
64

with identifying information. This allows investigators to determine 

the origin of the explosives and aids them in tracking down criminals. Imported explosives, however, do not have to carry such 

markings. 

In 2002, the United States imported 14,900 metric tons of prepared explosives. Without markings, law enforcement has a distinct disadvantage in investigating crimes involving foreign-made 

explosives. The Justice Department has been working on regulations that would require importers to mark explosives when they 

enter the country, but these regulations have not been finalized. 

What effect does this loophole have on our ability to effectively 

investigate crimes involving explosives, and would you support legislation that would require appropriate markings to be placed on 

all imported explosives? 

Mr. MUELLER. Well, I do believe markings assist investigators in 

solving the crime, so to speak, and determining the sourcing of the 

components to any explosive device will assist you in determining 

who was responsible for any act using such a device. And so, yes, 

I think markings are helpful. 

I will tell you that in many cases, overseas and actually domestically, our laboratory can identify a sourcing of a particular explosive just because of the vast knowledge that they have gained over 

a number of years as to the manufacturers of various components 

and their identifying data. But that is not the same as the markings we have domestically. 

With regard to the support of that, again, that would be an administration position and I would have to defer to the Department 

as to exactly what position they are taking on a specific piece of 

legislation. 

Senator KOHL. Would you like to see personally all imported explosives to be marked? 

Mr. MUELLER. I think markings are helpful to the investigator 

and the laboratory technician who is trying to identify the sourcing 

of that explosive. 

TERRORIST SCREENING CENTER

Senator KOHL. All right. Director Mueller, the media has reported that biological threats may have played a role in the cancellation of numerous commercial flights in December and January. 

When asked at a hearing last month, Secretary Ridge admitted 

that our airline security procedures cannot currently protect 

against these types of biological threats. Secretary Ridge suggested 

that the best way to prevent such attacks is to concentrate on 

going after the people who may launch such an attack. 

A terrorist watch list is vital to our national security. The FBI, 

through the creation of the Terrorist Screening Center, known as 

TSC, is partially responsible for creating a single integrated terrorist watch list. In a recent interview, you said that this integrated list would be completed by March. Is this list fully operational today with a completely integrated watch list, and if it is 

not, when can we expect such a list to be fully integrated and operational? 

Mr. MUELLER. The Terrorist Screening Center was first established on December 1, 2003, and what it brought together was indi-
65

viduals’ access to the databases of all of the watch lists, and there 

are approximately 12, in a variety of agencies in the Government. 

What it brought together at that time was the ability, when there 

was a hit on the watch list, to thereafter determine whether it was 

valid and then to follow up with action through the joint terrorism 

task forces or through the border agencies. 

In the meantime, since December 1, 2003, the Terrorist Screening Center has been working with each of the agencies that had a 

relevant watch list to import its data in a way that assures that 

the name of the person is a valid name, that there is identifying 

information that supports it, and there is a basis for having the 

person on a Terrorist Watch List. 

I can tell you that the State Department has a list of easily over 

100,000, not just terrorists, but others whom they want to bar from 

the country. So extracting those names is a substantial process, 

and assuring that there is a basis for that name going into the 

watch list is also a very extensive process. 

We are about halfway through that process at this point. We 

have a consolidated watch list, but we do not have all of the watch 

list names in it because we are going through that screening process. I expect it to be finished by this summer. 

Senator KOHL. Thank you. Mr. Chairman, I thank you. 

Senator GREGG. Thank you, Senator. 

DUPLICATION OF EFFORTS/TERRORIST EXPLOSIVE DEVICE ANALYTICAL

CENTER

Following up on Senator Kohl’s point on the Terrorist Screening 

Center, we have been setting up these new initiatives that I presume are trying to get away from stovepipes and cross-fertilize the 

different agencies involved, such as the Foreign Terrorist Tracking 

Task Force and the Terrorist Screening Center and the Terrorist 

Threat Integration Center and the Terrorist Explosive Device Analytical Center (TEDAC) and the Joint Intelligence Coordination 

Council. 

I guess my question is, are we spinning here? Are we duplicating? Are some of these groups ending up being redundant and 

not adding value but actually just shifting deck chairs around? I 

would take, for example, the Terrorist Explosive Device Analytical 

Center, which as I understand it is essentially taking over the role, 

or attempting to take over the role, or attempting to duplicate the 

role that already exists at ATF, where they have two databases on 

explosive devices and where they have had the role of overseeing 

explosive devices for quite a while. 

Mr. MUELLER. Let me start with TEDAC, which the ATF quite 

obviously participates in. It was an idea that came from the Saudi 

Arabia bombings of May 12, 2003, and our participation in helping 

the Saudis on that case, and most recently what we have come to 

find in Iraq. 

There was not a worldwide effort to in develop a database in one 

place with an expertise associated with it to identify explosive devices from around the world used by various terrorist groups. So 

the idea came out of our work in Iraq, where we along with the 

Department of Defense (DOD), the British, and a number of others, 
66

are developing the database related to the various incidents occurring in Iraq. 

We have expanded that under the auspices of the FBI laboratory 

to include devices from around the world. Now, the first step was 

to get our own house in order to make certain that we are working 

together with DOD, the CIA, with ATF, and NSA to cooperatively 

develop this database. 

And so it was an idea borne out of our experiences in Iraq and 

elsewhere——

Senator GREGG. Let me get specific, Director. ATF has something 

called the X-Base, I believe it is called, and then they have something called the Bomb and Arson Tracking System. You are saying 

that TEDAC is not going to be duplicative of those but will have 

more of an international flavor than those have? 

Mr. MUELLER. I believe it will, but I would have to get back to 

you on how they can or should be integrated. 

[The information follows:] 

POSSIBLE INTEGRATION OF X-BASE INTO TEDAC 

The mission of the TEDAC is to forensically and technically analyze terrorist explosive devices used against U.S. interests anywhere in the world and to develop 

actionable intelligence. As such, the TEDAC will require a very robust database 

with state of the art link analysis software that will enable computers to compare 

Improvised Explosive Device (IED) components sent in from a variety of sources. 

This functionality will allow the TEDAC to rapidly recognize otherwise non-observable connections between IEDs that exist with a tremendous volume of detailed 

technical and forensic information and intelligence. The ultimate goal will be to 

identify those individuals associated with the IED and the unique signature used 

to manufacture the bomb. All intelligence gathered from the forensic and technical 

analyses of IEDs will be disseminated among the military and law enforcement explosives community for technical and tactical purposes. 

Currently, the Department of Justice is conducting a review of all explosives-related databases. The Department will, upon completion of the review, advise the relevant committees of the Department’s final conclusions.

Senator GREGG. And the other question that goes into that issue 

is that I understand the FBI is considering taking over all of the 

explosive activity that was traditionally with ATF. Is that true? 

Mr. MUELLER. That is not true. 

Senator GREGG. The investigative activity in the area of explosives? 

Mr. MUELLER. That is not true. 

Senator GREGG. Well, then maybe I am misinformed. It is my understanding that in this budget, we have a shift of that responsibility from ATF over to FBI. 

Mr. MUELLER. There is a differentiation of responsibilities between the FBI and ATF. We do have the responsibility for addressing terrorist, or possible terrorist incidents within the United 

States, and generally, the ATF has a responsibility for most other 

explosive incidents that you have within the United States. 

In terms of training, our training focuses on render safe, that is, 

how persons render safe the explosive device prior to there being 

an explosion and the ATF has the expertise in training what you 

do and how you investigate explosive devices that have gone off. 

I can tell you that there is a division of responsibility. There are 

occasionally tensions, both in the field and here, now that ATF is 

within the Department of Justice, the Department of Justice has 

a task force that is looking at that allocation of responsibility. 
67

Senator GREGG. That must be what I was informed of, and I 

guess I was misinformed, because our impression was that they 

had gone much further than just looking at it, that there had been 

sort of a preliminary move to have ATF move explosive activity 

over to FBI. I am glad to hear that is not the case, because I understand only about 1 percent of the explosions that occur are terrorist 

related. 

Mr. MUELLER. There is no move for us to take over ATF’s responsibility when it comes to investigating incidents involving explosions——

Senator GREGG. That are not terrorist. 

Mr. MUELLER [continuing]. Beyond the terrorism field. 

Senator GREGG. We have had this Madrid incident——

Mr. MUELLER. Yes. 

Senator GREGG [continuing]. And my question to you is, Europe 

is now starting to expedite its efforts in the area of 

counterterrorism and the European Union is talking about setting 

up a Europe-wide database that is counterterrorism oriented. I 

guess they had one, but they are talking about significantly improving it and increasing it. 

To what extent have you had discussions post-Madrid as to the 

role of ourselves and the FBI specifically in this new effort by the 

Europeans to become more sensitive to and more knowledgeable 

about the threat? 

Mr. MUELLER. Since the Madrid explosions I have not had much 

opportunity to talk to counterparts overseas other than my counterpart in the Spanish National Police, and the discussion there was 

not addressed to what Europe could do as a whole itself to integrate terrorism information, and then a subpart of that, involvement of the United States. 

For the most part, our relationships with our European counterparts are very good on a bilateral basis and we share a great deal 

of information, depending on the country, with our counterparts 

overseas. The European Union has what is called Europol, which 

is an entity established by the European Union to address law enforcement, terrorism issues and it, I would say, is in its opening 

stages. 

I have had discussions within the FBI, some outside, with regard 

to a proposal suggested by Congressman Wolf about our participating in an international terrorism information exchange and we 

are exploring the possibility of doing that under the auspices of 

NATO. One of the problems you have in terms of exchanging information is having everyone on the same security level so that one 

is given access to meaningful information. And one of the problems 

that one has where you have a group of countries working together, 

you wonder what the security level may be. Who gets the information? One has to work through that. Our thought is that NATO 

may give us the vehicle to do that because there are security levels, 

and persons seconded to NATO with the appropriate security clearances. This is a vehicle that we are currently exploring. 

Senator GREGG. So right now, there is no formal structure or 

communication process other than personal relationships between 

the Director of the CIA and yourself that causes information to 

move back and forth efficiently? 
68

Mr. MUELLER. No, I would say there is a lot more, a great deal 

more than that. Ourselves and the agency, we have legal attache ́

offices in most European capitals, not every one of them, and it is 

that legal attache ́ office that meets daily with our counterparts, 

whether it be in France or the United Kingdom or Spain. So there 

is an exchange of information between our legal attache ́s overseas 

and our counterparts overseas on a daily basis. 

We also have the foreign Embassies in Washington, DC. You also 

have Scotland Yard, MI–5, MI–6, and others who will have persons 

here who have exchanges with our people daily. And so there is a 

network of exchange of information that is ongoing that people 

don’t often hear much about but has been tremendously effective 

since September 11. 

What you do not have is Europol, which has been established by 

the European Union. While we have persons that have spent time 

at Europol, it is just getting established and whether it will be an 

effective information exchange for the European Union is still to be 

seen. In the meantime, we are going to explore this other option 

of exchanging with a number of countries information relating to 

terrorism under the umbrella of NATO. 

Senator GREGG. Is there compatible Terrorist Screening Center 

in Europe yet? 

Mr. MUELLER. No, there is not at this point. 

Senator GREGG. Would you presume that if there were, that we 

would integrate with it? 

Mr. MUELLER. Yes. I think we would exchange lists, yes. 

Senator GREGG. Should we help them get that going? It seems 

to me that a lot of our threat is going to be based there, and granted, you have got your Legats all over the place who I am sure are 

developing names, but that is a pretty ad hoc approach. 

Mr. MUELLER. I met with a representative of Europol maybe 2 

to 3 weeks ago in terms of what they have established in terms of 

capability and it is relatively small at this juncture. 

TOPOFF

Senator GREGG. What did you learn from the TOPOFF events 

that you could impart to us that we need to do in order to improve 

communication between the various parties who participated? I 

mean, the purpose of TOPOFF was to simulate an event and see 

where the weaknesses are. What was the FBI’s weakness and what 

should we do to address it? 

Mr. MUELLER. It has been some time since I have looked at 

TOPOFF. I think one of the basic lessons we learned out of it was 

the Seattle aspect of it, that is, the necessity of identifying the relative chain of command and the authorities beforehand. Since that 

time, I know the Department of Homeland Security has identified 

individuals in most cities, I believe, who would be the representative of the Department of Homeland Security on scene and is training those individuals. I think that was a weakness that I saw. 

There were certain weaknesses that we saw out of the TOPOFF 

exercise in Chicago, which was a chem-bio attack, and I would 

have to go back and refresh my memory on what those weaknesses 

were in terms of responding to that attack. 
69

Senator GREGG. Is there a formal structure for responding to the 

weaknesses that were identified? 

Mr. MUELLER. Yes. I know there is an after-action report and 

that the various items on that after-action report were identified 

and are being addressed by Homeland Security. 

Senator GREGG. Maybe you could give us a summary of what is 

being addressed for the record. 

Mr. MUELLER. I will be happy to do that. 

[The information follows:]

SUMMARY OF TOPOFF 2 AFTER-ACTION REPORT

Since the publication of the ‘‘TOPOFF 2 After-Action Summary Report,’’ the Department of Homeland Security (OHS) has used the conclusions from this analytical 

document to lead the federal government’s national effort to revamp, centralize, and 

unify a range of pre-existing federal and other incident response contingency plans. 

Among the actions undertaken by the DHS in response to TOPOFF 2 arc: 

—Enhanced interagency coordination for incident management.—At the time of 

TOPOFF 2, DHS had instituted a Crisis Action Team (CAT) to address incident 

management requirements. TOPOFF 2 After-Action comments suggested that 

the DHS develop more formal standard operating procedures with incident-specific interagency staffing requirements. These suggestions led to the transformation of the CAT into the Interagency Incident Management Group (IIMG), 

which was formed to address decision and coordination processes in elevated 

threat environments through bringing together federal, state, local, and private 

sector agencies as one functional entity to address specific contingencies, 

threats, or events. 

—Enhanced Principal Federal Official (PFO) capabilities.—The PFO concept, 

which was first tested in TOPOFF 2, has been enhanced through the establishment of training courses with curriculum that clarifies the mission, roles, and 

functions of these senior DHS officials in response operations. 

—Improved emergency public information coordination.—The DHS has led an intensive interagency effort that has resulted in the creation of an interagency incident communications strategy, emergency communications protocols, and vastly improved federal, state, and local coordination.

Senator GREGG. Where do you see the status of training first responders relative to the FBI role, to the extent there is any in that? 

Mr. MUELLER. Well——

Senator GREGG. And how do you see our first responder capability these days? 

Mr. MUELLER. We do a tremendous amount of training in evidence recovery throughout the country, throughout the world now 

in crime scene exploration. That is not what traditionally is called 

first responder, but it is our niche that we will continue to address. 

We have a render safe capability that we have continued to grow 

over the years and we will continue to grow that capability. 

In terms of the response from the fire or the ambulances and 

that form of first responder, as with the TOPOFF exercises, there 

have been other exercises. Every one of our special agents in 

charge in each of our cities is integrated now, both through our 

joint terrorism task forces, but also through various exercises in 

various cities with those first responders so the communication, the 

ability to stand up quickly and respond to a devastating attack, is 

much enhanced since September 11. 

Senator GREGG. So you think we are making progress on training 

first responders? 

Mr. MUELLER. Yes. 

Senator GREGG. Do you think it should be threat based, where 

we choose to put the money for this? 
70

Mr. MUELLER. I am going to have to leave that to others. That 

is a little bit out of my bailiwick. I think that is more in Tom 

Ridge’s. I am not that familiar with the financing——

Senator GREGG. Okay. I will——

Mr. MUELLER [continuing]. Structure, I will just put it that way, 

of allocating the funds. 

Senator GREGG [continuing]. Okay, onto other topics, then. 

Three, just quickly. Do you believe al Qaeda was responsible for 

the Madrid attack? 

Mr. MUELLER. From what we have seen to date, I believe so. 

Now, when you say al Qaeda, let me just qualify that to a certain 

extent. There may well have been a group of individuals who have 

adopted and believe in Bin Laden’s philosophy, theology, who are 

responsible for this, but may not have had, either sought or had 

the approval of those remaining leaders of al Qaeda. But I think 

it is fair to say that the evidence tends to point to individuals who 

were supportive of the radical fundamentalism and would be supporters of al Qaeda’s mission. 

COUNTERTERRORISM AGENTS

Senator GREGG. In changing the culture of the FBI, how many 

agents are you planning to put into the Counterterrorism Division? 

Mr. MUELLER. Well, we had——

Senator GREGG. Approximately? 

Mr. MUELLER. I moved 518 in fiscal year 2002. I would expect 

that at the end of 2004, we are authorized 2,418 agents. That is 

up from 1,351 agents in fiscal year 2001. With the additional increases sought in the 2005 budget, we will be up to 2,592 agents. 

Senator GREGG. As I understand it, there are still about 380 

agents who are assigned to the Criminal Division that are being 

used in counterterrorism, is that correct? 

Mr. MUELLER. I believe it is about 380 at the end of this year, 

yes. We are actually overburdening some more than that at this 

point. But with the 2004 budget increases, I believe we will be 389, 

is what we anticipate at the end of this year. 

Senator GREGG. I guess the obvious question is, and I am sure 

you have a strong answer to it, but the obvious question is, if 

counterterrorism is your number one responsibility now and if you 

have got 12,000 agents overall, approximately, first, why are we 

only dedicating 2,500 to the effort? 

And number two, why haven’t we been able to move the full complement into this arena, and is that a reflection of the fact that 

there is still some significant—resistance is the wrong term, but 

some significant desire or feeling amongst the line agents that they 

want to do things other than counterterrorism, that they were 

trained, they were brought up for 20 years, 30 years, 15 years in 

white collar crime and chasing the mafia and finding out who 

robbed the bank and they like that? 

Mr. MUELLER. It is not a reflection—of what a particular agent 

or group of agents want to do. I have sought, as we have discussed 

before, to request additional resources in counterterrorism, to move 

additional resources when I thought it was necessary. I moved in 

excess of 500 agents in fiscal year 2002 and I have sought addi-
71

tional enhancements so that if we get the 2005 budget, that 389 

figure should be down above, just a little above 230. 

I am also considering making a move of additional agents to 

counterterrorism. You will see that in the budget, we are looking 

at—in the budget submission, we are looking at a number of agents 

who in the past have been working on Government fraud cases 

where I believe the Inspector Generals can take up some of those 

cases. And I am looking for other ways to transfer agents to 

counterterrorism. 

I have looked to see what our continuous level of assignment of 

agents to counterterrorism would be absent the peaks. We have, as 

we have discussed before, we have had two peaks in the past, certainly with regard to—in the wake of 9/11 and then in anticipation 

of the hostilities in Iraq. I do believe that one of the benefits from 

having a number who are still being reassigned from criminal in 

some offices reflects the desire to have flexibility in the system. 

In the savings and loan crisis, when we were given additional resources, whether it be prosecutors or agents, we identified where 

the problem was and the agents were put in the particular city and 

they are there to this date. What we found in terrorism is that terrorism cells can arise anyplace in the United States, and when 

they arise, we have to do a combination of pushing resources to 

those particular offices as well as taking persons from those offices 

who are addressing another priority. Part of the reason that you 

have the statistics you have as to the overburn is attributable to 

that desire to be flexible. 

The bottom line is I am continuously looking at it. I will look at 

the end of this year, or as we go through this year, at the feasibility of reassigning agents from other programs to 

counterterrorism. 

Senator GREGG. I noticed you dropped a couple of activities. 

There were two specific areas that you decided——

Mr. MUELLER. The first one was fraud on the Government. The 

other one was assistance of EPA. 

Senator GREGG. We put a lot of things on the FBI’s table over 

the years before 9/11. There is probably a list that is longer than 

that that you could drop, isn’t there? 

Mr. MUELLER. There are areas that I have looked at. I mean, 

there are some areas that are relatively insignificant that don’t 

make a big cut. The one area where I have reassigned the most 

agents was from the drug program and we have continued to 

underburn in the drug program as a result of those agents being 

reassigned to do counterterrorism. 

One of the things, and it may be—I don’t think it is that different than what happened in the past, but each of the special 

agents in charge are directed to expend the resources to do the job 

in counterterrorism, even if it cuts into other programs. So if you 

have a terrorism lead that has gone unaddressed and agents assigned to counterterrorism are busy with terrorism matters, then 

you have to take them from someplace else. That is the type of 

flexibility that we have not necessarily used in the past that I 

think is important to use in the future where we have terrorism 

not limited to one city or two cities, but it can pop up anyplace 
72

around the country. And I say not just international terrorism, but 

domestic terrorism. 

LANGUAGE TRANSLATION

Senator GREGG. I understand that. I noticed that you have something like 65 people who are now trained in language who are fluent in Arabic languages, is that right? 

Mr. MUELLER. We have 24 Arabic speakers in the agent population. Now, we have dramatically increased our linguists and our 

translators in the Bureau, as I think you are aware. 

Senator GREGG. That is maybe where the 65 came from. That 

seems like an awfully small number. 

Mr. MUELLER. We are pushing training. We are recruiting as 

hard as we can for those who speak Arabic. We have had some success, but not as much success as I would like. We are enhancing 

the language training for our agents and those who receive the 

training will now be in a position where they can use that training, 

which has not always been the case. 

Senator GREGG. How can we help you get more people on board? 

Do you need a pay differential? 

Mr. MUELLER. We have gotten in our request last year in the 

2004 budget as well as in the 2005 budget. You have increased our 

budget to assist in sending agents as well as analysts and others 

for language training, not only in Arabic but Mandarin Chinese 

and other languages that we need to have an agent cadre fluent 

in. 

Senator GREGG. I would hope if there is something further we 

could do, we would like to do it. 

IDENT SYSTEM

In talking with Director Hutchinson at Homeland Security about 

the new IDENT system, US VISIT, where they are fingerprinting 

people coming into the United States, he advises us that they are 

using a flat screen, two index fingers, printing system for the sake 

of speed, basically was what it came down to, because using all five 

fingers or a roll system just took too long. 

We now built IAFIS, which cost us a huge amount of money, before you arrived. We had the same problems with that that we 

have had with Trilogy, except I think it even cost more in overruns. 

Mr. MUELLER. But it is also, if I can interject, it has been tremendously successful. 

Senator GREGG. Well, it took a long time to get there, believe me. 

It has been successful, and that is my point. It has been successful. 

It has got 44 million fingerprints on file, and yet it is not compatible with IDENT. This seems to be one of those things which is 

very hard to explain to a taxpayer, that we are putting in place a 

system at the State Department and Homeland Security to identify 

people coming into the country. We have 44 million fingerprints 

over here. Sure, most of them may be domestic, but there are certainly a lot that aren’t and the two systems can’t talk to each 

other. The next terrorist event, we may find out a fellow got 

through the IDENT system but his fingerprints were over at 

IAFIS. 
73

Mr. MUELLER. Well, this has been a matter of much discussion, 

not just recently, but over the last year. Quite obviously, the 10-

print roll prints is the gold standard. I know that the Department 

of Homeland Security was faced with the necessity of establishing 

very quickly a biometric system that was affordable and could be 

put up quickly and opted for the two-print system in the meantime. 

There are discussions about how that can be expanded to a 10-

print flat as opposed to a 10-print rolled, which would take a long 

time for everybody and I don’t think we would want at our borders 

with the fact that 1 million persons go in or out of the country 

every day. 

So it is a combination of, on the one hand, you have the gold 

standard. On the other hand, you have the practicality of identifying persons coming in swiftly in such a way that you can identify 

terrorists. The way we do it now is we have a file that we provide 

to the Department of Homeland Security that includes all the fingerprints and they strip off the two index fingerprints and utilize 

that to identify persons who may be terrorists, on the wanted list, 

coming through the country, or coming through the border. We are 

working with State and the Department of Homeland Security to 

improve that system. 

Senator GREGG. I appreciate that but what are we actually 

doing? 

Mr. MUELLER. We are meeting to decide what the standard will 

be down the road, taking into account that the 10-rolled print is 

the gold standard which everybody would like and looking at the 

practicality both of the software, the hardware and what it would 

mean to allowing persons through our borders of having a system 

that is more substantial than the two-fingerprint system that we 

currently have at the borders. 

Senator GREGG. Is it doable to integrate the two systems? 

Mr. MUELLER. I think it is. I do believe so. Just in the two-print 

system, I do think it is doable down the road. We are exploring——

Senator GREGG. What do you need to do to do it? 

Mr. MUELLER. Developing the technology, and I am not intimately familiar with the technology that is being used currently, 

the two in the VISIT system at the borders, but developing the 

technology and the communications capability so that given just 

the two-print system, there can be a timely search against the FBI 

database by a communications carrier. 

Senator GREGG. Maybe you could have somebody in your group 

meet with Mr. Hutchinson and——

Mr. MUELLER. We are. 

Senator GREGG. Well, I know you are, daily, I am sure, and with 

State and get back to this committee with a proposal as to how you 

plan to do this and a timeframe. 

Mr. MUELLER. Yes, sir. 

Senator GREGG. It just seems to us, to me, anyway, that we are 

wasting our resources. We have put a lot of money into it and we 

should be trying to figure out a way to get the two to talk to each 

other. It may not be doable if you have got a condition that you 

are going to have to get people through the checkpoint in 13 seconds or whatever the condition is, but it would seem to me that if 

there is a way to do it and we need money to do it from a tech-
74

nology standpoint, we could find the money, because we would hate 

to see that database just sit there and not be accessed. 

I appreciate it. You have been very courteous with your time 

today. Is there anything further you wish to add? 

Mr. MUELLER. The only item I didn’t address is the concern that 

you raised, and that is about the adaptability of the Bureau to the 

new mission. You read these books about taking a corporation or 

an agency or a large organization through a transformation. The 

books will tell you that there are 30 percent that welcome the 

transformation and see the future, there are 30 percent that have 

to be persuaded, and there are 30 percent that like the old ways. 

There are agents in the FBI, without a question of a doubt, who 

enjoyed what they were doing before, perhaps enjoyed doing it 

more than some of the things they are called upon to do at this 

point, and there will be for a number of years. But I do believe that 

just about every FBI agent understands the responsibility that the 

Bureau has, along with other agencies, to prevent another terrorist 

attack, they understand that responsibility, the necessity of transforming the organization, the new mission, and are pursuing that 

new mission as we have missions in the past. 

It was something new for us to develop a game plan to address 

La Cosa Nostra or the Mob, to change from doing bank robberies 

and bank embezzlements to an extended multi-year integrated 

multi-agency plan to address a threat against the United States 

and we adapted then. I do believe we are adapting, and will continue to adapt with this new challenge thanks to the dedication 

and loyalty of FBI agents and analysts and support staff to the Bureau, the Government, the American people, and their understanding the importance of our role in protecting the national security of the United States. 

With that, thank you, sir. 

Senator GREGG. We thank you for your service and thank your 

agents for their service and the people who work at the FBI and 

do an extraordinary job. It is very much appreciated. To the extent 

we criticize you, we hope it is taken as constructive. That is our 

goal. Thank you. 

Mr. MUELLER. Thank you, sir. 

STATEMENT OF GLENN A. FINE, INSPECTOR GENERAL, DEPARTMENT 

OF JUSTICE 

Senator GREGG. Our next panel will include members of the Government Accountability Office and the Inspector General. 

We have with us Glenn Fine, who is the Inspector General for 

the Department of Justice; Dr, Randolph Hite and Dr. Laurie 

Ekstrand, who both work for the Government Accountability Office. 

All of them specialize, obviously, in making sure that various agencies function efficiently and effectively and focus especially on the 

issue of the FBI and other agencies responsible for 

counterterrorism. 

We appreciate you taking the time to come and testify. You all 

were here to hear, I believe, Director Mueller’s thoughts and what 

we would like to do is get your thoughts on the specific issues of 

technology and how it is being put in place at the FBI and what 

we can do to make sure we don’t have these continued cost over-
75

runs, and more importantly, what we can do to make sure the technology works the way it is supposed to work. 

We will start with Mr. Fine, anything you wish to say, or if you 

want to submit a statement, that is fine, too. 

Mr. FINE. Thank you, Mr. Chairman. Thank you for inviting me 

to testify about the FBI’s efforts to modernize its information technology systems. Within the past 2 years, the Office of the Inspector 

General has issued several reports that examined IT issues in the 

FBI, including a review of the FBI’s management of its IT investments as well as the implementation of the FBI’s most important 

IT project, Trilogy. 

My written statement provides a detailed description of the history of delays and cost overruns in Trilogy. My statement also describes other reviews that the OIG recently has completed or has 

ongoing in the FBI, including a report describing the delays in integrating IDENT, the Department of Homeland Security’s automated 

fingerprint identification database, with IAFIS, the FBI’s fingerprint database; a review of the FBI’s use of investigative resources 

before and after the September 11 attacks; a report examining the 

FBI’s failure to detect the espionage of Robert Hanssen for more 

than 20 years; and ongoing reviews of other important FBI programs, such as the FBI laboratory’s DNA unit, the FBI’s Language 

Translation Services Program, and the FBI’s Foreign Legats, 

among others. 

You have asked me in my oral remarks this morning to briefly 

focus on the OIG’s assessment of the Trilogy project. Trilogy is essential to modernizing the FBI’s archaic and inadequate computer 

systems. The FBI’s current systems do not permit FBI employees 

to readily access and share information throughout the FBI. Without this capability, the FBI cannot efficiently investigate criminal 

cases, effectively analyze intelligence information, and bring together all the investigative information in the FBI’s possession to 

solve crimes and help prevent future terrorist attacks. 

The Trilogy project, as you know, has three main components: 

One, the upgrade of the FBI’s hardware and software; two, the upgrade of the FBI’s communications network; and three, the upgrade 

and consolidation of the FBI’s five most important investigative applications. 

Our reviews have found that Trilogy has grown from what in the 

year 2000 was estimated to be a 3-year, $379 million project to 

what is now a $581 million project that may not even be fully completed before the end of this calendar year. Senior FBI IT managers recently told OIG auditors that the infrastructure components, the first two components of Trilogy, should be completed by 

April 30. However, there is still a significant risk of missing even 

the latest deadline. 

The third component of Trilogy, upgrading and consolidating the 

investigative applications, is still ongoing. The most important part 

of this component is the Virtual Case File, which will replace the 

FBI’s inadequate Automated Case Support System. 

In our view, the reasons for the repeated delays and the increased costs in the Trilogy project include poorly defined requirements as Trilogy was developed, the lack of firm milestones and 

penalties to the contractors for missing deadlines, the FBI’s weak 
76

IT investment management structure and processes, the lack of a 

qualified project integrator to manage the two main Trilogy contractors and take responsibility for the overall integrity of the final 

product, and the lack of FBI management continuity and oversight, 

due in part to the frequent turnover of senior FBI IT managers. 

These problems with Trilogy were consistent with the OIG’s repeated warnings about the FBI’s IT systems and its management 

processes in general. A variety of OIG reports have identified significant deficiencies in the FBI’s IT program, including fragmented 

management, inadequate training, and a failure to adequately respond to recommendations regarding IT improvements. 

Although the FBI has had a difficult time developing and deploying Trilogy, at this juncture the completion of at least the initial 

phase of Trilogy is in site. Director Mueller has made Trilogy a priority and has focused personal attention on this project, to his credit. In addition, the FBI recently appears to have focused its attention on addressing many of the weaknesses we have described. 

Both the FBI and the Department of Justice now have Chief Information Officers who appear committed to a no-nonsense approach 

to managing the Trilogy project. 

Once completed, Trilogy will significantly enhance the FBI’s ability to manage its cases and share information. But more progress 

is still needed on Trilogy’s user applications, particularly the Virtual Case File, and completion of Trilogy will not signal the end of 

the FBI’s IT modernization effort. Trilogy will only lay the foundation for future IT advancements. 

The FBI must focus sustained attention on ensuring that it has 

state-of-the-art information technology systems to permit FBI employees to effectively process and share information. As the FBI 

looks to the future to meet the continuing threat of terrorism and 

the increased sophistication of domestic and international crime, it 

must give its employees the IT tools they need to perform their 

mission effectively and efficiently. Given the importance of this 

issue, the OIG will continue to review and report on the FBI’s 

progress or lack of progress in this critical area. 

That concludes my prepared statement and I would be happy to 

answer any questions, Mr. Chairman. 

PREPARED STATEMENT

Senator GREGG. I have got a lot of questions, but I want to hear 

from the whole panel first. 

[The statement follows:]

PREPARED STATEMENT OF GLENN A. FINE

Mr. Chairman, Senator Hollings, and Members of the Subcommittee on Commerce, Justice, State and the Judiciary: 

INTRODUCTION

I appreciate the opportunity to testify before the Subcommittee as it examines the 

Federal Bureau of Investigation’s (FBI) fiscal year 2005 budget request. I have been 

asked to speak about the FBI’s progress in modernizing its information technology 

(IT) systems, specifically its agency-wide IT modernization project known as Trilogy. 

Within the past two years, the Office of the Inspector General (OIG) has issued several reports that examined IT-related issues at the FBI, including the FBI’s responsiveness to previous OIG recommendations dealing with IT issues and a review of 

the FBI’s IT Investment Management process. As part of the latter review, issued 
77

in December 2002, we examined the FBI’s implementation of Trilogy. In addition, 

last month we opened a new audit that is currently examining the overall management of the Trilogy project and the extent to which Trilogy will meet the FBI’s current and longer-term IT requirements. 

Our overall assessment is that the FBI has had a difficult time trying to modernize its information technology systems, and has experienced a series of delays, 

missed deadlines, and cost increases. However, at this juncture, the completion of 

Trilogy is in sight. Director Mueller has made Trilogy a priority and has focused 

personal attention on this project, to his credit. Although more progress is needed 

on Trilogy’s user applications, particularly the Virtual Case File, once completed 

Trilogy will significantly enhance the FBI’s ability to manage its cases and share 

information. 

Trilogy and the first version of the Virtual Case File system are just the start 

of the FBI’s information technology modernization effort. In the years ahead, the 

FBI will need to focus even greater attention to ensure that it implements stateof-the-art information technology to allow its employees to effectively perform their 

critical mission. 

In the first section of my statement, I will provide a brief overview of the Trilogy 

project, describe the history of the FBI’s progress in developing Trilogy, and summarize the OIG’s preliminary assessment of the reasons for the delays in its implementation. In the next section, I will discuss the results of other, recent OIG reviews 

of the FBI’s IT management process. I will conclude the statement by providing a 

brief overview of recently completed and ongoing OIG reviews that examine other 

important FBI issues that may be useful to this Committee. 

THE TRILOGY PROJECT

Overview 

Trilogy is the largest of the FBI’s IT projects and has been recognized by the FBI 

and Congress as essential to modernizing the FBI’s archaic and inadequate computer systems. One component of Trilogy, the Virtual Case File, will replace one of 

the FBI’s inadequate database systems, the Automated Case Support (ACS) system, 

which is used as a case tracking system. Among its many shortcomings, ACS does 

not permit FBI agents, analysts, and managers to readily access and share case-related information throughout the FBI. Without this capability, the FBI cannot efficiently investigate criminal cases, analyze intelligence information, and bring together all of the investigative information in the FBI’s possession to help prevent 

future terrorist attacks. 

The Trilogy project has three main components: 

—Information Presentation Component (IPC)—intended to upgrade the FBI’s 

hardware and software; 

—Transportation Network Component (TNC)—intended to upgrade the FBI’s communication networks; and 

—User Applications Component (UAC)—intended to upgrade and consolidate the 

FBI’s five most important investigative applications. 

The first two components of Trilogy provide the infrastructure needed to run the 

FBI’s various user applications. The User Application component of Trilogy will upgrade and consolidate the FBI’s investigative applications, beginning with the five 

most critical. However, it is important to note that Trilogy will not replace the 37 

other less-critical investigative applications or the FBI’s approximately 160 other 

non-investigative applications. Rather, Trilogy is intended to lay the foundation so 

that future enhancements will allow the FBI to achieve a state-of-the-art IT system 

that integrates all of the agency’s investigative and non-investigative applications. 

Project Schedule and Costs 

In the last several years, the FBI’s Trilogy project has suffered a continuing series 

of missed completion estimates and associated cost growth. In November 2000, Congress appropriated $100.7 million for the initial year of what was estimated to be 

a 3-year, $379.8 million project. The FBI hired DynCorp in May 2001 (in March 

2003, DynCorp was merged into Computer Sciences Corporation (CSC)) as the contractor for the IPC/TNC infrastructure components of Trilogy. At that time, the 

scheduled completion date for the Trilogy infrastructure was May 2004. In June 

2001, the FBI hired Science Applications International Corporation (SAIC) to complete the user applications component of Trilogy—including the Virtual Case File—

with a scheduled completion date of June 2004. 

Infrastructure Components 

A stable schedule for Trilogy was never firmly established for much of the 

project’s history. Beginning in 2002, the FBI’s estimated dates for completing the 
78

Trilogy project components began to swing back and forth and were revised repeatedly. The FBI moved up the completion date for deploying the Trilogy infrastructure 

to June 2003 from the original date of May 2004 because the September 11, 2001, 

terrorist attacks had increased the urgency of completing Trilogy. Later, the FBI 

said the infrastructure would be completed by December 31, 2002. In February 

2002, the FBI informed Congress that with an additional $70 million, the FBI could 

accelerate the deployment of Trilogy. According to the FBI, this acceleration would 

include completion of the two infrastructure components by July 2002 and rapid deployment of the most critical analytical tools in the user applications component. 

Congress therefore supplemented the FBI’s fiscal year 2002 Trilogy budget by $78 

million, for a total of $458 million, to accelerate the completion of all three components. 

The promised milestone for completing the infrastructure components slipped 

from July 2002 to October 2002 and then to March 2003. On March 28, 2003, CSC 

completed the Wide Area Network for Trilogy. In April 2003, Director Mueller reported to Congress that more than 21,000 new desktop computers and nearly 5,000 

printers and scanners had been deployed. He also reported that the Trilogy Wide 

Area Network—with increased bandwidth and three layers of security—had been 

deployed to 622 sites. While this deployment improved the hardware available to 

FBI staff, it provided no new software capability. 

In April 2003, the FBI and CSC agreed to a statement of work for the remaining 

infrastructure components of Trilogy, including servers, upgraded software, e-mail 

capability, and other computer hardware, with final engineering change proposals 

and a completion date of October 31, 2003. In August 2003, CSC informed the FBI 

that the October 2003 completion date would slip another two months to December 

2003. In October 2003, CSC and the FBI agreed that the December 2003 date again 

would slip. 

The General Services Administration’s Federal Systems Integration and Management Center, known as FEDSIM, competes, awards, and manages contracts for its 

federal agency clients. FEDSIM had used its Millennia contracting vehicle to award 

contracts for Trilogy on behalf of the FBI. In November 2003, the General Services 

Administration formally announced that CSC failed to meet the deadline for completing work on the infrastructure portions of Trilogy that are required to support 

the user applications, including the Virtual Case File. 

On December 4, 2003, CSC signed a commitment letter agreeing to complete its 

infrastructure portions of the Trilogy project by April 30, 2004, for an additional 

$22.9 million, including an award fee of over $4 million. An award fee is used when 

the government wants to motivate a contractor with financial incentives. The FBI 

covered these additional costs by reprogramming funds from other FBI appropriations. In January 2004, the FBI converted the agreement with CSC to a revised 

statement of work providing for loss of the award fee if the April 30, 2004, deadline 

is not met. In addition, the revised statement of work provides for cost sharing at 

a rate of 50 percent for any work remaining after the April 30 deadline. 

As of early March 2004, CSC was in the process of installing in the FBI’s field 

offices the remaining computer hardware infrastructure needed to use the previously deployed Wide Area Network. If completed by April 30, 2004, the original 

target set in 2001 for the infrastructure components of Trilogy will be met, but the 

accelerated schedule funded by Congress will be missed by some 22 months. 

Senior FBI IT managers recently told OIG auditors that the infrastructure components appear to be on target for meeting the latest milestone of April 30, 2004, although they cautioned that there is a risk of missing this latest deadline because 

the schedule is ambitious and there is no slack time. However, other FBI officials 

involved in the project believed that CSC’s ability to complete the remaining engineering work by April 30, 2004, is an open question. A contractor recently hired by 

the FBI’s Chief Information Officer to facilitate solutions with the two Trilogy contractors described the April 30 deadline as ‘‘a real management challenge.’’

User Applications 

With respect to development of the Virtual Case File, the first of three system 

deliveries for the Virtual Case File occurred in December 2003. However, it was not 

functional and therefore was not accepted by the FBI. FBI officials told our auditors 

that, as of January 2004, 17 issues of concern pertaining to the functionality and 

basic design requirements of the Virtual Case File needed to be resolved before the 

Virtual Case File could be deployed. According to FBI personnel working on the resolution of these problems, the 17 issues were corrected as of March 7, 2004. However, significant work still remains on addressing security aspects and records management issues in the Virtual Case File. 
79

The FBI is now requiring the contractor, SAIC, to provide a new, realistic completion date and cost estimate for delivery of a usable Virtual Case File. Based on this 

information, expected within the next week or two, the FBI intends to renegotiate 

the contract for the user applications component to include firm, verifiable milestones and penalties for missing the milestones. 

The remaining work required to actually deploy a usable and functional initial 

version of the Virtual Case File appears significant. The Virtual Case File will be 

installed in stages, with the first stage including the migration of the ACS database. 

However, our conversations with FBI IT managers suggest uncertainty about the 

completion dates for each stage. As noted above, the timetable is currently being negotiated with SAIC. 

No one interviewed by our auditors in the FBI, the Department, or the General 

Services Administration thought the Virtual Case File would be ready when the 

supporting infrastructure for the system is scheduled to be in place as of April 30, 

2004. They said that to speed the delivery of at least a basic functional Virtual Case 

File system, it is possible that some features initially intended as part of the first 

delivery of the system will have to be deferred until later. Many FBI managers told 

us that they are uncertain whether a functional, complete version of the VCF will 

be deployed before the end of calendar year 2004. 

Trilogy Cost 

In addition to frequent schedule slippages, Trilogy costs have grown considerably. To accelerate the project, the original estimated project cost of $380 million increased by $78 million to $458 million. Through reprogramming and other funding 

in fiscal year 2003, the currently authorized total funding level is $581 million. According to an FBI report, as of January 2004 the remaining available funds were 

about $12 million. As of March 19, 2004, the FBI’s Chief Information Officer believed that current funding appears to be adequate to complete Trilogy. However, 

in our view, until the user applications contractor provides an updated cost estimate, it will be difficult to gauge the approximate total cost of the Trilogy project, 

particularly since enhanced versions are planned sometime after the initial deployment. 

Further, the FBI’s ability to track Trilogy costs adequately was questioned by a 

March 3, 2004, FBI inspection report. The report recognized internal control weaknesses and said that Trilogy-related financial records are fragmented and decentralized with no single point of accountability. Because the FBI’s Financial Management 

System does not capture detailed Trilogy-related expenditures, FBI auditors could 

not ascertain a ‘‘global financial profile’’ of Trilogy. 

Problems in Trilogy’s Development 

Based on the OIG’s previous audit work that examined the FBI’s IT management 

process, together with the preliminary results of our ongoing audit of Trilogy, we 

believe the reasons for the delays and associated increased costs in the Trilogy 

project include: lack of firm milestones and penalties for missing milestones; lack 

of a qualified project integrator who would manage the interfaces between the two 

contractors and would have responsibility for the overall integrity of the final product; weak IT investment management structure and processes; until recently, lack 

of management continuity and oversight due, in part, to the frequent turnover of 

FBI IT managers and the FBI’s focus on its other important law enforcement challenges; poorly-defined requirements that evolved as the project developed; and unrealistic scheduling of tasks by the contractors. 

Contract Weaknesses 

The FBI’s current and former Acting Chief Information Officers told us that the 

primary reason for the schedule and cost problems associated with the infrastructure components of Trilogy is a weak statement of work in the contract with CSC. 

In addition, despite the use of two contractors to provide three major project components, until recently the FBI did not hire a project integrator to manage contractor 

interfaces and take responsibility for the overall integrity of the final product. According to FBI IT managers, FBI officials acted as the project integrator even 

though they had no experience to perform such a role. 

According to FBI IT and contract managers, the ‘‘cost plus’’ award fee type of contracts used for Trilogy did not require specific completion milestones, did not include 

critical decision review points, and did not provide for penalties if the milestones 

were not met. Under cost plus award fee contracts, the contractors are only required 

to make their best effort to complete the project. Furthermore, if the FBI does not 

provide reimbursement for the contractors’ costs, under these agreements the contractors can cease work. Consequently, in the view of the FBI managers with whom 

we spoke, the FBI was largely at the mercy of the contractors. 
80

FEDSIM representatives explained that a cost-plus contract is used for large 

projects where the requirements and the costs are not defined sufficiently to allow 

for a firm fixed-price contract. The FEDSIM’s Millennia contracting vehicle currently has nine ‘‘industry partners’’ who are eligible to bid on federal projects. Under 

Millennia, contracts can be awarded relatively quickly because of the limited number of potential bidders. Because the FBI wanted a quick contract and did not have 

highly defined requirements, it used the cost plus award fee contract vehicle. 

In our ongoing audit of Trilogy, we plan to evaluate the effect of the contractual 

terms on the schedule, cost, and performance of the project. 

IT Investment Management Weaknesses 

In addition to the lack of controls built into the statements of work for Trilogy, 

the FBI’s investment management process was not well developed. Had the FBI developed a mature IT investment management process, the Trilogy project likely 

could have been completed more efficiently and timely. The investment management 

process at the FBI is still in the early stages of development. Absent a mature IT 

investment process, FBI IT investment efforts are at risk for significant developmental problems. 

Management Continuity and Oversight 

Part of the problem acknowledged by the FBI for not acting timely on IT recommendations from the OIG over the years has been the turnover of key FBI managers. Similarly, we believe that turnover in key positions affected the FBI’s ability 

to manage and oversee the Trilogy project. 

Since November 2001, 14 different key IT managers have been involved with the 

Trilogy project, including 5 Chief Information Officers or Acting Chief Information 

Officers and 9 individuals serving as project managers for various aspects of Trilogy. 

This lack of continuity among IT managers contributed to the problems of ensuring 

the effective and timely implementation of the Trilogy project. According to contractor personnel who are advising the FBI on Trilogy, the FBI also suffered from 

a lack of engineering expertise, process weaknesses, and decision-making by committees instead of knowledgeable individuals. In the contractors’ opinion, weak government contract management has created more of the problem with Trilogy than 

the terms of the contracts. 

We have spoken to many officials in the FBI, the Department of Justice, and 

FEDSIM who believe that the FBI has recently improved its management and oversight of Trilogy and of information technology in general. The FBI appears to have 

hired from other federal agencies and from private industry capable individuals, including the current Acting Chief Information Officer and several key project management personnel. Officials within both the Department of Justice and the FBI 

now are optimistic that the FBI’s current information technology management team 

has the talent to solve the FBI’s problems in this area. We also have been impressed 

with the quality of the FBI’s current managers of Trilogy, including the Acting Chief 

Information Officer. However, we believe it essential for the FBI to maintain continuity in the management of Trilogy. 

Lack of Defined Design Requirements 

One of the most significant problems with managing the schedule and costs of the 

Trilogy project was the lack of a firm understanding of the design requirements by 

both the FBI and the contractor. Not only were Trilogy’s requirements ill defined 

and evolving as the project progressed, but certain events triggered the need to 

change initial design concepts. For example, after September 11, 2001, Director 

Mueller recognized that the initial concept of simply modifying the old Automated 

Case Support system would not serve the FBI well over the long run, and the FBI 

created the plans for the Virtual Case File. Other changes to the design occurred 

because of the experiences and lessons learned from the response to the September 

11 terrorist attacks, the Hanssen espionage case, and the belated production of documents to defense attorneys in the Oklahoma City bombing case. 

However, during the initial years of the project, the FBI had no firm design baseline or roadmap for Trilogy. The FBI also may have overly relied on contractor expertise to help define the requirements, while the contractor may have overly relied 

on the FBI to provide direction for the Trilogy design. 

Unrealistic Scheduling of Tasks 

According to an FBI official monitoring development of the Trilogy infrastructure, 

CSC has had problems producing an appropriate resource-driven work schedule. 

Furthermore, SAIC is using a scheduling tool for development of the user applications component with which the FBI is unfamiliar. In our view, unrealistic scheduling of project tasks has led to a series of raised expectations, followed by frustra-
81

tion when the completion estimates were missed. We intend to examine the schedules more closely in our ongoing audit of the Trilogy project. 

Prior OIG Audits on FBI IT Investment Management Practices and FBI’s Implementation of IT Recommendations 

The problems demonstrated by the Trilogy project were consistent with our concerns about the FBI’s IT systems and management process in general. Since 1990, 

various OIG reports have identified significant deficiencies with the FBI’s IT program, including outdated infrastructures, fragmented management, ineffective systems, and inadequate training. Within the past 18 months, the OIG completed two 

reviews that looked at these and other aspects of the FBI’s efforts to modernize its 

IT systems, one issued in December 2002 and the other issued in September 2003. 

The first audit, issued in December 2002, examined the FBI’s IT investment management practices. The OIG found that, in the past, the FBI had not effectively 

managed its IT investments because it failed to: (1) effectively track and oversee the 

costs and schedules of IT projects; (2) properly establish and effectively use IT investment boards to review projects; (3) inventory the existing IT systems and 

projects; (4) identify the business needs for each IT project; and (5) use defined processes to select new IT projects. We concluded that despite efforts to improve its IT 

management, the FBI had not fully implemented the above five critical processes 

associated with effective IT investment management. Consequently, the FBI continued to spend hundreds of millions of dollars on IT projects without adequate assurance that the projects would meet their intended goals. 

Our audit made eight recommendations with respect to Trilogy, including urging 

the FBI to establish cost, schedule, technical, and performance baselines and track 

significant deviations from these baselines, and taking corrective action as necessary. The FBI agreed with all eight of the Trilogy-related recommendations, with 

one minor exception, and to date has taken corrective action on three. 

In a September 2003 audit, the OIG comprehensively examined the FBI’s implementation of the OIG’s prior IT-related recommendations. While the FBI had made 

substantial progress on many of the recommendations, implementing 93 of 148 total 

recommendations, we concluded that full implementation of the remaining recommendations was needed to ensure that the FBI’s IT program effectively supported 

the FBI’s mission. 

OIG Conclusions on Trilogy 

In sum, we found various reasons for Trilogy’s delays and problems. Initially, the 

FBI did not have a clear vision of what the FBI’s Trilogy modernization project 

should achieve, let alone specific design requirements, and the contractors were not 

held to a firm series of achievable milestones. The FBI’s investment management 

process also left it ill equipped to ensure that all three components of Trilogy were 

developed in an integrated fashion. Moreover, at the outset, the FBI and others did 

not provide consistent or effective management of Trilogy, leading to technical and 

scheduling problems. 

The FBI recently appears to have focused attention on addressing much of these 

weaknesses. Our preliminary assessment is that both the FBI and the Department 

of Justice now have Chief Information Officers who are committed to a successful 

implementation of Trilogy, with a no-nonsense approach to managing the Trilogy 

contracts and a commitment to closely monitor its progress. The FBI also appears 

to be attempting to ensure that Trilogy is completed as soon as possible, and the 

General Services Administration also is participating fully in this oversight role. In 

addition, the Department of Justice Chief Information Officer meets regularly with 

FBI and GSA staff to oversee progress on Trilogy. However, significant work remains, particularly on the Virtual Case File, which may not be fully implemented 

by the end of this year. Because of the importance of the Trilogy project, the OIG 

will continue to monitor the FBI’s implementation of Trilogy. 

ADDITIONAL OIG REVIEWS IN THE FBI

In addition to these IT reviews, the OIG continues to conduct wide-ranging reviews of other priority issues in the FBI. The following are a few examples of recently completed reviews in the FBI, as well as ongoing OIG reviews, that may be 

of interest to the Committee. 

Recently Completed OIG Reviews 

IDENT/IAFIS: The Batres Case and the Status of the Integration Project.—In 

early March 2004, the OIG issued a special report that examined the status of efforts to integrate IDENT, the Department of Homeland (DHS) Security’s automated 

fingerprint identification database, with IAFIS, the FBI’s automated fingerprint 
82

identification database. The OIG review described the tragic consequences that can 

result because these immigration and criminal fingerprint identification systems are 

not integrated. Victor Manual Batres, an alien who had an extensive criminal history, was caught two times by the Border Patrol attempting to enter the United 

States illegally. Both times the Border Patrol voluntarily returned him to Mexico 

without checking his criminal record. He came back into the United States, where 

he raped and murdered a nun. During this period, the Border Patrol never learned 

of his extensive criminal history, which should have subjected him to detention and 

prosecution, partly because IDENT and IAFIS are not linked. 

The OIG has reported extensively on the slow pace of the integration of IDENT 

and IAFIS in several reports over the past few years. In the Batres report, we noted 

that according to the Department and DHS timetable provided to us by integration 

project managers, full integration of the two systems was not scheduled to be completed for many years. Since issuance of our Batres report several weeks ago, DHS 

leaders have publicly stated that the integration process will be expedited, and that 

hardware to allow Border Patrol agents to check detained aliens in both IDENT and 

IAFIS will be provided to Border Patrol stations on an expedited timetable. However, additional issues remain to be resolved, such as access to DHS’s immigration 

databases by the FBI and state and local officials and questions about what fingerprint information will be made available to immigration inspectors at ports of entry. 

The FBI’s Efforts to Improve the Sharing of Intelligence and Other Information.—

A December 2003 OIG audit examined the FBI’s efforts to enhance its sharing of 

intelligence and law enforcement information with federal, state, and local officials. 

The audit noted that fundamental reform with regard to sharing this information 

is under way at the FBI. The audit also found that the FBI has taken a series of 

actions to improve its ability to communicate information within the FBI, analyze 

intelligence, and disseminate information outside the FBI. However, the OIG audit 

described continued obstacles to the FBI’s reform efforts and cited the need for: (1) 

improving information technology; (2) improving the FBI’s ability to analyze intelligence; (3) overcoming security clearance and other security issues concerning the 

sharing of information with state and local law enforcement agencies; and (4) establishing policies and procedures for managing the flow of information. 

FBI Casework and Human Resource Allocation.—A September 2003 OIG audit examined the FBI’s use of resources in its investigative programs over a 7-year period—6 years prior to September 11, 2001, and 9 months after that date. The audit 

provided detailed statistics on the FBI’s allocation of resources to its ten program 

areas during this period. It also examined the FBI’s planned allocation of resources 

during this same period compared to the actual allocation of resources. In addition, 

the OIG audit detailed the types and numbers of cases the FBI investigated in these 

program areas. Using data from the FBI’s systems, the OIG found that although 

the FBI had identified combating terrorism as its top priority in 1998, until the September 11 attacks it devoted significantly more of its agent resources to traditional 

law enforcement activities, such as white-collar crime, organized crime, drug, and 

violent crime investigations, than to its counterterrorism programs. 

In a current follow-up review examining the FBI’s use of resources, the OIG is 

examining in greater detail the operational changes in the FBI resulting from this 

ongoing reprioritization effort, including the types of offenses that the FBI is no 

longer investigating at pre-September 11 levels and the changes in the types of 

cases worked at individual field offices. After completing this follow-up review, the 

OIG plans to open an additional audit to obtain feedback from federal, state, and 

local law enforcement agencies regarding the impact of the FBI’s reprioritization on 

their operations. 

Review of the FBI’s Performance in Deterring, Detecting, and Investigating the Espionage Activities of Robert Philip Hanssen.—In a comprehensive special report released in August 2003, the OIG examined the FBI’s efforts to detect, deter, and investigate the espionage of Robert Hanssen, the most damaging spy in FBI history. 

The OIG review concluded that Hanssen escaped detection not because he was extraordinarily clever and crafty in his espionage, but because of long-standing systemic problems in the FBI’s counterintelligence program and a deeply flawed FBI 

internal security program. The review also found that the FBI has taken important 

steps to improve its internal security program since Hanssen’s arrest, including the 

implementation of a counterintelligence-focused polygraph examination program, development of a financial disclosure program, and creation of a Security Division. 

However, the OIG review concluded that some of the most serious weaknesses still 

had not been remedied fully. The OIG is continuing to monitor the FBI’s response 

to the recommendations in this report. 
83

Ongoing Reviews 

In addition to these recently issued reports, the OIG has additional reviews under 

way that are examining other critical issues in the FBI. Examples of these ongoing 

reviews include the following. 

Terrorist Screening Center.—On September 16, 2003, the President established 

the Terrorist Screening Center (TSC) to consolidate terrorist watch lists and provide 

24/7 operational support for thousands of federal officers who need access to such 

watch lists. The FBI was assigned responsibility to administer the TSC and is working with the DHS, the Department of State, the Central Intelligence Agency, and 

other agencies to make the TSC operational. Last week, the OIG initiated an audit 

to examine whether the TSC: (1) has implemented a viable strategy for accomplishing its mission; (2) is effectively coordinating with participating agencies; and 

(3) is appropriately managing the terrorist-related information to ensure that a complete, accurate, and current watch list is developed and maintained. 

Attorney General Guidelines.—In May 2002, the Attorney General issued revised 

guidelines that govern general crimes and criminal intelligence investigations. The 

OIG review is examining the FBI’s implementation of the four sets of guidelines: 

Attorney General’s Guidelines Regarding the Use of Confidential Informants; Attorney General’s Guidelines on FBI Undercover Operations; Attorney General’s Guidelines on General Crimes, Racketeering Enterprise and Terrorism Enterprise Investigations; and Revised Department of Justice Procedures for Lawful, Warrantless 

Monitoring of Verbal Communications. The OIG review seeks to determine what 

steps the FBI has taken to implement the Guidelines, examine how effective those 

steps have been, and assess the FBI’s compliance with key provisions of the Guidelines. 

Terrorism Task Forces.—The OIG is examining how the law enforcement and intelligence functions of the Department’s Terrorism Task Forces support their efforts 

to detect, deter, and disrupt terrorism. The review is specifically evaluating the purpose, priorities, membership, functions, lines of authority, and accomplishments for 

the FBI’s Joint Terrorism Task Forces, National Joint Terrorism Task Force, Foreign Terrorist Tracking Task Force, the United States Attorneys’ Offices’ Anti-Terrorism Advisory Councils, and the Deputy Attorney General’s National Security Coordination Council. 

DNA Laboratory.—The OIG is completing a review that examines the failure of 

a former technician in the FBI Laboratory DNA Analysis Unit to complete steps designed to detect contamination in the analysis process. In addition, with the assistance of nationally known DNA scientists, the OIG is completing a broader assessment of the DNA Analysis Unit to determine if vulnerabilities exist in its DNA protocols and procedures. 

Language Translation Services.—The OIG is reviewing the FBI’s language translation services program in light of the FBI’s efforts after the September 11 terrorist 

attacks to hire linguists and to use technology to handle the increasing backlog of 

counterterrorism and foreign counterintelligence translation work. The OIG review 

will examine the extent and causes of any FBI translation backlog; assess the FBI’s 

efforts to hire additional translators; and evaluate whether FBI procedures ensure 

appropriate prioritization of work, accurate and timely translations of pertinent information, and proper security of sensitive information. 

Intelligence Analysts.—One of the FBI’s primary initiatives after the September 

11 terrorist attacks was to enhance the FBI’s analytical ability and intelligence capabilities. An OIG audit is examining how the FBI hires, trains, and staffs the various categories of FBI intelligence analysts. The OIG is reviewing the FBI’s progress 

toward meeting hiring, retention, and training goals as well as how analysts are 

used to support the FBI’s counterterrorism mission. 

Legal Attache ́ Program.—The FBI’s overseas operations have expanded significantly in the last decade. The FBI operates offices known as Legal Attache ́ or Legats in 46 locations around the world. The primary mission of Legats is to support FBI investigative interests by establishing liaison with foreign law enforcement 

agencies. Through interviews and visits to several Legats, an OIG review is examining the type of activities performed by Legats, the effectiveness of Legats in establishing liaison with foreign law enforcement agencies and coordinating activities 

with other law enforcement and intelligence agencies overseas, the criteria used by 

the FBI to determine the placement of Legat offices, and the process used for selecting and training FBI personnel for Legat positions. 

Smith/Leung Case.—At the request of FBI Director Mueller, the OIG is conducting a review of the FBI’s performance in connection with former FBI Supervisory Special Agent James J. Smith, who recently was charged with gross negligence in his handling of national defense information. The OIG’s review will examine Smith’s career at the FBI and his relationship with Katrina Leung, an asset in 
84

the FBI’s Chinese counterintelligence program with whom Smith allegedly had a 

long-term intimate relationship. The OIG also will examine a variety of performance 

and management issues related to the Smith/Leung case. 

CONCLUSION

The FBI is making significant strides in reevaluating and reengineering many of 

its historic processes and procedures. Central to this transformation is the FBI’s 

critical need to modernize its archaic IT systems. Development and deployment of 

the Trilogy system—the centerpiece of the agency’s IT modernization project—has 

until recently been frustratingly delayed and costly. The delays have left FBI managers, agents, analysts, and other employees without the modern tools they need. 

Considering the antiquated information technology environment in which they have 

had to operate for many years, FBI employees deserve much credit for what they 

have been able to accomplish. 

Trilogy, when it is finally implemented, will greatly enhance the FBI’s information technology capabilities. Much of the Trilogy upgrade is nearing completion, although the Virtual Case File still needs significant effort. However, implementation 

of Trilogy will not signal the end of the FBI’s information technology modernization 

effort. The project will lay the foundation for future information technology advancements, but constant effort will be needed to ensure that the FBI implements and 

maintains cutting edge technology that permits its employees to effectively process 

and share information. This must remain a critical priority for the FBI. The FBI 

needs to provide sustained and careful management of the continuing upgrades to 

ensure that FBI employees have the tools they need to perform their mission. The 

FBI’s ability to perform its functions effectively, including counterterrorism, counterintelligence, and criminal law enforcement, depends to a large degree on the success 

of the FBI’s information technology projects. Given the importance of this issue, the 

OIG will continue to review and monitor the FBI’s progress in these efforts.

STATEMENT OF LAURIE E. EKSTRAND, DIRECTOR, HOMELAND SECURITY AND JUSTICE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE 

ACCOMPANIED BY RANDOLPH HITE, DIRECTOR, INFORMATION TECHNOLOGY ARCHITECTURE AND SYSTEMS ISSUES, GOVERNMENT 

ACCOUNTABILITY OFFICE

Senator GREGG. Dr. Ekstrand? 

Ms. EKSTRAND. Thank you, Mr. Chairman. I have a statement, 

a brief oral statement for both Mr. Hite and myself, and this statement covers overall progress in transformation, specifically in the 

areas of strategic planning and human capital planning, information technology management, and the realignment of staff resources to priority areas. 

Let me start with transformation. Overall, we are encouraged by 

the progress that the FBI has made in several areas, and of particular note, we want to focus on the completion of a new strategic 

plan and of a human capital plan. While for both of these plans we 

can cite areas where they could be improved, on the whole, we believe they contain a number of elements of best practice. 

Among the positive elements of the strategic plan include a comprehensive mission statement, results-oriented long-term goals and 

objectives, and it delineates priorities. But it could be improved by 

discussions of several additional topics, including how success in 

achieving goals is going to be measured. We understand that the 

FBI is going to augment their plan and include some of the information that we are recommending and we certainly commend that 

effort. 

In terms of strategic human capital planning, this also includes 

a number of the principles of sound human capital planning. Our 

main concerns in this area are that, first, the FBI has not hired 

a human capital officer as yet, and second, the performance man-
85

agement system for non-SES staff is not adequately linked to performance. 

Now let me turn your attention to the FBI’s effort to leverage the 

vast potential of information technology, IT, to assist the Bureau 

in transforming how it operates. While the FBI has long recognized 

the potential, as evidenced by sizeable sums of money that it has 

invested in IT projects, not the least of which is Trilogy, what it 

has not recognized, as well, as is this: How well the Bureau manages IT will ultimately determine how well the Bureau leverages 

IT as a transformation tool. 

Our research has shown that organizations that successfully exploit IT as a change agent employ similar approaches in managing, 

including adopting a corporate or agency-wide approach to managing IT, having an enterprise architecture, and having portfoliobased investment management processes. 

Unfortunately, the FBI has yet to manage its IT efforts in this 

way. As we have previously reported, the absence of such an approach to IT management results in IT investments that are duplicative, not interoperable, do not support mission goals and objectives, and cost more and take longer to implement than they 

should. In the case of the FBI, such cost, schedule, and performance problems can be seen in Trilogy. 

Now, to the FBI’s credit, its strategic plan and its recent proposals and actions recognize longstanding IT management shortcomings. That is the good news. The bad news is that until these 

recent steps become institutionalized, the prognosis for the FBI’s 

ability to effectively use IT to transform itself is uncertain, at best. 

Now, just briefly, let me turn to the staffing of priority areas, 

that is, counterterrorism, counterintelligence, and cyber, and the 

effects on more traditional crime areas, specifically drugs, white 

collar crime, and violent crime. 

The FBI’s three top priority areas now deploy about 36 percent 

of field agent positions, and this is the largest single category of 

agents. But despite the growth in agents in the area, agents from 

traditional crimes are still needed to work all leads, and this is 

fairly substantial, as Director Mueller indicated. 

Now, as would be suspected, the number of counterterrorism 

matters have increased substantially since 9/11. Conversely, the 

number of open matters in drugs, violent crime, and white collar 

crime has diminished. We have ongoing work to develop further information concerning potential effects of these shifts, particularly 

in the drug area, and we expect to report our findings later this 

year. 

This concludes our oral statement. Mr. Hite and I would be 

happy to answer any questions. 

Senator GREGG. Did you want to add anything, Mr. Hite? 

Mr. HITE. No, sir. We are fully integrated and interoperable up 

here. 

PREPARED STATEMENT

Senator GREGG. That is a first. We appreciate that. 

[The statement follows:]
86

1See U.S. General Accounting Office, FBI Reorganization: Progress Made in Efforts, but Major 

Challenges Continue, GAO–03–759T (Washington, D.C.: June 18, 2003). 

PREPARED STATEMENT OF LAURIE E. EKSTRAND

FBI TRANSFORMATION

FBI CONTINUES TO MAKE PROGRESS IN ITS EFFORTS TO TRANSFORM AND ADDRESS

PRIORITIES

What GAO Found 

We commend the FBI for its progress in some areas of its transformation efforts 

since we last testified on this subject in June 2003. We believe that commitment 

from the top, a dedicated implementation team, involvement of employees in the 

process, and the achievement of key milestones are encouraging signs of progress. 

However, we continue to encourage the development of a comprehensive transformation plan that would consolidate the crosswalks between the various aspects 

of transformation. This could help management oversee all aspects of the transformation. 

The FBI’s strategic plan has been completed. Overall we found the plan has important strengths as well as some areas in which improvements could be made. For 

example, the plan includes key elements of successful strategic plans (i.e. a comprehensive mission statement and results-oriented, long-term goals and objectives). 

However, the plan is missing some elements that could have made it more informative. Officials advised us that some of these elements are available elsewhere (i.e. 

lists of stakeholders and performance measures). The absence of these elements 

makes the plan less comprehensive and useful. 

The FBI has also developed a strategic human capital plan that contains many 

of the principles that we have laid out for an effective human capital system (i.e. 

the need to fill identified skill gaps by using personnel flexibilities). However, the 

FBI has yet to hire a human capital officer to manage the implementation of this 

process and the performance management system for the bulk of FBI personnel remains inadequate to discern meaningful distinctions in performance. 

The FBI recognizes the importance of information technology (IT) as a transformation enabler, making it an explicit priority in its strategic plan and investing 

hundreds of millions of dollars in initiatives to expand its systems environment and 

thereby improve its information analysis and sharing. However, FBI’s longstanding 

approach to managing IT is not fully consistent with the structures and practices 

of leading organizations. A prime example of the consequences of not employing 

these structures and practices is the cost and schedule shortfalls being experienced 

on Trilogy, the centerpiece project to modernize infrastructure and case management applications. Recent FBI proposals, plans, and initiatives indicate that it understands its management challenges and is focused on addressing them. 

Another key element of the FBI’s transformation is the realignment of resources 

to better focus on the highest priorities—counterterrorism, counterintelligence and 

cyber investigations. The FBI resources allocated to priority areas continue to increase and now represent its single largest concentration of field agent resources—

36 percent of its fiscal year 2004 field agent positions. 

Mr. Chairman and Members of the Subcommittee: We are pleased to be here 

today to address this committee regarding GAO’s work assessing the Federal Bureau of Investigation’s (FBI) transformation efforts. As you are well aware, the September 11, 2001, terrorist attacks were the most destructive and costly terrorist 

events that this country has ever experienced. The event precipitated a shift in how 

the FBI uses its investigative resources to prevent future terrorist incidents and ultimately led to FBI’s commitment to reorganize and transform itself. Today’s testimony follows up on our June 2003 testimony before the House Appropriations Subcommittee on Commerce, Justice, State and the Judiciary and Related Agencies on 

the FBI’s transformation efforts.1

It also draws on continuing work for the same subcommittee, the House Select 

Committee on Intelligence and several individual requestors. 

We will discuss the FBI’s: overall progress in transformation, efforts to update its 

strategic plan, development of a strategic human capital plan, information technology management capabilities, and realignment of staff resources to priority areas 

and the impact of the realignments on the FBI’s drug and other criminal investigation programs. 

In brief, we commend the FBI for its progress in its transformation efforts. We 

believe that commitment from the top, a dedicated implementation team, involvement of employees, and the development of strategic and human capital plans are 
87

2We judgmentally selected field offices with the largest number of special agent positions to 

be reallocated either away from drug enforcement or to the counterterrorism program areas 

based on the FBI’s May 2002 reallocation plans. As a result, we visited the FBI’s Atlanta, Chicago, Dallas, Denver, Detroit, Los Angeles, Miami, Newark, New York City, Phoenix, Sacramento, San Antonio, San Francisco, and Washington field offices in 2003 and the Dallas, 

Miami, and Washington field offices in 2004. 3We obtained input from 176 special agents and 34 analysts. These FBI investigative resources were not randomly selected from all agents and analysts in the 14 offices we visited. 

In addition, we did not specifically choose the agents who completed our questionnaire. FBI field 

office managers selected agents and analysts to participate in our inquiry. Consequently, we 

consider the questionnaire and interview results to be indicators of the FBI’s transformation efforts but they cannot be generalized to all agents and analysts in these offices or to the FBI 

nationwide. 4Pub. L. No. 103–62, 107 Stat. 285 (1993). 

5 U.S. General Accounting Office, Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review, GAO/GGD–10.1.16 (Washington, D.C.: May 1, 1997). U.S. General 

Accounting Office, Executive Guide: Effectively Implementing the Government Performance and 

Results Act, GAO/GGD–96–118 (Washington, D.C.: June 1996). 6We interviewed officials from the National Sheriffs’ Association, National Association of 

Chiefs of Police, International Association of Chiefs of Police, and local police agencies located 

in most of the cities in which we made FBI field office visits in 2003. 

encouraging signs of FBI’s reorganization progress. However, we want to note some 

activities that may enhance the value of future planning efforts, reiterate the importance of developing and tracking measures of progress toward achieving goals, discuss the history and future of IT efforts, and the shift in resources from the traditional crime areas to the new priority areas. 

Our testimony today is based on interviews with management and program officials at FBI headquarters during the last 2 years. We also interviewed management 

personnel in FBI field offices; 2 and obtained input from special agents and analysts 

in FBI field offices last spring.3 Additionally, to assess the progress that the FBI 

has made in its transformation efforts, we reviewed information from an October 

2003 and March 2004 briefing that the FBI provided to GAO on its transformation 

efforts and FBI’s recent strategic plan and strategic human capital plan. We compared these documents against GAO’s leading practices in the areas of organizational mergers and transformations, strategic planning, and strategic human capital 

management. 

We focused on assessing the FBI’s strategic plan for key elements required by the 

Government Performance and Results Act of 1993 (GPRA).4 GPRA provides a set 

of practices for developing a useful and informative strategic plan that can be applied to any level of the federal government to improve the quality and informative 

value of strategic plans to Congress, other key stakeholders, and the staff charged 

with achieving the agency’s strategic goals. To make this assessment we used criteria we developed for assessing agency strategic plans under GPRA.5 Our assessment is based on a review of the FBI’s strategic plan with limited information about 

the process the FBI undertook to develop the plan. We acknowledge that the FBI 

may be addressing these elements in other ways. 

We reviewed FBI’s strategic plan to see how it addressed six key elements: mission statement, long-term goals and objectives, relationship between the long-term 

goals and annual performance goals, approaches or strategies to achieve the goals 

and objectives, key external factors that could affect achievement of goals, and use 

of program evaluation to establish or revise strategic goals. 

Our analysis of the FBI’s information technology (IT) management capabilities is 

based on our prior work on the FBI’s enterprise architecture efforts and follow-up 

work to determine recent progress, information from the Justice Inspector General’s 

work on evaluating the FBI’s IT investment management process, and recent work 

on the organizational placement and authority of the FBI’s Chief Information Officer (CIO). We also used our prior research of CIO management practices of successful organizations and our evaluations of large IT modernization efforts similar to the 

Trilogy program. Further, we conducted follow up work with the FBI’s program 

management office to determine the cost and schedule overruns for Trilogy. 

To address the effect of the FBI’s resource realignments on drug and other traditional law enforcement efforts, we analyzed FBI budgetary, staffing, and caseload 

data and interviewed selected FBI, Drug Enforcement Administration (DEA), and 

local law enforcement officials.6

We performed our audit work in accordance with generally accepted government 

auditing standards. 
88

7 U.S. General Accounting Office, FBI Reorganization: Progress Made in Efforts to Transform, 

but Major Challenges Continue GAO–03–759T (Washington, D.C.: June 18, 2003). 8For more information, see U.S. General Accounting Office, Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformation GAO–03–669 (Washington, D.C.: July 2, 2003). 9The FBI has core-reengineering processes under way in the following areas: (1) strategic 

planning and execution, (2) capital (human and equipment), (3) information management, (4) 

investigative programs, (5) intelligence, and (6) security management. There are about 40 business process-reengineering initiatives under these six core areas. Appendix I outlines the various initiatives under each core area. 10Strategic planning is one of about 40 ongoing reengineering projects the FBI has undertaken to address issues related to its transformation efforts. 

FBI Continues to Make Progress in its Transformation Efforts but Needs a Comprehensive Transformation Plan to Guide Its Efforts 

In our June 2003 testimony on the FBI’s reorganization before the House Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related 

Agencies, we reported that the FBI had made progress in its efforts to transform 

the agency, but that some major challenges continued 7. We also noted that any 

changes in the FBI must be part of, and consistent with, broader, government-wide 

transformation efforts that are taking place, especially those resulting from the establishment of the Department of Homeland Security and in connection with the intelligence community. We also noted that to effectively meet the challenges of the 

post-September 11, environment, the FBI needed to consider employing key practices that have consistently been found at the center of successful transformation 

efforts.8 These key practices are to ensure that top leadership drives the transformation; establish a coherent mission and integrated strategic goals to guide the 

transformation; focus on a key set of principles and priorities at the outset of the 

transformation, set implementation goals and a time line to build momentum and 

show progress from day one; dedicate an implementation team to manage the transformation process; use the performance management system to define responsibility 

and ensure accountability for change; establish a communication strategy to create 

shared expectations and report related progress; involve employees to obtain their 

ideas and gain their ownership for the transformation; and build a world-class organization that continuously seeks to implement best practices in processes and systems in areas such as information technology, financial management, acquisition 

management, and human capital. 

Today, we continue to be encouraged by the progress that the FBI has made in 

some areas as it continues its transformation efforts. Specifically worthy of recognition are the commitment of Director Mueller and senior-level leadership to the FBI’s 

reorganization; the FBI’s communication of priorities; the implementation of core reengineering processes to improve business practices and assist in the bureau’s 

transformation efforts 9; the dedication of an implementation team to manage the 

reengineering efforts; the development of a strategic plan and a human capital plan; 

the efforts to involve employees in the strategic planning and reengineering processes; and the FBI’s efforts to realign its activities, processes, and resources to focus 

on a key set of principles and priorities. 

While the FBI has embedded crosswalks and timelines in their various transformation plans that relate one plan to another, we still encourage the development 

of an overall transformation plan that will pull all of the pieces together in one document. This document can be both a management tool to guide all of the efforts, 

as well as a communication vehicle for staff to see and understand the goals of the 

FBI. It is important to establish and track intermediate and long-term transformation goals and establish a timeline to pinpoint performance shortfalls and gaps 

and suggest midcourse corrections. By demonstrating progress towards these goals, 

the organization builds momentum and demonstrates that real progress is being 

made. We will continue to review this issue. 

FBI Has Developed a Strategic Plan with a Mission, Strategic Goals, and Approaches That Reflect Its New Priorities 

When we last testified in June 2003, the FBI was in the process of compiling the 

building blocks of a strategic plan. At that time it was anticipated that the plan 

would be completed by the start of fiscal year 2004. Although delayed by about 5 

months, the FBI has since completed its strategic plan.10 FBI officials indicated that 

the implementation of two staff reprogrammings and delays in the appropriation of 

its fiscal year 2003 and fiscal year 2004 budget, as well as initiatives undertaken 

to protect the homeland during the war in Iraq, delayed the completion of the strategic plan. 
89

Overall we found the plan has some important strengths as well as some areas 

in which improvements could be made. The strategic plan includes key elements of 

successful strategic plans, including a comprehensive mission statement; results-oriented, long-term goals and objectives; and approaches to achieve the goals and objectives. The FBI plan presents 10 strategic goals that appear to cover the FBI’s 

major functions and operations, are related to the mission, and generally articulate 

the results in terms of outcomes the FBI seeks to achieve. For example, one of the 

plan’s strategic goals is ‘‘protect the United States from terrorist attack;’’ another 

goal is ‘‘reduce the level of significant violent crime.’’ The plan also lists strategic 

objectives and performance goals for each long-term strategic goal. However, the 

performance goals do not appear to be outcomes against which the FBI will measure 

progress; rather they appear to describe approaches or be key efforts that FBI will 

undertake to achieve its long-term strategic goals and objectives. 

Importantly, the plan acknowledges that the FBI faces competing priorities and 

clearly articulates its top 10 priorities, in order of priority. The strategic plan also 

frequently discusses the role partnerships with other law enforcement, intelligence, 

and homeland security agencies will play in achieving the plan’s goals. The plan discusses the FBI’s approach to building on its internal capacity to accomplish its mission-critical goals by improving management of human capital, information technology, and other investigative tools. The plan also discusses the external factors, 

such as global and domestic demographic changes and the communications revolution, which have driven the development of its strategic goals. 

Strategic Plan Could Be Improved by Discussing Other Key Elements 

Although the FBI has addressed several key elements in its strategic plan, the 

plan needs more information on other elements of strategic planning that we have 

identified as significant to successful achievement of an organization’s mission and 

goals. FBI officials indicated that some of these elements are available in other documents and were not included in the plan for specific reasons. As the FBI moves 

forward with its new strategic planning and execution process, it should consider 

addressing in its strategic plan the following key elements: 

Involving Key Stakeholders.—As we have previously testified, any changes at the 

FBI must be part of, and consistent with, broader governmentwide transformation 

efforts that are taking place, especially those resulting from the establishment of the 

Department of Homeland Security and in connection with changes in the intelligence community. Successful organizations we studied based their strategic planning, to a large extent, on the interests and expectations of their stakeholders. Federal agency stakeholders include Congress and the administration, other federal 

agencies, state and local governments, third-party service providers, interest groups, 

agency employees, and, of course, the American public. Involving customers served 

by the organization—such as the users of the FBI’s intelligence—is important as 

well. The FBI strategic plan does not describe which stakeholders or customers, 

were involved or consulted during the plan’s development or the nature of their involvement. Such information would be useful to understanding the quality of the 

planning process FBI has undertaken and the extent to which it reflect the views 

of key stakeholders and customers. Consultation provides an important check for an 

organization that they are working toward the right goals and using reasonable approaches to achieve them. 

Relationship between Strategic and Annual Goals.—Under GPRA, agencies’ longterm strategic goals are to be linked to their annual performance plans and the dayto-day activities of their managers and staff. OMB guidance states that a strategic 

plan should briefly outline (1) the type, nature, and scope of the performance goals 

being included in annual performance plans and (2) how these annual performance 

goals relate to the long-term, general goals and their use in helping determine the 

achievement of the general goals. Without this linkage, it may not be possible to 

determine whether an agency has a clear sense of how it will assess the progress 

made toward achieving its intended results. 

It is not clear from the plan how the FBI intends to measure its progress in 

achieving the long-term strategic goals and objectives because the plan’s strategic 

objectives and performance goals are not phrased as performance measures and the 

plan does not describe or make reference to another document that contains annual 

performance measures. The plan also lacks a discussion of the systems FBI will 

have in place to produce reliable performance and cost data needed to set goals, 

evaluate results, and improve performance. According to an FBI official and documents the FBI provided, the FBI has developed ‘‘performance metrics’’ for each of 

its strategic goals. 

External and Internal Factors that Could Affect Goal Achievement.—While the 

plan clearly communicates how its forecast of external drivers helped to shape the 
90

11Over 80 percent of the special agents and 24 of the 34 analysts who completed our questionnaire in 2003 ranked counterterrorism, counterintelligence, and cyber crime investigations as 

the FBI’s first, second, and third priorities, respectively. 

FBI’s strategy, the plan does not discuss the external and internal factors that 

might interfere with its ability to accomplish its goals. External factors could include economic, demographic, social, technological, or environmental factors. Internal factors could include the culture of the agency, its management practices, and 

its business processes. The identification of such factors would allow FBI to communicate actions it has planned that could reduce or ameliorate the potential impact 

of the external factors. Furthermore, the plan could also include a discussion of the 

FBI’s plans to address internal factors within its control that could affect achievement of strategic goals. The approach the FBI plans to take to track its success in 

achieving change within the agency should be an integral part of FBI’s strategy. A 

clear and well-supported discussion of the external and internal factors that could 

affect performance could provide a basis for proposing legislative or budgetary 

changes that the FBI may need to accomplish the FBI’s goals. 

Role of Program Evaluation in Assessing Achievement of Goals and Effectiveness 

of Strategies.—Program evaluations can be a potentially critical source of information for Congress and others in ensuring the validity and reasonableness of goals 

and strategies, as well as for identifying factors likely to affect performance. Program evaluations typically assess the results, impact, or effects of a program or policy, but can also assess the implementation and results of programs, operating policies, and practices. The FBI’s strategic plan does not explicitly discuss the role evaluation played in the development of its strategic plan or its plans for future evaluations (including scope, key issues, and time frame), as intended by GPRA. The FBI 

has redesigned its program evaluation process and updated the performance metric 

for each program. This information could have been, but was not included in the 

strategic plan. As discussed elsewhere in this testimony, the FBI has a series of reengineering efforts under way that relate to six core processes they are seeking to 

transform. A discussion of how these reengineering efforts relate to and support the 

achievement of the FBI’s strategic goals would be a useful addition to the FBI’s 

strategic plan. 

We believe that an organization’s strategic plan is a critical communication tool 

and the credibility of the plan can be enhanced by discussing, even at a summary 

level, the approach the organization took in addressing these elements. 

FBI Has Involved Employees in the Strategic Planning Process and Communicated its Priorities 

As noted earlier, employee involvement in strategic planning, and transformation 

in general, is a key practice of a successful agency as it transforms. FBI executive 

management seems to have recognized this. Field office managers and field staff we 

spoke with last year generally reported being afforded the opportunity to provide 

input. For example, field management in the 14 field offices we visited in 2003 reported that they had been afforded opportunities to provide input into the FBI’s 

strategic planning process. In addition, 68 percent of the special agents and 24 of 

the 34 analysts who completed our questionnaire in 2003 reported that they had 

been afforded the opportunity to provide input to FBI management regarding FBI 

strategies, goals, and priorities by, among others, participating in focus groups or 

meetings and assisting in the development of the field offices’ annual reports. FBI 

managers in the field offices we visited and 87 percent of the special agents and 

31 of the 34 analysts who completed our questionnaire indicated that FBI management had kept them informed of the FBI’s progress in revising its strategic plan 

to reflect changed priorities. 

FBI management also seems to have been effective in communicating the agency’s 

top three priorities (i.e., counterterrorism, counterintelligence, and cyber crime investigations) to the staff. In addition to the awareness of management staff in FBI 

headquarters and field offices, nearly all of the special agents and all of the analysts 

who answered our questionnaire indicated that FBI executive management (i.e., Director Mueller and Deputy Director Gebhardt) had communicated the FBI’s priorities to their field offices. Management and most of the agents we interviewed in 

the field were aware of the FBI’s top three priorities.11 Further, over 90 percent of 

special agents and 28 of the 34 analysts who completed our questionnaire generally 

or strongly agreed that their field office had made progress in realigning its goals 

to be consistent with the FBI’s transformation efforts and new priorities. 
91

12 U.S. General Accounting Office A Model of Strategic Human Capital Management, GAO–

02–373SP, Washington, D.C.: (March 2002). 13 U.S. General Accounting Office Human Capital: Effective Use of Flexibilities Can Assist 

Agencies in Managing Their Workforces, GAO–03–2, Washington, D.C.: (Dec. 6, 2002). 14 U.S. General Accounting Office, Results-Oriented Cultures: Using Balanced Expectations to 

Manage Senior Executive Performance, GAO–02–966 (Washington, D.C.: Sept. 27, 2002). 15 U.S. General Accounting Office, Maximizing the Success of Chief Information Officers: 

Learning from Leading Organizations, GAO–01–376G (Washington, D.C.: February 2001) and 

U.S. General Accounting Office, Architect of the Capitol: Management and Accountability 

Framework Needed for Organizational Transformation, GAO–03–231 (Washington, D.C.: January 2003). 

FBI Has Developed a Strategic Human Capital Plan 

In prior testimony, we highlighted the importance of the development of a strategic human capital plan to the FBI’s transformation efforts, noting that strategic 

human capital management is the centerpiece of any management initiative, including any agency transformation effort. We noted that a strategic human capital plan 

should flow from the strategic plan and guide an agency to align its workforce 

needs, goals, and objectives with its mission-critical functions. We also noted that 

human capital planning should include both integrating human capital approaches 

in the development of the organizational plans and aligning the human capital programs with the program goals. In a September 2003 letter to the FBI director, we 

specifically recommended that the FBI: (1) hire a human capital officer to guide the 

development of a strategic human capital plan and the implementation of long-term 

strategic human capital initiatives and (2) replace its current pass/fail performance 

management system with one that makes meaningful distinctions in employee performance. 

Although the FBI has not yet hired a human capital officer, it has developed a 

strategic human capital plan. This plan contains many of the principles that we 

have laid out for an effective human capital system.12 For example, it highlights the 

need for the FBI to fill identified skill gaps, in such areas as language specialists 

and intelligence analysts, by using various personnel flexibilities including recruiting and retention bonuses.13 Concerning the hiring of a human capital officer, the 

FBI has efforts under way to recruit and hire a qualified candidate. 

The FBI said that it recognizes the need to review and revise its performance 

management system to be in line with its strategic plan, including desired outcomes, 

core values, critical individual competencies, and agency transformation objectives. 

It also recognizes that it needs to ensure that unit and individual performance are 

linked to organizational goals. A key initiative that has been undertaken by the FBI 

in this regard is the planning of a system for the Senior Executive Service that is 

based on, and distinguishes, performance. We have not reviewed the Senior Executive performance management system, but it should include expectations to lead 

and facilitate change and to collaborate both within and across organizational 

boundaries are critical elements as agencies transform themselves.14 As yet, the 

performance management system for the bulk of FBI personnel remains inadequate 

to identify meaningful distinctions in performance. The FBI’s human capital plan 

indicates that the FBI is moving in the direction of addressing this need, and we 

are encouraged by this. 

Clearly, the development of a strategic human capital plan is a positive step in 

this direction. However, the FBI, like other organizations, will face challenges as it 

implements its human capital plan. As we have noted before, when implementing 

new human capital authorities, how it is done, when it is done, and the basis on 

which it is done can make all the difference in whether such efforts are successful. 

Effective Information Technology Management Is Critical to the FBI’s Ability to Successfully Transform 

Information technology can be a valuable tool in helping organizations transform 

and better achieve mission goals and objectives. Our research of leading private and 

public sector organizations, as well as our past work at federal departments and 

agencies, shows that successful organizations’ executives have embraced the central 

role of IT as an enabler for enterprise-wide transformation.15 As such they adopt 

a corporate, or agencywide, approach to managing IT under the leadership and control of a senior executive—commonly called a chief information officer (CIO)—who 

operates as a full partner with the organizational leadership team in charting the 

strategic direction and making informed IT investment decisions. 

In addition to adopting centralized leadership, these leading organizations also develop and implement institutional or agencywide IT management controls aimed at 

leveraging the vast potential of technology in achieving mission outcomes. These include using a systems modernization blueprint, commonly referred to as an enter-
92

16 An architecture is a set of descriptive models (e.g., diagrams and tables) that define, in business terms and in technology terms, how an organization operates today, how it intends to operate in the future, and how it intends to invest in technology to transition from today’s operational environment to tomorrow’s. 17For example, see Federal Bureau of Investigation, Statement of Robert S. Mueller, III, Federal Bureau of Investigation before the Subcommittee for the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies, Committee on Appropriations, House of 

Representatives, (Washington, D.C.: June 2002). 18For example, see GAO–03–231 and GAO–01–376G. 

prise architecture,16 to guide and constrain system investments and using a portfolio-based approach to IT investment decision making. We have also observed that 

without these controls, organizations increase the risk that system modernization 

projects (1) will experience cost, schedule, and performance shortfalls; (2) will not 

reduce system redundancy and overlap; and (3) will not increase interoperability 

and effective information sharing. 

FBI currently relies extensively on the use of IT to execute its mission responsibilities, and this reliance is expected to grow. For example, it develops and maintains 

computerized systems, such as the Combined DNA (deoxyribonucleic acid) Index 

System to support forensic examinations, the Digital Collection System to electronically collect information on known and suspected terrorists and criminals, and the 

National Crime Information Center and the Integrated Automated Fingerprint Identification System to identify criminals. It is also in the midst of a number of initiatives aimed at (1) extending data storage and retrieval systems to improve information sharing across organizational components and (2) expanding its IT infrastructure to support new software applications. According to FBI estimates, the bureau 

manages hundreds of systems and associated networks and databases at an average 

annual cost of about $800 million. In addition, the bureau plans to invest about 

$255 million and $286 million in fiscal years 2004 and 2005, respectively, in IT services and systems, such as the Trilogy project. Trilogy is the bureau’s centerpiece 

project to (1) replace its system infrastructure (e.g., wide area network) and (2) consolidate and modernize key investigative case management applications. The goals 

of Trilogy include speeding the transmission of data, linking multiple databases for 

quick searching, and improving operational efficiency by replacing paper with electronic files. 

The FBI Director recognizes the importance of IT to transformation, and as such 

has made it one of the bureau’s top 10 priorities.17 Consistent with this, the FBI’s 

strategic plan contains explicit IT-related strategic goals, objectives, and initiatives 

(near-term and long-term) to support the collection, analysis, processing, and dissemination of information. Further, the FBI’s newly appointed CIO understands the 

bureau’s longstanding IT management challenges and is in the process of defining 

plans and proposals to effectively execute the FBI’s strategic IT initiatives. Nevertheless, the bureau’s longstanding approach to managing IT is not fully consistent 

with leading practices, as has been previously reported by us and others. The effect 

of this, for example, can be seen in the cost and schedule shortfalls being experienced on Trilogy. 

FBI Has Not Had Sustained IT Management Leadership with Bureauwide 

Authority 

Our research of private and public sector organizations that effectively manage 

IT shows that they have adopted an agencywide approach to managing IT under 

the sustained leadership of a CIO or comparable senior executive who has the responsibility and the authority for managing IT across the agency.18 According to the 

research, these executives function as members of the leadership team and are instrumental in developing a shared vision for the role of IT in achieving major improvements in business processes and operations to effectively optimize mission performance. In this capacity, leading organizations also provide these individuals with 

the authority they need to carry out their diverse responsibilities by providing budget management control and oversight of IT programs and initiatives. 

Over the last several years, the FBI has not sustained IT management leadership. 

Specifically, the bureau’s key leadership and management positions, including the 

CIO, have experienced frequent turnover. For instance, the CIO has changed five 

times in the past 24 months. The current CIO, who is also the CIO at the Department of Justice’s Executive Office of the U.S. Attorneys (EOUSA), is temporarily detailed to the FBI for 6 months and is serving in an acting capacity while also retaining selected duties at EOUSA. In addition, the IT official responsible for developing 

the bureau’s enterprise architecture, the chief architect, has changed five times in 

the past 16 months. As a result, development and implementation of key management controls, such as enterprise architecture, have not benefited from sustained 
93

19 U.S. Department of Justice, Office of the Inspector General, Federal Bureau of Investigation’s Management of Information Technology Investments, Report 03–09 (Washington, D.C.: December 2002). 20 U.S. General Accounting Office, Information Technology: A Framework for Assessing and 

Improving Enterprise Architecture Management (Version 1.1), GAO–03–584G (Washington, DC: 

April 2003). 21See for example, U.S. General Accounting Office, DOD Business Systems Modernization: Improvements to Enterprise Architecture Development and Implementation Efforts Needed, GAO–

03–458, (Washington, D.C.: February 2003); Information Technology: DLA Should Strengthen 

Business Systems Modernization Architecture and Investment Activities, GAO–01–631 (Washington, D.C.: June 2001); and Information Technology: INS Needs to Better Manage the Development of Its Enterprise Architecture, GAO/AIMD–00–212 (Washington, D.C.: August 2000). 22 U.S. General Accounting Office, Information Technology: FBI Needs an Enterprise Architecture to Guide Its Modernization Activities, GAO–03–959 (Washington, D.C.: September 2003) 

and U.S. General Accounting Office, Federal Bureau of Investigation’s Comments on Recent GAO 

Report on its Enterprise Architecture Efforts, GAO–04–190R (Washington, D.C.: November 2003). 

management attention and leadership and thus have lagged, as described in sections below. 

In addition, the FBI has not provided its CIO with bureauwide IT management 

authority and responsibility. Rather, the authority and responsibility for managing 

IT is diffused across and vested in the bureau’s divisions. As our research and work 

at other agencies has shown, managing IT in this manner results in disparate, 

stove-piped environments that are unnecessarily expensive to operate and maintain. 

In the FBI’s case, it resulted, as reported by Justice’s Inspector General in December 2002,19 in 234 nonintegrated applications, residing on 187 different servers, 

each of which had its own unique databases, unable to share information with other 

applications or with other government agencies. According to the acting CIO, the 

FBI is considering merging bureauwide authority and responsibility for IT in the 

CIO’s office with the goal of having this in place in time to formulate the bureau’s 

fiscal year 2006 budget request. In our view, this proposal, if properly defined and 

implemented, is a good step toward implementing the practices of leading organizations. However, until it is implemented, we remain concerned that the bureau will 

not be positioned to effectively leverage IT as an bureauwide resource. 

FBI Does Not Have an Enterprise Architecture but Is Taking Steps to Develop 

One 

As discussed in our framework for assessing and improving enterprise architecture management,20 an architecture is an essential tool for effectively and efficiently 

engineering business operations (e.g., processes, work locations, and information 

needs and flows) and defining, implementing, and evolving IT systems in a way that 

best supports these operations. It provides systematically derived and captured 

structural descriptions—in useful models, diagrams, tables, and narrative—of how 

a given entity operates today and how it plans to operate in the future, and it includes a road map for transitioning from today to tomorrow. Managed properly, an 

enterprise architecture can clarify and help optimize the interdependencies and 

interrelationships among a given entity’s business operations and the underlying 

systems and technical infrastructure that support these operations; it can also help 

share information among units within an organization and between the organization 

and external partners. Our experience with federal agencies has shown that attempting to modernize systems without having an enterprise architecture often results in systems that are duplicative, not well integrated, unnecessarily costly to 

maintain, and limited in terms of optimizing mission performance.21

We reported in September 2003, that the FBI did not have an enterprise architecture to guide and constrain its ongoing and planned IT investments.22 We also reported that the necessary management structures and processes—the management 

foundation, if you will—to develop, maintain, or implement an architecture were not 

in place. At the time, the bureau was beginning to build this foundation. For instance, the bureau had designated a chief architect, established an architecture governance board as its steering committee, and chosen a framework to guide its architecture development. However, it had yet to complete critical activities such as ensuring that business partners are represented on the architecture governance board, 

establishing a formal program office, adopting an architecture development methodology, and defining plans for developing its architecture. Further, it had not addressed other important activities, including developing written and approved architecture policy and integrating architectural alignment, into its IT investment management process. FBI officials told us then that the architecture was not a top priority and it had not received adequate resources and management attention. Consequently, we recommended, among other things, that the FBI director immediately 
94

23 U.S. General Accounting Office, Information Technology Investment Management: A Framework for Assessing and Improving Process Maturity, Exposure Draft, GAO/AIMD–10.1.23 (Washington, D.C.: May 2000). In March 2004, GAO updated this version: U.S. General Accounting 

Office, Information Technology Investment Management: A Framework for Assessing and Improving Process Maturity, Version 1.1, GAO–04–394G (Washington, D.C.: March 2004). 24Department of the Justice, Office of the Inspector General Report 03–09. 25 U.S. Department of Justice Office of the Inspector General, Action Required on the Federal 

Bureau of Investigation’s Management of Information Technology Investments, Audit Report 

Number 03–09, (Washington, D.C.: January 2004). 

designate development, maintenance, and implementation of an enterprise architecture as a bureau priority and manage it as such. 

Since our report, the FBI has made architecture development an explicit imperative in its strategic plan, and it has made progress toward establishing an effective 

architecture program. For instance, the FBI director issued a requirement that all 

divisions identify a point of contact that can authoritatively represent their division 

in the development of the architecture. In addition, a project management plan has 

been drafted that identifies roles and responsibilities and delineates plans and a set 

of actions to develop the architecture. The FBI is also in the process of hiring a contractor to help develop the architecture. Current plans call for an initial version of 

the architecture in June 2004. However, until the enterprise architecture is developed, the FBI will continue to manage IT without a bureauwide, authoritative frame 

of reference to guide and constrain its continuing and substantial IT investments, 

putting at risk its ability to implement modernized systems in a way that minimizes 

overlap and duplication and maximizes integration and mission support. 

FBI Is Working to Establish Control over IT Resources and Investments 

Federal IT management law provides an important framework for effective investment management. It requires federal agencies to focus more on the results they 

have achieved through IT investments, while concurrently improving their acquisition processes. It also introduces more rigor and structure into how agencies are to 

select and manage IT projects. In May 2000, GAO issued 23 a framework that encompasses IT investment management best practices based on our research at successful private and public sector organizations. This framework identifies processes 

that are critical for successful IT investment, such as tracking IT assets, identifying 

business needs for projects, selecting among competing project proposals using explicit investment criteria, and overseeing projects to ensure that commitments are 

met. 

Using GAO’s framework, the Inspector General evaluated the FBI’s IT investment 

management process in 2002, including a case study of Trilogy, and concluded that 

the process at that time was immature and had hindered the bureau’s ability to effectively manage IT.24 Specifically, the Inspector General reported that the bureau 

lacked a basic investment management foundation. For instance, the bureau did not 

have fully functioning investment boards that were engaged in all phases of investment management. In addition, the bureau had not yet developed an IT asset inventory, the first step in tracking and controlling investments and assets. In a January 

2004 follow-on report,25 the Inspector General credited the bureau with developing 

a plan to implement the recommendations and assigning responsibility to the 

Project Management Office to execute it, but noted that the office had not been 

granted authority to carry out this task. Project Management Office officials stated 

that as of February 24, 2004, they had not yet been provided such authority. According to the acting CIO, the FBI is currently in the process of hiring a contractor to 

assist with implementing all IT investment management processes bureauwide, including addressing remaining Inspector General recommendations. Until these steps 

are completed and mature investment processes are in place, the FBI will remain 

challenged in its ability to effectively minimize risks and maximize the returns of 

investments, including ensuring projects do not experience cost, schedule, and performance shortfalls. 

Until Effective IT Leadership and Management Controls are Implemented, 

Projects Remain at Risk 

As discussed in the previous sections, the FBI has efforts proposed, planned and 

under way that, once implemented, are intended to establish an IT leadership and 

management controls framework that is consistent with those used by leading organizations. Until this is accomplished, however, the bureau will largely be relying on 

the same management structures and practices that it used in the past and that 

produced its current IT environment and associated challenges. As previously stated, these practices increase the risk that system modernization projects will not deliver promised capabilities on time and within budget. A prime example is Trilogy, 
95

26 According to the FBI, the existing applications are Integrated Intelligence Information Application (a database of over 20 million records supporting collection, analysis and dissemination 

of intelligence for national security and counterterrorism investigations); Criminal Law Enforcement Application (a repository for storing, searching, and linking investigative data about people, organizations, locations, vehicles, and communications); Telephone Application (FBI’s central repository supporting collection, analysis, correlation and processing of telephone records for 

investigations); and Automated Case Support (a suite of integrated applications for managing, 

storing and searching information and documents for FBI investigations and administrative 

cases). 

the FBI’s ongoing effort to, among other things, modernize its systems infrastructure and investigate case management applications. It consists of three components: 

—Transportation Network Component, which is communications network infrastructure (e.g., local area networks and wide area networks, authorization security, and encryption of data transmissions and storage), 

—Information Presentation Component, which is primarily desktop hardware and 

software (e.g., scanners, printers, electronic mail, web browser), and 

—User Applications Component, which includes the investigative case management applications 26) that are being consolidated and modernized. This component is commonly referred to as the Virtual Case File, which when completed, 

is to allow agents to have multimedia capability that will enable them to among 

other things scan documents and photos into electronic case files and share the 

files with other agents electronically. 

To date, the FBI’s management of Trilogy has resulted in multiple cost overruns 

and schedule delays. The table below details the cost and schedule shortfalls for 

each of the three components that comprise Trilogy. In summary, the FBI established its original project commitments in November 2000 but revised them in January 2002 after receiving additional funding ($78 million) to accelerate the project’s 

completion. About this time, the FBI also revised the Trilogy design to introduce 

more functionality and capability than original planned. Based on the January 2002 

commitments, the first two components of Trilogy were to be completed in July 

2002, and the third was to be completed in December 2003. However, the project’s 

components have collectively experienced cost overruns and schedule delays totaling 

about $120 million and at least 21 months, respectively.
96

TABLE 1.—TRILOGY COST AND SCHEDULE SHORTFALLS BY COMPONENT 

Trilogy Component 

November 2000 

commitments (date/

funding in millions) 

January 2002 commitments (date/

funding in millions) 

Variance between 

November 2000 and 

January 2002 commitments (schedule 

in months/funding 

in millions) 

March 2004 commitments (date/

funding in millions) 

Variance between 

January 2002 and 

March 2004 commitments (schedule 

in months/funding 

in millions) 

Transportation Network Component ........................................................................................................................... 1 5/04 1 7/02 2 (22 months) Completed 3/03 8 months 

1 $238.6 1 $288.1 $49.5 $0.0 ............................

Information Presentation Component ......................................................................................................................... 1 5/04 1 7/02 2 (22 months) 4/04 21 months 

1 $238.6 1 $288.1 $49.5 $339.8 $51.7

User Applications Component ................................................................................................................................... 6/04 12/03 2 (6 months) 3 6/04 6 months 

$119.2 $139.7 $20.5 3 $170.0 $30.3

Project management and other funding .................................................................................................................... $22.0 $30.0 $8.0 $71.3 $41.3

Total funding ................................................................................................................................................ $379.8 $457.8 $78.0 $581.1 $123.3

1 Commitment date and funding amount is for both Transportation Network Component and Information Presentation Component. 2Months the schedule commitment was accelerated. 3 According to a key Trilogy project official, new schedule and cost commitments are being developed for the User Applications Component.

Source: GAO based on FBI data. 
97

27We currently have work under way for the House Appropriations Subcommittee to assess 

the impact of the FBI’s realignment of resources away from drug and other traditional criminal 

programs, including an assessment of changes in price, purity, and use of illegal drugs. We expect to report out on this effort later in the year. 28The FBI later in fiscal year 2003 initiated another reprogramming to permanently reallocate about an additional 160 agent positions from its drug program to one of the priority areas. 29The FBI has the authority to reprogram funds (i.e., move funds between activities within 

a given account) without notifying the relevant Appropriations Committees unless a specific purpose is prohibited or the amount of the reprogramming exceeds a dollar threshold ($500,000 or 

a 10-percent change in funding level, whichever is less). Any other reprogramming action requires notification of the relevant Appropriations Committee 15 days in advance of the reprogramming.

These Trilogy shortfalls in meeting cost and schedule commitments can be in part 

attributed to the absence of the kind of IT management controls discussed earlier. 

Specifically, in its study of the FBI’s investment management processes which included a case study of Trilogy, the Inspector General cited the lack of an enterprise 

architecture and mature IT investment management processes as the cause for 

missed Trilogy milestones and uncertainties associated with the remaining portions 

of the project. In our view, a major challenge for FBI going forward will be to effectively manage the risks associated with developing and acquiring Trilogy and other 

system modernization priorities discussed in its strategic plan, while the bureau is 

completing and implementing its enterprise architecture and other IT-related controls and is adopting a more centralized approach to IT management leadership. 

FBI Continues to Realign Staff Resources to Address Counterterrorism Related Priorities 

As we pointed out in our June 2003 testimony and our follow-up letter to the FBI 

in September 2003, a key element of the FBI’s reorganization and successful transformation is the realignment of resources to better ensure focus on the highest priorities. Since September 11, the FBI has permanently realigned a substantial number of its field agents from traditional criminal investigative programs to work on 

counterterrorism and counterintelligence investigations. Additionally, the bureau 

has had a continuing need to temporarily redirect special agent and staff resources 

from other criminal investigative programs to address higher-priority needs. Thus, 

staff continue to be redirected from other programs such as drug, white collar, and 

violent crime to address the counterterrorism-related workload demands. The result 

of this redirection is fewer investigations in these traditional crime areas. 

We want to make clear that we in no way intend to fault the FBI for the reassignment of agents from drug enforcement, violent crime, and white collar crime to higher-priority areas. Indeed, these moves are directly in line with the agency’s priorities 

and in keeping with the paramount need to prevent terrorism.27 In 2002, the FBI 

Director announced that in keeping with its new priorities, the agency would move 

over 500 field agent positions from its drug, violent crime, and white collar crime 

programs to counterterrorism. The FBI has transferred even more agent positions 

than it originally announced and has augmented those agents with short-term reassignment of additional field agents from drug and other law enforcement areas to 

work on counterterrorism.28 As figure 1 shows, about 25 percent of the FBI’s field 

agent positions were allocated to counterterrorism, counterintelligence, and cyber 

crime programs in prior to the FBI’s change in priorities. Since that time, as a result of the staff reprogrammings 29 and funding for additional special agent positions 

received through various appropriations, the FBI staffing levels allocated to the 

counterterrorism, counterintelligence, and cyber program areas have increased to 

about 36 percent and now represent the single largest concentration of FBI resources and the biggest decrease is in organized crime and drugs. 
98

31The figure of 674 positions excludes 11 supervisory positions that were returned to the drug 

program. 32The FBI has certain managerial flexibilities to temporarily redirect staff resources to address critical needs and threats. 33 A workyear represents the full-time employment of one worker for 1 year. For this statement, a matter is an allegation that is being or has been investigated by the FBI.

30These percentages differ from those reported in our June 18, 2003 testimony (GAO–

03759T), which were limited to direct funded field agent positions.

The FBI’s staff reprogramming plans, carried out since September 11, have now 

permanently shifted 674 field agent positions 31 from the drug, white collar crime, 

and violent crime program areas to counterterrorism and counterintelligence. In addition, the FBI established the Cyber program, which consolidated existing cyber resources. 

Despite the reprogramming of agent positions in fiscal year 2003 and the additional agent positions received through various supplemental appropriations since 

September 11, agents from other program areas continue to be temporarily redirected to work on leads in the priority areas, including counterterrorism-related 

leads.32 This demonstrates a commitment on the part of the FBI to staff priority 

areas. 

As figure 2 shows, the average number of field agent workyears charged to investigating counterterrorism-related matters has continually outpaced the number of 

agent positions allocated to field offices for counterterrorism since September 11.33

The FBI’s current policy is that no counterterrorism leads will go unaddressed even 

if addressing them requires a diversion of resources from other criminal investigative programs such as the drug, violent, and white collar crime. 
99
100

As we previously reported, as the FBI gains more experience and continues assessing risk in a post-September 11 environment, it should gain more expertise in 

deciding which matters warrant additional investigation or investment of investigative resources. However, until the FBI develops a mechanism to systematically analyze the nature of leads and their output, the FBI will have to continue its substantial investment of resources on counterterrorism-related matters to err on the side 

of safety. We are not intending to imply that, even with more information from past 

experience, that all leads should not be investigated, but more analytical information about leads could help prioritize them. 

Neither the FBI nor we were in a position to determine the right amount of staff 

resources needed to address the priority areas. However, the body of information 

that might help to make these determinations is growing. Since the September 11 

attacks, the FBI has updated its counterterrorism threat assessment and has gained 

additional experience in staffing priority work. This development, along with an 

analysis of the nature of all leads (those that turn out to be significant and those 

that do not) and the output from them, could put the bureau in a better position 

to assess the actual levels of staff resources that the agency needs in 

counterterrorism, counterintelligence, and cyber programs. Of course, any new terrorist incidents would again, upset the balance and require additional staff in the 

priority areas. 

An FBI counterterrorism manager we spoke with during a recent field office visit 

said that to develop a system to determine which terrorist leads to pursue and 

which ones to not pursue would be a complex task. He noted that in the past there 

would have been some citizen contacts that the FBI may not have generally pursued, but said that now any lead, regardless of its nature, is followed up. He observed that following up on some of these leads have resulted in the arrests and 

convictions of terrorists. For example, the FBI manager recounted a telephone lead 

from a tour boat operator who reported concerns about a passenger who was taking 

photographs of bridges and asking unusual questions about infrastructure. That 

lead started an investigation that led to the arrest of, and criminal charges against, 

the suspect, who was alleged to be plotting a terrorist attack. 

According to FBI officials, information from leads is collected in a database that 

can be searched in a number of ways to help in investigations. To the extent that 

more systematic and sophisticated analysis routines can be developed and applied 

to these data (or any expansions of this data set) the FBI may be able to develop 

richer information about the relative risk of leads. This information could help 

prioritize work and manage scarce resources. While we agree with the FBI 

counterterrorism manager we cited above who labeled this a complex task, the potential value of the output, given that resources are always limited, seems worth 

the investment. 

Counterterrorism Matters Have Continued to Increase 

The level of effort in counterterrorism is further reflected in the number of 

counterterrorism matters that have been opened following September 11. As figure 

3 shows, the number of newly opened counterterrorism matters has remained significantly above the pre-September 11 levels, peaking in the second quarter of fiscal 

year 2003 and dropping somewhat in the most recent quarters.
101

34FBI’s drug program workforce is composed of field agent positions funded through direct 

FBI appropriations and those supported with OCDETF funds. The OCDETF Program was established in 1982 to focus federal, state, and local law enforcement efforts against organized crime 

drug-trafficking organizations that pose the most serious threat to our national interests.

Reallocation of FBI Resources Has Affected the FBI’s Drug Enforcement and 

Other Traditional Law Enforcement Efforts 

Use of field agent staff resources in other traditional criminal investigative programs (such as drug enforcement, violent crime, and white collar crime) has continuously dropped below allocated levels as agents from these programs have been 

temporarily reassigned to work on counterterrorism-related matters. As would be 

expected, the number of newly opened drug, violent crime, and white collar crime 

cases has fallen in relation to the decline in the number of field agent positions allocated or assigned to work on these programs. 

The change in priorities and the accompanying shift in investigative resources 

have affected the FBI’s drug program the most. Nearly half of the FBI field agent 

drug positions have been permanently reallocated to priority program areas. Since 

September 11, about 40 percent of the positions allocated to FBI field offices’ drug 

program have been reallocated to counterterrorism and counterintelligence priority 

areas. As figure 4 shows, just prior to September 11, about two-thirds (or 890) of 

the 1,378 special agent positions allocated to FBI field offices for drug program matters were direct-funded.34 The remaining one-third (or 488) of the special agent positions was funded by the Organized Crime and Drug Enforcement Task Force program (OCDETF). As of the first quarter of fiscal year 2004, the number of directfunded positions allocated to FBI field offices for the drug program had decreased 

over 60 percent, going from 890 to 337. OCDETF-funded agent positions, which 

have remained constant, now account for about 60 percent of the FBI field offices’ 

drug program staff resources. 
102

35The HIDTA program began in 1990 to provide federal assistance to help coordinate and enhance federal, state, and local drug enforcement efforts in areas of major illegal drug production, 

manufacturing, distribution, transportation, and use.

While this reduction represents a substantial decline in the number of field agent 

positions allocated to drug work, in fact, the reduction in drug enforcement 

workyears was actually larger than these figures reflect. Specifically, as needs arose 

for additional agents to work counterterrorism leads, field agents assigned to drug 

program squads were temporarily reassigned to the priority work. As figure 5 

shows, at the extreme, during the first quarter of fiscal year 2002 (just after the 

events of September 11), while 1,378 special agent positions were allocated to drug 

work, only about half of these staff resources worked in the FBI drug program. In 

mid-fiscal year 2003, the allocated number of drug agent positions and the average 

number of field agent workyears charged to drug matters started to converge toward 

the new targeted levels. Since that time, however, the FBI has had to redirect additional field agents allocated to its drug program to counterterrorism and other priority areas. As of the second quarter of fiscal year 2004, about a quarter (225 of 

825) of the agents assigned to the FBI’s drug program were actually working in 

higher-priority areas. The reduction in drug enforcement resources has reduced both 

the number of drug squads in FBI field offices as well as the number of FBI agents 

supporting the High-Intensity Drug Trafficking Area (HIDTA) program initiatives, 

according to FBI officials.35
103

The significant reduction in agent strength in the drug enforcement area is likely 

to be an important factor in the smaller number of FBI drug matters opened in fiscal year 2003 and the first quarter of fiscal year 2004. As figure 6 shows, the number of newly opened drug matters went from 2,420 in fiscal year 1998 to 950 in fiscal year 2002 and to 587 in fiscal year 2003. 

The openings for the first quarter of fiscal year 2004 indicate a rate for the entire 

year at about fiscal year 2003 levels.
104

Similarly, as figures 7 and 8 show, the average number of field agent workyears 

charged to violent crime and white collar crime matters also declined below the 

number of allocated agent workyears as these agents too have been temporarily redirected to counterterrorism-related matters.
105
106
107

As figures 9 and 10 show, the number of newly opened violent crime and white 

collar crime matters has declined since September 11.

CONCLUSIONS

The FBI’s transformation effort is driven in part by challenges facing the federal 

government as a whole to modernize business processes, information technology, 
108

and human capital management. It is also driven by the need to make organizational changes to meet changes in its priorities in the post-September 11 environment. This effort will require a structure for guiding and continuously evaluating 

incremental progress of the FBI’s transformation. It must also be carried out as part 

of, and consistent with, broader government-wide transformation efforts that are 

taking place, especially those resulting from the establishment of DHS and in connection with the intelligence community. The FBI has made substantial progress, 

as evidenced by the development of both a new strategic plan and a strategic human 

capital plan, as well as its realignment of staff to better address the new priorities. 

Although the new strategic plan and strategic human capital plans include cross 

walks to each other, we still believe that an overall transformation plan is more valuable in managing the transformation process. The FBI is also making progress in 

strengthening its management of IT, including establishing institutional IT management controls and considering changes to the scope of CIO’s authority over IT 

spending. 

Impacts of the FBI shift in field agent resources on crime programs including the 

FBI’s drug, white collar, and violent crime programs should be monitored. Our ongoing work, which we expect to complete later this year, will provide information on 

whether other federal and state resources are replacing lost FBI resources in the 

traditional crime areas and on whether reductions in FBI drug program field agents 

have had an impact on the price, purity, availability, and use of illegal drugs. 

Mr. Chairman and Members of the Subcommittee, this concludes my prepared 

statement. I would be pleased to answer any questions you and the Subcommittee 

members may have. 

APPENDIX 1.—FBI REENGINEERING PROJECTS COMPLETED AND UNDERWAY

Core processes Reengineering projects 

Strategic planning and execution (6) ....................................... HQ organizational structure 

Strategic planning process 

Communication strategy 

Executive secretariat 

Project management 

Inspection process 

Capital (human and equipment) (17) ...................................... Career development/succession planning 

Executive development and selection program (EDSP) 

File/clerical support 

Office of Professional Responsibility 

Training 

Hiring and recruiting 

Fitness test/height-weight standards 

Preparation for legal attache ́ assignment 

Administrative officer position upgrade 

Analyst professionalism 

Culture/values 

Time utilization record keeping system (TURK) 

Asset Management 

Financial audit streamlining 

Management of supplies purchase and distribution 

Field office reorganization 

Resident agency consolidation 

Information management (4) .................................................... Trilogy 

Top secret/sensitive compartment information (TS/SCI) local 

area network 

Records management division reorganization 

Rapid start/ICON 

Investigative programs (6) ....................................................... Counterterrorism strategy 

Counterintelligence strategy 

Cyber strategy 

Criminal investigation division strategy 

Manual of Investigative Operations and Guidelines (MIOG)/

Manual of Administrative Operations and Procedures 

(MAOP) Project 

Foreign Intelligence Surveillance Act 

Intelligence (2) .......................................................................... Review criminal informant program (CIP) and asset program 

issues 

Analytical tools for intelligence analysts 
109

Core processes Reengineering projects 

Security Management (5) .......................................................... Continuity of operations planning (COOP) 

FBI headquarters space strategy 

Vital records 

Security manual pilot project 

Repository for Office of Professional Review (OPR) appeals/

security violations 

Source: FBI. 

ENTERPRISE ARCHITECTURE

Senator GREGG. Dr. Ekstrand, what should the enterprise architecture plan be? 

Ms. EKSTRAND. I defer to my counterpart. 

Mr. HITE. An enterprise architecture is not a one-size-fits-all 

proposition. It is a function of what the organization is about, its 

complexity, its size, its mission, and it is also a function of what 

it is intended to be used for. 

So in the case of FBI, you have a very large organization, huge 

in scope, important mission, and the intended purpose ultimately 

is to drive IT modernization and these are very demanding goals. 

So, therefore, it would argue to have a very well-defined, robust enterprise architecture. 

So having said that, what it would be is a set of interrelated 

models, diagrams, tables and narrative that define what the FBI 

does, where it does it, how it does it, when it does it, who does it, 

defines all these things both in business terms, in mission or logical terms, and also in terms of the technology that is going to be 

employed in order to exercise those kinds of operations. So it would 

include the standards and the protocols and the rules that are 

going to govern the types of technology that are going to be employed, both from an application standpoint and from a supporting 

infrastructure standpoint. It is like the mother of all system change 

tools. 

Senator GREGG. How should it be developed? Should it be developed by outside consultants or should it be developed internally, 

and how do you perceive that the FBI intends to develop it? 

Mr. HITE. It could be developed either way. We recently did a 

survey of the state of enterprise architecture across the Government and looked to see how agencies were doing this. The vast preponderance hire a contractor to assist them in doing this and they 

work with the contractor. There are very few who actually contract 

out the entire operation to a contractor, and there are a few that 

do it in-house. 

My understanding of how the FBI is going to proceed is to—and 

they have, I believe as of yesterday, awarded a contract for development of its enterprise architecture. It has a draft plan to set up 

an organization to lead this effort and to manage the contractor. 

So it will be done largely by a contractor under the FBI’s direction 

and guidance. The FBI will, in essence, be acquiring its enterprise 

architecture product from a contractor. 

Senator GREGG. Have you looked at the contract that they have 

developed and signed and do you think that this is a game plan 

that makes sense? Have they outlined a game plan that makes 

sense? 
110

Mr. HITE. No, sir, I have not. I have not seen that. That is a fair 

question to ask. 

Senator GREGG. Since you have been actively involved in this, 

wouldn’t it have been logical that they would have come to you and 

said, does this make sense, before they signed the contract? 

Mr. HITE. That is certainly a service that we would be willing to 

work with them on. We——

Senator GREGG. Did they do that? 

Mr. HITE. We have had FBI-initiated dialogue by the acting CIO 

for him to share with us what his plans and proposals are going 

forward and it allowed us to provide feedback. We have not spoken 

specifically about the contractual terms for this enterprise architecture development area. 

Senator GREGG. Well, I would like to ask you if you could take 

a look at what they have proposed as to how they are going to develop this enterprise zone conceptually and then in the specifics of 

the contract and get back with this committee with your assessment of whether it is an approach that is going to work. 

Mr. HITE. Yes, sir. 

Senator GREGG. I don’t want to do another thing where we—I 

mean, we have got a track record here of approaches that don’t 

work. 

Mr. HITE. Understood. 

Senator GREGG. Although I have to admit, this Director has really tried to address the issue aggressively. 

FEDERAL BUREAU OF INVESTIGATION/DRUG ENFORCEMENT

ADMINISTRATION RELATIONSHIP

You mentioned that you have been looking at the effect that the 

reallocation of FBI people has had on drug enforcement efforts. 

Have you looked at the relationship between DEA and FBI and 

whether we should have DEA even take a—obviously, it is their 

name, it is what they should be doing. Why is the FBI in drug enforcement at all? Where are we going here? Have you done a study 

of that at all? 

Ms. EKSTRAND. We haven’t done a study of that, but when we 

testified last June before House Appropriations, we had had a substantial amount of interaction with DEA in terms of how they perceived their role changing with the withdrawal, to some extent, of 

FBI presence in the area. We are planning to do some additional 

work in that area and report out this summer for House Appropriations. 

Senator GREGG. I would be very interested in an assessment of, 

as FBI migrates over to counterterrorism and has to give up some 

of its portfolio, the Director was quite up front. He said most of the 

portfolio they are giving up is in drug interdiction. What is DEA’s 

role in picking that up? Can it do more? In other words, could DEA 

step in and do more of what the FBI has been doing in this arena 

so the FBI could actually free up more agents? Are you looking at 

that? 

Ms. EKSTRAND. We are looking at some of that. We do know that 

as of last June, there had been a number of new positions authorized at DEA and that even more were requested for the following 

year. So we do know that DEA’s resources, number in terms of 
111

agents, has been growing. But we haven’t had the opportunity as 

yet to get into this in detail. 

Senator GREGG. To the extent you could, that would be useful to 

us because this committee has the unique position of being able to 

move resources and we don’t mind doing that if it is constructive, 

but we would like to have some substance upon which to make 

those decisions. But it seems logical to me that DEA’s role has got 

to significantly increase and you have got to give them more resources and we have got to then expect the FBI to move resources 

out of drug enforcement and into counterterrorism as a result of 

freeing those up. 

Mr. Fine, there are so many areas I would like to talk to you 

about, but I will focus on this IT issue. I thought it was good that 

everybody said the FBI appears to be getting on the right track 

here and things are moving well. How do we sustain that as we 

move forward and especially with the Virtual Case File issue? We 

have got all this hardware and we have got the communications capability, but if you don’t have anything to put on the hardware or 

the communications capability that works, what good is it? 

Mr. FINE. I do think the FBI is making progress in improving 

things, but it does need to do more. It has to ensure that they have 

definitive milestones that the contractors have to meet. They have 

to hold them accountable for those milestones. They have to keep 

sustained attention on this. They have to define their requirements 

right up front so that the contractor knows what it has to deliver 

and be held accountable if it doesn’t deliver that. 

I think there has also been, unfortunately, a fair amount of turnover and not necessarily stability in the senior FBI IT management 

structure, so that people are moving on and not having responsibility, sustained responsibility, to assure a project through to completion. I do think they have a new acting CEO that is technically 

astute and seems committed to this. But there has to be that constant attention on that, as well. 

So I think there has to be a hard-nosed approach to this that 

perhaps in the past the FBI has not fully implemented. 

VIRTUAL CASE FILE CONTRACT

Senator GREGG. Have you looked at what they are doing now in 

the Virtual Case File contract that they are negotiating right now? 

Have you been involved in that process to put in place that type 

of a discipline? 

Mr. FINE. Yes. We have an audit opened. We recently opened it. 

We have done it in the past and recently opened a new audit on 

Trilogy, on all the aspects of Trilogy. So our auditors are talking 

to the FBI IT managers every day and trying to find out where 

they are going, how they are doing it, and ensuring that there is 

this aggressive approach to ensuring that it comes in without excessive cost overruns or delays. 

Senator GREGG. If I understood the Director correctly, and maybe 

I didn’t hear him correctly, but my impression was that he said, 

with regard to the Virtual Case File, that they were in the process 

of developing a new contract, essentially, to get the program into 

the next phase and that it had not been agreed to and that he 

agreed that disciplines should be put into it. He didn’t necessarily 
112

say they were going to be put into it. And I would be interested 

in getting your current assessment, not now, but as this moves forward as to how effectively that is being done. 

Mr. FINE. We would be happy to do that. Our understanding is 

that there was a contract, but they are negotiating and renegotiating the requirements of it and when to do it, and they are in the 

process of defining that now. And we will be involved with monitoring and overseeing it because of the importance of this issue. 

IDENT/IAFIS INTEGRATION

Senator GREGG. You mentioned IAFIS and you have done an 

IDENT/IAFIS paper. 

Mr. FINE. Report, yes. 

Senator GREGG. Report. 

Mr. FINE. We have done a number of studies on that, but most 

recently, a report on the Batres case and the status of the IDENT/

IAFIS integration. 

Senator GREGG. Is this possible? I mean, the Director seemed to 

think it was possible to integrate these two. But, the IDENT people 

want to have a very short timeframe to get the person through and 

IAFIS is built on the concept of what he refers to as the gold standard, which takes 20 minutes probably to take fingerprints under 

that scenario. Is there some capacity to resolve this? 

Mr. FINE. I think there is and I think it is technologically possible. I think there are three main issues with the IDENT/IAFIS 

integration. One, along the border, having the Border Patrol ensure 

that it checks detained aliens against IAFIS. And they are getting 

the machines out there but they don’t have the machines out there, 

the 10-print machines that would connect IAFIS at all the border 

stations. As a result, or after our report, the Department of Homeland Security said it would expedite a process of getting——

Senator GREGG. Is that an issue of money or just an issue of the 

machines not being available or bureaucracy——

Mr. FINE. I think it is an issue of money, to some extent, but also 

attention and urgency to the process. I think there is an urgency 

now, and there needs to be that urgency. That is the first issue. 

The second issue is ensuring that the FBI and State and local 

law enforcement has access to IDENT and access to the information in IDENT, and going that way, as opposed to simply having 

the immigration authorities have access to the FBI system. 

And the third issue is the issue that you raised, at ports of entry, 

US VISIT, and what information is going to be taken from people 

who are coming to enter the country and what it is going to be 

bounced off against. I don’t believe they have determined what they 

intend to do and how they intend to do it. And part of the issue 

is getting the parties together and determining what they can do 

and what they should do. Prior to this, I don’t think there has been 

that focus on that issue. 

Senator GREGG. How do we get that focus? I have raised it now 

at two different hearings and I have gotten very nice responses, but 

is there actually something happening? 

Mr. FINE. I think there is something happening. I have spoken 

to Director Mueller. I speak with him regularly and he has indicated that they are talking with the Department of Homeland Se-
113

curity, with the State Department, and even, my understanding, 

the National Security Council is also involved in the process. It is 

a cross-agency issue, but there needs to be that focus on it and a 

decision made on a government-wide basis how they are going to 

do it. 

It was hard enough when the INS was in the Department of Justice, getting them on the same page with the FBI. It is even harder 

now that they are in separate agencies, but that is what needs to 

happen. There needs to be clear terms. There needs to be memoranda of understanding, and they need to decide how they are 

going to go forward with this. 

Mr. HITE. Mr. Chairman——

Senator GREGG. Yes? 

Mr. HITE [continuing]. If I could just add a couple of comments 

on that, I testified last week on US VISIT and we have issued a 

number of reports on it. We actually have one coming out for the 

Appropriations Committee next month, which is an update on the 

status of US VISIT, and the way US VISIT is being developed and 

deployed. It is going to be in increments and some of these nearterm increments are designed to meet legislative requirements for 

deployment of a capability to certain ports of entry by a certain 

time. 

The initial deployment that has occurred at airports and seaports 

does provide for a biweekly download of certain files from IAFIS to 

the IDENT component of US VISIT. It is not a real-time download 

of information, but it is every 2 weeks. That is all part of an interim solution approach to US VISIT that is needed in order to 

meet these very aggressive milestones. 

They are also in the process of bringing on an integration contractor and one of the responsibilities of that integration contractor 

will be to develop the long-term solution for US VISIT, which will 

get into some of these other issues about how many fingerprints 

are necessary, and I know they are working with NIST and the 

other agencies on that. There was talk about whether eight fingerprints would be a sufficient standard, and I think there has been 

talk that maybe dropping back to two prints for the intended purpose of US VISIT will be enough. But there is this dialogue. There 

are memorandums of understanding and working groups among all 

these agencies involved in US VISIT. 

Senator GREGG. Well, I hope you are right. I have the feeling this 

is deja vu all over. This committee has been down this road before 

9/11, when we tried to get these various agencies to talk to each 

other. As Mr. Fine points out, we couldn’t even get Border Patrol 

and FBI to talk to each other when we had them both under our 

jurisdiction. 

There is a real frustration in seeing 44 million fingerprints sitting over here and setting up a system which is supposed to fingerprint people coming into the country and knowing that the ones 

you are doing as you fingerprint people coming into the country 

does not have the capability of accessing that database. I hope that 

there is some greater being up there that is straightening this out, 

but I don’t really sense it. I haven’t seen any reaction that gives 

me that impression. 
114

Mr. HITE. We did, in our issued report 6 months ago, we made 

a recommendation about having a government-wide governing 

structure for US VISIT because it is a government-wide program, 

and based on the steps that have been taken in the last 6 months, 

we have closed out that recommendations as having been satisfied. 

They have a three-tiered approach to establishing this governmentwide governance structure. 

Senator GREGG. That is good news. I hope it translates into results. It is always nice to hear that there is movement. 

LEGAT PROGRAM

You also, Mr. Fine, have a report coming out, I think, on the 

Legat program. I would be interested in just your reaction to it. It 

has expanded dramatically with this committee’s very strong support, although sometimes occasional words of caution from our 

most senior member, Senator Hollings. But it has been expanded. 

It was a priority of the prior Director and has been proven to be, 

I think, an invaluable resource in light of what our present threat 

is and the changed personality of the FBI and the international 

role it has. 

But I would be interested in where you see the weaknesses are 

and where are the strengths, or aren’t you going to be able to tell 

us yet? 

Mr. FINE. Well, we haven’t issued the report, so I don’t want to 

get into all of it, but I do agree with you that it has been an important component of the FBI’s efforts. With the globalization of crime, 

with the increase of international terrorism, it had to do this and 

I think it deserves credit for moving forward in that regard. 

I think it is working generally well. I do think there are some 

issues, particularly with training of the people who are going 

abroad, with language training, with training of them to pursue 

their roles in foreign countries immediately. So I think that is an 

important issue. But beyond that, I think we should wait for the 

report. But I think it is a critical issue that the FBI has taken on 

and that we need to follow up on. 

Senator GREGG. What about the language issue? The Director 

said they have 24 agents who speak Arabic. I think there are 65 

who are in the backup who aren’t agents who speak Arabic. There 

are 250 or something like that as I recall that speak Mandarin. Not 

a lot of people. There is a lot of information floating around for that 

few people to be on top of. 

Mr. FINE. I think that is absolutely right. We do have an ongoing 

review of that issue. We have a review of the FBI’s efforts to hire 

and train linguists, for example, to ensure that they are able to 

translate all the information they have. There are backlogs. There 

are backlogs of translations. And when that happens and they have 

information in the FBI in their files, in their transcripts that they 

can’t translate, it undermines their mission. So I think it is a critical issue that the FBI has to focus on. 

I know that the Director is focused on that. It is not easy. But 

we are going to review how they can improve their efforts to be 

able to translate all that they have and to expand the pool of 

agents who have foreign language capabilities. 
115

LINGUISTS

Senator GREGG. Has GAO looked at this issue of an overriding 

centralized translation center capability? 

Ms. EKSTRAND. We have not. We had reported last June in terms 

of the number of linguists hired and they are substantially the 

same numbers that Director Mueller just gave. But we have not 

had a renewed opportunity to look at that——

Senator GREGG. So you haven’t discussed whether we should 

have basically a translation capability that is independent of the 

Bureau? 

Ms. EKSTRAND. No, sir, we have not looked at that. 

Senator GREGG. Have you looked at that? 

Mr. FINE. I think we are sort of involved in the issue, but I don’t 

think that is the focus of our review, how government-wide to address this issue. 

Senator GREGG. Is there something else this committee should 

know about specifically the technology area or the personnel allocations that would help us as we try to make sure we have a more 

effective and aggressive Bureau? 

Mr. FINE. I think the committee’s efforts in this regard are very 

important. It is important to monitor and ensure that the FBI does 

upgrade its technology. I think that the FBI recognizes this. But 

it is important to point out that even when Trilogy is online, and 

it is not clear when it will be online, I am not completely optimistic 

that it will happen, the first two components at the end of April 

and then a Virtual Case File, as the Director said, 2 months later. 

To have a real operating system that works, that the agents 

know about and are trained on and accept is, in my view, going to 

take longer than that. But I do think it is important to focus attention on the fact that Trilogy itself is not the end of the road. It is 

only a portion. It is only the foundation. As one, I think, FBI manager has said, it gets the FBI out of the ditch and gets them on 

the road, but it doesn’t get them on the highway. And the FBI 

needs to sustain its attention on these efforts because without it, 

FBI employees can’t do the job that they are assigned to do. It is 

actually a credit to them that they have done well with the archaic 

systems they have. But we need to give them better systems. 

Senator GREGG. Isn’t that what the enterprise architecture 

should do, give them the road map to getting on the highway? 

Mr. HITE. That will be part of the—one variable in the equation, 

to that end. I would echo what Mr. Fine said and use a different 

metaphor, that Trilogy is the beginning of a long marathon of systems modernization. It is not a sprint. And in order to finish a 

marathon, you have got to be trained and equipped to finish it. You 

have got to be ready to finish it. 

And being ready means you have the tools at your disposal to effectively execute a modernization. Enterprise architecture is one of 

those tools. Mature investment processes are another. There is a 

whole host of things that need to be in place, and unfortunately, 

the FBI historically has not been a favorable poster child for good 

IT management. Now you have got some people in place——

Senator GREGG. It has been behind. 
116

Mr. HITE [continuing]. I believe who understand that and are 

trying to change that. But changing that is not going to be an overnight endeavor, so there is going to be hundreds of millions of dollars to modernize systems. There is going to be hundreds of millions of dollars going into operating and maintaining existing systems, and it is not going to change overnight. 

Senator GREGG. Should we have a more disciplined approach 

from the appropriations side in funding IT at the FBI so there is 

not a peak and a valley approach, or are we approaching it appropriately as appropriators? 

Mr. FINE. It is hard to answer that question, but I do believe and 

appreciate the fact that the committee is asking these questions, is 

keeping the pressure on the FBI. In my understanding, it is regularly asking for updates from the FBI and I think that is important 

rather than to appropriate the money and wait to see what happens. So I think the committee’s efforts are instrumental in this regard. 

Mr. HITE. There are mechanisms that other subcommittees use 

with regard to IT modernization programs like US VISIT. The 

CBP’s, Custom and Border Protection’s, Automated Commercial 

Environment, which is an import-export processing system, for the 

IRS, what has the Tax Systems Modernization, now the Business 

Systems Modernization, where the Appropriations Committees ask, 

or actually direct in their appropriation language that the agency 

develop each year a plan of expenditure, how they plan to invest 

the money, which gets into what they are going to spend it on, 

when, and how are they going to ensure that the money is spent 

wisely and there is adequate control surrounding the use of that 

money. 

They require that the expenditure plan be approved by the head 

of the Department for that agency, to be approved by OMB, and 

to be reviewed by GAO, and then we support the committee in reviewing it and giving them information to make decisions about 

their oversight of the use of that money. I am not advertising——

Senator GREGG. Is the FBI at the level where it can do that? I 

mean, right now, we are just trying to get it up and running. 

Mr. HITE. And so that would be the focus of any plan for how 

they are going to invest the funds, to deal with how they are going 

to get it up and running, the near-term priorities as well as setting 

the groundwork for the long-term disciplined approach to wholesale 

systems modernization. 

Senator GREGG. I don’t think the FBI is the only organization 

that needs to be disciplined and systematized. I think we do, too, 

as appropriators. So I would be interested in getting that information. Maybe you could sit down with our staff and review how that 

is done in other committees. I am sure they are probably familiar 

with it. I think we should have a systematized approach, also. 

I thank you very much. This hearing has been very informative. 

I appreciate the work you folks do in keeping these various agencies on track. It is very constructive and very much appreciated. 
117

SUBCOMMITTEE RECESS

The next hearing is scheduled for this Thursday. It will be with 

the Secretary of State, Colin Powell, at the office in the Capitol 

Building at 10 o’clock. Thank you. 

[Whereupon, at 12:14 p.m., Tuesday, March 23, the subcommittee was recessed, to reconvene at 10 a.m., Thursday, March 25.]

(119)

DEPARTMENTS OF COMMERCE, JUSTICE, AND 

STATE, THE JUDICIARY, AND RELATED 

AGENCIES APPROPRIATIONS FOR FISCAL 

YEAR 2005

THURSDAY, MARCH 25, 2004 

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. 

The subcommittee met at 10:01 a.m., in room S–146, the Capitol, 

Hon. Judd Gregg (chairman) presiding. 

Present: Senators Gregg, Stevens, Domenici, Hollings, Kohl, and 

Byrd. 

DEPARTMENT OF STATE 

OFFICE OF THE SECRETARY

STATEMENT OF COLIN L. POWELL, SECRETARY OF STATE 

Senator GREGG. First off, we want to thank the Secretary for 

coming before the subcommittee today. He certainly had a hectic 

schedule, just back from Spain and we very much appreciate your 

time, Mr. Secretary, in light of all the responsibilities you have and 

especially in light of your extraordinary travel schedule. You have 

got to be a little tired and we appreciate that, but we do thank you 

for taking time to come in. 

This subcommittee has a lot of involvement obviously in the 

State Department. We have tried and we are going to continue to 

try to be supportive of the State Department. There are a lot of 

issues I know we want to get to so I am going to reserve an opening statement so we can get your statement and then move to questions. But I will obviously yield to Senator Hollings for any statement he wishes to make. 

Senator HOLLINGS. I think that is the best approach and I yield 

also. 

Senator GREGG. Then we will start right out unless, Senator 

Byrd, did you want to say anything? 

Senator BYRD. I will follow the same standard here. 

Secretary POWELL. I am almost reluctant to say anything after 

that. 

Senator GREGG. We came to hear you. 

Secretary POWELL. Mr. Chairman, I thank you and Senator Hollings, and Senator Byrd. I am just back from Madrid. I flew overnight the night before last, attended a very moving memorial service for the Spaniards who were killed in the terrible tragedy of
120

3/11, had meetings with outgoing Prime Minister Aznar and with 

the new incoming Prime Minister, Mr. Zapatero. Although we have 

some disagreements with Mr. Zapatero on Iraq and we will work 

through that, one thing there is no disagreement on is that the 

United States and Spain will be united in this fight against terrorism. Spain has been fighting terrorism long before 3/11 or 9/11. 

They have had to face the ETA terrorists, so I am confident that 

we will find ways to cooperate in this battle against terrorism. 

It is always a pleasure to appear before this subcommittee. This 

is not like the old army story like we are always glad to see the 

inspector general. But in this case really it is true because, Mr. 

Chairman, you and the members of the committee have been supportive of what we have been trying to do in the Department for 

the last 3 years. I remember during my transition pre-confirmation 

period when we talked about some of the problems that you saw 

in the Department with respect to management, with respect to 

construction of our Embassies and things of that nature. I have 

tried in the 3 years I have been Secretary to be responsive to your 

concerns. 

Before I go further, let me take this opportunity to especially acknowledge Senator Hollings, since this may well be the last chance 

we will have to see each other in this particular capacity, to thank 

you for your support, your prodding, and your friendship for so 

many years, Dr. Hollings. 

Senator HOLLINGS. Thank you. He and I got honorary degrees at 

Tuskegee together. That is Dr. Powell. 

Senator GREGG. Very appropriate. 

Senator HOLLINGS. We had Cappy James and the Air Force down 

there. The Tuskegee flyers trained in South Carolina. 

Secretary POWELL. Tuskegee Airmen. 

Mr. Chairman and members of the subcommittee, I thank you for 

the opportunity to testify on the State Department’s portion of the 

President’s budget request for fiscal year 2005. I have a longer 

statement I would submit for the record, Mr. Chairman, with your 

permission. 

Senator GREGG. Absolutely. 

Secretary POWELL. While I know that this subcommittee’s specific oversight deals with that part of the request that involves 

State Department operations, I want to give you as well an overview of what those operations will support in the way of foreign 

policy. So let me give you the overall budget picture first and then 

touch on foreign operations. Finally I will deal with the top priorities of our specific funding request before you. 

The 2005 international affairs budget for the Department of State, USAID, and other foreign affairs agencies totals $31.5 billion 

broken down as follows, foreign operations $21.3 billion, State operations of principal interest to this subcommittee, $8.4 billion, Public Law 480, food aid, $1.2 billion, international broadcasting $569 

million and the Institute of Peace $22 million. 

President Bush’s top foreign policy priority reflected in this budget is winning the war on terrorism. Winning on the battlefield with 

our superb military forces is just one step in this effort. To eradicate terrorism altogether, the United States must help create stable governments and nations that once supported terrorism like 
121

Iraq and Afghanistan. I visited both of those places last week and 

I hope in the course of our questioning I can say a word about what 

I saw. 

We must go after terrorist support mechanisms as well as the 

terrorists themselves, and we must help alleviate conditions in the 

world that enable terrorists to bring in new recruits. To these ends, 

the 2005 budget will support our foreign affairs agencies as they 

focus on the reconstruction of Iraq and Afghanistan. We will continue to support our coalition partners to further our counterterrorism, law enforcement and intelligence cooperation, and we 

will continue to expand democracy and help generate prosperity, 

especially in the Middle East. 

Forty-eight percent of the President’s foreign affairs budget sup- ports the war on terrorism. For example, $1.2 billion supports Afghanistan reconstruction, security and democracy building in 2005. 

More than $5.7 billion provides assistance to countries around the 

world that have joined us in the war on terrorism. And $3.5 billion 

indirectly supports our war on terrorism by strengthening our ability to respond to emergency and conflict situations. And finally, 

$190 million is aimed at expanding democracy in the greater Middle East; crucial if we are to attack successfully the motivation to 

terrorism. 

Two of the greatest challenges facing us today are the reconstruction of Iraq and the reconstruction of Afghanistan. With respect to Iraq, the Coalition Provisional Authority and the Iraqi 

Governing Council, in my judgment have made great strides in the 

areas of security, economic stability and growth, and democratization. Iraqi security forces are now in the forefront of our security 

efforts, and you can see that they are taking casualties as they go 

about securing their country for their people. 

In addition, the CPA has established a new Iraqi army, issued 

a new currency, and refurbished schools, hospitals, the sanitary infrastructure, working on the oil infrastructure. So much good work 

is going on with respect to reconstruction that it is unfortunate 

that the continuing security situation we face tends to drown out 

or put a black cloud over the good work that is being done. 

But much work remains to be done. Working with our coalition 

partners we will continue to train Iraqi police, border guards, the 

civil defense corps and the army in order to ensure the country’s 

security. At the same time, as I noted, we are going to work on 

these critical infrastructure needs. 

But there is progress taking place. The definitive example of that 

progress, on March 8 the Iraqi Governing Council adopted a transitional administrative law, which is essentially an interim constitution for Iraq. This was a remarkable milestone. You will recall that 

Friday when we thought it was going to be signed and suddenly 

there was a signing table, 25 pens and nobody showed up because 

there was a problem over it. And over the weekend that problem 

was solved, through argument, through debate, through democratic 

process; something that they had never had experience with before. 

But it happened. 

This administrative law recognizes freedom of religion and puts 

the judiciary on an independent track. It puts the military firmly 

under civilian control. It gives women the access to civil society and 
122

the political life of the country. It is a huge step for the Iraqi people 

and we should not sell short what an accomplishment this is. 

The U.N. Secretary General’s special advisor Mr. Brahimi, Ambassador Brahimi, has been invited back to Iraq by the Governing 

Council in order to work with the Council and the CPA to put in 

place a revised interim government that will take sovereignty from 

the CPA on the first of July. In my visit with Ambassador Bremer 

last week we talked about the transition from the CPA to a very 

large State Department chief of mission operation, a very large 

Embassy. Already I have four Ambassadors over there working 

with Ambassador Bremer and trying to make this transition as 

smooth as possible. 

Mr. Chairman, Afghanistan is another high priority and I was 

there last week. We are committed to helping build a stable and 

democratic Afghanistan. They had a very fine constitutional process at the end of last year where they adopted a constitution for 

this country that just a few years ago was a basket case, a despotic 

basket case. Now it has a constitution, and as you saw in press reporting this morning, President Karzai has scheduled elections for 

early September for both a new president as well as for a legislature. 

Still there are problems along the Afghan-Pakistan border, still 

problems out in Herat but as I drove through Kabul last week you 

could see buildings going up, you could see women who felt secure 

enough in their life now to remove the burkha; about 50 percent 

covered and 50 percent not covered. I visited a registration place 

in a school where women were registering to vote, filling out the 

forms, stepping forward, getting their registration card and proudly 

showing it to me that they are now part of the life of the new Afghanistan. So we have accomplished a lot in Afghanistan, but here 

too there is much more work to do. 

I was watching some footage yesterday that we are going to use 

at the Donors’ Conference next week that shows some of our reconstruction efforts in Afghanistan, and one shot on this video is of the 

new blacktop road, complete with markers that goes from Kabul to 

Kandahar. We will continue that road around to Herat, in working 

with our Saudi partners, our Japanese partners, and provide a 

beltway for this country. But it is more than just a beltway. It is 

a road that will link the country together, give the central government the ability to control the regions a little more effectively. It 

will contribute to the economic life of the country. But more importantly, it will also link Afghanistan with the other nations of central Asia. 

Pakistan is looking at this and is starting to readjust its infrastructure, its port activities, to take into account that there will be 

peace in this part of the world as we go into the years ahead. The 

old silk route of 2,000 years ago is going to be recreated, except 

this time it will be with hard roads and ports, with an information 

infrastructure, and hope eventually with pipelines that criss-cross 

this area and move oil and natural gas from central Asia to the 

east and not just to the west. 

So the opportunities here are enormous. We have to deal with security. We have got to get rid of those remaining Taliban and al 

Qaeda elements. But we should not sell short not only our accom-
123

plishments of the last couple of years, but the potential that lies 

ahead for a region, the Caucuses, central Asia, south Asia all being 

linked in a new hub of transportation and trade as long as we can 

keep the peace and security, and that is what we are committed 

to. 

The 2005 budget, as I said, includes $1.2 billion in assistance for 

Afghanistan, which is on top of the $2.2 billion in 2004; $1.2 billion 

already out there and I will make a public announcement of the 

other $1 billion at the Afghan Donors’ Conference in Berlin next 

week. 

As important as waging the war on terrorism is to America, we 

have other priorities in our foreign affairs budget; HIV/AIDS, 8,000 

people a day are dying of this terrible disease. It is extremely difficult to make economic improvements in a country if you are not 

working on these kinds of problems, and the President is with his 

HIV/AIDS program. Over the past year we have worked with Congress to pass legislation laying the groundwork for this fight. 

In marking our progress, earlier this month, Ambassador Tobias 

who heads the program for us, Secretary Thompson, Administrator 

Natsios of AID, and I rolled out the strategy for the HIV/AIDS plan 

and announced the first dispensation of dollars for these programs; 

$350 million in contracts will roll out to some of the NGOs and 

PDOs. As a crucial next step, the 2005 budget request expands on 

the President’s plan with $2.8 billion to combat AIDS in the most 

affected countries in Africa and the Caribbean. Together, the Department of State, USAID, and the Department of Health and 

Human Services, will use the significantly increased resources 

quickly and effectively to achieve the President’s ambitious goals in 

the fight against global AIDS. 

Just as a digression, we are also seeing polio back in certain 

parts of Africa, and this has to be part of our health efforts as well, 

coming out of the Department of State and coming out of USAID. 

Of course, there are other dimensions of economic success in Africa, and the program that we are pushing forward and you know 

a great deal about, the Millennium Challenge Corporation. The corporation has now been formed. I am the chairman of the board. We 

have sent a nominee to the Senate to be the CEO of this board, 

Mr. Paul Applegarth. The Millennium Challenge Corporation will 

fund infrastructure and other similar proposals to those countries 

that are committed to democracy, the free enterprise system, individual rights of men and women, the rule of law, and the end of 

corruption. We have other foreign assistance accounts, but the millennium challenge account will invest in those countries that are 

moving in the right direction. 

Let me turn now, gentlemen, to the part of the budget request 

that is of particular interest to you, State operations. As you recall, 

we created the diplomatic readiness initiative in 2002 to address 

staffing and training gaps that had become very averse to the conduct of America’s diplomacy. The goal of the diplomatic readiness 

initiative was to hire 1,158 new foreign and civil service employees 

over a 3-year period. These new hires, the first over-attrition hires 

in years, would allow us to provide training opportunities for our 

people and greatly improve the Department’s ability to respond to 
124

crises, to ramp up when we needed to, such as we have had to do 

in Iraq and Afghanistan. 

I cannot say strong enough what a dynamic impact this program 

has had on the Department. The Department sees that its leadership, but more importantly its leadership in Congress cares about 

the Department. Your are willing to invest in the readiness of our 

people, bring in new people. I got a report from the Under Secretary for Management yesterday that close to 30,000 people have 

already signed up for the next giving of the foreign service exam. 

We have been averaging 50,000 people a year for the last 2 years 

wanting to become part of this new team, which I think has been 

energized by the support we have been receiving from the Congress 

and for that I am very appreciative. 

We also created new mandatory leadership and management 

training. It is great for our people to learn how to speak different 

languages and learn all about foreign policy and to be experts and 

write papers. But they also have to be able to lead and manage 

people in these very, very complicated missions that we have 

around the world. So beginning from the first day that you come 

into the foreign service and go to the junior officers’ course, the 

entry level course, you will receive leadership and management 

training and will continue throughout your whole career. If this 

bears a marked similarity to the way they do it in the military, it 

is not coincidental or accidental. We are essentially adopting what 

I learned in the military and bringing it over to the foreign service 

and to the civil service. We are giving leadership training to our 

senior civil service employees as well. 

The other thing I am very proud of, of course, is the information 

technology investment that we have made with your support. It 

has paid off. Every desk in the State Department, everywhere in 

the State Department now has an Internet capable computer sitting there. We did it in-house for the most part. 

Senator GREGG. And it worked. 

Secretary POWELL. It works. 

Senator GREGG. Not like some of our other agencies. 

Secretary POWELL. Frankly, we looked outside and then we decided, we can do this ourselves. You may recall, gentlemen, that 

you had a real problem with the way we were running our Diplomatic Telecommunications Service for years, and Mr. Tenet and I 

sat down and said, let us figure out who can deliver the capacity 

best, and we solved that. Mr. Tenet provides the capacity, and the 

person working for Mr. Tenet to do that also works for me. So we 

have a good deal and it is working. Our capacity has increased, the 

cost has gone down considerably, and everybody is happy. Therefore, I can put broadband capability in every mission around the 

world. 

Just a little war story on how this works, as you know, part of 

our effort to reach out to the Congress was to create a State Department office up here to respond to Members of Congress. I was 

able to get an office in the House. I do not want to point any fingers but I have not yet been able to get a room on the Senate side. 

Be that as it may, 30 percent of the work of my House office comes 

from the Senate side. I was in there the other day waiting for a 

hearing to begin and just talking to my folks who work there. 
125

There are three people in there. I said, what kind of requests are 

you getting? Constituent requests, visa problems, all this, hundreds 

and hundreds—the volume is going up 300 percent in the last year. 

I said, give me an example of how you solve a problem that a 

Member of Congress brings to you. They said visa problems are 

common ones. Somebody will come in and say, why didn’t a friend 

of mine get a visa when they applied in New Delhi or Mumbai or 

somewhere like that? I said, how do you handle that? Do you go 

to the Department and ask Consular Affairs? They said, no, we go 

right to the Embassy. How do you go right to the Embassy? Information technology. I said, show me. Sandra Shipshock, the officer 

who was working in the office, went to her computer and in 10 seconds she had not only gotten to the Embassy, she got into the Embassy’s consular section data base. And in less than 20 seconds she 

had pulled up the specific visa application with a picture of the individual who had applied for the visa and why the visa was denied. 

This data base is all secure. We have firewalls. Not anybody can 

just go in like you are going to Google. But the fact of the matter 

is that the kind of information technology system we have put in 

place allows us to provide that kind of service, not only to Members 

of Congress but to the public. 

In that same vein, now that we have this information technology 

system coming along, we have to change the way we do business. 

We cannot just be an information system without a change in the 

process and the thinking of the Department. That is what our 

SMART Project is all about that we are asking for your support. 

We want to get rid of cables. Get rid of the way we used to do it 

in World War II. My staff gave me a chart the other day and it 

was recognizing that the last Wang computer left the Department 

3 months ago. I am pleased to hear that. It should have left 10 

years ago. But we are now in the information age and I ask for 

your support for our SMART program so that we can change the 

thinking in the Department as well as just put new computers and 

software into place. 

Mr. Chairman, the Department has the responsibility to protect 

more than 60,000 Government employees who work in Embassies 

and consulates abroad. I know how interested you have been in 

this program over the years. You know that we have reorganized 

our efforts. We reorganized the Office of Overseas Building Operations to manage the effort with speed, efficiency and effectiveness 

under the leadership of General Chuck Williams. At the beginning 

of this administration we were building one new secure Embassy 

a year. Today we are building 10 new secure Embassy compounds 

a year. Many of these compounds also have separate facilities for 

USAID. They are also deserving of protection. 

Moreover, we have reduced the Embassy’s program cost by 20 

percent using modern management techniques, using common components among our Embassy projects. Within the budget we are 

watching a plan to replace the remaining 150 Embassies and consulates that do not meet current security standards over the next 

14 years for a total cost of $17 billion. 

To fund construction of these compounds we will begin the capital security cost-sharing program in 2005. Not everybody is crazy 

with this cost-sharing program, but it has to be done and I am 
126

working with my Cabinet colleagues on it. Each agency with staff 

overseas will contribute annually toward construction of new facilities based on the number of positions that that Department or 

agency wants in the type of space that we are preparing for them. 

We arrived at the cost shares in the 2005 President’s budget request in consultation with each agency and Department. 

Along with securing our facilities we have focused on assuring 

that overseas staffing is deployed where they are mostly needed to 

serve U.S. interest. As agencies assess the real cost of maintaining 

staff overseas I hope they will adjust their overseas staffing levels 

to the minimum absolutely necessary since they will now have to 

contribute to the cost of maintaining them overseas. 

Our budget request also, I might say, touches on physical security improvements to those soft targets in our missions, schools, 

recreational facilities. You know that we have an extensive plan to 

go after the soft targeting possibility, providing physical security 

improvements to overseas schools attended by dependents of Government employees and other citizens. Our 2005 request includes 

$27 million for this effort, including $10 million for the schools, $5 

million to improve security at employee association facilities, and 

$12 million for residential security upgrades. Protection of Americans living and working overseas is one of our highest priorities. 

We also appreciate the ongoing support from this committee for 

our peacekeeping budget. U.N. peacekeeping operations in troubled 

and fragile regions have been and remain critical to ensuring that 

such places are given stability and the time they need to work on 

long-term solutions to their underlying conflicts and problems. 

UNAMSIL in Sierra Leone and UNMISET in East Timor have 

been effective in helping new governments to establish themselves. 

We are also supporting peacekeeping missions in Liberia and Ivory 

Coast, and I would just ask for your continued support. 

I am going to have difficulty meeting all of the peacekeeping financial responsibilities that I expect to arise over the next year, 

but the 2005 submission is certainly a good start on meeting those 

responsibilities. We will just have to see how the cost flows out in 

the course of the fiscal year. 

PREPARED STATEMENT

Mr. Chairman, Senator Hollings, Senator Byrd, thank you for 

this opportunity to present our case. I thank you for your past support and I will thank you in advance for your future support. 

[The statement follows:]

PREPARED STATEMENT OF COLIN L. POWELL

Mr. Chairman, members of the subcommittee, thank you for the opportunity to 

testify on the State Department’s portion of the President’s Budget Request for fiscal year 2005. While I know that your specific oversight is of the State Department 

operations portion of that budget request, I want to give you as well an overview 

of what those operations will support in the way of foreign policy. So let me give 

you the overall budget picture first and, then, touch on foreign operations. Finally, 

I will deal with highlights of our funding request for State Department operations. 

The President’s fiscal year 2005 International Affairs Budget for the Department 

of State, USAID, and other foreign affairs agencies totals $31.5 billion, broken down 

as follows: Foreign Operations—$21.3 billion; State Operations—$8.4 billion; Public 

Law 480 Food Aid—$1.2 billion; International Broadcasting—$569 million; and U.S. 

Institute of Peace—$22 million. 
127

Mr. Chairman, the President’s top foreign policy priority is winning the war on 

terrorism. Forty-eight percent of the President’s budget for foreign affairs directly 

supports that priority by assisting our allies and strengthening the United States’ 

diplomatic posture. For example: $1.2 billion supports Afghanistan reconstruction, 

security and democracy building, and more than $5.7 billion is provided for assistance to countries around the world that have joined us in the war on terrorism, and 

$3.5 billion indirectly supports the war on terrorism by strengthening our ability to 

respond to emergencies and conflict situations. Moreover, $190 million is aimed at 

expanding democracy in the Greater Middle East, in part to help alleviate the conditions that spawn terrorists. In addition, $5.3 billion is targeted for the President’s bold initiatives to fight 

HIV/AIDS and create the Millennium Challenge Corporation, both of which will support stability and improve the quality of life for the world’s poor—and, again, help 

to relieve conditions that cause resentment and despair. 

Mr. Chairman, let me elaborate a bit on how some of these dollars will be spent. 

WINNING THE WAR ON TERRORISM

Winning on the battlefield with our superb military forces is just one step in defeating terrorism. To eradicate terrorism, the United States must help create stable 

governments in nations that once supported terrorism, go after terrorist support 

mechanisms as well as the terrorists themselves, and help alleviate conditions in 

the world that enable terrorists to bring in new recruits. To this end, in fiscal year 

2005 the State Department and USAID will continue to focus on the reconstruction 

of Iraq and Afghanistan, support our coalition partners to further our 

counterterrorism, law enforcement and intelligence cooperation, and expand democracy and help generate prosperity, especially in the Middle East. 

Building a Free and Prosperous Iraq 

The United States faces one of its greatest challenges in developing a secure, free and prosperous Iraq. The USG is contributing almost $21 billion in reconstruction 

funds and humanitarian assistance to this effort. The World Bank and the International Monetary Fund are expected to provide another $4 to 8 billion in loans and 

grants over the next three years. These resources, coupled with the growing assistance of international donors, will ease the transition from dictatorship to democracy 

and lay the foundation for a market economy and a political system that respects 

human rights and represents the voices of all Iraqis. 

The Coalition Provisional Authority (CPA) and the Iraqi Governing Council (IGC) 

have made great strides in the areas of security, economic stability and growth, and 

democratization. Iraqi security forces now comprise more than half of the total security forces in the country. In addition, the CPA has established a New Iraqi Army, 

issued a new currency and refurbished and equipped schools and hospitals. And, as 

you know, the CPA is taking steps to help the Iraqis form a fully sovereign government this summer. 

Much work remains to be done. Working with our coalition partners, we will continue to train Iraqi police, border guards, the Civil Defense Corps and the Army in 

order to ensure the country’s security as we effect a timely transition to democratic 

self-governance and a stable future. 

At the same time, we are helping provide critical infrastructure, including clean 

water, electricity and reliable telecommunications systems which are essential for 

meeting basic human needs as well as for economic and democratic development. 

Thousands of brave Americans, in uniform and in mufti, are in Iraq now working 

tirelessly to help Iraqis succeed in this historic effort. Alongside their military colleagues, USAID, State Department and the Departments of the Treasury and Commerce are working to implement infrastructure, democracy building, education, 

health and economic development programs. These efforts are producing real 

progress in Iraq. 

As a definitive example of this progress, on March 8, the IGC formally signed the 

Transitional Administrative Law (TAL)—essentially an interim constitution for 

Iraq. This was a remarkable milestone. The TAL recognizes freedom of religion and 

expression, the right to assemble and to organize political parties, and other fundamentally democratic principles, as well as prohibiting discrimination based on 

gender, nationality or religion. This is a huge step for the people of Iraq and for 

the region—a step toward constitutional democracy. It is a step that just a year ago, 

Iraqis would not have imagined possible. 

The U.N. Secretary General’s Special Advisor, Lakhdar Brahimi, was invited back 

to Iraq by the IGC last week. He will help the Iraqis to determine what sort of transitional Iraqi government will be developed and to prepare for elections at the end 

of this year or early in the next. Creating a democratic government in Iraq will be 
128

an enormous challenge. But Ambassador Bremer, working with the Iraq Governing 

Council and with the United Nations and our coalition partners, is committed to 

success. And when the CPA, funded and directed by the Department of Defense, 

goes out of business on June 30 and the State Department assumes the lead role 

in representing and managing U.S. interests in Iraq, we will carry on that commitment. We are already thoroughly involved. I was just in Baghdad last week meeting 

with Ambassador Bremer, members of the IGC, and talking to some of our troops. 

I know how thoroughly involved we are. And we will all succeed. 

Winning the Peace in Afghanistan 

Mr. Chairman, Afghanistan is another high priority for this Administration. The 

United States is committed to helping build a stable and democratic Afghanistan 

that is free from terror and no longer harbors threats to our security. After we and 

our coalition partners defeated the Taliban government, we faced the daunting task 

of helping the Afghan people rebuild their country. We have demonstrated our commitment to this effort by providing over $3.7 billion in economic and security assistance to Afghanistan since 2001. 

Through our assistance and the assistance of the international community, the 

government of Afghanistan is successfully navigating the transition that began in 

October 2001. Afghanistan adopted a constitution earlier this year and is preparing 

for democratic national elections this summer. With technical assistance from the 

United States, Afghanistan successfully introduced a new stable currency in October 

2002 and is working to improve revenue collection in the provinces. The lives of 

women and girls are improving as women pursue economic and political opportunities and girls return to school. Since 2001, the United States has rehabilitated 205 

schools and 140 health clinics and trained fifteen battalions of the Afghan National 

Army (ANA). Also, President Bush’s commitment to de-mine and repave the entire 

stretch of the Kabul-Kandahar highway was fulfilled. The road had not been functional for over 20 years. What was once a 30-hour journey can now be accomplished 

in 5 or 6 hours. 

While the Afghanistan of today is very different from the Afghanistan of September 2001, there is still much left to accomplish. In the near-term, the United 

States will assist the government of Afghanistan in its preparations for elections 

this summer to ensure that they are free and fair. To demonstrate tangible benefits 

to the Afghan people, we will continue to implement assistance on an accelerated 

basis. The fiscal year 2005 Budget contains $1.2 billion in assistance for Afghanistan that will be focused on education, health, infrastructure, and assistance to the 

ANA, including drawdown authority and Department of Defense ‘‘train and equip’’. 

For example, U.S. assistance efforts will concentrate on rehabilitation and construction of an additional 275 schools and 150 health clinics by June 2004, and complete 

equipping of the fifteen army battalions. The United States will also extend the 

Kabul-Kandahar road to Herat so that people and commerce will be linked East and 

West across Afghanistan with a ground transportation link between three of the 

largest cities. 

Last week, when I was in Kabul to meet with President Karzai and his team, I 

had the chance to visit a voter registration site. I saw how far Afghanistan has progressed, in only two years, along the path to constitutional democracy. I saw also 

clear evidence of the Afghan people’s commitment to continue on that path despite 

the many challenges ahead. I met 9 or 10 women at the site and they knew what 

was at stake in their country. They were eager for the free and fair elections called 

for in the Bonn Agreement and I assured them that America was solidly behind 

them. I told them that as long as they are committed to building a new, democratic 

Afghanistan, we will stand shoulder to shoulder with them. 

Support for Our Coalition Partners 

As part of the war on terrorism, President Bush established a clear policy to work 

with other nations to meet the challenges of defeating terror networks with global 

reach. This commitment extends to the front-line states that have joined us in the 

war on terrorism and to those nations that are key to successful transitions to democracy in Iraq and Afghanistan. 

Our assistance enables countries cooperating closely with the United States to 

prevent future attacks, improve counter-terrorism capabilities and tighten border 

controls. As I indicated earlier, the fiscal year 2005 Budget for International Affairs 

provides more than $5.7 billion for assistance to countries around the world that 

have joined us in the war on terrorism, including Turkey, Jordan, Afghanistan, 

Pakistan, Indonesia and the Philippines. 

U.S. assistance has also resulted in unparalleled law enforcement and intelligence 

cooperation that has destroyed terrorist cells, disrupted terrorist operations and pre-
129

vented attacks. There are many counterterrorism successes in cooperating countries 

and international organizations. For example: 

—Pakistan has apprehended more than 500 al Qaeda terrorists and members of 

the Taliban through the leadership of President Musharraf, stronger border security measures and law enforcement cooperation throughout the country. I 

talked with President Musharraf when I was in Islamabad last week. As you 

know, his military forces were over the weekend hotly engaged with Taliban 

and al Qaida fighters in the border areas. More of the terrorists were being 

killed or captured. Fighting will likely continue. 

—Jordan continues its strong counterterrorism efforts, including arresting two individuals with links to al Qaeda who admitted responsibility for the October 

2002 murder of USAID Foreign Service officer Lawrence Foley in Amman. 

—The North Atlantic Treaty Organization has endorsed an ambitious transformation agenda designed to enhance its capabilities by increasing deployment 

speed and agility to address new threats of terrorism. 

—Colombia has developed a democratic security strategy as a blueprint for waging a unified, aggressive counterterror-counternarcotics campaign against designated foreign terrorist organizations and other illegal, armed groups. 

The United States and its Southeast Asian allies and friends have made significant advances against the regional terrorist organization Jemaah Islamiyah which 

was responsible for the Bali attack in 2002 that killed more than 200 people. In 

early August 2003, an Indonesian court convicted and sentenced to death a key figure in that bombing. 

Since September 11, 2001, 173 countries have issued orders to freeze the assets 

of terrorists. As a result, terror networks have lost access to nearly $200 million in 

more than 1,400 terrorist-related accounts around the world. The World Bank, 

International Monetary Fund and other multilateral development banks have also 

played an important role in this fight by strengthening international defenses 

against terrorist finance. 

While progress has been made attacking terrorist organizations both globally and 

regionally, much work remains to be done. The fiscal year 2005 President’s Budget 

strengthens our financial commitment to our coalition partners to wage the global 

war on terror. Highlights of the President’s request include $700 million for Pakistan to help advance security and economic opportunity for Pakistan’s citizens, including a multi-year educational support program; $461 million for Jordan to increase economic opportunities for Jordanian communities and strengthen Jordan’s 

ability to secure its borders; and $577 million for Colombia to support President 

Uribe’s unified campaign against drugs and terrorism. 

In September 2003, at the United Nations, President Bush said: ‘‘All governments 

that support terror are complicit in a war against civilization. No government 

should ignore the threat of terror, because to look the other way gives terrorists the 

chance to regroup and recruit and prepare. And all nations that fight terror, as if 

the lives of their own people depend on it, will earn the favorable judgment of history.’’ We are helping countries to that judgment. 

Mr. Chairman, one of the aspects of the War on Terrorism that gives us a particular sense of urgency is proliferation of weapons of mass destruction. These terrible weapons are becoming easier to acquire, build, hide, and transport. 

On February 11, President Bush spoke at the National Defense University (NDU) 

and outlined the Administration’s approach to this growing danger. The President 

described how we have worked for years to uncover one particular nefarious network—that of A.Q. Khan. 

Men and women of our own and other intelligence services have done superb and 

often very dangerous work to disclose these operations to the light of day. Now, we 

and our friends and allies are working around the clock to get all the details of this 

network and to shut it down, permanently. 

We know that this network fed nuclear technology to Libya, Iran, and North 

Korea. 

At NDU, President Bush proposed seven measures to strengthen the world’s efforts to prevent the spread of WMD: 

—Expand the Proliferation Security Initiative (PSI) to address more than shipments and transfers; even to take direct action against proliferation networks. 

—Call on all nations to strengthen the laws and international controls that govern 

proliferation, including passing the UNSCR requiring all states to criminalize 

proliferation, enact strict export controls, and secure sensitive materials. 

—Expand our efforts to keep Cold War weapons and other dangerous materials 

out of the hands of terrorists—efforts such as those accomplished under NunnLugar. 
130

—Close the loophole in the Nuclear Nonproliferation Treaty that allows states 

such as Iran to produce nuclear material that can be used to build bombs under 

the cover of civilian nuclear programs. 

—Univeralize the IAEA Additional Protocol. 

—Create a special committee on the IAEA Board of Governors to focus on safeguards and verification. 

—And, finally, disallow countries under investigation for violating nuclear nonproliferation treaties from serving on the IAEA Board of Governors. 

As the President said at NDU, the nexus of terrorists and WMD is a new and 

unique threat. It comes not with ships and fighters and tanks and divisions, but 

clandestinely, in the dark of the night. But the consequences are devastating. No 

President can afford to ignore such a threat. And President Bush will not ignore 

it. 

Expansion of Democracy in the Middle East 

We believe that expanding democracy in the Middle East is critical to eradicating 

international terrorism. But in many nations of the Middle East, democracy is at 

best an unwelcome guest and at worst a total stranger. The United States continues 

to increase its diplomatic and assistance activities in the Middle East to promote 

democratic voices—focusing particularly on women—in the political process, support 

increased accountability in government, assist local efforts to strengthen respect for 

the rule of law, assist independent media, and invest in the next generation of leaders. 

As the President emphasized in his speech last November at the National Endowment for Democracy (NED), reform in the Middle East is of vital importance to the 

future of peace and stability in that region as well as to the national security of 

the United States. As long as freedom and democracy do not flourish in the Middle 

East, resentment and despair will continue to grow—and the region will serve as 

an exporter of violence and terror to free nations. For the United States, promoting 

democracy and freedom in the Middle East is a difficult, yet essential calling. 

There are promising developments upon which to build. The government of Jordan, for example, is committed to accelerating reform. Results include free and fair 

elections, three women holding Cabinet Minister positions for the first time in Jordan’s history, and major investments in education. Positive developments also can 

be found in Morocco, which held parliamentary elections last year that were acclaimed as free, fair and transparent. 

In April 2003, the Administration launched the Middle East Partnership Initiative (MEPI), an intensive inter-agency effort to support political and education reform and economic development in the region. The President continues his commitment by providing $150 million in fiscal year 2005 for these efforts. 

To enhance this USG effort with a key NGO, the President has doubled the NED 

budget to $80 million specifically to create a Greater Middle East Leadership and 

Democracy Initiative. NED is a leader in efforts to strengthen democracy and tolerance around the world through its work with civil society. We want that work to 

flourish. 

As President Bush said in his November speech at NED: ‘‘The United States has 

adopted a new policy, a forward strategy of freedom in the Middle East. This strategy requires the same persistence and energy and idealism we have shown before. 

And it will yield the same results. As in Europe, as in Asia, as in every region of 

the world, the advance of freedom leads to peace.’’ 

Public Diplomacy in the Middle East 

And the advance of freedom is aided decisively by the words of freedom. 

Democracy flourishes with freedom of information and exposure to diverse ideas. 

The President’s fiscal year 2005 Budget promotes expansion of democracy in the 

Middle East by providing public access to information through exchange programs 

and the Middle East Television Network. 

New public diplomacy efforts including the Partnerships for Learning (P4L) and 

Youth Exchange and Study (YES) initiatives have been created to reach a younger 

and more diverse audience through academic and professional exchange programs. 

In fiscal year 2005, the P4L and the YES programs, funded at $61 million, will focus 

more on youth of the Muslim world, specifically targeting non-traditional, non-elite, 

often female and non-English speaking youth. 

U.S. broadcasting initiatives in the Middle East encourage the development of a 

free press in the American tradition and provide Middle Eastern viewers and listeners access to a variety of ideas. The United States revamped its Arabic radio 

broadcasts in 2002 with the introduction of Radio Sawa, which broadcasts to the region twenty-four hours a day. As a result, audience size for our Arabic broadcasting 
131

increased from under 2 percent in 2001 to over 30 percent in 2003. Based on this 

successful model, the United States introduced Radio Farda to broadcast to Iran 

around the clock. Building on this success, the fiscal year 2005 President’s Budget 

Request provides over $70 million for Arabic and Persian radio and television broadcasts to the Middle East. Last month, the United States launched the Middle East 

Television Network, an Arabic language satellite network that will have the capability of reaching millions of viewers and will provide a means for Middle Easterners 

to better understand democracy and free market policies, as well as the United 

States and its people. This network kicked off on February 14 with nine hours per 

day of broadcasting. Today, the broadcasting is 24/7. The network—Al-Hurra, or 

‘‘the Free One’’—reaches 22 countries, including Iraq. President Bush has already 

appeared on the network and I did an interview several weeks ago. 

OUR NEW APPROACH TO GLOBAL PROSPERITY

President Bush’s approach to global economic growth emphasizes proven American values: governing justly, investing in people, and encouraging economic freedom. President Bush has pledged to increase economic engagement with and support for countries that commit to these goals through an ambitious trade agenda 

and new approaches to development assistance focusing on country performance and 

measurable results. 

The Millennium Challenge Account (MCA) 

In February of 2003, we sent the Congress a budget request for the MCA and legislation to authorize the creation of the Millennium Challenge Corporation (MCC), 

the agency designed to support innovative development strategies and to ensure accountability for results. 

The MCC will fund only proposals for grants that have clear, measurable objectives, a sound financial plan and indicators for assessing progress. The Congress appropriated $1 billion for MCA for fiscal year 2004. The fiscal year 2005 budget request of $2.5 billion makes a significant second year increase to the 

MCA and paves the way to reaching the President’s commitment of $5 billion in fiscal year 2006. 

Trade Promotion Authority (TPA) 

President Bush recognizes that the fastest, surest way to move from poverty to 

prosperity is through expanded and freer trade. America and the world benefit from 

free trade. For this reason, one of his first actions upon taking office in 2001 was 

to seek TPA, allowing him to negotiate market-opening agreements with other countries. The President aims to continue vigorously to pursue his free trade agenda in 

order to lift developing countries out of poverty, while creating high-paying job opportunities for America’s workers, businesses, farmers and ranchers and benefiting 

all Americans through lower prices and wider choices. As the President said in 

April, 2001 at the Organization of American States: ‘‘Open trade fuels the engines 

of economic growth that creates new jobs and new income. It applies the power of 

markets to the needs of the poor. It spurs the process of economic and legal reform. 

It helps dismantle protectionist bureaucracies that stifle incentive and invite corruption. And open trade reinforces the habits of liberty that sustain democracy over the 

long term.’’

Since receiving TPA in 2002, the President has made good on his promise, completing free trade agreements with Chile and Singapore, which were quickly approved by Congress and went into effect on January 1. We have recently completed 

negotiations with five Central American countries on the Central America Free 

Trade Agreement (CAFTA) and our work to bring the Dominican Republic (DR) into 

that agreement concluded successfully on March 14 with the signing of an FTA with 

that country. Now, the DR can join CAFTA. In February, we announced the conclusion of an agreement with Australia. More recently, negotiations have been completed with Morocco and an agreement announced, and negotiations are ongoing 

with the Southern African Customs Union (SACU), Bahrain, and on the Free Trade 

Agreement of the Americas (FTAA). We are concluding comprehensive agreements 

that include market access for goods and services, strong intellectual property and 

investment provisions, and include commitments for strong environmental and labor 

protections by our partners. These arrangements benefit Americans and our trading 

partners. 

Building on this significant progress, the President intends to launch free trade 

negotiations with Thailand, Panama, and the Andean countries of Colombia, Ecuador, Bolivia and Peru. The President has also stated his vision for a Middle East 

Free Trade Area by 2013, to ignite economic growth and expand opportunity in this 

critical region. Finally, the President is committed to wrapping up successfully the 
132

World Trade Organization’s Doha agenda. The United States has taken the lead in 

re-energizing these negotiations following the Cancun Ministerial. 

CARING FOR THE WORLD’S MOST VULNERABLE PEOPLE

Emergency Plan for AIDS Relief 

When President Bush took office in January 2001, the HIV/AIDS pandemic was 

at an all time high, with the estimated number of adults and children living with 

HIV/AIDS globally at 37 million, with 68 percent of those individuals living in subSaharan Africa. From fiscal years 1993 to 2001 the total U.S. Government global 

AIDS budget was about $1.9 billion. As part of the Emergency Plan for AIDS Relief, 

the President proposed $2 billion in fiscal year 2004 as the first installment of a 

five-year, $15 billion initiative, surpassing nine years of funding in a single year. 

The President’s Emergency Plan for AIDS Relief represents the single largest international public health initiative ever attempted to defeat a disease. The President’s 

Plan targets an unprecedented level of assistance to the 14 most afflicted countries 

in Africa and the Caribbean to wage and win the war against HIV/AIDS. In addition, programs will continue in 75 other countries. 

By 2008, we believe the President’s Plan will prevent seven million new infections, treat two million HIV-infected people, and care for 10 million HIV-infected individuals and those orphaned by AIDS in Botswana, Cote d’Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, 

Uganda and Zambia. 

Announced during President Bush’s State of the Union address on January 28, 

2003, the Emergency Plan provides $15 billion over five years for those countries 

hardest hit by the pandemic, including $1 billion for the Global Fund to Fight AIDS, 

Tuberculosis and Malaria. The fiscal year 2005 Budget provides $2.8 billion from 

State, USAID, and the Department of Health and Human Services (HHS) to combat 

global AIDS, more than tripling funding for international HIV/AIDS since the President took office. 

Over the past year, we have worked with the Congress to pass legislation laying 

the groundwork for this effort and to appoint a senior official at the State Department to coordinate all U.S. Government international HIV/AIDS activities. Ambassador Randall Tobias has been confirmed by Congress and has now taken steps to 

assure immediate relief to the selected countries. 

Earlier this month, Ambassador Tobias, Secretary Thompson, USAID Administrator Andrew Natsios, and I rolled out the strategy for this plan and announced 

the first dispensation of dollars—$350 million in contracts to some of the NGOs and 

PVOs who will be carrying out the fight at the grass-roots level. It was a thrilling 

moment, I can assure you. 

As a crucial next step, the fiscal year 2005 Budget Request expands on the Emergency Plan. By working together as a highly collaborative team, and placing primary ownership of these efforts in the hands of the countries that we are helping—

just as you will recall the Marshall Plan did so successfully in post-WWII Europe—

the Department of State, USAID and HHS can use significantly increased resources 

quickly and effectively to achieve the President’s ambitious goals in the fight against 

global AIDS. 

Mr. Chairman, President Bush summed it up this way in April of last year, 

‘‘There are only two possible responses to suffering on this scale. We can turn our 

eyes away in resignation and despair, or we can take decisive, historic action to turn 

the tide against this disease and give the hope of life to millions who need our help 

now. The United States of America chooses the path of action and the path of hope.’’ 

These dollars put us squarely on that path. 

Emergency Humanitarian Assistance—Helping Others in Need 

The President’s Budget Request reflects a continued commitment to humanitarian 

assistance. The request maintains U.S. leadership in providing food and non-food assistance to refugees, internally displaced persons, and other vulnerable people in all 

corners of the world. In addition, the budget reflects the findings of the Program 

Assessment Rating Tool (PART) evaluations completed for the United Nations High 

Commissioner for Refugees and for USAID’s Public Law 480 Title II international 

food assistance, which confirmed a clear purpose for these programs. 

In 2003, the Administration provided funding to several international and nongovernmental organizations to assist nearly 200,000 Angolan refugees and internally displaced persons return home after decades of civil war. 

In an Ethiopia enveloped by drought, the Administration led international efforts 

to prevent widespread famine among 13 million vulnerable people, providing over 

one million metric tons of emergency food aid (valued at nearly half a billion dollars) 
133

to the World Food Program and NGOs, funding immunizations for weakened children, and supplying emergency seeds to farmers. 

In Sudan, the Administration worked with the United Nations and the Government of Sudan so that vital assistance could be delivered to the Sudanese people. 

This year the United States will provide about $210 million in vital assistance to 

the people in the south, including approximately 125,000 metric tons (valued at 

nearly $115 million) in food aid, as well as non-food assistance, such as sanitation 

and water. We anticipate that a comprehensive peace agreement in Sudan will allow 

us to expand significantly our development assistance to help the Sudanese people 

in effecting a long-awaited recovery following decades of civil war. The fiscal year 

2005 Budget includes $436 million in humanitarian and development, economic, and 

security assistance funding, much of which will be contingent upon a peace settlement between the government and the south. 

The fiscal year 2005 Budget ensures that the Administration can continue to respond quickly and appropriately to victims of conflict and natural disasters and to 

help those in greatest need of food, shelter, health care and other essential assistance, including those in areas starting to recover from conflict and war, such as Liberia. In particular, the budget requests funding for a flexible account to give the 

President the ability to respond to unforeseen emergency needs, the Emergency 

Fund for Complex Foreign Crises, funded at $100 million. 

Now, Mr. Chairman, let me turn to the State Department operations portion of 

the President’s Budget Request which, as you will recall, totals $8.4 billion. 

KEEPING AMERICANS SAFE AT HOME AND ABROAD

The State Department has the responsibility to protect more than 60,000 U.S. 

Government employees who work in embassies and consulates abroad. Since the 

1998 bombings of two U.S. embassies in East Africa, the State Department has improved physical security overseas; however, as many of you are well aware, many 

posts are still not secure enough to withstand terrorist attacks and other dangers. 

To correct this problem, in 1999, the State Department launched a security upgrade 

and construction program to begin to address requirements in our more than 260 

embassies and consulates. 

Capital Security Cost Sharing Program 

Working with the Congress, President Bush has accelerated the pace of improving 

and building new secure facilities. Moreover, we have reorganized the Overseas 

Buildings Office to manage the effort with speed, efficiency, and effectiveness. Within the budget, we are launching a plan to replace the remaining 150 embassies and 

consulates that do not meet current security standards over the next 14 years, for 

a total cost of $17.5 billion. To fund construction of these new embassy compounds, 

we will begin the Capital Security Cost Sharing (CSCS) Program in fiscal year 2005. 

We will implement this program in phases over the next five years. 

Each agency with staff overseas will contribute annually towards construction of 

the new facilities based on the number of positions and the type of space they occupy. We arrived at the cost shares in the fiscal year 2005 President’s Budget Request in consultations with each agency and the State Department’s Overseas Buildings Office. 

CSCS is also a major component of the President’s Management Agenda Initiative 

on Rightsizing. Along with securing facilities, we have focused on assuring that 

overseas staffing is deployed where they are most needed to serve U.S. interests. 

As agencies assess the real cost of maintaining staff overseas, they will adjust their 

overseas staffing levels. In this way, new embassies will be built to suit appropriate 

staffing levels. The program is already producing rightsizing results. Agencies are 

taking steps to eliminate unfilled positions from their books to reduce any unnecessary CSCS charges, which in turn is leading to smaller embassy construction requirements. 

Border Security 

Prior to September 11, 2001, the State Department’s consular officers focused primarily on screening applicants based on whether they intended to work or reside 

legally in the United States. In deciding who should receive a visa, consular officers 

relied on State Department information systems as the primary basis for identifying 

potential terrorists. The State Department gave overseas consular officers the discretion to determine the level of scrutiny that should be applied to visa applications 

and encouraged the streamlining of procedures. 

Today, Consular Affairs at the State Department, working with both Customs and 

Border Protection and the Bureau of Citizenship and Immigration Services at the 
134

Department of Homeland Security, are cooperating to achieve our goals more effectively by sharing information and integrating information systems. 

The Department of State has invested substantial time, money, and effort in revamping its visa and passport process as well as its provision of American Citizen 

Services. The Department has more than doubled its database holdings on individuals who should not be issued visas, increased training for all consular officers, established special programs to vet applications more comprehensively, increased the 

number of skilled, American staff working in consular sections overseas, and improved data-sharing among agencies. The State Department, along with the Department of Homeland Security, is currently developing biometrics, such as fingerprints, 

digital photographs or iris scans, for both visas and passports in order to fulfill requirements of the Patriot and Border Security Acts and the International Civil Aviation Organization. 

As a part of the State Department’s efforts to screen visa applicants more effectively, and in particular to ensure that a suspected terrorist does not receive a visa 

to enter the United States, we will be an active partner in the Terrorist Screening 

Center (TSC). The TSC, established in December 2003, will maintain a single, consolidated watchlist of terrorist suspects to be shared with Federal, state, local and 

private entities in accordance with applicable law. The Department of State will also 

participate in the Terrorist Threat Integration Center (TTIC), a joint-effort aimed 

at reducing the potential of intelligence gaps domestically and abroad. 

To achieve our goal of secure borders and open doors, in fiscal year 2005 the State 

Department plans to expand the use of biometrics to improve security in the visa 

and passport processes; more effectively fill gaps worldwide by hiring people with 

specific skills including language expertise; improve and maintain all consular systems; and more broadly expand data sharing with all agencies with border control 

or immigration related responsibilities. The budget in fiscal year 2005 includes $175 

million for biometric projects including photographs and fingerprints to comply with 

Border Security and Patriot Acts. 

The Border Security program underwent a PART analysis in the development of 

the fiscal year 2004 and fiscal year 2005 budgets and this budget request reflects 

the results of those analyses. The Department is moving ahead on program management improvements that clearly link to the Department of Homeland Security goals 

related to visa policy. 

The Critical Importance of Diplomatic Readiness 

You will recall, Mr. Chairman, members of the subcommittee, that we created the 

Diplomatic Readiness Initiative (DRI) in 2002 to address staffing and training gaps 

that had become very adverse to the conduct of America’s diplomacy. The goal of 

DRI was to hire 1,158 new foreign and civil service employees over a three-year period. These new hires, the first over-attrition hires in years, would allow us to provide training opportunities for our people and greatly improve the Department’s 

ability to respond to crises and emerging priorities overseas and at critical domestic 

locations. To bring these new people on board—and to select the best men and 

women possible—we significantly improved Department hiring processes, to include 

recruiting personnel from more diverse experience and cultural backgrounds and 

people who could fill critical skill gaps. In the process, we broke records in recruiting and thus had the best and the brightest from which to select. The Department 

of State will be reaping the benefits from this process for many years to come. We 

also created new mandatory leadership and management training, enhanced public 

diplomacy and consular training, and made significant increases in the amount of 

language training available for new Foreign Service Officers. DRI hiring has supported the Department’s efforts in responding to crises since September 11th and 

provided the additional resources necessary to staff overseas locations that truly 

represent the front line in the war on terrorism. 

Some of these positions, however, are being diverted to support new requirements 

not envisioned by DRI, such as permanently staffing new embassies in Afghanistan, 

Iraq, Sudan, and possibly in Tripoli. Because of this, the fiscal year 2005 Budget 

Request provides additional resources to continue our DRI commitment. 

DRI has allowed the Department to focus on recruiting, training and retaining a 

high quality work force, sized to requirements that can respond more flexibly to the 

dynamic and demanding world in which we live. We need to continue it. 

USAID has begun a similar effort to address gaps in staffing in technical skills, 

calling it the Development Readiness Initiative. USAID plans to hire approximately 

40 Foreign Service Officers in fiscal year 2004 under this initiative. This Budget Request includes authority for USAID to hire up to 50 additional Foreign Service Officers in fiscal year 2005, in order to fill critical skill gaps identified through a comprehensive workforce analysis. 
135

Information Technology 

Mr. Chairman, with your help and support, last year was a watershed year for 

the Department of State in the field of Information Technology. Shortly after assuming my position, I identified Information Technology as one of my highest priorities. 

Our objective was faster, smarter, simpler, and more effective diplomacy at every 

level. Three years later, we now have worldwide Internet access on desktops, as well 

as classified communications at every appropriate post. This has changed the way 

the State Department does business and could not have been accomplished without 

your support and that of the other members of the subcommittee, as well as the 

full Appropriations Committee. As we move forward with our efforts to replace our 

decades old cable system with the SMART program, the Committee’s continued support of our IT modernization efforts will be as important as ever. 

Soft Target Protection 

Mr. Chairman, I also want to tell you that your subcommittee’s leadership in ensuring the protection of so-called ‘‘overseas soft targets’’ including overseas American schools is greatly appreciated. The Department has established a three-phased, 

multi-year program to provide physical security improvements to overseas schools 

attended by the dependents of U.S. government employees and other U.S. citizens. 

Our fiscal year 2005 request includes $27 million for this effort including $10 million for the schools, $5 million to improve security at employee association facilities, 

and $12 million for residential security upgrades. The protection of Americans living 

and working overseas is our highest priority. 

Peacekeeping Operations 

We also appreciate the ongoing support from this Committee for our peacekeeping 

budget. U.N. Peacekeeping Operations in troubled and fragile regions has been and 

remains critical to ensuring that such places are given the stability and time they 

need to work on long-term solutions to their underlying conflicts. UNAMSIL in Sierra Leone, and UNMISET in East Timor have been effective in helping the new 

governments to establish themselves. We also supported peacekeeping missions in 

Liberia and Ivory Coast to assist their fragile transitional governments to implement peace agreements in those war-torn states. Your support in meeting these important needs has been indispensable. We look forward to working with you on helping us meet additional peacekeeping obligations as they emerge. 

CONCLUSION AND QUESTIONS

Mr. Chairman, I have focussed your attention for long enough. There is more in 

the President’s Budget Request for fiscal year 2005; but what I have outlined above 

represents the top priorities for the State Department. I will be pleased to answer 

any questions you have about these priorities or about any other portion of the 

budget request in which you are interested. If I cannot answer the question myself, 

I have a Department full of great people who can; and I will get you an answer for 

the record. 

Thank you.

Senator GREGG. Thank you, Mr. Secretary. We will try to be 

helpful. There are so many issues that we would like to take up, 

and I know each of us has a series of areas. Let me just do a couple 

and then turn it over to Senator Hollings and Senator Byrd and 

then we will go around again. 

FAILURE OF CLINTON ADMINISTRATION WITH TERRORISM

The first one is, I think you ought to be given the opportunity 

to respond to what Mr. Clarke said yesterday, although you were 

in Madrid. This committee dealt a great deal with the prior administration on the way it ramped up for terrorism and therefore with 

Mr. Clarke directly and indirectly, and we had some issues which 

are fairly well documented, with the failure of the prior administration to really get its act together and get coordinated. 

One of the big problems we had was the terrible stovepipe approach in the other administration. We tried to set up something 

called the National Domestic Preparedness Office (NDPO), and we 
136

tried to set up a number of major initiatives, a Deputy Attorney 

General to focus activity on terrorism, and quite honestly we ran 

into a lot of resistance and most of it came out of Mr. Clarke’s 

shop, because I think he had much more of a centralized rather 

than cross-fertilization approach. So, I personally have reservations 

about his own track record in this area, but his criticism is there 

and he is a professional in this area. 

However you came into the office of Secretary of State and he 

has stated essentially that this administration did not put a high 

priority on terrorism. It focused primarily on China and Russia and 

the relationship on the Korean peninsula. Of course, the attack on 

the American observer ship, was the first major foreign crisis of 

this administration, and that terrorism was a backburner issue, to 

paraphrase from his viewpoint, once this administration came into 

office. I think you are probably the fairest broker around here, to 

be very honest. I think the American public views you as a straight 

shooter who has seen it all, both as, obviously, the Chairman of the 

Joint Chiefs of Staff and as Secretary of State, and Chairman of 

Joint Chiefs under both Republican and Democratic Presidents. 

TERRORISM—HIGH PRIORITY

So I would be honest in your assessment as a fair broker as to 

what level of interest you folks put into terrorism, what the priority was when you took office as Secretary of State, and do you 

agree with Mr. Clarke’s characterizations? 

Secretary POWELL. No, I do not. Terrorism was an important 

issue for President Bush and for all of us coming in. We were not 

unmindful of the fact that the Cole had just been attacked. We 

were not unmindful of the fact that our Embassies had been blown 

up, and terrorism was a danger. As I testified before the commission the other day, the very first briefing I received during my 

transition period, some 4 days after President Bush announced me, 

was from Mr. Clarke. The other colleagues that he had and that 

were becoming my colleagues, and the outgoing administration 

were involved in intelligence and terrorism. This is not the sign of 

somebody who did not have an interest in terrorism. It was also 

something the President made clear we had to be interested in. 

But you cannot ignore when a China problem comes along or a 

Russia problem. All of these are important issues, and terrorism 

was an important issue. 

I did not have adequate opportunity in my presentation the other 

day to describe all of the things that the State Department was 

doing in the name of the President throughout the spring and summer of 2001 to warn and alert American citizens around the world, 

to warn and alert our Embassies, all the things that Mr. Rumsfeld 

was doing to make sure that our military forces were secure, sending fleets to sea, taking our ships and our other military forces out 

of areas of vulnerability. The CIA was hard at work. We saw the 

threat. We did not ignore the threat. We responded to the threat. 

The suggestion, however, that there was one magic moment or 

one magic bullet or one moment in time when you could connect 

two dots and say, we know that these individuals are in our country and we know that they are planning to fly planes into the 

World Trade Center is not right. We never connected the dots like 
137

that, and I am not sure that except in hindsight could one have 

seen that the dots might have been connected in that way. So I 

think all of us were working hard. 

The question about, you did not have enough meetings, I had all 

kinds of meetings in the Department. But the whole thing did not 

rest on all the principals getting together every day to talk to one 

another or to stare at one another. You do that when something 

is unfolding in a crisis atmosphere, as Mr. Clarke makes reference 

to, just before the millennium Y2K period. That is different. That 

is when you were in a real-time mode and you were expecting 

something to happen over New Year’s Eve Y2K. 

But I can tell you that the President was interested in this. He 

gave instructions to the chiefs of mission. The President sends a 

letter to every Ambassador who is taking over as a chief of mission, 

and one of the elements in that letter was, you are responsible for 

the security of your Embassy. I was charged by the President to 

work with those Ambassadors. 

We did not see, to the best of my knowledge and you have heard 

from Mr. Tenet, and the FBI will be presenting before the commission next week, we did not see enough information to say that we 

knew that there was a threat already inside the country, nor did 

I see in my first several months until 9/11 came along, those first 

7 months—the previous administration had 7, 8 years. But in our 

first 7 months I never saw a case come together that was of sufficient power of persuasion that you could say, we know enough 

about al Qaeda and we know enough about the Taliban that we 

could simply on our own, without getting Pakistan on our side, to 

go and invade Afghanistan and look for Osama bin Laden. It would 

not have been possible without the support and cooperation of the 

countries in the region, Uzbekistan, Pakistan, and not just say 

what we had to work out with the Russians and others in the region. 

So I have thought about this. I have listened to the testimony. 

Mr. Clarke says that he tried to get access to various people in the 

administration. Dr. Rice has responded to this. She was available 

to him. He worked directly for her. There has been a discussion of 

memos sent, memos not sent, e-mails sent, e-mails not sent. I hope 

all of this will be balanced by the commission as they complete 

their work. I will wait for the commission’s final report as opposed 

to daily comments that come from members of the commission in 

the press. 

UPDATE ON IRAQ AND AFGHANISTAN

Senator GREGG. Thank you for that evaluation. You mentioned 

that you have been to Afghanistan and Iraq, and of course, that is 

the future of how we fight terrorism. You said you wanted to give 

us an update on what is going on there. Tell us what your thoughts 

are. 

Secretary POWELL. Yes, sir. Afghanistan, it has been 2 years 

since I was there. I was there shortly after the Taliban was booted 

out, when there was only one telephone available for the whole 

government and money was being moved around by the half-ton in 

order to pay for something. I went back this time and we have a 

functioning government. We have a government that is slowly ex-
138

tending its reach out to the provinces. It is still difficult but it is 

slowly moving in that direction. We have a government that now 

rests on a solid constitution, and we should be proud of our effort 

in making that happen. 

We have buildings going up all over. The Pakistanis were noting 

to me that 95 percent of the capacity of their cement industry has 

been reached because of construction that is taking place next door 

in Afghanistan. They are very delighted with that, of course. We 

have a road that has been rebuilt. We have restored hope to a people, and we have got to stay the course. We have got to stay the 

course with our NATO allies, who are now taking an active role 

under the leadership of NATO for security in Kabul and for putting 

it place more provincial reconstruction teams. I think it is up to 12 

now. 

So Afghanistan has shown a lot of progress over the last 2 years. 

Even though there are problems that remain, we should not sell 

ourselves short on what we have been able to accomplish. This is 

a country that 3 years ago had every woman walking around covered, that had nothing but the most despotic regime imaginable on 

the face of the Earth. That was the home office for al Qaeda and 

the home office for international terrorism. Now it has a government resting on a constitution, rights for the people, people are 

registering to vote. If there are remaining al Qaeda elements in the 

country or along the border with Pakistan, they are running and 

hiding. The remnants of the Taliban are causing trouble but they 

are also running and hiding. 

We have gotten Pakistan to completely reverse its strategy from 

being a supporter of the Taliban to being an enemy of the Taliban; 

losing men in the fight along the border now to go after these remnants. So we have got to stay the course, and because we have created a better life for the Afghan people, we have got to finish the 

job. 

With respect to Iraq, Ambassador Bremer and I spent a long 

time going over the progress that has been made. I see in the future an interim government coming in place, a full constitution 

being written. I see a new national assembly coming into being, a 

new national government coming into being. I see the United Nations getting involved. The major problem is security. Remnants of 

the old regime, terrorists and criminals who are operating inside 

of Iraq, and it is a problem for us, a serious problem. We have got 

to get on top of it. 

But we cannot say that just because we are having this security 

problem that this therefore makes this a mission that should not 

have been undertaken. It was the right mission to be undertaken. 

We have freed 25 million people. We have given them the beginning of a democratic system, and what we have to do now is not 

shrink back from the fight that is ahead of us but to fight this 

fight, fight it well with our friends and allies, and work with the 

Iraqi people who by any poll that anyone has taken, wants us to 

be involved. Wants us to leave, of course, but wants us to help 

them get the kind of country and the kind of system we are talking 

about, and then leave. And create a place, a country that we will 

not be arguing about with respect to weapons of mass destruction, 
139

who will be living in peace with its neighbors. This is a sound objective for us to pursue and we should pursue it. 

STATE BUDGET IN IRAQ

Senator GREGG. One more question and then I will turn to Senator Hollings. On that point, the Coalition Provisional Authority is 

using approximately $1 billion this year, projected to basically try 

to reconstruct Iraq. This gets handed off from the DOD to you on 

July 1, as you mentioned. Yet as we look at the budget that was 

sent up, there does not appear to be any funding to support the 

State Department on this. The question is obvious. 

Secretary POWELL. Yes, there is not a specific line item in 2005. 

We believe that, and Ambassador Bremer and I had very candid 

talks about this because, you are quite right, it becomes the responsibility of the State Department on the first of July. But right 

now we believe that there will be sufficient funds available to the 

Department on the first of July that will carry us through the end 

of the year. 

FUNDS FROM THE DEPARTMENT OF DEFENSE

Senator GREGG. Will they be coming from DOD? 

Secretary POWELL. Yes, the funds that are available to the CPA 

do not suddenly disappear on the first of July. A lot of the things 

that are being done now for the CPA will continue be done for the 

State Department. Just a brief example. The Program Management 

Office that the Department of the Army runs now, that is getting 

policy direction from the CPA as well as from the Department of 

Defense, that the same Program Management Office will continue 

to provide that contracting, administrative fund flow service, but 

now it will be getting its policy direction and its supervision from 

the chief of mission. 

DEPARTMENT OF DEFENSE SHARING WITH STATE

Senator GREGG. Have you ever found the DOD to be very generous about sharing funds with the State Department? 

Secretary POWELL. No, nor has the State Department been very 

generous about sharing funds with DOD. But when both Departments know what they have to do and the President wants done, 

I have found that both Departments over time will what the President wants. In this case, the funds that are going to be used are 

funds that are for this purpose. 

WHO PAYS THE COALITION PROVISIONAL AUTHORITY

Senator GREGG. Will the CPA employees become State employees? Will you be paying them directly or will their payment continue to flow through DOD? 

Secretary POWELL. It will be a combination. Some of them are 

State employees now working within the CPA, and of course, they 

remain on my rolls when we change over to the chief of mission. 

But a lot of people who are there we hope will continue to do their 

work on non-reimbursable details from their Department. I am not 

going to pay the Army Program Management Office. 
140

Senator GREGG. Can we get a projection as to how this is going 

to be handled? 

Secretary POWELL. Yes. 

[The information follows:]

Secretary Powell asked me to respond to your question at his March 25, 2004, 

hearing about how the State Department plans to fund personnel costs as operations transition from the Coalition Provisional Authority (CPA) to U.S. Embassy 

Baghdad. 

We are currently working with our colleagues in the Department of Defense 

(DOD), the CPA, and many other U.S. Government agencies to address this question. 

We plan to establish, by July 1, 2004, a U.S. Ambassador and U.S. Embassy staff 

and U.S. Mission facilities that will house the USG agencies in Iraq serving under 

Chief of Mission authority. The State Department has announced positions for 142 

American employees. On average, the cost to establish a new State Department position overseas is about $350,000. Of course, in Iraq, a number of additional cost 

factors are thrown into the mix that are not considered within this average. 

We do not yet have refined cost estimates for how much the U.S. Mission will cost 

the State Department in fiscal year 2004. Estimates of personnel costs must include 

not only base salaries, but also certain additive costs for being posted in Iraq (e.g., 

allowances and differentials), locally engaged staff costs, travel, and rough order of 

magnitude logistics/life support costs for the currently planned State Department 

staffing. Estimates must also include certain staffing assumptions for provincial 

teams. 

However, as you are aware, the big ticket costs for our Iraq presence will be incurred to provide security, facilities, logistics/life support, and information technology/communications for the U.S. Mission complex. The cost of these requirements 

in fiscal year 2004 will depend on the total size of the U.S. Mission, including USG 

agencies other than State, and the support arrangements now being discussed with 

CPA, DOD, and other agencies. 

As of April 15, ten other agencies have requested a presence in Embassy Baghdad, for a total of 254 American positions. In the long term, we estimate a total of 

350–400 permanently assigned Americans from some 12–15 other agencies will 

serve under the Chief of Mission in Iraq. 

Together with other agencies, we continue to refine plans and budget estimates 

for our operations in Baghdad after June 30. We should soon have more accurate 

estimates to share with you.

Senator GREGG. Because it does seem to us that you are going 

to end up getting the ball handed to you but it will not have any 

air in it. 

Secretary POWELL. We will have air in it, sir. I have Ambassador 

Ricciardone, our Ambassador from Manila has been working this 

for me. He stayed on in Baghdad after I left last week with retired 

General Mick Kicklighter, representing Secretary Rumsfeld, so that 

we can have a smooth baton pass. 

TRANSFER

Senator GREGG. Maybe your staff could brief our staff on how the 

baton pass is coming along. 

Secretary POWELL. Yes, it is coming along. 

Senator GREGG. Senator Hollings. 

ARMED SERVICES WILL NOT GIVE MONEY

Senator HOLLINGS. The Armed Services Committee has already 

provided in law that DOD shall not pay you. Did you know that? 

Secretary POWELL. They shall not——

Senator HOLLINGS. The Armed Services authorization bill, the 

defense authorization bill, there is a proviso in there that they 

shall not pay you. 
141

Secretary POWELL. Shall not pay me? 

Senator HOLLINGS. Any money into the cost sharing program. 

Secretary POWELL. Cost sharing. I thought we were still on Iraq. 

Senator HOLLINGS. That is what I am talking about too. So you 

better get it straightened out. I think we are getting a policy where 

all departments are going to take care of cost sharing and I am 

worried about State Department ending up holding the bag for all 

of these departments. Even though the President, the White House 

has set out that policy and it is understood, we are signing legislation into law that says, none of these monies can be used for cost 

sharing. 

Secretary POWELL. But I do not think that relates directly to 

Iraq. That relates to our worldwide effort to get cost sharing in our 

facilities. 

Senator HOLLINGS. That is right. 

Secretary POWELL. We will push back on that provision of law, 

and maybe some people who are not willing to participate in cost 

sharing will not find that we provide facilities for them. 

CLARKE AND STATE CONNECTION

Senator HOLLINGS. I think you are the gentleman to push back 

on it. Now I was not even going to get into Clarke, but how many 

times did he meet with you? Was he in your loop at the Department of State? 

Secretary POWELL. I saw Mr. Clarke at various meetings that 

were held, interagency fora, whenever the subject of terrorism was 

being discussed or counterterrorism, and we were in the White 

House meetings and Mr. Clarke was there. I know Mr. Clarke very 

well. I have known him for many years. The day he briefed me he 

came over to the Department on the 20th of December with his colleagues at my invitation. 

CLARKE LACKING

Senator HOLLINGS. And he did brief you on counterterrorism. Did 

you find him wanting in his task as a terrorism czar as they call 

him? 

Secretary POWELL. Wanting in his task? 

Senator HOLLINGS. Yes. 

Secretary POWELL. He knew the subject well. He had been working on the subject for many years. He was engaged in it and he 

was pushing it. But I have no reason to believe that he was not 

able to press his case to his immediate supervisors in the White 

House. 

Senator HOLLINGS. But you could not know. 

Secretary POWELL. I cannot tell you what he did day to day in 

the White House. 

Senator HOLLINGS. You cannot tell me what went on with him 

and Condoleezza Rice and the National Security—you are over at 

the Department of State. 

Secretary POWELL. Yes. 
142

SECRETARY WITNESS CLARKE

Senator HOLLINGS. I love the effort here, because you do have 

the credibility. I agree with the distinguished chairman that you 

have got credibility with us all. It is nice to try to superimpose your 

understanding and everything else about this situation with the 

Clarke matter, but in truth you are not a witness about all of that, 

are you? 

Secretary POWELL. I am a witness to the extent that I participated in discussions on terrorism and counterterrorism matters, 

and my Department and people working for me participated in this 

on a very, very regular basis, and interacted on a regular basis 

with Mr. Clarke. It is not just principals meetings that were being 

held, but counterterrorism security group meetings were held on a 

regular basis. My intelligence officials, I have my own intelligence 

bureau, I have my own counterterrorism coordinator in the Department, and they all worked on a regular basis with Mr. Clarke and 

with the CIA and with the FBI. That is why whenever the threat 

level was modified, it went up or went down, it was a matter of 

immediate interest to us. We put out warnings and advisories. We 

sometimes told Embassies to close down for a couple days. We responded on a constant, continuous basis to the threat information 

that we had. 

Senator HOLLINGS. I am totally familiar with your intelligence 

operation because some people have questioned it. But I investigated it in 1954 when it was run by Scott MacLeod and Park 

Armstrong. They were the individuals in the Department of State. 

Be that as it may, I want to commend you—we were together 

Friday night in Islamabad and you really did the country credit in 

your little presentation at that dinner. We were very proud of you, 

and later on on CNN going into it that night. 

Secretary POWELL. Thank you, Senator. 

Senator HOLLINGS. With relation, and that is why I am asking 

on Afghanistan. You take Iraq and you take Afghanistan, Afghanistan has got 4 million more people than Iraq. And different than 

Iraq, we have got the people with us. They are solid with us in Afghanistan. You got the Taliban there, but the people are with us. 

We have got a history of having helped defeat the Soviets and so 

they are glad to have us. Specifically when they tell us about weapons and cache of weapons and any kind of munitions and everything else, we go there and find it. In Iraq, we have got 11,000 

leads and come up dry on 11,000 leads with nothing. 

MONEY TO AFGHANISTAN

We have got NATO there in Afghanistan and we do not have 

NATO or really an alliance in Iraq. I cannot, for the life of me 

watching and listening and working with both of them, here we 

have got over $100 billion, they say $125 billion on Iraq. I know 

they requested only $1.2 billion for Afghanistan and we got it up 

to $2 billion. And that was the big meeting that we had with your 

folks, with the Ambassador and all of his folks, even with Karzai 

and everyone else. They just needed more help. The opportunities 

were galore. The AID fellow was slipping me one card with $600 
143

million and all. It just seemed to me that we were not following 

through. 

Specifically, I want you to comment on it and see if you cannot 

help it. Let us get right to helicopters. And I will name the gentleman, General Stone. General Stone, he came on board last June 

and they had no attack operations whatsoever. It took him until 

about September and October to train them, and the first one they 

pulled off was in the end of November, December. Now as you and 

I both know, they are doing darn good up there on the border. They 

are putting their lives on the line and everything else like that. 

We were told with respect to helicopters they had yet to arrive. 

He says, you know my word is my success out here. If I cannot give 

my word and follow through with it, he says, I am nothing. I told 

him back in September, and in fact the contractor has already been 

manufacturing the helicopters and everything else of that kind, but 

the State Department has not authorized the Defense Department 

or the Defense Department—I never could get it exactly straight, 

but there is some snarl in the bureaucracy. When you and I were 

there they did not have any, and the next say, on Saturday they 

brought over a couple of them from Nepal so they could make some 

raids. 

So here, 21⁄2 years later we have yet to equip them with night 

goggles. They said they were on the way. But I am 21⁄2 years behind looking for Osama and I am finally getting some operations, 

and I still do not have the helicopters, and you can help us there. 

And as you indicate with that election coming off, we ought to 

be putting way more in the National Endowment for Democracy. 

We got it up to $30 billion and then we added another $60 billion 

and everything else, but relatively nothing in Afghanistan. 

I learned with the foreign minister in Tunis, because we took 

that in World War II, and I was amazed coming out of Morocco 

where they had 65 percent illiteracy, they had 65 percent literacy 

in Tunis, 80 percent homeownership and everything else of that 

kind. The foreign minister said, the secret, Senator, is let the 

women vote. In Muslim countries, you let the women vote, they 

want good schools, they want good homes. Karzai is doing just as 

you have attested, getting the women to participate in that September election. But he does not have the money to follow through 

and everything else of that kind. 

We are pennypinching. We are just throwing, like you say, the 

largest State Department facility in history, almost $900 billion to 

go into Baghdad where the jury is out. I am not as sanguine as you 

are. I am worried about it. 

PUTTING MORE AID IN AFGHANISTAN

But we know, and you and I both agree on Afghanistan, but let 

us put the money to it. Karzai needs about $5 billion to really follow through. General Jones, as you know, the commander of NATO 

says, one, two, three, he will have three areas secured by September and the fourth area where the Taliban is, there are about 

1,300 there and he can get rid of those by the end of the year. So 

we are on course. I am very hopeful about Afghanistan. Like I saw, 

the jury is out on the other. That is one of the main things. I have 
144

got two or three other questions, but if you would like to comment——

Secretary POWELL. Let me just touch on a few, if I may, Senator. 

With respect to Pakistan, we are working the helicopter issue. 

They need more helicopter capacity in that part of the tribal areas. 

On night vision goggles, when we were there last week they had 

not——

Senator HOLLINGS. They had not arrived. 

Secretary POWELL. They had not signed the letter of agreement 

(LOA). They are working on it. 

Senator HOLLINGS. Whatever the snarl is, good God, you and I 

are trying to get Osama for 21⁄2 years and we just had not signed 

the papers to get——

Secretary POWELL. No, they had not signed the LOA. 

Senator HOLLINGS. They had not signed or whatever it is. 

Secretary POWELL. It is being worked now. 

One other indicator of how things are going in Afghanistan, and 

we should not dismiss the fact that this is an example of what we 

can do if we stick with it, and it is an example that might apply 

to Iraq, 3 million refugees have come home from the largest refugee 

population in the world. Three million people who are being accommodated, slowly but surely, but they will be accommodated. 

With respect to NATO in Afghanistan, I think ultimately there 

will be a NATO role in Iraq as well as an alliance. But most of the 

nations of NATO are already involved in Iraq as part of our coalition efforts. We should not dismiss that. So they have expressed 

their support for what we are trying to do. 

There is a difference in the funding that has been made available 

to Afghanistan and the funding that is made available to Iraq, but 

I think we have determined that our needs in Iraq are far greater 

than the needs in Afghanistan, even if we had double or triple the 

amount available. 

AFGHANISTAN OVER IRAQ

Senator HOLLINGS. The opportunity is greater in Afghanistan. 

The needs are greater in Iraq. You and I agree. But let us take the 

opportunity that is there where you put just—the President has 

asked for $1.2 billion, for God’s sake, and hundreds of millions over 

there for the needs in Iraq. But here are the opportunities. You 

could take $20 million and put in what we call a VOIP, a voice over 

Internet provider, and we could get the Internet going and communications going and we could have that by the end of the year if 

you got a good contractor in there, and then we would have communications in a friendly country where they like us, they support 

us, they support NATO and everything else, and they are working 

with us to try to get rid of the Taliban. That is an opportunity. 

Secretary POWELL. The only other thing I would mention is, as 

you know, we have asked for doubling of the NED funds this year. 

Senator HOLLINGS. In Iraq. 

Secretary POWELL. No, overall. The overall account, we have 

asked for a doubling of the National Endowment for Democracy 

(NED). 
145

And I congratulate the Tunisians for what they have done with 

respect to literacy. That is what we would like to see in all these 

other places as well. 

Senator HOLLINGS. Let me yield. 

Senator GREGG. Senator Byrd. 

Senator BYRD. Thank you, Mr. Chairman. 

Mr. Secretary, I am an ex-officio member of this committee. I 

take this opportunity to thank the chairman and the ranking member of this subcommittee. They are very learned and experienced, 

dedicated members of the Appropriations Committee. I also want 

to thank you for your long service to your country. I have observed 

your service from my vantage point of several positions going back 

over a number of years, and I share the encomiums that have been 

expressed already by the chairman and the ranking member. 

There has been some discussion here about foreign aid and the 

Pentagon. Press reports indicate that the Pentagon will continue to 

handle foreign aid in Iraq even after a new U.S. Embassy is established on July 1, 2004. I never understood why the CPA should be 

under the control of the Defense Department in the first place. 

DOD is responsible for fighting wars and protecting national security. Getting the Pentagon into the foreign aid business is a mistake, and I have been fighting that, and I have been fairly effective 

as the ranking member and as the chairman from time to time of 

the Appropriations Committee of the Senate, but not in the case of 

Iraq. I have been opposed to shifting monies over to the Defense 

Department, money for foreign aid. It distracts the Department 

from its core mission. I am talking about the Defense Department 

now. 

Moreover, in every major postwar situation during the last 50 

years, the State Department and USAID have been in charge of reconstruction efforts. Even in the case of Vietnam where the war 

was still being fought, the State Department and USAID were primarily in charge of economic and development assistance efforts. 

After June 30, the case for the State Department to manage the 

aid will be even more compelling. There will be an Iraqi government, there will be a U.S. mission in Iraq. I cannot understand 

why the Defense Department will still be in the business of managing foreign aid. 

WHY DOES THE DEPARTMENT OF DEFENSE FUND THE COALITION

PROVISIONAL AUTHORITY

You are a former chairman of the Joint Chiefs of Staff. Should 

we not be getting the Defense Department out of the foreign aid 

business and letting the State Department do the job that it is supposed to do? 

Secretary POWELL. Mr. Chairman, a couple of observations. The 

Defense Department is superb at fighting wars, but they also have 

a record of dealing with the situation that one finds in a country 

in the immediate aftermath of a conflict. We all can remember very 

well General MacArthur in Japan after World War II and military 

officers in Germany after World War II until such time as we were 

able to transition over to other agencies of government. 

In the case of Iraq, it was logical and made sense that the Defense Department should be prepared for the immediate aftermath 
146

of the war and to be responsible for the country as it is being stabilized and as the reconstruction effort got underway. But it was 

always anticipated that once a point had been reached when we 

are ready to return sovereignty and we were ready to continue with 

the reconstruction effort, it would all transfer over to the chief of 

mission, the Ambassador and the State Department. That is on 

track. 

Even so, during this period where Defense has had the direct responsibility for CPA, USAID has been intimately involved. We have 

a very large USAID mission there, contracting for and undertaking 

reconstruction efforts. In fact they have been the bulk of the reconstruction efforts. 

On the first of July when this transfers over, if we are able to 

keep that schedule, and I hope and think we will be able to keep 

that schedule, everything comes under the chief of mission. So you 

might still, after that point, have an Army Program Management 

Office for the simple reason that the State Department is not 

equipped to program manage the sums of money that are going to 

be available from the supplemental. So I want that Army Program 

Management Office to contribute to provide contracting support, all 

the other things required to handle that sum of money. 

What will change is that they will get all policy direction and all 

instructions will come from the chief of mission, the Ambassador, 

who will work for me in the name of the President. He ultimately 

works for the President. 

When I talk to Secretary Rumsfeld and Mr. Bremer about this, 

they all understand this. As I said to Secretary Rumsfeld in a conversation we had last week to make sure there is no confusion, 

there is not any confusion between us, on first of July, anybody 

who is doing things that belong to the Pentagon now becomes a 

supporting organization to the chief of mission and to the State Department. There are some things that they do very, very well and 

it would be not wise of the State Department to say, we do not 

want you to do this anymore because you belong to the Pentagon. 

We want you to continue to do it, but you will be doing it under 

the authority of the chief of mission, and when you need policy 

guidance as to whether a dollar should go here or go there, or 

whether this project is approved or that project is approved, that 

decision will come from the chief of mission reporting to the State 

Department. And the State Department back in Washington will, 

of course, discuss this on an interagency basis with all relevant 

agencies in the Government and we will get our overall direction 

from the President. 

Senator BYRD. Here, Mr. Secretary, in my hands I hold two different declassified versions of the national intelligence estimate on 

Iraq. Now I read from a version that was released in July 2003 

after the war. This passage is part of the dissenting view of the 

State Department’s Bureau of Intelligence and Research. Here is 

what it says.

‘‘The Assistant Secretary of State for Intelligence and Research believes that Saddam continues to want nuclear weapons and that available evidence indicates that 

Baghdad is pursuing at least a limited effort to maintain and acquire nuclear weapons related capability. The activities we have detected do not, however, add up to 

a compelling case that Iraq is currently pursuing what INR would consider to be 

an integrated and comprehensive approach to acquire nuclear weapons. Iraq may 
147

be doing so, but INR considers the available evidence inadequate to support such 

a judgment. 

‘‘Lacking persuasive evidence that Baghdad has launched a coherent effort to reconstitute its nuclear weapons program, INR is unwilling to speculate that such an 

effort began soon after the departure of U.N. inspectors or to project a timeline for 

the completion of activities it does not now see happening. As a result, INR is unable to predict when Iraq could acquire a nuclear device or weapon.’’

Secretary POWELL. Sir, what was the date you said that was, 

July? 

Senator BYRD. This is the declassified version of the national intelligence estimate on Iraq. This version was released in July 2003 

after the war. It is the declassified version. 

Also, here is the declassified version of the national intelligence 

estimate on Iraq that was released in October 2002. That was 

when the Senate of the United States did the most shameful thing 

that it has done. It washed its hands of its responsibility to declare 

war, and it shifted that constitutional power to the President of the 

United States, to one man, to declare war, to decide when to declare war, and how and when to use the military. 

This is the declassified version of the national intelligence estimate on Iraq that was released in October 2002. That was when 

our Senators were misled into casting a vote to declare war, to shift 

that power to one man to declare war. This version was released 

in October 2002, before the war. 

I looked through every page of this version, and the State Department’s dissenting views from which I just read have been omitted from this version. In other words, the intelligence views that 

did not agree, the intelligence views from your Department, Mr. 

Secretary, that did not agree with the White House’s political agenda were cut out in the version released before the war. They were 

cut out. 

Let me read just one sentence in the State Department’s alternative views of Iraq’s nuclear weapons. One sentence. ‘‘The activities we have detected do not, however, add up to a compelling case 

that Iraq is currently pursuing what INR would consider to be an 

integrated and comprehensive approach to acquire nuclear weapons.’’ That language was left out at the time when it should have 

been left in for the American people and all to see. 

I know that you have confidence in the Department’s intelligence 

bureau. You just stated it today. You just made reference to the intelligence bureau. You expressed confidence in your own intelligence bureau. And I have confidence in it. Yet, it was left out of 

this document about Iraq’s weapons of mass destruction program. 

So can you explain why the State Department’s views were not 

included in this document right here, that were so important to the 

President’s case to go to war in Iraq? Did it concern you that the 

State Department’s views were left out in the document that was 

released publicly before the war? 

Secretary POWELL. Senator, I do not have the benefit of having 

read or studied those two documents recently. Are you saying these 

are declassified versions of the same document separated in time? 

Senator BYRD. Yes. 

Secretary POWELL. I would have to read what the overall NIE 

said. I know that the presentation I made on the fifth of February 
148

tried to carefully balance and put forward to the international community what we believed about at the time. 

Senator BYRD. There it is. 

Secretary POWELL. I cannot respond to this, Senator, because I 

am not the author of either document, and I do not have an opportunity to read what the basic document says, not just the footnote. 

The fact is that, as the INR footnote says and I am sure the basic 

document says, there was never any doubt that he wanted to have 

nuclear weapons. As I testified before the world on the fifth of February, he was keeping in place the knowledge infrastructure, he 

was keeping in place the capacity to have such weapons, or plans 

to have such weapons, and that there was some indication that he 

was undertaking procurement activities. There was a difference of 

opinion with respect to some of the procurement activities concerning centrifuges, and I made that point when I made my presentation. 

So I think it was clear this is something he wanted to have, but 

there were legitimate differences of opinion as to how far he was 

on the road to having such a capability. One thing that I have 

never doubted is that if he had been released from the pressure of 

the international community or if he had been released from the 

sanctions policy that was in effect, all of which he was trying to 

do, there is no doubt in my mind that he would have gotten right 

back on track with the intellectual infrastructure and with the 

money available to him and with the plans that he had. 

Senator GREGG. Senator, if you have completed that line of questions, could we go on and get to other Senators and then come back 

for another round? 

Senator BYRD. I had not completed it. I will try to be brief. 

Based on the declassified national intelligence estimate, the 

State Department’s assessments on Iraq appear to be more accurate than the assessments of other agencies. But these conclusions 

regarding Iraq’s nuclear weapons program were all but ignored by 

senior administration officials. Vice President Cheney said virtually 

the opposite on national television when he stated, ‘‘we know [Saddam Hussein] has been absolutely devoted to trying to acquire nuclear weapons and we believe he has in fact reconstituted nuclear 

weapons.’’ Mr. Secretary, the world heard from the National Security Advisor who warned of nuclear weapons and mushroom clouds. 

These statements were absolute and unequivocal, but there is no 

mention whatsoever that the nuclear issue was hotly debated within the intelligence community. There is no mention of the questions 

raised by the State Department’s intelligence service. Those concerns did not match the administration’s case for war, so those concerns were brushed aside, brushed over, and brushed away. 

In your view, Mr. Secretary, why were the State Department’s 

conclusions, which ended up being the most accurate of all, ignored 

by other senior officials in the administration, especially the Vice 

President? 

Secretary POWELL. Sir, I cannot track each statement. All I can 

say is that the position put forward by me and with Mr. Tenet behind me, having approved every word of my presentation of the 

fifth of December, reflected the best judgment of the intelligence 

community. Now where there are differences of opinion and nu-
149

ance, you have to make a judgment as to what the preponderance 

of evidence supports, and Mr. Tenet is the one who makes that 

judgment. I think he put a balanced judgment into the overall NIE 

that was available to the Congress, that was available to me as I 

prepared my presentation and which reflected the best judgment of 

the community when I made my presentation. And I had qualifiers 

in my presentation to suggest that there were differences of opinion. 

Senator BYRD. I thank you, Mr. Secretary, and I thank you, Mr. 

Chairman. 

Senator GREGG. It is the tradition of this subcommittee at least 

to recognize the chairman of the full committee whenever he arrives. 

Senator Stevens. 

Senator STEVENS. I would take just a few minutes, if I may. 

There are five hearings this morning. I have tried to visit each one 

of them, Mr. Chairman. 

Mr. Secretary, my first report to you is that my Flat Stanley got 

home all right. 

Secretary POWELL. I am pleased to hear that. 

Senator STEVENS. We met the Secretary in Jordan and he was 

kind enough to——

Secretary POWELL. We are still looking for the digital pictures so 

we can put it up in the State Department. 

Senator STEVENS. I have got one. I hope you know what a Flat 

Stanley is. If you do not have a grandchild——

Secretary POWELL. You do not know what a Flat Stanley is? 

FUNDING FOR THE COALITION PROVISIONAL AUTHORITY POST-JULY

Senator STEVENS. Mr. Secretary, first, I come primarily because 

I am worried about the funding for the CPA in the transition after 

July 1. I do hope that we can get your guidance on what will take 

place there. As I understand it, it is fairly certain that the current 

funding of CPA will run out, and I do not know whether we are 

going to get to the 2005 bill in time to start October 1. There may 

be a gap there. Are you prepared to deal with that? 

Secretary POWELL. We believe and we are still grinding down on 

this, Senator, in conversations with Ambassador Bremer and Secretary Rumsfeld and our two staffs working with each other, we 

will not walk in on the first of July and find no money there. There 

will be sufficient funds that should be able to carry the new operations under the chief of mission through certainly the end of the 

year and the end of 2005. But we really need to drill down on those 

numbers to make sure we have got it right. 

Senator STEVENS. I hope we can visit later on in the year here 

about that funding, because very clearly——

Secretary POWELL. We have got to make sure we have got it 

right. 

Senator STEVENS. Senator Hollings and I have met with members of the provisional council that did urge that we go forward and 

did urge that they want that authority at the end of June, so I 

think we ought to be sure that the funding is there until we do get 

the 2005 bill approved. 
150

Having said that, I know of no one I admire more than the two 

gentlemen on my right here, Senator Byrd and Senator Hollings. 

We disagreed of the vote on the war resolution, and I still maintain 

that based upon the briefings that I had as chairman of the Defense Subcommittee and as President pro tem I had reached the 

same conclusions that you announced, and I still believe that there 

are weapons of mass destruction. We found their airplanes that 

they were not supposed to have after the first gulf war buried in 

the sand. It took us more than 1 year to find them, and we only 

found them by virtue of an informant that told us where they were. 

Now if they can bury airplanes, they can bury weapons of mass destruction. 

READINESS OF IRAQI SELF-DEFENSE FORCES

But in any event, the problem now is winning the peace. I have 

one other question to ask you about the status of the training of 

their self-defense force. I hope that we will call it a self-defense 

force rather than an army because I do not believe they should 

have an army yet. 

But in any event, the self-defense force and the police that will 

take over the major responsibility will be in Baghdad immediately. 

Do you have information on the status of that? Will they be ready 

and are they trained sufficiently to maintain that security to allow 

us to pull our forces out of Baghdad and have them—and the perimeter outside of Baghdad? 

Secretary POWELL. I would like to provide a more fulsome answer from Ambassador Bremer and the Pentagon, but based on 

what I heard last week the training that the State Department is 

responsible for with respect to police is going well. We are producing in two places trained policemen coming through with 8 

weeks of solid training. We have got to make sure they are getting 

equipped with cars, with uniforms, with weapons, with the forensic 

infrastructure that a police department needs. The military is now 

also training police. So I think the volume of trained police will increase very significantly in the months ahead. Getting them fully 

equipped is the challenge. 

With respect to the army, there is an army that is being trained 

now, and battalions are starting to come out of that flow, and I 

think General Abazaid is anxious to speed that up. There is a huge 

amount of effort going into training of the civil defense units as 

they are called, but not civil defense in the old context that we remember, Senator Stevens, but militia—not even militia. A national 

guard is the closest parallel I think that would be located in the 

different regions to provide security. 

Mr. Rumsfeld says that up to 200,000 Iraqi personnel are now 

in uniform helping us with security and putting themselves at risk. 

Eleven of them were killed the other day. So it is not as if they 

are not wanting to go out there and fight for their country and protect their country. But we still have challenges ahead to fully equip 

and train this force in a competent way. 

[The information follows:]

Public security and law enforcement are critical priorities in Iraq and key to the 

new Iraqi government’s ability to establish the institutions necessary to effectively 

govern after June 30th. The Department of State has been providing extensive sup-
151

port to the Coalition Provisional Authority since May of 2003 to achieve these goals. 

These efforts will continue beyond the transition, and will enable the Iraqis to ultimately assume full responsibility for security and public safety. As more and more 

Iraqi police are trained and can take up regular duties, coalition forces will be able 

to reduce their efforts in this area. Due to the neglect and abuses of the past 35 

years, the security forces must be rebuilt, and it will take time before they reach 

full operational capacity and can operate independently. 

It is encouraging to note that there are nearly 200,000 Iraqis working with coalition military forces and providing security for their country, serving as part of institutions such as the New Iraqi Army, Iraq Police Service, Border and Customs, and 

the Iraq Civil Defense Corp (ICDC). 

The Iraqi Civil Defense Corps—which is similar to an internal self-defense force—

is supporting Coalition operations throughout Iraq. Approximately 35,000 troops in 

36 ICDC battalions are trained, deployed, and operating side-by-side with Coalition 

companies and battalions. CJTF–7 plans to stand up 9 more battalions by June, 

bringing the total number of ICDC to about 41,000 personnel either on duty or in 

training. ICDC training should be completed by August. In the Baghdad area, there 

are currently 6,300 trained and equipped ICDC troops. They are fully integrated 

into the operations of 1 Armored Division, which is assigned to the Baghdad area 

of responsibility. 

Four battalions of the Iraqi Armed Forces have completed recruit training. The 

fifth battalion will enter training in mid-May, and by October we expect to have 27 

battalions of IAF trained and equipped. Their mission will be defense against external threats. 

With respect to the police, the CPA has determined that an Iraq Police Service 

(IPS) of approximately 75,000 personnel will be needed, and in order to reach this 

number, over 35,000 new recruits must be selected and trained. The Bureau for 

International Narcotics and Law Enforcement Affairs (INL) is funding necessary 

construction and renovations at a site offered in Jordan for the training, which 

began in November 2003. The training program consists of 8 weeks of intensive 

basic policing skills training that stresses modern, democratically based policing 

methods under the instruction of up to 400 United States and other international 

police instructors trained to deliver the course. 

With INL funding, the curriculum for this training was developed by the Department of Justice International Criminal Investigative Training Assistance Program 

(ICITAP), and is based largely on the successful model used in Kosovo and other 

post-conflict areas. In a few months, the Jordan site will be at full capacity, and 

will be able to support up to 3,000 recruits and 1,000 instructors and staff at any 

given time. 

As follow-on to the basic training, recruits will then complete a structured fieldtraining program over a twenty-four week period administered by International Police Advisors who will focus on the practical application of the course work and will 

further develop their skills in core policing areas. So far, nearly 1,500 Iraqi police 

recruits have graduated from basic skills training and are deployed back at home. 

In addition, there are approximately 2,300 recruits in training in Jordan and Iraq. 

ICITAP has also developed a three week Transition and Integration Program 

(TIP) for delivery to the approximately 46,000 existing IPS personnel. The program 

focuses on international standards of human rights, modern police patrol procedures, the applicable Iraqi criminal laws and firearms proficiency. This course is designed to facilitate a change in outlook, behavior, action and activities of all Iraqi 

police regardless of assignment or rank. 

This course is being conducted country wide and has been prioritized to be delivered to those officers who will function as field training officers to the new recruits 

who will soon be graduating from basic training. The delivery of this course will continue until all existing IPS officers have successfully completed this training. So far, 

over 10,000 Iraqi police have received this training. 

The CPA training plan also calls for further development of three police academies in Iraq—in Baghdad, Arbil and Basra, to also deliver the 8-week basic course. 

These three facilities, when fully renovated, will, together be able to train approximately 2,000 students at any one time. One hundred Iraqi police trainers have already been given a ‘‘train-the-trainer’’ course at the Jordan facility and have returned to Iraq. In addition, 230 U.S. military police trainers have been given the 

‘‘train-the-trainer’’ course and will work with the Iraqi trainers in the three Iraq 

academies. 

Our efforts are directed at enabling the Iraqi police to achieve the capacity to provide public security and law enforcement, and thereby allowing coalition forces to 

withdraw as soon as practical and safe.
152

Senator STEVENS. One last question Mr. Chairman. When we 

look at the plans now for the period past June 30, it is my understanding that the largest Embassy we have will be the Embassy 

that is in Baghdad. 

Secretary POWELL. Yes, sir. 

Senator STEVENS. Are we going to appoint an Ambassador there? 

Secretary POWELL. Yes, sir. 

Senator STEVENS. I am hard-pressed to understand why it is 

going to be that large. Could you just describe the need for that big 

an Embassy and its staff? 

Secretary POWELL. A lot of things have to be done in Iraq. First 

and foremost, we have to make sure that we have the people in 

place to manage a very large sum of money made available by the 

Congress through the supplemental. 

Second, we have got to help the Iraqis develop a sophisticated 

government with ministries that are answerable to political authorities, and that is going to take some effort. We will have a very 

large USAID presence in the country. We will have representatives 

of the chief of mission in different parts of the country to represent 

our interests. There will be a very large security component, because we expect that it will still be not a safe environment. 

So when you add all of these things up, we think it will take a 

fairly large mission staff to do all these things. There will be an 

Office of Security and Cooperation, and we continue to work to improve the capabilities of Iraqi police and military personnel and the 

civil defense units that I spoke of. And there will be a lot of contracting people who may work for other departments but will be 

answerable to the chief of mission, and therefore become part of 

the overall mission size. 

Senator STEVENS. Will any of the funding for that come from the 

supplemental or what’s available to the new government? 

Secretary POWELL. Yes, there are opportunities to tap into the 

funding stream of the supplement to support this overhead for 

managing of the supplemental money. 

Senator STEVENS. Last item, my friend. Any bricks and mortar 

involved in that? Are we going to build a new building? 

Secretary POWELL. We are looking now—yes, we are examining 

sites now for a new Embassy facility, and there is wedge money in 

the program now to begin that work. 

Senator STEVENS. That is to permanently house that many people or will it come down? 

Secretary POWELL. I certainly hope it will come down over time, 

but in the first year or two there is a massive amount of work that 

has to be done. The Embassy is not being scaled for that large a 

presence over time. It will take some years to build the Embassy 

and we are still figuring out what to scale it for. But it will be a 

major facility. 

Senator STEVENS. Will the provisional authority be there at the 

same time in that building? 

Secretary POWELL. The provisional authority will go away. 

Senator STEVENS. Is the new government going to be in the 

green zone? 

Secretary POWELL. I assume initially it will be, but I do not know 

the answer to that question. I will get it for the record. 
153

Senator STEVENS. Thank you. 

Thank you, Mr. Chairman. I do appreciate your courtesy. Gentlemen, appreciate your courtesy. 

Senator GREGG. Thank you, Mr. Chairman. 

HMONG REFUGEES IN LAOS

Senator Kohl, I appreciate your patience. 

Senator KOHL. Thank you, Senator Gregg. I would like to change 

briefly to another area of the world which my staff has told you I 

was going to inquire about and that is Laos. Mr. Secretary, I am 

deeply concerned about reports coming from Laos on the status of 

the Hmong. My State of Wisconsin is the home to 33,000 former 

Hmong refugees, many of whom are concerned about the status of 

their family and friends in Laos who have been living in the jungle 

since the end of the Vietnam War. Estimates are that there are as 

many as 17,000 still in the jungles. 

As you know, Mr. Secretary, the United States is indebted to 

these former Hmong insurgents who fought valiantly with us during the Vietnam war. In recent weeks there have been reports that 

hundreds of Hmong have been emerging from the jungle to take 

advantage of an unofficial Lao government amnesty program. The 

Lao government denies that there is such a program. We have been 

receiving reports that many of these Hmong have not surrendered 

willingly, but they have been captured and are being severely mistreated. 

Last week Senator Feingold and myself, along with other Senators, sent a letter to Ambassador Negroponte asking for his assistance in urging the United Nations to send a high level U.N. representative or a fact-finding mission to Laos to monitor the treatment of the Hmong. To ensure the safety of this Hmong population 

we need to do all we can to shed light on the situation there. Unfortunately, as you know, there is virtually no international access 

to the areas where the Hmong live. So can I ask for your support 

in this request for a high level U.N. representative or fact-finding 

mission to Laos? 

Secretary POWELL. Sir, we will be answering your letter in the 

next day or so, but we believe the United Nations can play an important role. There are U.N. agencies working in the area now. I 

really do need to talk to Kofi Annan as to whether he wants to designate another new special representative for this, but we will consider this request. 

Our initial look into the issues raised in your letter suggest that 

they are coming out, but we have not yet got any evidence to suggest they are being abused in the way that some people have said 

they are being abused. I do not say it has not happened or is not 

happening, but we still have to do more work to establish the facts. 

We are trying to get greater access to them, and we are in touch 

with the Lao government about the need for greater access, and we 

are about pushing the United Nations to achieve greater access. 

As a separate matter, as you know, there is a Hmong population 

that is in Thailand and we are working hard to see if we can settle 

them as refugees as part of our refugee resettlement program here 

in the United States. 

[The information follows:]
154

I would like to respond on behalf of the Secretary regarding the Department’s position on normal trade relations (NTR) for Laos which you raised during the March 

25 Commerce, Justice, State Appropriations hearing. 

The Administration supports granting NTR status for Laos and bringing into force 

the bilateral trade agreement negotiated in 1997 and signed in 2003. Laos is one 

of only three countries worldwide (the other two being Cuba and North Korea), and 

the only lesser-developed country, subject to tariff rates generally far higher than 

those available under NTR. Extending NTR to Laos could help open Laos to the outside world, which could in turn lead to more internal openness and transparency. 

Progress toward a more open and democratic society will help us achieve our foreign 

policy objectives across the board. While some opponents of NTR argue that it 

should be used as a reward for a completed democratic reform process, we believe 

that granting NTR to Laos will benefit the Lao people, and will create a more cooperative environment in which the United States can effectively pursue key human 

rights and democratization objectives. 

The United States Government remains deeply concerned about human rights in 

Laos, including treatment of the Hmong minority. We have repeatedly made clear 

to the Lao government the strong concern of the American people and government 

about the poor human rights situation and will continue to do so. In regard to recent 

reports of Hmong living in remote areas seeking to resettle in Laos, reports so far 

indicate that the Lao Government has treated those seeking resettlement humanely. 

We have offered assistance for this population, but the Lao Government has not responded. Also, Secretary Powell has written to the Lao Foreign Minister supporting 

Ambassador Hartwick’s urging that the Lao Government allow our Embassy or 

international organizations access to these people so that we can assess their conditions first hand. We do have reports that fighting continues between some Hmong 

groups and the Lao Government, and we have urged that the Lao take a humanitarian approach. 

I hope this answers your questions. Please feel free to contact me if we may be 

of further assistance.

UNITED STATES SENATE, 

Washington, DC, March 15, 2004. 

Ambassador JOHN D. NEGROPONTE, 

U.S. Ambassador to the United Nations, United States Mission to the United Nations, 799 UN Plaza, New York, NY. 

DEAR AMBASSADOR NEGROPONTE: We are writing to ask for your assistance in 

urging the United Nations to send a U.N. representative or fact-finding mission to 

Laos to monitor the treatment of hundreds of Hmong-Lao, many of whom are former 

insurgents and their families, who have recently emerged from the jungles of Laos. 

A high-level U.N. presence is essential in securing the safety of these individuals, 

as well as in providing greater transparency regarding Lao governmental actions to 

the international community. 

Over the past several weeks, hundreds of Hmong-Lao and their families have left 

the jungles of Laos. Many of these former insurgents fought with the Central Intelligence Agency during the Vietnam War to rescue downed American pilots, to 

thwart supply lines along the Ho Chi Minh trail and to hold off North Vietnamese 

troops. When the Vietnam War ended and the communist Pathet Lao took over the 

government, thousands of Hmong were killed and sent to reeducation camps. Most 

Hmong fled Laos or hid in the jungles of Laos, fearing for their lives. Some estimate 

that as many as 17,000 Hmong have been living in the jungles since 1975. The 

United States remains indebted to these courageous individuals and their families. 

The U.S. government claims that these individuals have surrendered to the Lao 

government and are participating in an unofficial and ‘‘unstated’’ amnesty program 

organized by the government of Laos. Yet, our offices have heard contradictory information. Reports indicate that the Laotian government denies the existence of any 

amnesty program for these individuals. In addition, many of our constituents claim 

that these former insurgents have been captured by the Lao military and did not 

surrender. Our constituents fear that these people are in serious danger and allege 

that many have already been killed, including women and children. Amnesty International in a report on March 4, 2004 states, ‘‘Amnesty International has received 

conflicting reports as to their [the Hmong’s] reception and treatment by Lao authorities.’’

The restrictions imposed by the Lao government on international access have prevented policymakers, journalists and humanitarian groups from knowing the reality 

on the ground and understanding the needs. The United Nations can play a crucial 

role in shedding light on the situation. We ask you, therefore, to urge the United 

Nations to send a U.N. representative or fact-finding mission to ensure that these 
155

former insurgents are treated humanely and that the Lao government respects its 

obligations under international law. 

We thank you for your consideration. 

SENATOR RUSS FEINGOLD, 

SENATOR HERB KOHL, 

SENATOR BARBARA BOXER, 

SENATOR MARK DAYTON, 

SENATOR DIANNE FEINSTEIN, 

REPRESENTATIVE RON KIND, 

REPRESENTATIVE MARK GREEN, 

REPRESENTATIVE DEVIN NUNES, 

REPRESENTATIVE GEORGE RADANOVICH, 

REPRESENTATIVE DANA ROHRABACHER, 

Members of Congress.

Senator KOHL. Thank you. Mr. Secretary, an AP story earlier 

this week based on information from the Hmong leader in the jungle reported that 6,000 Laotian troops using machine guns, grenades, mortars, and helicopter gunships had launched a new attack 

against a group of 2,000 Hmong insurgents and their families. At 

least seven women and children were killed. Amnesty International 

reported in October that the Lao government has used starvation 

as a weapon of war against thousands of Hmong in the jungle. We 

have seen reports, such as photos in a Time Asia piece last summer 

that Hmong in the jungle are living in deplorable conditions. 

What can we do to press the Laotians on the human rights situation? Senator Feingold and myself contacted the Lao government 

about the Amnesty report. They have denied the report. Our ambassador industry has been pressing for normal trade relations 

with Laos, and that bill was recently introduced in the Finance 

Committee. 

My question is, is this the time for us to be rewarding that government with normal trade relations when we are supposedly, and 

I believe should be, so concerned about their human rights treatment? 

Secretary POWELL. We are concerned about the human rights 

treatment. We have received reports of this military operation and 

we are trying to confirm or get a denial of it; to find out what the 

fact are. The Embassy is working hard to establish the facts. While 

I have seen the same reports that you have, I just do not know the 

real facts yet. 

The Lao government does have an amnesty policy with respect 

to the trade relief legislation. Let me take another look at it because I really am not familiar with it. 

Senator KOHL. I would appreciate that very much. 

Secretary POWELL. I would be delighted, Senator. 

Senator KOHL. Finally, you refer to the Buddhist temple in Thailand and resettlement efforts. I would like to know what the State 

Department plans are to ensure the humane treatment of those 

Hmong Lao who do not qualify for resettlement in the United 

States. In the interest of time I will submit the question and I look 

forward to some response from you. 

Secretary POWELL. Yes, sir. Thank you, Senator. 

Senator KOHL. I thank you, Mr. Secretary. 

Senator GREGG. Thank you, Senator Kohl. I know the Secretary 

has to leave but there are number of issues we would still like to 
156

take up with you, and maybe we could all take maybe 5 minutes, 

10 minutes at the most to go over those. 

CHARLES TAYLOR BEFORE TRIBUNAL

There are a series of issues that deal with peacekeeping and activities in Africa. One of my concerns, as you know, is how we get 

Charles Taylor over to be tried before the tribunal, so I would ask 

you a series of questions. One is, do you expect the UNMIL process 

to be successful if Charles Taylor is not tried? If your answer is no, 

then how do we get him tried? 

Number two, it appears that there is going to be an expanded 

peacekeeping effort throughout Africa, especially in Sudan eventually, what are you projecting that we are going to have to come up 

with for peacekeeping in Africa? 

Secretary POWELL. The best I can do with respect to projections 

is what we have now in the 2005 budget, but I want to put down 

a cautionary word that we do have these other demands coming 

along. I hope they are coming along. I hope we will be able to work 

on peacekeeping forces for the Sudan. As you know, we are in a 

very intense, delicate period of negotiations with the Sudanese and 

the SPLN to try to get a comprehensive peace agreement. So we 

may well have to come back to the Congress at some point in the 

future during 2005 for additional support for peacekeeping efforts. 

With respect to Mr. Taylor, he is still subject to the court. I believe he should come before that court. As you know, he is in Nigeria and the circumstances of him being moved to Nigeria was that 

the Nigerian government would not come under pressure in this 

immediate period to turn him over to the court. The Nigerian government has said, however, that when Liberia has a functioning 

government that is recognized and makes a request for Mr. Taylor, 

then it can be looked at at that time. 

This was not a perfect solution, but last year when we were facing this problem we needed to get the violence ended, and we needed to get some control of this country and over the population. We 

needed to get Charles Taylor out. We found a way to do that and 

it required us to make a compromise with respect to letting him 

remain in Nigeria without the Nigerians being under pressure to 

turn him over right now, or else we would not have been able 

to——

Senator GREGG. But the understanding was that he would not 

stay in Nigeria——

Secretary POWELL. He is. 

Senator GREGG [continuing]. And not be a force. 

Secretary POWELL. He is not much of a force. 

Senator GREGG. He is. He is agitating. There are reports that he 

has got an army up and running in the Ivory Coast. 

Secretary POWELL. He does not have an army up and running. 

He is an annoyance. I have followed this very carefully because the 

last thing I wanted to see was to have Charles Taylor trying to create armies or stop what we are trying to do in Liberia. I have seen 

the reports about creating an army but I have never been able to 

verify that one exists. 
157

Senator GREGG. How can we justify this tribunal if the first person they indicted will not be brought before them? We brought 

Milosevic in. Why should we not bring in Taylor? 

Secretary POWELL. We will. It took a long while to get Milosevic 

in, and we finally had to apply different kinds of pressure and wait 

for a different set of circumstances in Belgrade before we could get 

Milosevic in. We still believe Charles Taylor belongs before this tribunal and we hope that that is where he will end up. 

But last year the challenge we were facing was to get food into 

the people of Liberia who were starving and to get the killing 

ended. And we succeeded. We succeeded by getting Charles Taylor 

out, and the way we got Charles Taylor out was to send him to Nigeria with an understanding with the Nigerians that they would 

not be pressured. The Nigerians know that ultimately Charles Taylor has to be dealt with, and they have set out the circumstances 

under which he could be dealt with. That is when there is a functioning government in Liberia and a request for his return. I think 

eventually he will stand before the bench of justice. 

Senator GREGG. Before I turn it over to Senator Hollings I do 

what to thank your Department. You are doing a lot of things 

right. You are doing the IT right, and I think General Williams has 

done an excellent job of getting Embassy construction under control. I hope he is going to take a serious look at the new U.N. building on the security side. This is a big dollar item and I think his 

expertise and his shop’s expertise in that would be very important 

on the security side. 

Senator Hollings. 

MIDEAST-WEST DIALOGUE

Senator HOLLINGS. Mr. Secretary, we can use your help on that 

International Center for Mideast-West Dialogue. I had the pleasure 

of talking with the president of Austria some 7, 8 years ago and 

he allowed how we ought to have better relations between the 

Christian and the Muslim world, or the Western and the Mideast 

world, and that he talked to the Ayatollah Khomeini by phone 

every week, and other leaders there. At that particular time we 

were looking there at the facility—I am rushing along because I do 

not want to use your time—at Istanbul that was given to us by the 

former Ambassador and everything else in a card game, and he lost 

a bet. He bought it and gave us a magnificent facility, presently on 

loan to the British. 

I said, wait a minute now, we have gone along and we have got 

a wonderful consulate there, really a well-appointed facility, but 

why not start an East-West Center where you have got a secular 

state, Turkey, and everything else of that kind. We put in $7 million, Senator Byrd, in the bill and everything else, and we are ongoing. Now all of a sudden, Assistant Secretary Frank Taylor in 

your Department says it is not safe. This is not an Inman facility; 

we do care whether it is safe obviously. But we would not be loaning it to the Brits if we were not sure of its safety, you know what 

I mean? If you get those entire in there, and this particular facility, 

they want to move it into the United Nations, move it into New 

York, we would have questions about some of the people in the dia-
158

logue even getting visas to come into New York under the present 

circumstance and turmoil and what have you. 

Now you can get right in behind us and help us. We will put 

some more money and we will get it going. I think it is the Council 

for American Overseas Research Center, and they are a private 

group that is an NGO that takes and gets all these things working 

together and what have you. They have got credibility, and they 

will all join in. I have seen the success of the North-South Center, 

the East-West Center. We have got to get something going in the 

Mideast. Looking at the morning headlines, we are getting worse 

and worse. 

Otherwise, I have got to comment on Iraq, because I am worried 

about you and that big facility that you have taken. After all, the 

largest facility we have ever built for the Department of State, and 

you have got General Williams and he is tip-top and we have 

worked closely together—$450 million here. We have got $900-

some million set aside and you say they have not—the State Department says we expect to have 1,000 American personnel in 

there and 2,000 Iraqis working. So they are going to have 3,000 in 

the thing, and here we do not have security. 

My friend Senator Stevens said we differ voting for the resolution. Let me level, because I did with my own people back home 

and the press and everything else like that, I knew what it was 

doing when I voted for that authority for the President to go into 

Iraq. He had stated amongst all the build-up on October 7 in Cincinnati, facing present danger of evil, we cannot wait until the 

smoking gun is a mushroom cloud. When your Commander-inChief says that, and you know he has got availability with the 

Mossad. We all yap about the intelligence. We act like we are the 

only ones—whether it was good or bad, and distorted, twisted, 

blah, blah, blah. Israel depends on knowing what is going on in 

downtown Baghdad. Their survival depends on it. They have got 

the best of intelligence. 

So when the Commander-in-Chief said that, I voted for the resolution. I was misled, and we all were misled and we can see it in 

the morning news. Now we have got to do the best we can in there. 

What happens is that we still do not have enough troops. It was 

the same thing—I thought I was back in Saigon with Westmoreland talking to General Abazaid. He in the one breath said to me 

we needed 90 more days to train the police. We do not have the 

police trained sufficiently for June 30. We have not secured the 

borders. We have got green troops in the turmoil of trying to not 

have enough troops, bringing in Guard and Reserve with the 

greens, so a fellow lights a hibachi in the backyard and that there 

gives us a radar, a heat signal and we shoot and kill the family 

and the kids. We see another photographer and he aims a camera 

and we think it is a rocket and we kill the Reuters newsman. 

I had a good friend that has been in Baghdad for years off and 

on and he said, I shopped in downtown Baghdad in September. I 

went back in November and it was taking my life in my hands. 

So that train—we are doing the work for the Iraqis, and we have 

got the constitution. You feel good about it, but they say, wait a 

minute, that is an open-ended document. It subject to amendment. 

It gives the Kurds autonomy so the rest of them want autonomy. 
159

And Ambassador Bremer says we are not going to have an Islamic 

democracy, yet you have got a majority vote, and the majority vote 

is going to vote an Islamic democracy. 

With all of that, Bremer is gone come June 30. Abazaid is gone. 

They are all leaving, and they are leaving it for you. And you are 

building up a temple even bigger than Saddam ever built, $1 billion, $900 some million for 3,000 personnel, and then you say that 

the AID people are going to—they are. They are going to have to 

go up with their security. They are insecure all over the place. And 

it is going to be open sesame come June 30, and we ought to know 

at this committee level, ought not to be planning a $900 million facility. Maybe $90 million, or take over one of the—they have got 

them all over the place, all those palaces and everything, and we 

are in them, in many of them. 

We can take where they have got—and that is off the beaten 

track and a good facility, and move that crowd that is in there, all 

computerized, looking for WMD. Just move them out and move you 

in, and we have got a facility and everything else and we will see 

how things go. That is a secure place and everything else of that 

kind. 

But I find the Defense Department—look, I asked about all those 

troops everywhere. I got to General McKernan and I said, General, 

I know you and you know me, you need some more troops. I said, 

I could have used more troops in June last year. I said, what for? 

He said, I could have gotten better security in the Sunni Triangle. 

I said, why not more troops now to get the Sunni Triangle, get the 

borders and everything else secure and what have you? The deBaathification under Chalabi—and he will need the Secret Service 

by this time next year—Chalabi in charge of that has knocked off 

the leadership of the army, he has knocked off the leadership of the 

Sunnis and made some of them hostile and joined with Saddam 

loyalists, and they have joined with a lot of the insurgency coming 

in and terrorists and what have you, and the movement is—there 

is a definite movement going against us there, and you are going 

to end up holding the bag. That is what I am worried about. 

Senator GREGG. Senator, we are going to run out of time here 

with the Secretary. 

Senator HOLLINGS. That is all right. He can comment or not. 

Senator GREGG. You can comment on that, then we will go to 

Senator Domenici, then to Senator Byrd. 

Senator HOLLINGS. Help us on that Mideast-West Center. 

Secretary POWELL. You are right, security is a problem there. Remember, the British just had a horrible situation with one of their 

consulates being blown up. I think we have to be careful about 

using that facility. 

Senator HOLLINGS. That is right, we are in trouble. 

Senator GREGG. Senator Domenici, and then we will go to Senator Byrd. 

IRAQ RECONSTRUCTION, COST OF

Senator DOMENICI. Thank you very much, Mr. Chairman. Mr. 

Secretary, fellow members on the subcommittee, first I apologize 

for being late, particularly to you, Mr. Chairman. I had three committee hearings at the same time. 
160

I want to talk just for a minute about Iraq reconstruction and 

then I want to change the subject to non-proliferation. It still remains an issue. First on reconstruction, I hope that the experts 

that are going to use the $18 billion for reconstruction in Iraq will 

consider the fact that this reconstruction money ought to go as far 

as it can. By that I mean if there is any way that you can use it 

for guarantees and the like, so that less dollars get more accomplished, I think that would be a very good way to handle it. 

Now I am not familiar with how you plan to reconstruct Iraq, 

and how you plan to bring this economy into being, but I would 

suggest that you have some finance experts advising the Department on how to stretch the $18.5 billion. We know here that when 

we do guarantees, their cost on our budget is tremendously less 

than the amount of the loans. I leave that with you, and I hope 

that you will take every opportunity. If the $18.5 billion does not 

permit that and you see some places where more is needed, I would 

hope you would ask us. 

MOX PROGRAM; STATUS OF LIABILITY WITH RUSSIA

I want to change the subject. It seems almost trivial with what 

we are doing, but I think non-proliferation of nuclear, and chemical, and biological weapons remains a terrific problem for the 

world. I want to ask you again about the MOX program. You know 

what that is. That is the program with the Russians that caused 

America to change its policy and start building a plant for MOX, 

which is a new way to convert some of the radioactive consequences of nuclear build-up. 

I am very concerned about the Russian-United States program 

that will remove 34 million tons of plutonium from the respective 

stockpiles. As you know, I have been involved with this effort beginning way back when we put it into effect. Frankly, I do not 

blame you, but I am very disappointed that the negotiations regarding this issue of liability has not yet been resolved. I tell you, 

Mr. Secretary, that it is a matter that deserves your attention. The 

Russians have negotiated a deal like this with another group, the 

G–8 partners and they have done it at a level of protection that is 

different from what we are talking about in this United States. I 

do not think we ought to let them get away with treating us differently. 

In other words, they are making the liability question harder for 

our country than they did for the G–8. I would hope that again, 

Mr. Secretary, that you would find the very, very best people and 

get on with this. We must not lose the momentum of this huge deal 

that we made at the same time we got that highly enriched uranium. I think you are aware of that. They made a deal. We got 

enough highly enriched uranium that we bought that could make 

thousands of bombs, and it was bought and it is here in America. 

It is being fixed up to where it can be used in nuclear powerplants. 

But the MOX program deals with a more dangerous compound. 

It deals with what nuclear weapons are made of. Or put it this 

way, you cannot make them without this. For the Russians to give 

us under an agreement 34 million tons—I believe that my staff is 

wrong. I think it is 34 tons. 

Secretary POWELL. It is a lot. 
161

Senator DOMENICI. It is a lot and it could make a lot of bombs, 

and they will not be able to be made. Could I have your comments 

on this? 

Secretary POWELL. I am familiar with the program and I am familiar with the liability issue. Our responsibility in this is outside 

of Russia, so I have got to take the question back to other colleagues in the administration and get back to you on it, and talk 

to my friends at DOE and my own staff to see what we can do 

about the liability problem. 

Senator DOMENICI. It would be done if you solve that problem. 

Thank you, and thank you, Mr. Chairman. 

[The information follows:]

On March 25 at the hearing on CJS appropriations, you and Secretary Powell discussed the status of the liability issues with Russia and how it affects progress in 

United States and other G–8 partners’ participation in Russia’s plutonium disposition program. The Secretary promised to follow-up with you on this matter. This is 

an interim reply. 

State and other interested agencies remain engaged at senior levels on the issues 

you raised. We will provide a substantive response as soon as those deliberations 

are completed. We appreciate your strong interest in this issue and this critical initiative.

Senator GREGG. Senator Byrd. 

Senator BYRD. Let me thank you again, Mr. Chairman, and Senator Hollings for your patience, and for your many courtesies to 

me. I am not a member of the subcommittee. 

Let me thank you again, Mr. Secretary, for the good work you 

do. When I came to Congress, we had Secretary Dulles as our Secretary of State. My first trip out of this country was a trip around 

the world. I remember that in high school I was assigned a book 

to read, Jules Verne’s ‘‘Around the World in Eighty Days.’’ We went 

around the world in 68 days, I believe it was, in an old Constellation. Of course, that would have been called a junket in these days. 

We visited Afghanistan, where they went into the town square 

there, the men wore leggings and looked as though they wore secondhand clothing. The time of day was announced in the town 

square. There was no warm water in the hotel where we stayed. 

Mrs.—I am trying to remember the name of the lady from Illinois 

who was a member of the delegation. There were seven on the delegation, among whom was a member from Minnesota, a former missionary to China. We visited Afghanistan. We also visited Iraq and 

visited the king of Iraq, as it was at that time. I sometimes think 

that I would like to go back to Afghanistan and see what changes 

have been made. 

ISRAEL FENCE STATUS AND COST AND ISRAEL-PALESTINIAN CONFLICT

While I was in Iraq, I decided to go down to Babylon, the old Biblical city of Babylon, sitting on the banks of the Euphrates River, 

and my memory carried me back to that chapter in the Bible where 

Daniel was called in before the king to interpret the handwriting 

on the wall, mini, mini, tiki, euphrasi. The meaning as Daniel interpreted it, God hath numbered thy Kingdom and finished it. 

Thou art weighed in the balance and art found wanting. Thy kingdom is divided and given to the Meads and Persians. That night 

the king was killed, and his dominions were indeed given to the 

Meads and the Persians. 
162

I marvel at the prophesies that we have heard and read from the 

Bible, and have seen them come true, and are seeing them come 

true. 

I agree with Richard Clarke’s statement, and I paraphrase it, in 

that the war in Iraq has distracted us from the war against those 

who attacked us on 9/11 and the war in Afghanistan. I believe that, 

and believed it before he stated it. I am against that war in Iraq, 

I was against it, am against it, and will continue to be against it. 

I made no bones about that. I think that it has been a terrible distraction from our homeland security, our own security of this country. I think that we are lacking, and I think that something terrible 

will happen again in this country. I think that it is only a matter 

of time. I believe that these people are patient and that they will 

come back. I do not think that this country is being made more secure by our being in Iraq. I do not fall for that baloney. I was sold 

lots of that in my time, having been an old meat cutter, bologna. 

I think that the war in Iraq has also been a great distraction 

from the handling of the Israeli-Palestinian conflict. I think that is 

where the basic problems have arisen. There has been a lot written 

in the press about the wall that the Israeli government is building 

inside the 1967 boundaries. Every country has that right of self-defense. I do not question that right. I am sure that you do not agree 

with those who criticize the administration for abandoning the 

Middle East peace process, but for all practical purposes, the Bush 

road map, which was never really anything more than words on 

paper, is dead. 

The fact is that neither Israelis nor Palestinians have any reason 

to believe that this administration is going to expend any political 

capital to move the process forward anytime soon. Real progress 

was being made before this administration took office, but since 

that day, the situation has slid steadily backwards and bloodshed 

has spun out of control. Hundreds, if not thousands, of deaths could 

have been avoided. This administration’s disengagement from the 

Israeli-Palestinian conflict is a major impediment to what we are 

trying to do to promote democracy and combat terrorism in the 

Middle East. 

The issue with respect to the wall is where this wall is located. 

It has already cut off hundreds of thousands of Palestinians from 

their land, from their neighbors, and even from their family members. Does not this action violate the policy that the location of 

boundaries should be decided through negotiation, not by unilateral 

action by the parties? My question would be, what is the administration’s position on this? What are we going to do about it? 

Secretary POWELL. We have problems with the wall and we have 

expressed those problems to the Israelis. They are free to protect 

themselves against the kind of terrorist activities that have so frustrated our peace efforts and frustrated the peace efforts of the previous administration. We have expressed our concern where the 

wall moves away from what could be seen as something that is 

clearly Israeli into Palestinian territory, taking into the wall large 

numbers of Palestinians on their land. There have been adjustments made to the fence, or the wall, as you prefer to call it. We 

just call it a fence. Adjustments have been made to the fence that 
163

take this into account, and we are continuing to work with the 

Israelis on this matter. 

But it is mostly a fence and not a wall, and for that reason the 

Israelis do not believe, and they think this with good merit, that 

it is not necessarily a defining feature that cannot be changed in 

the future as a result of negotiations between the two sides. A 

fence can be put up. A fence can be taken down. We have seen that 

over the past few months where some parts of the fence have already been taken down. 

The road map is not dead, and the President did invest considerable political capital in it. He went to Sharmel Sheikh and he went 

to Akuba last year. That was an investment of his personal prestige, and political energy of this administration. President Clinton 

invested enormous political capital, only to see it all come crashing 

down in the last week of his administration because of the intransigence of Yasser Arafat, and the same problem we have faced with 

Yasser Arafat and his unwillingness to do what should be done, 

what we believe can be done to bring terror under control. 

For this reason, the President put forward of the two states living side by side in peace. He made it clear; called one of them Palestine and the other one Israel and worked toward that end. We 

tried to get new people into positions of authority in the Palestinian Authority. Prime Minister Abumaz in the last year, we invested in him. We put political capital on him. But he was frustrated by Mr. Arafat’s unwillingness to yield any authority over security forces. He stepped down, and now Prime Minister Karai, we 

are ready to help him. We are working with the Egyptians, we are 

working with our British colleagues, we are working with the 

Israelis. 

The President said yesterday we were prepared to send another 

team over. We have had teams going back and forth trying to get 

some traction, trying to see if we can use the Israelis’ recent idea 

for moving out of Gaza as a way to get this thing going forward, 

depending on what the Israelis are also planning at the same time 

with respect to the West Bank at the route of the fence. 

So we are not disengaged, Senator Byrd. But perhaps the most 

difficult portfolio that we have to manage begins and ends with terror. As long as terror continues, as long as the Palestinian leaders 

and the Palestinian people do not crack down on terror then we are 

going to continue to have problems getting this peace process moving forward. Israel has a right of self-defense. Israel cannot participate with a partner that has really no leader to that partnership. 

Senator HOLLINGS. Would you yield just one second? The MLR, 

you and I understand that, the main line of resistance to terrorism 

is Palestine-Israel. General Musharraf just said, look, if you folks 

can go and settle that, terrorism the world around will disappear. 

What you need—if I were king for a day, is I would reconstitute 

you as the general in charge of an international peacekeeping force 

and move right in between the two. 

When you have got Sharon, the Bull Connor of Israel—if you 

look on page 152 of the Seven Day War and then Prime Minister 

Levi Eschov turned to Major Ari Sharon when Sharon said, we are 

going to eliminate Egypt, just like he is trying to eliminate Palestine. He says, Ari, victory in war settles nothing. The Arabs will 
164

still be there. You have got a hardhead. He cannot learn, and we 

cannot just put our future in his hands. We have got to move in 

with some kind of international peacekeeping force and get something going. Not maps and talking and every other darn thing. We 

know what is necessary, separate the two of them. The only object 

to that is the United States and Israel. The free world is for that. 

I will bet you on it. 

Thank you. 

Senator BYRD. Mr. Chairman, may I just close with this thought, with this question? The United States provided $480 million to 

Israel in this current fiscal year. How much is Israel spending to 

build this wall? Since money is fungible and our aid goes to Israel 

in the form of a big check, can it be said that America is paying 

for this wall? 

Secretary POWELL. Money is fungible, but I cannot give you an 

answer off the top of my head as to what the wall expenditures are. 

As you know with respect to loan guarantees, we do dock those 

loan guarantees in response to Israeli activities with response to 

settlement activities. 

[The information follows:]

This is in response to your March 25 inquiry of Secretary Powell regarding Israeli 

expenditures on the seam-line fence, and whether U.S. assistance to Israel is being 

used in that effort. 

U.S. assistance to Israel serves multiple purposes—relieving the impact of economic burdens Israel has incurred due to its regional isolation; maintaining Israel’s 

qualitative military edge; preventing regional conflict; and building the confidence 

necessary for Israel to take calculated risks for peace. 

Economic Support Funds (ESF)—$477 million in fiscal year 2004, with $360 million requested for fiscal year 2005—may only be used for balance-of-payments support. At the discretion of the Israeli Government, ESF can be used to (a) purchase 

goods and services from the United States; (b) service debt owed to, or guaranteed 

by, the U.S. Government; (c) pay to the U.S. Government any subsidies or other 

costs associated with loans guaranteed by the USG; (d) service Foreign Military 

Sales debt, both current and refinanced; and (e) finance other uses as agreed upon 

by both sides. Use of ESF money for military purposes—including the procurement 

of commodities or services for military purposes—is explicitly ruled out. 

Foreign Military Financing (FMF)—$2.15 billion in fiscal year 2004, with $2.22 

billion requested for fiscal year 2005—represents about 25 percent of the Israeli defense budget and is crucial to Israel’s multi-year defense modernization plan. 26.3 

percent of this FMF (approximately $580 million in fiscal year 2004) may be used 

for Off-Shore Procurement. Most of this amount is spent in Israel, which supports 

their maintenance of a strong domestic defense industry. 

In addition to ESF and FMF, the Emergency Wartime Supplemental Appropriations Act, 2003, authorized $9 billion in loan guarantees for Israel, to be made available in fiscal years 2003–2005. The Act states that the loan guarantees may be 

issued only to support activities in the geographic areas that were subject to the 

administration of the Government of Israel before June 5, 1967. The Act further 

states that the guarantees shall be reduced by an amount equal to Israeli expenditures (between March 1, 2003, and the date of issue of the guarantee) for activities 

which the President determines are inconsistent with the objectives and understandings reached between the United States and the Government of Israel regarding the implementation of the loan guarantee program. 

Thus, on November 25th, the United States Government announced a deduction 

of $289.5 million from the total of $3 billion in loan guarantees available to Israel 

in fiscal year 2003. This deduction reflects issues of concern to the United States, 

including settlement activities and the route of the security fence. As the President 

has stated clearly and consistently, ‘‘Israel should freeze settlement construction, 

dismantle unauthorized outposts, end the daily humiliation of the Palestinian people, and not prejudice final negotiations with the placements of walls and fences.’’

As for costs incurred by the GOI in construction of the separation barrier, publicly 

available estimates are on the order of $2 million per kilometer. With the Government of Israel having built nearly 200 kilometers of fence so far, total costs are ap-
165

proximately $400 million. The planned route of the fence calls for another 400 kilometers to be built, bringing the total, on completion, to approximately $1.2 billion. 

These, of course, are only estimates. 

I hope that this addresses your concerns. If we can be of assistance in the future 

on this or any other matter, please do not hesitate to contact us.

Senator HOLLINGS. We need Secretary Powell to go there and 

say, Mr. Sharon, pull down this wall, just like Reagan. Go ahead 

and do it. We can stop some terrorism. Iraq has no terrorism. We 

started it there. We know where the terrorism is and we know the 

MLR, you and me. You can do it. Thank you. 

Senator BYRD. Thank you, Mr. Chairman. 

Senator GREGG. Do you want to respond? 

Secretary POWELL. Terrorism will emanate from those places, 

even with an international force there, until such time as the Palestinian leaders decide that it is not serving their interest any 

more and they stop it. 

Senator HOLLINGS. But you do not have any leaders. They are a 

basket case after 35 years of occupation. Anybody with get up and 

go has got up and gone. 

Secretary POWELL. There are people who claim they are leaders, 

and there are people who are invested with leadership by the people themselves. They are the ones that are not acting. 

Senator HOLLINGS. But if you want a democracy in the Mideast 

you would have gone to Syria where Lebanon is a sort of 50–50 democracy, get the Syrian army out of Lebanon and then you would 

solve the Hezbollah and Hamas problem. Not Iraq. 

Senator GREGG. I wish we could solve the Israeli-Palestinian 

issue at this conference table this morning. 

Senator HOLLINGS. I think you can. We have got the man to do 

it. 

Senator GREGG. I suspect that even with our unique talents it 

may be beyond our capacity. 

Mr. Secretary, we appreciate your generous commitment of time, 

especially after all your flying the past few days. 

Secretary POWELL. Thank you, Mr. Chairman. 

CONCLUSION OF HEARINGS

Senator GREGG. If there is nothing further, the subcommittee 

will stand in recess. 

[Whereupon, at 12 noon, Thursday, March 25, the hearings were 

concluded, and the subcommittee was recessed, to reconvene subject to the call of the Chair.]

(167)

DEPARTMENTS OF COMMERCE, JUSTICE, AND 

STATE, THE JUDICIARY, AND RELATED 

AGENCIES APPROPRIATIONS FOR FISCAL 

YEAR 2005

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. 

NONDEPARTMENTAL WITNESSES 

[The following testimonies were received by the Subcommittee on 

Commerce, Justice, and State, the Judiciary, and Related Agencies 

for inclusion in the record. The submitted materials relate to the 

fiscal year 2005 budget request for programs within the subcommittee’s jurisdiction.]

PREPARED STATEMENT OF THE AMERICAN MUSEUM OF NATURAL HISTORY

ABOUT THE AMERICAN MUSEUM OF NATURAL HISTORY

The American Museum of Natural History [AMNH] is one of the nation’s preeminent institutions for scientific research and public education. Since its founding 

in 1869, the Museum has pursued its mission to ‘‘discover, interpret, and disseminate—through scientific research and education—knowledge about human cultures, 

the natural world, and the universe.’’ It is renowned for its exhibitions and collections of more than 32 million natural specimens and cultural artifacts. With nearly 

four million annual visitors, its audience is one of the largest, fastest growing, and 

most diverse of any museum in the country. Museum scientists conduct 

groundbreaking research in fields ranging from zoology, comparative genomics, and 

informatics to earth, space, and environmental sciences and biodiversity conservation. Their work forms the basis for all the Museum’s activities that seek to explain 

complex issues and help people to understand the events and processes that created 

and continue to shape the Earth, life and civilization on this planet, and the universe beyond. 

More than 200 Museum scientists, led by 46 curators, conduct laboratory and collections-based research programs as well as fieldwork and training. The Museum’s 

research programs are organized under five divisions (Anthropology; Earth, Planetary, and Space Sciences; Invertebrate Zoology; Paleontology; and Vertebrate Zoology), along with the Center for Biodiversity and Conservation (CBC). The Museum 

also conducts graduate training programs, supports doctoral and postdoctoral scientists with research fellowships, and offers talented undergraduates an opportunity 

to work with Museum scientists. 

The Museum’s Center for Biodiversity and Conservation, founded in 1993, is dedicated to enhancing the use of scientific data to mitigate threats to global biodiversity, and integrating this information into the conservation process and to disseminate it widely. It conducts conservation-related field projects around the world, 

trains scientists, organizes scientific symposia, presents public programs, and produces publications geared toward scientists, policy makers, and the lay public. Each 

spring, the CBC hosts symposia that focus on conservation issues. In 2002, the symposium, ‘‘Sustaining Seascapes: the Science and Policy of Marine Resource Management,’’ was co-sponsored by NOAA’s Marine Protected Areas Center, along with 

other federal and private organizations, and examined the large-scale conservation 

of marine ecosystems, giving special consideration to novel approaches to the sus-
168

tainable management of biodiversity and fisheries. The focus of 2003’s symposium 

was on conservation issues related to increased ecotourism in Southeast Asia, and 

2004’s symposium examines the role of invertebrates in environmental systems. 

The Museum’s vast collections provide the foundation for the Museum’s interrelated research, education, and exhibition missions. They often include endangered 

and extinct species as well as many of the only known ‘‘type specimens’’—examples 

of species by which all other finds are compared. Collections such as these are historical libraries of species and artifacts, providing an irreplaceable record of life on 

earth. They provide vital data for Museum scientists as well for more than 250 national and international visiting scientists each year. 

The Museum’s renovated Hall of Ocean Life, reopened in Spring 2003, is a major 

focal point for public education on marine science issues. Drawing on the Museum’s 

world-renowned expertise in Ichthyology as well as other areas of vertebrate as well 

as invertebrate zoology, the Hall is pivotal in educating visitors about the oceans’ 

key role in sustaining life on our planet. The renovated Hall of Ocean Life, together 

with the new Halls of Biodiversity, Planet Earth, and the Universe and the rebuilt 

Hayden Planetarium (part of the new Rose Center for Earth and Space) provide 

visitors a seamless educational journey from the universe’s beginnings to the formation and processes of Earth to the extraordinary diversity of life on our planet. 

In its Halls of Biodiversity, Planet Earth, and the Universe, the Museum presents 

current science news through Science Bulletins—multimedia productions that bring 

the latest science news and discoveries to the public using high-definition video documentaries, kiosks, and the web. The Bulletins present features on such issues as 

marine biodiversity, ocean life discoveries, and more. In addition, the Museum’s 

comprehensive education programs attract more than 400,000 students and teachers 

and more than 5,000 teachers for professional development opportunities. The Museum also takes its resources beyond its walls with Moveable Museums, an afterschool program, online resources, and through the National Center for Science Literacy, Education, and Technology, launched in 1997 in partnership with NASA. 

COMMON GOALS OF NOAA AND THE AMERICAN MUSEUM

Today, as throughout its history, the National Oceanic and Atmospheric Administration [NOAA] is committed to managing and conserving the nation’s living marine 

resources and their environments, forecasting environmental changes, providing decision makers with reliable scientific information, and fostering global environmental stewardship, especially of coastal and marine resources. The American Museum shares NOAA’s commitment to these environmental goals and to the scientific 

research, technologies, and public education that support them. Indeed, informed 

environmental stewardship and preservation of our planet’s biodiversity and resources—in marine, coastal, and other natural environments and habitats—are integral to the Museum’s most fundamental purposes. 

The Museum has also long been at the forefront of developing new research 

tools—including molecular technologies, new collection types, innovations in computation, and GIS and remote sensing—that are revolutionizing the way research 

can be conducted and data analyzed, as well as the way museum collections can be 

used. The Museum has significant resources in these areas, which it would bring 

to bear in continued partnership with NOAA. These include: 

Remote Sensing and Geographical Information Systems Technologies.—The CBC 

launched the Remote Sensing/Geographical Information Systems (RS/GIS) lab in the 

fall of 1998. Wise conservation policy requires effective knowledge of the distribution 

of species and ecological communities at local, regional, and global scales. Without 

this information, it is difficult to decide where to allocate scarce conservation resources. Remote sensing technologies can provide essential data on such things as 

land-cover and land-use, as well as sea surface temperatures and chlorophyll content. GIS makes it possible for scientists to compare and visualize the relationships 

among satellite and legacy data, raw standardized samples, and data obtained 

through ground truthing. Because it provides the database backbone than can connect field work to analysis, GIS is becoming an indispensable component in environmental data analysis and is thus revolutionizing work in conservation. 

The CBC uses its RS/GIS technologies in biodiversity and marine reserve research 

in various ways—for example, to identify sites suitable for biological inventory; to 

provide supplementary quantitative and qualitative data in and around study sites; 

and to develop visual depictions and digital presentations for reports, publications, 

and meetings. RS/GIS is also key for predictive modeling, which when coupled with 

groundtruthing significantly enhances understanding of aquatic habitats. 

Molecular Research Program.—The Museum is also home to a distinguished molecular systematics program that is at the leading edge of comparative genomics and 
169

the analysis of DNA sequences for biological research. In its laboratories, more than 

40 researchers in molecular systematics, conservation genetics, and developmental 

biology conduct their research on a variety of terrestrial and aquatic study organisms. Their work is supported by the Museum’s new frozen tissue collection of biological tissues and isolated DNA stored in a super-cold storage facility, which preserves genetic material and gene products from rare and endangered organisms that 

may become extinct before science fully exploits their potential. These researchers 

also have onsite access to a 700-processor supercomputing cluster—the fastest parallel computing cluster in an evolutionary biology laboratory and one of the fastest 

installed in a non-defense environment. 

MARINE ENVIRONMENTS INITIATIVE

The explosion of research technologies has created an opportunity for the Museum 

to integrate these state-of-the-art analytical tools into its biological and environmental research, as well as to present results to the public in its exhibition halls, 

websites, and educational programs. This intersection of research capability and 

technological opportunity underlies the Museum’s marine environments initiative. 

The Museum proposes to continue, in partnership with NOAA, this basic and applied research initiative in areas of shared concern, such as the following: 

Biodiversity and Conservation Research.—AMNH investigators are exploring applications of GIS and remote sensing technologies to advance research pertinent to 

conservation and protecting threatened species and habitats. For example, Museum 

vertebrate and invertebrate zoologists carry out ambitious field work and collection 

expansion programs throughout the tropical freshwaters of the globe, conduct biotic 

surveys, and explore marine ecosystems. In addition to the discovery and classification of many still unknown species, Museum work concerns the protection and conservation of many species whose habitats and survival are at risk. These researchers rely on the capacities of GIS/RS to develop finer, tighter, more precise datasets. 

Also, GIS analysis enables researchers to ask more sophisticated and flexible questions, and to discover patterns, series, and gradations. Projects include the following: 

—Marine reserve networks.—Analyzing the physical, biological, and cultural processes affecting coral reef systems in the Bahamas. GIS allows the researchers 

to integrate maps with sets of biophysical and socioeconomic data and to create 

dynamic models for testing hypotheses about marine reserve networks in a spatially realistic framework. 

—Humpback whales in Madagascar.—Researchers from the American Museum 

and the Wildlife Conservation Society are using GIS to track the migrations of 

humpback whales in the western Indian Ocean region and create a database 

that contains identification photos, biopsies, DNA sequences, and sighting information for hundreds of whales. 

—Aquatic ecosystem research.—Aquatic ecosystems research includes predictive 

modeling and riparian ecosystems research, and focuses on questions of restoration, management, and monitoring, drawing on resources of the Museum and 

facilities of the Southwestern Research Station. 

—Biotic surveys and inventories.—The CBC has conducted floral and faunal surveys in Bolivia and Vietnam, providing data on the distribution and abundance 

of species, and enabling researchers to analyze the role of climate change on 

land cover and develop plans to reduce threats to biodiversity. Researchers are 

also experienced in training local field biologists and conservation managers 

how to conduct surveys using RS data and biophysical measures and how to 

apply results to the long-term conservation of biodiversity. 

Collections data and access.—Museum researchers use GIS to bring the Museum’s 

vast collections alive and to increase exponentially the analyses that researchers can 

carry out for conservation research and decision-making. By coupling GIS with the 

Museum’s increasingly strong web presence, researchers worldwide are able to pose 

more sophisticated questions and uncover new connections and relationships among 

the collections data. 

Public education and outreach.—The Museum features current NOAA-related 

science and discovery in the Hall of Ocean Life as well as in its other educational 

programs and resources. For example, the Museum is collaborating with partners 

such as the New York State Marine Education Association and the New York Sea 

Grant on an annual conference, scheduled for Summer 2004, to promote marine 

awareness and encourage the growth and exchange of instructional resources within 

the scientific, commercial, and educational communities. 
170

These applications for GIS and other technologies demonstrate the Museum’s 

unique capabilities to advance environmental forecasting, provide decision makers 

with reliable scientific information, and foster global environmental stewardship. 

We therefore request $1 million to continue in partnership with NOAA to build 

its marine environmental sciences initiative. Contributing its participatory share 

with funds from nonfederal as well as federal sources, the Museum will use cuttingedge technologies to advance basic and applied research, integrated with education 

and access efforts, related to marine environments. In so doing, we seek to increase 

scientific understanding and public awareness of vital environmental resource management issues. 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND

LAND-GRANT COLLEGES (NASULGC) AND THE UNIVERSITY CORPORATION FOR ATMOSPHERIC RESEARCH (UCAR) 

On behalf of the 235 institutions that constitute the University Corporation for 

Atmospheric Research (UCAR) and the National Association of State Universities 

and Land-Grant Colleges (NASULGC), we thank the Subcommittee for your support 

of weather and climate research and education within the National Oceanic and Atmospheric Administration (NOAA). Under your leadership, Congress has taken important steps to recognize NOAA’s contribution to our nation’s quality of life, national security, public health, and economic well-being. However, UCAR and 

NASULGC have grave concerns that the fiscal year 2005 President’s budget request 

places that progress in serious jeopardy by recommending significant reductions or 

eliminations of funding compared to the fiscal year 2004 appropriated amount. 

The proposed reductions in funding for extramural research and education programs are very worrisome and seem in direct contradiction to the atmospheric 

science community’s repeated request to establish a significant peer-reviewed NOAA 

extramural research fund to strengthen NOAA research by creating strong partnerships between the agency and the academic and private sectors. Enabling such collaborations among the country’s best scientists is warranted given the statement 

contained in the fiscal year 2005 Budget Request that, ‘‘Weather- and climate-sensitive industries, directly or indirectly, account for approximately $2.7 trillion of the 

Nation’s gross domestic product.’’ We urge the Subcommittee to return NOAA to its 

fiscal year 2004 appropriated level of $3.689 billion at the very minimum. 

Currently, NOAA is undergoing a congressionally mandated evaluation of its research enterprise. During this time of change and uncertainty, it is critical that 

Congress continue to support, and use any restructuring to enhance, NOAA’s core 

research programs and competitive programs and partnerships with the academic 

community. These partnerships leverage research and research applications expertise, bring the best talent to bear in addressing high priority technology development requirements, and serve to train a new generation of scientists that NOAA 

and the rest of the scientific community will desperately need as present employees 

retire. As NOAA research activities are strengthened, we urge the Subcommittee to 

keep in mind the concept of the competitive, peer-reviewed Collaborations Fund, an 

external, peer-reviewed grants program to accelerate progress in the nation’s weather research, for which the atmospheric sciences community has been advocating for 

several years. 

We would like to offer the following specific NOAA program recommendations: 

Office of Oceanic and Atmospheric Research (OAR) 

Climate and Global Change Program.—The fiscal year 2005 budget request includes a reduction of $9.15 million and 12 FTE for the Climate and Global Change 

program. We understand that this is a partial offset to fund climate increases for 

observation programs, but we question the choice of programs, all involving the external research and education communities, that will be diminished greatly or eliminated. Each of the targeted programs has much to do with the nation’s basic climate 

research and the future of the atmospheric science in this country. They include 

NOAA’s entire post doctoral program in climate science; NOAA’s entire participation 

in the inter-agency funded, Presidential award-winning Significant Opportunities in 

Atmospheric Research and Science (SOARS) program for undergraduate students 

who are underrepresented in the atmospheric sciences; university climate research 

grants that enable this country to participate in international field programs, such 

as the Climate Variability and Predictability World Climate Program (CLIVAR), designed to improve our ability to observe, understand, predict, and respond to 

changes in the global environment; and the entire Human Dimensions of Global 

Change Research Program that funds competitively awarded social sciences re-
171

search grants to advance understanding of the human response to and planning for 

the effects of climate variability. NOAA is the only agency funding this applied social sciences research examining how social and economic systems are influenced by 

fluctuations in short-term climate (seasons to years), and how human behavior can 

be affected by variability in the climate system, and it is the only agency funding 

this country’s participation in CLIVAR. We urge the Subcommittee to restore the 

fiscal year 2005 Climate and Global Change funding and personnel levels to the fiscal year 2004 enacted level of $69.66 million and current FTE level. 

Climate Observations and Services.—We urge the Subcommittee to support the re- quested amount of $72.82 million, particularly the increases requested for the Global Ocean Observing System (increased by $10.7 million over current program levels) 

and Carbon Cycle Atmospheric Observing System (increased by $6.5 million over 

current program levels). The increases for these programs will build the climate observing system required to support the research, modeling, and decision support activities for the Administration’s Climate Change Research Initiative. We ask that 

the Subcommittee urge NOAA to expand partnerships with academia in this area, 

as we understand that most of the research is slated to be conducted internally. 

Educational Partnership Program for Minority-Serving Institutions (EPPMSI).— We urge the Subcommittee to support the fiscal year 2005 $15.0 million request for 

EPPMSI, and to support the requested transfer of the program from Program Support to OAR. The under-representation of minorities in the earth science disciplines 

continues to be a glaring problem, and NOAA’s outreach initiatives provide vital 

contributions toward correcting the imbalance. EPPMSI also has the full support of 

NASULGC’s Office for the Advancement of Public Black Colleges. 

National Weather Service (NWS) 

The U.S. Weather Research Program (USWRP) is an interagency program that is 

dedicated to making forecasts of high-impact weather more specific, accurate, and 

reliable, thereby saving lives and property, and helping regional economies. It is a 

program that engages in basic research, the societal applications of that research, 

and to moving these applications into operations. It therefore straddles the missions 

of OAR (research and applications oriented) and NWS (operations oriented). Within 

the President’s fiscal year 2005 request, USWRP is moved from OAR to NWS. Before this is accomplished, we ask that the Subcommittee take into consideration relevant recommendations of the NOAA Research Review Team, of a current internal 

USWRP study, of the OAR and NWS administration, and of congressional authorizers. We support any plan that is carefully considered and that strengthens 

NOAA’s leadership role in this interagency program. We urge the Subcommittee to 

support the fiscal year 2005 request of $4.25 million for USWRP. 

THORPEX.—A Global Research Program is a component of the USWRP that has 

its own line in the fiscal year 2005 request. THORPEX is an interagency, international program the goal of which is to provide, for the benefit of society and the 

economy, 7–14 day forecasts that are as reliable and useful as are current 2–3 day 

forecasts. We urge the Subcommittee to support the fiscal year 2005 THORPEX request of $2.3 million. 

The Space Environment Center (SEC) is the national and world warning center 

for solar disturbances that can affect people and equipment working in the space 

environment as well as the communications network of the nation. We agree with 

the Administration’s conclusions that the operational nature of SEC is a good fit 

with the NWS mission and that the Center should therefore be transferred from 

OAR. We urge the Subcommittee to support the $7.5 million requested for the Space 

Environment Center, as well as the proposed SEC transfer to NWS from OAR. 

The Cooperative Observer Network Modernization (COOP) will eventually provide 

the country with a network of accurate surface weather data that is critical to the 

maintenance of the country’s climate record as well as to work of NWS local field 

offices and university research laboratories. We urge the Subcommittee to support 

the reinstatement and modernization of the Cooperative Observer Network by appropriating the requested fiscal year 2005 funding level of $1.4 million. 

The NOAA Profiler Network is zeroed out in the fiscal year 2005 request, terminating the nation’s 35 stations that provide hourly wind profiles from the ground 

to 53,000 feet to operational weather forecasters and weather models. These data 

provide invaluable support in the forecasting of tornadoes, winter storms and flash 

floods. The Network saves lives and helps mitigate the destruction of property in 

severe weather. The fiscal year 2004 enacted funding for the Network was $4.1 million, an amount that allowed continued operation of the stations while the NWS 

prepared a report, requested by Congress, analyzing the need for a profiler network 

and producing a plan for implementation of a modernized system. This report has 

not been completed. We strongly urge the Subcommittee to restore in fiscal year 
172

2005 $4.1 million plus inflation for the continued operation of the Profiler Network, 

and to urge the NWS to produce, as soon as possible, the detailed plan requested 

by Congress for the replacement of the current Network with a much-needed stateof-the-art system. 

National Environmental Satellite, Data, and Information Service (NESDIS) 

National Polar-orbiting Operational Environmental Satellite System (NPOESS).—

We support the requested increase of $30.9 million for NPOESS, and urge you to 

ensure that the necessary resources are provided to guarantee the system’s capability to utilize, manage, store, and make available the data from this critical observing program. Resources are necessary also for education and training activities 

that are critical to encourage and enable the efficient and effective use of these data. 

This service is provided through the Cooperative Program for Operational Meteorology, Education and Training (COMET) program. We urge the Subcommittee to 

support the requested fiscal year 2005 amount of $307.6 million for NPOESS. 

Regional Climate Centers.—The President’s budget terminates funding for these 

centers, which are located on university campuses and continue to provide detailed 

climate and related products essential to private sector economic activities specific 

to each of the regions. They are needed to address the expanding demand for climate services, currently growing at a rate of 25 percent per year. We urge the Subcommittee to restore funding for Regional Climate Centers to the fiscal year 2003 

level of $2.98 million. 

Facilities 

Boulder Facilities Operations.—Six OAR laboratories, one NESDIS Data Center, 

one OAR Joint Institute, and the Denver Forecast Office of the National Weather 

Service are all housed in Boulder at the David Skaggs Research Center. The rent 

for this important facility should definitely be paid out of facilities operating costs 

and not have to be taken from research funding as has been forced upon NOAA in 

past years. We urge the Subcommittee to support the $4.56 million fiscal year 2005 

request for Boulder Facilities Operations. 

About UCAR 

UCAR is a consortium of 68 universities that manages and operates the National 

Center for Atmospheric Research and additional atmospheric and related sciences 

programs. In addition to its member universities, UCAR has formal relationships 

with approximately 100 additional undergraduate and graduate schools including 

several historically black and minority-serving institutions, and 40 international 

universities and laboratories. 

About NASULGC 

NASULGC is the nation’s oldest higher education association. Currently the association has 213 member institutions—including the historically black Land-Grant 

institutions—located in all fifty states. Its members constitute the major public research institutions in the nation. The Association’s overriding mission is to support 

high quality public education through efforts that enhance the capacity of member 

institutions to perform their traditional teaching, research, and public service roles. 

Conclusion 

The academic community is cognizant of the serious budgetary constraints that 

face the Congress in the coming fiscal year. However, short-term savings achieved 

by cutting funding for extramural research and education programs will surely result in long-term degradation of NOAA’s ability to meet its core mission requirements which are critical to the economic health, safety, and security of the nation. 

We thank you for your past support for atmospheric science and look forward to 

working with you to restore and stabilize the funding base for NOAA’s extramural 

research and education programs. 

PREPARED STATEMENT OF THE ASSOCIATION FOR ENTERPRISE OPPORTUNITY

Chairman Gregg, Ranking Member Hollings and other Members of the Subcommittee: On behalf of the Association for Enterprise Opportunity (AEO), thank 

you for the opportunity to submit comments to the Commerce-Justice-State Appropriations Subcommittee regarding the proposed termination of the Small Business 

Administration (SBA) Microloan Program and the Program for Investments in 

Microentrepreneurs (PRIME) in the President’s fiscal year 2005 budget. My name 

is Bill Edwards, and I am Executive Director of AEO. AEO is the national trade 

and membership association for microenterprise development in the United States 
173

with nearly 500 member organizations nationwide. The vast majority of AEO’s 

membership consists of microenterprise practitioner agencies, including over half of 

all Microloan Intermediaries and PRIME grantees. AEO is requesting $30 million 

in lending capital for the SBA Microloan Program, $25 million for SBA Microloan 

Technical Assistance, and $15 million for the SBA PRIME Program. 

The Administration’s proposed elimination of the SBA Microloan and PRIME Programs threatens to wipe out two essential federal funding sources for microenterprise development in the United States, effectively terminating the only available 

sources of business assistance for thousands of underserved entrepreneurs across 

the country. 

AEO respectfully requests that this Subcommittee fund these crucial SBA pro- grams at the following levels: $30 million for Microloan Lending (requiring a $2.8 

million appropriation), $25 million for Microloan Technical Assistance, $15 million 

for PRIME, and $14.5 million for Women’s Business Centers. 

The SBA Microloan Program 

The SBA Microloan Program, the single largest source of funding for microenterprise development in the nation, was created in 1992 to help small business owners 

in need of small amounts of capital (less than $35,000) that are not yet ‘‘bankable’’ 

in the private sector lending community. Since 1992, SBA Microloan Intermediaries 

have made nearly 19,000 Microloans totaling over $213 million, primarily to women, 

minority, and low-income entrepreneurs. In fiscal year 2003, Intermediaries made 

2,422 loans, totaling $29,932,410.49, well exceeding the SBA’s stated goal of $28 

million in new loans. 

The Administration contends that banks will now lend to Microloan borrowers 

through 7(a) loan programs such as SBA Express, Community Express, and Lowdoc. 

This is not true. While banks may at times make business loans under $35,000, 

these programs serve entirely different borrowers, using entirely different criteria. 

Microloan borrowers often have FICO credit scores as low as 550, past credit problems, little or no collateral, and a lack of business experience. Traditional banks will 

simply not lend to these borrowers, with or without a SBA guarantee. Also, it is 

important to note that 40 percent of SBA Microloans go to start-ups while 7(a) loan 

guarantees require that individuals already be in business anywhere from 1 to 3 

years. 

Despite lending to the riskiest borrowers, the Microloan Program has experienced 

a default rate of less than 1 percent. This accomplishment can be primarily attributed to the countless hours of intensive technical assistance that Intermediaries provide to Microloan borrowers. The technical assistance acts as a driver for business 

success and greatly improves the chances for successful business repayment. 

Finally, the Administration claims that the Microloan Program costs taxpayers $.97 per $1.00 loaned, but fails to recognize that this cost is directly related to the 

high level of technical assistance that borrowers receive and, thus, to the success 

of the program itself. Without technical assistance, these borrowers would be illequipped to manage a business! AEO is awaiting the SBA’s response to a question 

posed by the Senate Small Business Committee regarding the methods by which the 

$.97 per $1.00 loaned were calculated. 

The SBA PRIME Program 

PRIME is the only federal microenterprise program that provides intensive training and technical assistance to low- and very low-income entrepreneurs. For many 

entrepreneurs, lack of access to capital is only one of the barriers to starting or 

growing a successful small business. PRIME provides grants to microenterprise organizations throughout the country to offer this invaluable assistance. In addition, 

PRIME is unique in that at least 50 percent of all grant award dollars must be used 

to provide these services to very low-income individuals. 

The Administration has proposed the elimination of the PRIME Program for the 

past four years. However, Congress has continued to fund PRIME each year and in 

doing so has recognized that by investing in very low-income entrepreneurs, the program succeeds in creating jobs and income in communities that need it most. 

PRIME is just that—an investment. PRIME clients create and retain jobs, move off 

of public assistance and pay increased taxes as their businesses and incomes grow. 

The SBA Women’s Business Center Program 

The Women’s Business Centers (WBC) of the Office of Women’s Business Ownership provide training and technical assistance to women starting or expanding their 

businesses. In 2003 alone, Women’s Business Centers across the country trained 

and counseled over 104,000 women in core business areas such as marketing, bookkeeping and finance. The Centers serve an invaluable role in meeting the special 

needs of female entrepreneurs across the country. 
174

America’s 9.1 million women-owned businesses employ 27.5 million people and 

contribute $3.6 trillion to the economy. However, women continue to face unique obstacles in the world of business and greatly need the specialized services that Women’s Business Centers provide. 

Again, we ask that the Subcommittee do what is truly best for small business in 

America and appropriate: $30 million for Microloan Lending (requiring a $2.8 million appropriation), $25 million for Microloan Technical Assistance, $15 million for 

PRIME, and $14.5 million for Women’s Business Centers. 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND

LAND-GRANT COLLEGES (NASULGC) AND THE CONSORTIUM FOR OCEANOGRAPHIC

RESEARCH AND EDUCATION (CORE) 

On behalf of the 256 institutional members of the Consortium for Oceanographic 

Research and Education and the National Association of State Universities and 

Land-Grant Colleges, thank you for your support of ocean sciences within the National Oceanic and Atmospheric Administration (NOAA). Under your leadership, 

Congress has taken important steps to recognize NOAA’s contributions to our nation’s quality of life, national security, public health, and economic well-being. However, CORE and NASULGC have serious concerns that the Administration budget 

request for fiscal year 2005 puts that progress in jeopardy by recommending significant cuts in funding for NOAA’s extramural ocean research programs. 

As you are aware, NOAA is the third largest source of federal funding for marine 

academic research, oversees the nation’s coastal and ocean monitoring networks, 

and participates in several important climate research programs. In that capacity, 

NOAA provides support for scientists at many of our member institutions to conduct 

research that provides critical information to policy-makers. This external research 

offers important benefits to NOAA, leveraging limited resources to meet ever-expanding needs for scientific support of its missions. 

University research funds are awarded through peer-reviewed, competitive processes, ensuring that tax dollars support the best science and that duplication is 

minimized. In addition to grants awarded by NOAA, the states and universities 

themselves support academic research through their contributions to scientists’ salaries and research facilities. This reduces NOAA’s personnel and infrastructure costs, 

and gives the agency greater flexibility to make rapid changes in order to address 

emerging issues and priorities. 

NOAA-sponsored extramural research also is essential to support the training of 

the next generation of ocean scientists and engineers. Because the competitive review process ensures that funding is awarded to the highest-priority science, graduate students have the opportunity to work on cutting edge research. These students will provide the foundation upon which our nation’s future ability to understand and manage marine issues is built. University partnerships will also be the 

best remedy for the large number of anticipated NOAA retirements in the coming 

years. Currently NOAA is undergoing a congressionally mandated evaluation of its 

research enterprise. During this time of change and uncertainty, it is critical that 

Congress continue to support, and use any restructuring to enhance NOAA’s competitive research programs and partnerships with the academic community. These 

partnerships will allow NOAA to bring the best talent to bear in addressing high 

priority research and development requirements. 

The academic community recognizes the serious budgetary constraints that Congress faces in the coming fiscal year. However, short term savings achieved by cutting funding for extramural research programs could seriously jeopardize NOAA’s 

long term capacity to meet its core mission requirements. 

We thank you for your past support for ocean science and look forward to working 

with you to restore and stabilize the funding base for NOAA’s extramural programs. 

A list of recommended funding levels for specific programs is below. 

Thank you for your consideration. 

National Ocean Service 

Competitive programs of the National Centers for Coastal Ocean Science 

(NCCOS).—The Administration’s fiscal year 2005 budget request includes reductions of approximately $10 million from the competitive research programs of the 

National Centers for Coastal Ocean Science. These programs support important 

peer-reviewed, multi-disciplinary research in three goal areas: coastal ecosystem 

studies, cumulative coastal impacts, and harmful algal blooms and hypoxia. The 

proposed cuts would have devastating impacts on ongoing research and threaten the 
175

viability of future science plans, and we urge you to restore funding to the previously appropriated level of $23.5 million. 

National Estuarine Research Reserve System (NERRS).—We support the National Estuarine Research Reserve Association’s requested level of $20 million for NERRS, 

an increase of $3.6 million over the fiscal year 2005 President’s request. This level 

is necessary to maintain support for the system’s basic operating requirements and 

core programs, and to provide support for one new site in Texas. NERRS operates 

the only national monitoring program for estuaries, identifying short-term variability and long-term trends in coastal environmental quality and health at national, 

regional, and local levels. These funds would also support the NERRS graduate fellowship program that brings academic research expertise to bear upon coastal and 

estuarine research data gaps and trains the next generation of scientists. 

Oceanic and Atmospheric Research 

Climate and Global Change Program.—The fiscal year 2005 budget request in- cludes a reduction of $9.15 million for the Climate and Global Change program. 

This important competitive grants program helps further our understanding of how 

the oceans control Earth’s climate and enhances our predictive capability with respect to forecasting climate cycles affecting the United States. We urge you to restore the program to the fiscal year 2004 enacted level of $69.7 million. 

Global Ocean Observing System.—For fiscal year 2005, NOAA is requesting an in- crease of $10.7 million to continue building a global ocean observing system. These 

funds bring the completion of the system to 53 percent, establishing a global network of ocean reference stations to document long-term ocean/atmosphere variability and provide validation points for climate forecast models. This funding is an 

important step towards completion of a multi-year plan to fully implement the ocean 

climate observing system by 2010. 

Oceans and Human Health.—The fiscal year 2004 omnibus appropriations bill 

provided $10 million to continue an important new program in NOAA studying the 

role of the oceans in human health. This developing effort is composed of three key 

elements: establishment of NOAA centers of excellence, implementation of a competitive external research grants, and support for traineeships and distinguished 

scholars. NOAA’s program, which complements the joint National Science Foundation and the National Institute of Environmental Health Sciences initiative, is particularly important given the agency’s unique leadership position with respect to 

ocean and coastal stewardship. We urge the Committee to continue the program and 

provide a modest increase of $2 million in fiscal year 2005. 

National Sea Grant College Program.—For over 35 years, Sea Grant has proven 

its value to U.S. taxpayers as a program that supports rigorous, high-quality research that is directly responsive to the concerns of coastal constituents. Over 300 

Sea Grant institutions across 31 programs collaborate to respond to issues of national and regional importance using federal, state and industry partnerships that 

provide an extraordinary return on a modest federal investment. Congress recognized the value of Sea Grant when it reauthorized the program in 2002 at funding 

levels 25 percent higher than before. However, Sea Grant has lost significant opportunities to respond to critical national issues simply because actual program funding 

has not kept pace with inflation and needs. For this reason, we urge you to provide 

$68.4 million for Sea Grant in fiscal year 2005. 

Ocean Exploration.—The Administration’s fiscal year 2005 budget requests a decrease of $1.8 million for the Ocean Exploration program which funds partnerships 

with public and private institutions to search for new ocean resources, assess and 

explain the diversity of marine organisms, survey and explore historic shipwrecks, 

monitor ocean acoustics, and support educational efforts and outreach. This reduction will lead to a 20 percent decline in funding available for the academic community and other partners to engage with NOAA’s program on specific projects. We 

urge you to restore this funding so that the ocean science community will be able 

to continue their participation in efforts to promote ocean exploration and research. 

National Undersea Research Program (NURP).—Each year, NOAA’s undersea research program supports over 200 research projects focused on developing the tools 

and expertise needed to work in the undersea environment. Projects are carried out 

primarily through the six regional NURP Centers, and are chosen on the basis of 

a merit-based peer-review process. This open, competitive process ensures a variety 

of high quality research projects directed towards pressing national and regional 

problems. We urge you to provide funding of $15 million in fiscal year 2005 to support the work of the NURP centers. 

Educational Partnership Program for Minority-Serving Institutions (EPPMSI).—

We support the request of $15 million for EPPMSI, and support the requested 

transfer of the program from Program Support to OAR. The under-representation 
176

of minorities in the earth science disciplines continues to be a glaring problem, and 

NOAA’s outreach initiatives are vital steps towards correcting the imbalance. This 

program also has the support of NASULGC’s Office for the Advancement of Public 

Black Colleges. 

National Marine Fisheries Service 

Marine Mammals.—Sound is an essential tool for ocean researchers to penetrate 

the otherwise opaque waters of the sea. However, in recent years, concerns have 

grown about the impact of many types of noise on marine mammals, including 

acoustic research. One of the primary challenges to addressing this issue is our current, very limited scientific understanding of the effects of sound on marine mammals. Increasing this understanding would clarify and guide NOAA managers in developing administrative policies to allow the conduct of ocean research in compliance 

with applicable environmental laws as well as making it easier for researchers to 

include effective mitigation measures in their experimental plans. We urge that $4 

million be made available to NOAA for its participation in an independent, peerreviewed interagency research program on the effects of sound on marine mammals. 

In addition, we urge that $1 million be provided to NOAA Fisheries to strengthen 

its permitting capabilities and develop more efficient and effective criteria and guidance for ocean researchers with respect to marine mammals. 

NOAA Education Programs 

National Ocean Sciences Bowl (NOSB®).—Since its establishment in 1997, the 

National Ocean Sciences Bowl has reached more than 8,200 students and teachers 

in 24 regions, bringing the oceans into high school classrooms. The NOSB®, an academic competition for high school students who excel in math and science, is funded 

through a partnership with NOAA and other federal agencies, academia, foundations and industry. The Committee’s past support for the NOSB® has supported important program enhancements including a pilot program to introduce the NOSB®

in inner-city schools with high numbers of disadvantaged students, the National 

Ocean Scholars program in which students who have participated in the NOSB®

compete for two-year college scholarships, and increased regional support. To continue and expand the NOSB® program, $1.5 million is requested for fiscal year 

2005. 

Program Support—Marine Operations and Maintenance 

Oceanographic Fleet Support.—For fiscal year 2005, NOAA has requested $2.5 

million from the University-National Oceanographic Laboratory System fleet to support work in the Pacific Ocean. The time at sea would be used to support long-time 

series research for Fisheries-Oceanographic Coordination Investigations (FOCI), 

studies of deep-sea vents and the maintenance of tsunami moorings in the Gulf of 

Alaska and the Pacific Ocean. Increased utilization of the UNOLS fleet by our federal colleagues helps to lower the overall costs of fleet support, leaving more funding 

for agency operations and research and experimentation. 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF UNIVERSITY FISHERIES

AND WILDLIFE PROGRAMS

The National Association of University Fisheries and Wildlife Programs 

(NAUFWP) appreciates the opportunity to submit testimony concerning the fiscal 

year 2005 budget of the National Oceanic and Atmospheric Administration (NOAA). 

NAUFWP represents approximately 55 university programs and their 440 faculty 

members, scientists, and extension specialists, and over 9,200 undergraduates and 

graduate students working to enhance the science and management of fisheries and 

wildlife resources. 

The National Sea Grant College Program provides essential academic research, 

education, and extension services for the oceans community. Sea Grant research is 

critical to the maintenance and improvement of the nation’s marine resources, such 

as in the areas of combating aquatic nuisance and marine invasive species. The program is an excellent example of collaboration between federal and state governments and universities. Unfortunately, the Sea Grant program has been undermined by project terminations and a requested decrease in fiscal year 2005. Therefore, NAUFWP strongly urges Congress to appropriate $62.4 million for this program in fiscal year 2005, which is $5 million above the President’s request. 

NAUFWP supports the National Invasive Species Act (NISA) Program to prevent 

and control invasive species, and the Marine Aquaculture Program. These partnership programs within NOAA provide information to support policy and management 

decisions, increase knowledge of coastal and marine ecosystems, and provide the sci-
177

entific basis for enhancing the Nation’s marine economic sector. NAUFWP supports 

the Administration’s request of $500,000 for NISA/Prevent and Control, and $1.612 

million the Marine Aquaculture Program. We urge Congress to appropriate these 

amounts for fiscal year 2005. 

Thank you for considering the views of universities with fisheries and wildlife programs. We look forward to working with you and your staff to ensure adequate 

funding for fish and wildlife research, education, and conservation. Please include 

this testimony in the official written record. 

PREPARED STATEMENT OF THE OCEAN CONSERVANCY

The Ocean Conservancy (TOC) is pleased to share its views regarding the marine 

conservation programs in the budgets of the National Oceanic and Atmospheric Administration (NOAA), the Department of State’s Bureau of Oceans and International 

Environmental and Scientific Affairs and the Marine Mammal Commission and requests that this statement be included in the official record for the fiscal year 2005 

Commerce, Justice, State, the Judiciary and Related Agencies bill. 

TOC cannot overstate the importance of this Subcommittee in advancing marine 

conservation and appreciates the funding provided in fiscal year 2004. TOC is deeply troubled by the severe cuts totaling over $237 million to the National Ocean Service and the National Marine Fisheries Service proposed in the Administration’s fiscal year 2005 budget request. If enacted, these cuts will cripple the agency’s ability 

to properly manage our oceans. TOC recognizes the constraints this Subcommittee 

faces, but with the upcoming release of the U.S. Commission on Ocean Policy’s draft 

report, we urge that you reject these cuts and make ocean conservation a top priority. 

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Conservation Trust Fund 

Passed by Congress in 2000, the Conservation Trust Fund is a groundbreaking 

bipartisan accomplishment and represents a major advancement in conservation 

funding. TOC is grateful that this Subcommittee has upheld its commitment to 

funding the Conservation Trust Fund over the last four fiscal years and calls for 

your continued commitment in fiscal year 2005 by dedicating $560 million for critical ocean and coastal conservation activities within NOAA. We also urge you to protect the integrity of the trust fund by limiting its uses to net increases, rather than 

using the fund as a substitute for base funding. 

Coral Reef Conservation 

NOAA plays a critical role in protecting coral reefs, serves on the Interagency 

Coral Reef Task Force and has major responsibilities for implementing the National 

Action Plan to Conserve Coral Reefs. Through monitoring, mapping, restoration and 

outreach activities, NOAA works with state, territorial, local and other parties to 

reduce land-based pollution, overfishing, diseases, and other threats to coral reefs. 

TOC urges the Subcommittee to provide $2 million above the Administration’s request, which will leverage an additional $2 to $4 million in matching resources, to 

support local action strategies to protect coral reefs through partnerships with local, 

state and territorial governments, universities and the private sector. 

National Ocean Service 

National Marine Sanctuary Program 

The 13 U.S. national marine sanctuaries encompass more that 18,000 square 

miles of our most significant marine resources. TOC applauds the Subcommittee’s 

recognition of the importance of the Sanctuary program by providing $49 million for 

operations in fiscal year 2004 and urges at least level funding in fiscal year 2005. 

Continued funding at this level will reduce staffing shortages, support conservation, 

community outreach, research, and education programs, as well as provide the necessary funds for updating sanctuary management plans as required by law. TOC 

also supports $10 million for construction, particularly for interpretive facilities to 

educate the public about the federal government’s role in managing our nation’s 

ocean and coastal resources. 

Marine Protected Areas (MPAs) 

TOC appreciates this Subcommittee’s continued support of NOAA’s MPA initiative 

and requests $5 million in fiscal year 2005. This $0.5 million increase will allow 

NOAA to work more effectively with federal and state agencies and other partners 

to acquire data for the ongoing MPA inventory, support the Marine Protected Areas 
178

Advisory Committee and better assist stakeholders, including states and the National Park Service, by holding regional workshops and providing training and technical assistance. 

Nonpoint Pollution Implementation Grants 

Polluted runoff continues to be the nation’s largest source of water pollution. TOC 

urges the Subcommittee to reject the Administration’s proposed termination of this 

program and maintain level funding in fiscal year 2005 to help coastal states and 

territories continue to implement their approved nonpoint pollution control plans. 

National Marine Fisheries Service 

Expanding Fisheries Stock Assessments 

The status of roughly two-thirds of our commercially caught ocean fish populations is unknown due in large part to lack of funding for basic research and regular stock assessments. We applaud the Subcommittee’s decision to increase stock 

assessment funding to $18 million in fiscal year 2004 and urge that this trend continue with $33.9 million in fiscal year 2005, $15 million above the Administration’s 

request. Regular stock assessments will give managers baseline information critical 

to managing our fisheries and help reduce the backlog in research days-at-sea, 

which currently exceeds 3,800 days according to NMFS’s current 10-year plan. This 

funding is one of The Ocean Conservancy’s highest priorities. 

Fisheries Observers 

Along with stock assessments, reliable, objective information about how many fish 

and marine wildlife are being caught, directly and as bycatch, is crucial to responsible management of our ocean resources. Observers are a key means of collecting 

such information. TOC recommends $35 million for fisheries observers in fiscal year 

2004, $12.5 million above the Administration’s request, and encourages the Subcommittee to prioritize the following programs. 

—West Coast Observers.—TOC respectfully requests that the Subcommittee fund 

west coast observers at $5 million in fiscal year 2005, $120,000 above fiscal year 

2004 enacted. 

—Pelagic Longline Observers.—TOC strongly supports $3 million in funding for 

Atlantic and $4 million in funding for Western Pacific pelagic longline fisheries 

observers. High interaction rates with endangered sea turtles have resulted in 

partial closures in both fisheries in recent years to avoid jeopardizing the continued existence of these species. In 2004, fishermen will return to the closed 

areas with gear and bait modifications expected to reduce the number and severity of sea turtle interactions. Adequate observer coverage is essential to determine the effectiveness of these modifications in each fishery. NMFS will require 100 percent observer coverage in the reopened longline swordfish fishery 

in the Western Pacific. TOC believes that a minimum of 20 percent observer 

coverage should be required throughout the Atlantic, with 100 percent coverage 

for any further gear research. Since 2001, Atlantic observer coverage has not 

met even the 5 percent level required by NMFS in order to comply with the 

ESA. As a result, NMFS estimates that several hundred endangered sea turtles 

were captured in excess of authorized levels before the agency took action to require further protections. 

—New England Observers.—TOC appreciates this Subcommittee’s inclusion of report language and $9.3 million for New England groundfish observers in fiscal 

year 2004 and requests level funding and the inclusion of the following report 

language in fiscal year 2005: ‘‘The Subcommittee expects NMFS to allocate sufficient funds to achieve ten percent observer coverage in the New England 

groundfish fishery, and in the non-directed fishery to the extent practicable.’’

—Bycatch Observers.—TOC respectfully requests the Subcommittee support level 

funding at $4.9 million in fiscal year 2005. 

Endangered Species Act—Other Species 

TOC urges the Subcommittee to restore funding in fiscal year 2005 for Endangered Species Act (ESA) recovery planning and implementation. This funding is 

vital for NMFS to support the recovery of endangered marine species like the 

smalltooth sawfish, respond to listing petitions in a timely fashion, conduct Section 

7 consultations, designate critical habitat and implement recovery plans. Of the 52 

ESA-listed species managed by NOAA, less than one-third have recovery plans in 

place, most of which are critically out of date. We implore the Subcommittee to address this problem and provide $5.7 million in fiscal year 2005, $2.0 million above 

the Administration’s request. 
179

Marine Mammal Protection 

A lack of adequate resources has severely hampered NMFS’s ability to effectively 

implement the Marine Mammal Protection Act. TOC is deeply disappointed that the 

Subcommittee cut funding in fiscal year 2004 and strongly urges the Subcommittee 

to provide at least $15 million in fiscal year 2005. This will allow NMFS to fund 

top priority studies identified by the take reduction teams; design and implement 

fishery management plans that will not endanger marine mammals; conduct research on population trends, health, and demographics; and carry out education and 

enforcement programs. This funding is one of The Ocean Conservancy’s highest priorities. In addition, we urge the Subcommittee to restore funding for the Marine 

Mammal Health and Stranding Response Program, which was cut in fiscal year 

2004, and provide $2 million in fiscal year 2005. Die-offs of large numbers of marine 

mammals, including a recent bottlenosed dolphin event in Florida, are of significant 

conservation importance. Determining the cause of these events requires not only 

expertise, but also financial resources. 

Protected Resources Stock Assessments 

The MMPA and the ESA require NMFS to regularly evaluate the status of approximately 230 stocks of marine mammals, sea turtles, and other marine and 

anadromous species. Accurate and precise biological information is necessary to 

carry out effective conservation programs, promote recovery, evaluate listing status, 

and authorize scientifically defensible incidental take permits. Unfortunately, over 

130 marine mammal stocks and all U.S. sea turtle populations lack the necessary 

data required under MMPA or ESA. TOC urges the Subcommittee to consider providing $5 million in fiscal year 2005, which will begin to address the problem. 

National Environmental Policy Act (NEPA) Implementation 

TOC supports the Administration’s $8.0 million request for implementing NEPA. 

This funding is critical, as NMFS is required by law to consider and document potential environmental impacts of agency actions, ranging from complex rulemakings 

to controversial research permits. Of these funds, we urge the committee to dedicate 

$2 million to ensure robust NEPA analyses for marine mammal permitting. 

Highly Migratory Shark Fisheries Research Program 

This effective multi-regional collaborative effort conducts vital research on shark 

and ray populations in the Gulf of Mexico, the Atlantic, and the Pacific. This research provides NMFS with critical information necessary for effective management 

and conservation of shark fishery resources. TOC appreciates the Subcommittee’s 

rejection of the Administration’s proposed cut in fiscal year 2004 and requests level 

funding at $2.0 million in fiscal year 2005. 

DEPARTMENT OF STATE

Bureau of Oceans and International Environmental and Scientific Affairs 

International Fisheries Commission Account 

TOC requests $200,000 for the State Department to implement the landmark 

Inter-American Convention for the Protection and Conservation of Sea Turtles and 

the Memorandum of Understanding on the Conservation and Management of Marine Turtles and their Habitats of the Indian Ocean and South East Asia. The 

United States played a leading role in the establishment of these conservation instruments and our continued leadership and support will ensure that momentum 

continues. 

MARINE MAMMAL COMMISSION

TOC requests that the Subcommittee support the Marine Mammal Commission’s 

base program at $2.25 million in fiscal year 2004, $350,000 above the Administration’s request. 

ANTI-ENVIRONMENTAL RIDERS

TOC urges the Subcommittee to not attach any anti-environmental rider to this 

or any other appropriations bill. In the past, riders have been used by Members of 

Congress to roll back environmental protections and prevent NOAA from advancing 

marine conservation. 

These programs and issues are of the utmost importance to the stewardship of 

the nation’s living marine resources. We greatly appreciate your support for these 

programs in the past and look forward to continued, responsible funding for these 

programs in fiscal year 2005. Thank you for considering our requests. 
180

PREPARED STATEMENT OF THE NATIONAL FEDERATION OF COMMUNITY BROADCASTERS

Thank you for the opportunity to submit testimony to this Subcommittee request- ing a $55 million appropriation for the Public Telecommunications Facilities Program (PTFP) in fiscal year 2005. As the President and CEO of the National Federation of Community Broadcasters, I speak on behalf of nearly 250 community radio 

stations and related organizations across the country. This includes the new Low 

Power FM service that has recently been authorized by the FCC. NFCB is the sole 

national organization representing this group of stations, which provide service in 

both the smallest communities and largest metropolitan areas of this country. Nearly half of our members are rural stations, and half are minority controlled stations. 

In summary, the points we wish to make to this Subcommittee are that NFCB: 

—Supports funding for PTFP that will cover the on-going needs of public radio 

and television stations. 

—Supports funding for conversion of public radio and television to digital broadcasting. 

—Requests report language to ensure that PTFP utilizes any digital funds it receives for radio as well as television needs. 

Community radio supports $55 million in funding for the Public Telecommunications Facilities Program in fiscal year 2005. Federal support distributed through 

the PTFP is essential to continuing and expanding the public broadcasting service 

throughout the United States. It is particularly critical for rural stations and for 

those stations serving minority communities. PTFP funds new stations, expanding 

the reach of public broadcasting to rural areas and to audiences that are not presently served by existing stations. In addition, it replaces obsolete and worn out 

equipment so that the existing stations can continue to broadcast high quality programming. Finally, with the advent of digital broadcasting, PTFP funding will help 

with the conversion to this new technology. 

We support $55 million in funding to ensure that both the on-going program—

currently funded in fiscal year 2004 at $22 million—will be continued, and that the 

increase to $55 million will be available to help cover the cost of radio and television 

converting to digital transmission. This increase in funding is urgent because the 

FCC has now endorsed a standard for digital radio broadcasting and the television 

conversion deadline is imminent. In addition, commercial radio stations are converting to digital transmission and public radio should not be left behind. 

Funding from PTFP has been essential to keep public radio stations on the air 

by funding replacement of equipment, often after 20 or more years of use. The program is administered carefully to be sure that stations are acquiring the most appropriate type of equipment. They also determine that equipment is being properly 

maintained and will not fund the replacement of equipment before an appropriate 

length of time. PTFP has also helped bring public radio service to rural areas where 

it is not available. Sometimes they fund translators to expand the coverage of an 

existing station and sometimes they help with the planning and equipment needs 

of a new station. Recently, many of these new projects have been for Native American controlled stations on Indian Reservations or new local Low Power FM installations. 

Federal funding is particularly critical to stations serving rural and underserved 

audiences which have limited potential for fundraising because of sparse populations, limited number of local businesses, and low income levels. Even so, PTFP 

funding is a matching program so that the federal money is leveraged with a local 

commitment of funds. This program is a strong motivating factor in raising the significant money necessary to replace, upgrade and purchase expensive broadcast 

equipment. 

Community radio supports funding for conversion to digital broadcasting for public radio and television. While public television’s digital conversion is mandated by 

the Federal Communications Commission, public radio is converting to digital to 

provide more public service and to keep up with the market. The digital standard 

for radio has been approved. The initial conversion of radio stations is being concentrated in 13 seed markets and it is important that public radio be part of this 

project. Most exciting to public radio is the encouraging results of tests that National Public Radio has conducted that indicate that stations can broadcast two high 

quality signals, even while they continue to provide the analog signal. The development of 2nd digital audio channels will potentially double the public service that 

public radio can provide, particularly to unserved and underserved communities. 

We appreciate Congress’ direction to the Corporation for Public Broadcasting that 

it utilize its digital conversion fund for both radio and television and ask that you 

ensure that the PTFP funds are used for both media. Congress stated, with regard 

to the fiscal year 2000 digital conversion funds:
181

‘‘The required (digital) conversion will impose enormous costs on both individual 

stations and the public broadcasting system as a whole. Because television and 

radio infrastructures are closely linked, the conversion of television to digital will 

create immediate costs not only for television, but also for public radio stations. 

Therefore, the Committee has included $15,000,000 to assist radio stations and television stations in the conversion to digitization . . .’’ (S. Rpt. 105–300)

Thank you for your consideration of our testimony. If the Subcommittee has any 

questions or needs to follow-up on any of the points expressed above, please contact: 

Carol Pierson, President and CEO, National Federation of Community Broadcasters, 

1970 Broadway, Suite 1000, Oakland, CA 94612. Telephone: 510–451–8200. Fax: 

510–451–8208. E-mail: carol@nfcb.org. 

The NFCB is a twenty-nine year old grassroots organization which was established by and continues to be supported by our member stations. Large and small, 

rural and urban, NFCB member stations are distinguished by their commitment to 

local programming, community participation and support. NFCB’s nearly 250 members come from across the United States, from Alaska to Florida; from every major 

market to the smallest Native American reservation. While urban member stations 

provide alternative programming to communities that include New York, Minneapolis, San Francisco and other major markets, rural members are often the sole 

source of local and national daily news and information in their communities. 

NFCB’s membership reflects the true diversity of the American population: 41 percent of members serve rural communities, and 46 percent are minority radio services. 

On community radio stations’ airwaves examples of localism abound: on KWSO 

in Warm Springs, Oregon, you will hear morning drive programs in their Native 

language; throughout the California farming areas in the central valley, Radio 

Bilingu ̈ e programs five stations targeting low-income farm workers; in Chevak, 

Alaska, on KCUK you will hear the local weather reports and public service announcements in Cup’ik/Yup’ik Eskimo; in Dunmore, West Virginia, you will hear 

coverage of the local school board and county commission meetings; KABR in Alamo, 

New Mexico serves its small isolated Native American population with programming almost exclusively in Navajo; and on WWOZ you can hear the sounds and culture of New Orleans throughout the day and night. 

In 1949 the first community radio station went on the air. From that day forward, 

community radio stations have been reliant on their local community for support 

through listener contributions. Today, many stations are partially funded through 

the Corporation for Public Broadcasting grant programs. CPB funds represent under 

10 percent of the larger stations’ budgets, but can represent up to 50 percent of the 

budget of the smallest rural stations. PTFP funding is a critical source of matching 

funds for these essential community resources. 

PREPARED STATEMENT OF THE MARINE FISH CONSERVATION NETWORK

The Marine Fish Conservation Network (Network) is pleased to share its views 

regarding National Marine Fisheries Service (NMFS) programs in the National Oceanic and Atmospheric Administration’s (NOAA) fiscal year 2005 budget request. We 

ask that this statement be included in the hearing record for the fiscal year 2005 

Commerce, Justice, State, and the Judiciary Appropriations Bill. We are requesting 

a budget increase of $40.75 million for NMFS programs in the fiscal year 2005 

budget to be allocated for stock assessments ($15 million), observer programs ($12.5 

million), essential fish habitat ($10.15 million), and vessel monitoring systems ($3.1 

million) as described below. 

The Network is a national coalition of more than 160 environmental organizations, commercial and recreational fishing associations, aquariums, and marine 

science groups dedicated to conserving marine fish and promoting their long-term 

sustainability. We greatly appreciate the funding this Subcommittee has provided 

for the marine fish conservation programs within NMFS in the past and we look 

forward to working with the Subcommittee to enact adequate levels of funding for 

the coming fiscal year. 

There are four areas of the NMFS budget where we believe the requested funding 

levels need to be increased to help the agency fulfill its obligations as the federal 

government’s fish management agency. 
182

STOCK ASSESSMENTS

Request: Total of $33.9 million 

While we are pleased that NMFS has requested an $800,000 increase in the expanding stock assessments line item, we remain concerned that funding in this area 

is insufficient. There currently is a gap of over $40 million between what NMFS 

needs to conduct stock assessments of federally managed fish populations and the 

funding that is available. Also, NMFS estimates that under current funding levels 

it has a deficit of 3,811 days at sea, many of which are used to conduct stock assessments. The impact of this deficit is demonstrated by the fact that the status of 

three-quarters of all fish species managed by NMFS is unknown, largely due to a 

lack of funding for basic research and stock assessments. An additional $15 million, 

for a total appropriation of $33.9 million for expanding stock assessments, would 

further this essential work. 

OBSERVER PROGRAMS

Request: Total of $35 million 

As stated by NOAA in their budget summary, the current level of funding will 

only provide observers for 43 fisheries and adequate coverage for only 29 of those. 

Last year Congress took a strong positive step to improve the management of America’s fish populations when it increased the overall fisheries observer budget by almost $11 million. Observers are an essential fish management tool because they 

provide critical data on the amount and type of ocean wildlife killed due to fishing. 

However, the proposed fiscal year 2005 budget would decrease this funding by $2.3 

million. A nationwide observer program for all federal fisheries would cost approximately $118 million. A smart investment toward the sustainability of our nation 

fisheries would be to fully fund a national observer program. Increasing funding for 

observers by $12.5 million to a total of $35 million, would be a down payment on 

that effort. 

ESSENTIAL FISH HABITAT

Request: Total of $15 million 

Essential fish habitats (EFH) are those waters and substrate upon which fish depend for reproduction and growth. Land-based activities and destructive fishing 

practices threaten the viability of these habitats and the sustainability of the fish 

populations that depend on them. While the Sustainable Fisheries Act of 1996 gave 

NMFS a clear mandate to identify and protect EFH, too little has been done to protect these habitats. NMFS has approximately $4.85 million in its base budget for 

EFH. This level of funding is not nearly adequate for protecting the EFH for the 

almost 1,000 federally managed fish, nor for the research necessary to understand 

the relationship between habitat and healthy fish populations. Increasing funding 

by $10.15 million to a total of $15 million would better equip NMFS to gain the 

information necessary to further refine EFH designations and take action to protect 

EFH from the adverse impacts of fishing. 

VESSEL MONITORING SYSTEMS

Request: Total of $12.4 million 

Increasing funding for vessel monitoring systems (VMS) to $12.4 million would 

allow for the establishment and implementation of VMS, as well as placing VMS 

transponders on many of the estimated 10,000 vessels in the U.S. commercial fishing fleet. This represents a $3.1 million increase over the President’s request. VMS 

programs enhance data collection and safety at sea. VMS is beneficial to regulators 

because it will allow officials to know when a fishing vessel is violating closed areas 

or is fishing beyond the end of a regulated fishing season. 

Thank you for considering our request for increasing funding for these important 

fish management programs. These increases will go a long way toward ensuring 

that NMFS can better manage and protect our nation’s fish resources now and for 

the future. 

PREPARED STATEMENT OF THE HONORABLE JIMMIE KERR, PINAL COUNTY SUPERVISOR

Chairman Gregg, Ranking Member Hollings, and distinguished members of the 

Subcommittee, thank you for allowing me to testify today in support of a $9 million 

Cooperative Assistance Grant (CAP) from the U.S. Marshals Service (USMS) for ex-
183

pansion of the Pinal County detention facility in the fiscal year 2005 Senate Commerce, Justice, State and the Judiciary Appropriations bill. 

As you may know, Mr. Chairman, Arizona is the second fastest growing state in 

the nation. And, Pinal County is the fastest growing county per capita in the state. 

Unfortunately, with increased population comes increased crime. Simply put, our 

jails and prisons are grossly overcrowded and each and every year this problem is 

only exacerbated by our growing population. Our county has come up with a unique 

proposal that will repay the federal government, help the Marshals Service obtain 

much needed additional bed space, and, at the same time, relieve our county’s overcrowded prison population. This proposal would be a win-win for the federal government and Pinal County. 

Under the proposal, the CAP grant would enable Pinal County to build an additional 500 unit pod onto its new detention facility. In return, the USMS would be 

guaranteed an additional 200 beds in the Pinal County facility. 

Pinal County would reduce the established USMS per diem rate for all inmates 

in the facility by $18.60 per day until the grant is fully repaid to the USMS. It is 

estimated that USMS would recover the entire $9 million in less than seven years, 

which would save the USMS the total annual operating cost equivalent of approximately 153,577 prisoner days over this roughly seven year period. 

The reduced per diem rate, while working to pay back the USMS, would also help 

fund the additional operating costs of the new facility to the tune of about $2.92 

million per year (200 inmates × $40 × 365 days = $2,920,000). In addition, the 

USMS would save nearly $1.4 million per year over the next seven years for operating expenditures under this unique proposal ($18.60 × 200 × 365 = $1,357,800). 

Again, our detention center facilities are way too overcrowded and Pinal County’s 

approach to this problem benefits both the federal government and the county. At 

a time when the federal deficit threatens fiscal solvency, this plan responds to those 

fiscal demands by repaying the federal government for all the money that is borrowed. 

Therefore, I strongly urge the Subcommittee to support Pinal County’s request for 

a $9 million CAP grant to expand its overcrowded facility. Thank you in advance 

for your consideration of this request. 

PREPARED STATEMENT OF THE REGIONAL INFORMATION SHARING SYSTEMS (RISS) 

PROGRAM

The Regional Information Sharing Systems (RISS) Program respectfully requests 

that Congress appropriate for fiscal year 2005, $50 million to continue their support 

in combating terrorism, drug trafficking, and organized crime. 

These funds will enable RISS to continue services to state and local law enforcement agencies to identify, target, prosecute, and remove criminal conspirators involved in terrorism activity, drug trafficking, organized criminal activity, criminal 

gangs, and violent crime that span multijurisdictional boundaries. Funds will allow 

RISS to continue to support the investigation and prosecution efforts of over 6,600 

local, state, tribal, and federal law enforcement member agencies across the nation 

comprising over 744,000 sworn law enforcement personnel. 

Through funding from Congress, RISS has implemented and operates the only secure Web-based nationwide network—called riss.net—for communications and sharing of criminal intelligence by local, state, tribal, and federal law enforcement agencies. Funds will allow RISS to upgrade the technology infrastructure and resources 

to support increased use and reliance on the system by member law enforcement 

agencies and support the integration of other systems connected to riss.net for information sharing and communication. Using Virtual Private Network technology, the 

law enforcement users access the public Internet from their desktops and have a 

secure connection over the private riss.net intranet to all RISS criminal intelligence 

databases and resources. RISS member law enforcement agencies accessed riss.net 

an average of 3.6 million times per month during fiscal year 2003. Riss.net is a 

proven, highly effective system that improves the quality of criminal intelligence information available to law enforcement officers to make key decisions at critical 

points in their investigation and prosecution efforts. 

The Office of Justice Programs (OJP), Regional Information Sharing Systems 

(RISS) is a federally funded program comprised of six regional intelligence centers. 

The six centers provide criminal information exchange and other related operational 

support services to local, state, tribal, and federal law enforcement agencies located 

in all fifty states, the District of Columbia, U.S. territories, Canada, Australia, and 

England. These centers are: 
184

—Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network 

(MAGLOCLEN).—Delaware, District of Columbia, Indiana, Maryland, Michigan, Pennsylvania, Ohio, New Jersey, and New York, as well as Australia, Canada, and England. —Mid-States Organized Crime Information Center (MOCIC).—Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin, as well as Canada. —New England State Police Information Network (NESPIN).—Connecticut, 

Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, as well as 

Canada. —Regional Organized Crime Information Center (ROCIC).—Alabama, Arkansas, 

Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, 

South Carolina, Tennessee, Texas, Virginia, and West Virginia, as well as Puerto Rico and the U.S. Virgin Islands. —Rocky Mountain Information Network (RMIN).—Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming, as well as Canada. —Western States Information Network (WSIN).—Alaska, California, Hawaii, Oregon, and Washington, as well as Canada, Guam, and Australia. 

RISS is a force multiplier in fighting increased violent criminal activity by terrorists, drug traffickers, sophisticated cyber criminals, street gangs, and emerging 

criminal groups that require a cooperative effort by local, state, tribal, and federal 

law enforcement. There is an increasing communications sophistication by the criminal networks, including terrorists, and a rising presence of organized and mobile 

narcotics crime. Interagency cooperation in sharing information has proven to be the 

best method to combat the increasing criminal activity in these areas. The RISS 

centers are filling law enforcement’s need for rapid, but controlled, sharing of information and intelligence pertaining to known or suspected terrorists, drug traffickers, and other criminals. Congress funded the RISS Program to address this 

need as evidenced by its authorization in the Anti-Drug Abuse Act of 1988. 

The success of RISS has been acknowledged and vigorously endorsed by the International Association of Chiefs of Police (IACP), as well as other national law enforcement groups such as the National Sheriffs’ Association (NSA) and the National 

Fraternal Order of Police (NFOP). 

RISS is operating current state-of-the-art technical capabilities and systems architecture that allow local, state, tribal, and federal law enforcement member agencies 

to interact electronically with one another in a secure environment. The RISS system has built-in accountability and security. The RISS secure intranet (riss.net) protects information through use of encryption, smart cards, Internet protocol security 

standards, and firewalls to prevent unauthorized access. The RISS system is governed by the operating principles and security and privacy standards of 28 CFR 

Part 23 (Criminal Intelligence Systems Operating Policies). The technical architecture adopted by RISS requires proper authorization to access information, but also 

provides flexibility in the levels of electronic access assigned to individual users 

based on security and need-to-know issues. Riss.net supports secure e-mail and is 

easily accessible using the Internet. This type system and architecture is referenced 

and recommended in the General Counterdrug Intelligence Plan (GCIP) and is endorsed by the National Criminal Intelligence Sharing Plan (NCISP). 

The FBI Law Enforcement Online (LEO) system and the RISS system achieved 

interconnection of the two systems in 2002 for distribution of sensitive but unclassified homeland security information to authorized users of both LEO and RISS. The 

value of this interconnection was recognized in 2003 by the National Criminal Intelligence Sharing Plan, which is sponsored by the U.S. Department of Justice. The 

Plan designates the RISS/LEO interconnection as the initial sensitive but unclassified communications backbone for implementation of a nationwide criminal intelligence sharing capability. This nationwide sensitive but unclassified communications backbone supports fully functional, bidirectional information sharing capabilities that reuse existing local, state, tribal, regional, and federal infrastructure investments. The Plan recommends that interoperability of existing systems with the 

RISS/LEO communications capability proceed immediately to leverage information 

sharing systems and expand intelligence sharing. The International Association of 

Chiefs of Police, the U.S. Attorney General, and other federal agency administrators 

endorse the Plan and have adopted it as a national model for all law enforcement 

agencies, organizations, and associations. RISS officials are working to implement 

the Plan recommendations within current budgetary restraints. 

In addition, RISS has recognized that the need for exchange of information extends beyond law enforcement and the RISS/LEO virtual single system. During 

2003, RISS implemented a service available over riss.net to link law enforcement 

with the public safety and first responder agencies involved in securing our nation 
185

from terrorism. The service is known as the RISS Anti-Terrorism Information Exchange, or RISS ATIX, and includes a secure Web site, secure bulletin board, and 

secure e-mail. Through this capability, users can post timely threat information, 

view and respond to messages posted by government, police, fire, emergency, and 

infrastructure security personnel, and collaborate with law enforcement partners. 

These additional groups of users include public service, public safety, emergency 

management, utility, and other critical infrastructure personnel that have traditionally not been served by RISS. RISS began this service with limited funding to provide a rapid, secure means for first responder agencies to share information. 

RISS has entered into a partnership with the High Intensity Drug Trafficking 

Areas (HIDTA) to electronically connect all of the HIDTAs to riss.net for communications and information sharing. Currently, 16 HIDTAs are electronically connected as nodes to riss.net, and RISS is working to complete the connection of the 

remaining HIDTAs. Twelve state agencies are currently connected as nodes on 

riss.net. An additional nine state law enforcement agencies are pending connection 

as nodes to share information, including terrorism and homeland security information, using riss.net. 

The Executive Office for United States Attorneys (EOUSA) has connected staff to 

riss.net at each of the 93 U.S. Attorneys’ Offices (USAO) Anti-Terrorism Task 

Forces throughout the United States. Staff at the U.S. Department of Justice, 

Criminal Division, has connected to riss.net. RISS and the El Paso Intelligence Center (EPIC) officials entered into a partnership and have electronically connected 

EPIC as a node to riss.net to capture clandestine laboratory seizure data from RISS 

state and local law enforcement member agencies. Other systems connected to 

riss.net include the Law Enforcement Intelligence Unit (LEIU), the National Drug 

Pointer Index (NDPIX), the National White Collar Crime Center (NW3C), the National Law Enforcement Telecommunication System (NLETS), and the Criminal Information Sharing Alliance (CISA), formerly the Southwest Border States Anti-Drug 

Information System (SWBSADIS). The United States Postal Inspection Service 

(USPIS) is currently pending connection to riss.net as a node. The National Drug 

Intelligence Center (NDIC) uses the RISS network as a communications mechanism 

for publishing counterdrug intelligence products to federal, state, local, and tribal 

law enforcement members. 

The integration of the above-mentioned state and federal agencies and systems 

with the riss.net secure nationwide communications backbone has increased the 

sharing of criminal intelligence and alerts and homeland security information within their own agencies and among the other agencies. The operation of RISS ATIX 

provides first responders and critical infrastructure personnel with a secure means 

via riss.net to communicate, share information, and receive terrorist threat information. 

Due to the interest of many law enforcement agency systems to electronically connect to the RISS/LEO backbone, RISS has developed a security architecture solution 

to allow users with various types of security credentials to connect and traverse 

riss.net to share information and access resources without being required to use the 

RISS specific security credentials. Adequate funding is needed to implement the 

technology. 

—RISS is operating an unprecedented nationwide network for communicating 

critical information in a secure environment to both law enforcement and other 

first responders. To support the increased needs of these personnel and continue 

to maintain the RISS system and demand for RISS services and resources, 

RISS is requesting an increase in funding to $50 million for 2005. 

In view of today’s increasing demands on federal, state, local, and tribal law enforcement budgets, requests for RISS services have risen. This support of law enforcement has had a dramatic impact on the success of their investigations. Over 

the three-year period 2001–2003, RISS generated a return by member agencies that 

resulted in 11,701 arrests, seizure of narcotics valued at over $189 million, seizure 

of over $9.8 million in currency, and recovery or seizure of property valued at over 

$31 million. 

RISS continues to work with federal, state, local, and tribal agencies in their efforts to combat the menace of drugs on our street, and the significant influence of 

youth gangs in the distribution and sale of drugs. RISS is working to foster relationships with public safety and first responder agencies to increase information sharing 

on terrorism and critical infrastructure matters among those groups and with law 

enforcement. 

The Bureau of Justice Assistance administers the RISS Program and has established guidelines for provision of services to member agencies. The RISS regional 

intelligence centers are subject to oversight, monitoring, and auditing by the U.S. 

Congress; the General Accounting Office, a federally funded program evaluation of-
186

1DOJ Fiscal Year 2005 Budget Summary, page ATF–29. 

2DOJ Fiscal Year 2005 Budget Summary, page ATF–35. 

3DOJ Fiscal Year 2005 Budget Summary, page ATF–35. 

fice; the U.S. Department of Justice, Bureau of Justice Assistance; and state and 

local governmental units. The Bureau of Justice Assistance also monitors the RISS 

centers for 28 CFR Part 23 compliance. This regulation emphasizes adherence to individual constitutional and privacy rights and places stricter controls on the RISS 

intelligence sharing function than those placed on most federal, state, or local agencies. RISS firmly recognizes the need to ensure that individuals’ constitutional 

rights, civil liberties, civil rights, and privacy interests are protected throughout the 

intelligence process. In this regard, RISS officials recently adopted a RISS Privacy 

Policy to further strengthen their commitment and support of 28 CFR Part 23 and 

protection of individual privacy rights. 

It is respectfully requested that the Congress fully fund the RISS Program as a line item in the Congressional budget, in the requested amount of $50 million. Local 

and state law enforcement, who depend on the RISS centers for information sharing, training, analytical support, investigative funding, and technical assistance, are 

experiencing increased competition for decreasing budget resources. It would be 

counterproductive to require the RISS members from state and local agencies to 

self-fund match requirements, as well as to reduce the amount of BJA discretionary 

funding. The state and local agencies require more, not less, funding to fight the 

nation’s crime/drug problem. The RISS Program cannot make up the decrease in 

funding that a match would cause, and it has no revenue source of its own. Cutting 

the RISS appropriation by requiring a match should not be imposed on the program. 

We are grateful for this opportunity to provide the committee with this testimony 

and appreciate the support this committee has continuously provided to the RISS 

Program. 

PREPARED STATEMENT OF THE INSTITUTE OF MAKERS OF EXPLOSIVES

Interest of the Institute of Makers of Explosives (IME) 

The IME is the safety and security association of the commercial explosives industry. Our mission is to promote safety and the protection of employees, users, the 

public and the environment; and to encourage the adoption of uniform rules and 

regulations in the manufacture, transportation, storage, handling, use and disposal 

of explosive materials used in blasting and other essential operations. ATF is one 

of the agencies that plays a primary role in assuring that explosives are identified, 

tracked, and stored only to and by authorized persons. The ability to manufacture, 

distribute and use these products safely and securely is critical to this industry. 

With this perspective, we have carefully reviewed the Administration’s fiscal year 

2005 budget request and have the following comments. 

Performance Measures Fall Short of Strategic Goals 

The commerce of explosives is one of the nation’s most heavily regulated activities. ATF plays a key role in this regulatory scheme through its implementation of 

Federal Explosives Law. To ensure that the Bureau meets its statutory responsibilities, ATF has identified goals and performance standards that can measure areas 

of progress or areas needing attention. With regard to its explosives mission, the 

Bureau states that its strategic goals are to ‘‘counter crimes of violence’’ by effective 

enforcement of Federal Explosives Law (FEL) and to ‘‘protect public safety’’ through 

regulation of the explosives industry and explosives safety efforts.1 To accomplish 

these goals, ATF sets a number of performance measures.2 Regrettably, with two 

exceptions, these measures do not identify outcome measures as required by Government Results and Performance Act. 

The two exceptions are the measures to ‘‘investigate all reported explosives thefts’’ 

and to respond to all ‘‘telephone inquiries from industry [within] 72 hours.’’ 3 We 

support these measures. However, we question ATF’s determination to limit its efforts to timely respond to inquiries from industry to those inquiries received by telephone. This measure should be expanded to include other electronic forms of communication, as well as letter correspondence. 

This leaves a number of measures with questionable outcomes. Under its goal to 

‘‘counter crimes of violence,’’ the Bureau states that it will open some yet to be determined number of explosives investigations and related to this the ‘‘number of [explosives] defendants convicted.’’ However, if ATF’s enforcement initiatives were 

working, a more meaningful outcome measure should be the number of investigations closed or otherwise resolved, irrespective of whether a conviction was obtained. 
187

4 18 U.S.C. 843(b)(4)(A). 

5Statement of Bradley A. Buckles, Director, ATF, Subcommittee on Treasury, Postal Service 

and General Government, House Appropriations Committee, February 28, 2002, page 17. (Fiscal 

year 2001—1,813 violations; 1st quarter fiscal year 2002—1,763 violations.) 6DOJ Fiscal Year 2005 Budget Summary, page ATF 29. About 9 percent of this request, $20.7 

million, is programmed for information and technology enhancements, basically a level funding 

of the fiscal year 2004 allocation for these functions. 7DOJ Fiscal Year 2005 Budget Summary, page ATF–A6

8DOJ Fiscal Year 2005 Budget Summary, page ATF–A5. 

9 63 FR 44999 (August 24, 1998). 

10Semiannual Agenda, 68 FR 73169–72 (December 22, 2003). 

Under its goal to ‘‘protect public safety,’’ the Bureau states that it will conduct 33 

percent of its universe of explosives licensee/permittees, which it projects to be about 

4,000, and that it will resolve up to 850 unsafe explosives conditions discovered by 

its inspectors. In fact, the statutory standard for inspection of licensee/permittees 

is, with the exception of ‘‘limited permittees,’’ to inspect all licensee/permittee applicants prior to the issuance of such license or permit.4 Thus the appropriate inspection measure should be the percentage of inspections performed within the timeframe required by law. ATF’s standard to resolve up to 850 unsafe explosives conditions is also inadequate. ATF has used this estimate at least since the Administration’s fiscal year 2003 budget request when it suggested that 850 corrective actions 

were less than half the Bureau’s current workload.5 The Administration’s fiscal year 

2005 request does not disclose what the Bureau’s current corrective action workload 

is. Without this context, the 850 corrective action standard has no basis. If ATF’s 

compliance initiatives are working, however, a more meaningful outcome measure 

should be to show a decreasing trend in the percent of non-compliance practices that 

industry fails to rectify after corrective actions have been issued. 

Concerns about the Adequacy of Budget Resources 

To accomplish the missions of ATF’s explosives and arson program, the Administration requests $231.2 million, an increase of $16.1 million over fiscal year 2004, 

but only $2.6 million over current services.6 Nearly half of this new money, $1.1 million is for partial funding of 62 new positions (31 FTE).7 All of these FTP would 

be brought in as inspectors.8 Still, the fiscal year 2005 budget request raises questions about ATF’s ability to perform assigned functions. 

—Baseline Data.—We cannot comment on the adequacy of ATF’s services to industries other than our own. Still, the budget request is difficult to evaluate in 

terms of resources because it does not disclose information about its current 

workload, with the exception of reports due to Congress. Even that is incomplete as noted below. To better justify the Bureau’s budget submission, ATF 

should be asked to provide information on: the number of investigations that 

are open, the date of the oldest and the number of new cases opened in the last 

fiscal year; the number of inspections that will be required to be preformed do 

to permit/license renewals; the number of times ATF failed and for what reason 

to issue a permit or license within the 90-day timeframe required by law; the 

number of background checks that ATF has performed, within what average 

timeframe, and of those, how many individuals failed to receive clearance, and 

of those, how many appealed the Bureau’s findings; the number of rulemakings 

outstanding and their priority; turnover rates among agents and inspectors; and 

the number of persons and from what agencies that are trained through ATF 

programs. Absent information of this type, it is unclear how Congress can effectively oversee ATF’s explosives operations and determine the adequacy of its 

budget request. 

—Inspections.—As noted above, the statutory standard for inspection of licensee/

permittees is, with the exception of ‘‘limited permittees,’’ to inspect the licensee/

permittee applicant prior to the issuance of such license or permit. ATF has not 

met this standard in all instances. We would hope, with the addition of 62 inspector positions, that this situation will improve. 

—Rulemakings.—The last publication of a ‘‘final’’ rule of consequence to the explosives industry was in 1998.9 Currently, ATF has six open rulemakings of interest and concern to the explosives industry.10 The oldest of these was proposed 

in 1997. Several are a result of the enactment of the Safe Explosives Act (SEA) 

in 2002. Our primary interface with ATF is through efforts to comply with the 

Bureau’s regulations. Two of these rulemakings, which implement the SEA, 

were issued as ‘‘interim final rules,’’ which allows rules to be enforced without 

standard input as to the effect of the rule on the regulated community. Subsequently, IME raised a number interpretative questions and concerns about 
188

11 27 CFR 55.109(a). 12March 7, 2000 and August 2, 2000. 13 67 FR 63862 (October 16, 2002). 14Semiannual Agenda, 68 FR 73170 (December 22, 2003). 15DOJ Fiscal Year 2005 Budget Summary, page ATF–A10. 16While the President did not enact the law requiring these reports until January 23, 2004, 

ATF was aware of congressional intentions with regard to such reports as early as September 

5, 2003. In view of the fact that the Bureau has been enforcing the SEA since May 2003, we 

would have thought that by September 2003 and certainly January 2004, ATF would have a 

clear idea of its implementation funding needs and priorities. 17Public Law 104–132, Section 732. 

these rules which are critical to the continued commerce of commercial explosives. Yet, ATF does not project finalizing these rules until February 2005. 

Another pending rulemaking deserving of comment stems from a loophole in 

current regulations that allows the importation of explosives with no marks of 

manufacture identification. Conversely, ATF regulations require domestic manufacturers to mark all explosive materials they manufacture for sale or distribution for reasons of security and safety.11 ATF has emphasized that the failure 

to apply these markings inhibits law enforcement from tracking explosives to 

the source, and proving criminal activity. The marks enhance safety because 

some explosives deteriorate over time and the code allows users to keep inventory fresh. Additionally, the marks are one of industry’s ‘‘QA/QC’’ tools, allowing 

the manufacturer the ability to trace product quality problems back to the point 

of manufacture and distribution. In 2000, IME petitioned ATF for a rulemaking 

to close this loophole as it applies to high explosives and blasting agents.12 Our 

petition would make it unlawful for any licensee to import such explosive materials without marking all explosives materials in the same manner prescribed 

by the ATF for domestic manufacturers. ATF finally published a proposed rulemaking on this issue in October 2002.13 In light of the priority given to 

strengthening homeland security, we have not understood the lack of urgency 

given to this rulemaking. In the latest edition of the Administration’s semi-annual regulatory agenda, ATF has pushed back for the third time its ‘‘deadline’’ 

for completing this rulemaking.14 Now, four years after the filing of our initial 

petition, we ask you to insist that ATF not let this target release date slip. —Reports.—ATF acknowledges three reports that are due to House and Senate 

Appropriations Committees.15 Two of the reports are required ‘‘prior’’ to the ob- ligation of the $14 million fiscal year 2004 allocation to implement the SEA or 

the National Explosives Licensing Center which will process the SEA license/

permit applications. The release of these funds is crucial to the effective and 

efficient implementation of the SEA. We are concerned by ATF’s lack of timeliness in submitting these reports given that the provisions of the SEA have been 

effective since May 24, 2003. According to ATF’s estimate, nearly a year will 

have passed between the effective date of the SEA and the ‘‘target’’ date of the 

delivery of these reports to Congress. We find this delay without justification.16

There are other reports due Congress from the ATF and are not mentioned in 

the Bureau’s budget request of particular concern to IME. The Antiterrorism 

and Effective Death Penalty Act of 1996 charged ATF, which was delegated the 

authority, to report on the feasibility of tagging explosive materials for purposes 

of detection and/or identification, rendering common chemicals used to manufacture explosive materials inert, and imposing controls on certain precursor 

chemicals used to manufacture explosive materials.17 We understand that ATF 

intends to provide two reports to meet this mandate. One will address issues 

related to the tagging, and in particular ‘‘identification’’ tagging, of explosive 

materials. The other will address issues related to the enhanced control of ammonium nitrate (AN)—a precursor chemical used to manufacture explosives. We 

have been told by ATF that the ‘‘AN’’ report is pending at DOJ and that the 

‘‘Taggant’’ report has yet to clear the Bureau. We are particularly concerned 

about the content and recommendations potentially contained in the Taggant 

report. ATF initially planned to submit the report to Congress by the end of fiscal year 2001. IME had worked with ATF to ensure that the Bureau had the 

industry data required. Throughout the process ATF made efforts to keep us informed of the work on the study and preliminary findings. As late as August 

2001, we were led to believe that ATF’s research had concluded, as did contemporary assessments by the National Academy of Sciences, that identification 

taggants cannot be supported with current technology. However, following the 

events of September 11, 2001, ATF informed us that the report had been pulled 

back and its conclusions are being reassessed. As tragic and sobering as the 

events of September 11th are, it does not alter the fact that current technology 
189

18 Conf. Rept. 108–401, to accompany H.R. 2673 (Public Law 108–199). 19DOJ Fiscal Year 2005 Budget Summary, page ATF–13. 

does not support identification taggants. In the Subcommittee’s oversight capacity, ATF should be asked about the release date of the 1996-mandated report 

and, after seven years of study, what if any of the reports recommendations 

have been changed due to the events of September 11th. 

ATF has also from time to time, but we hoped annually, reported on arson 

and explosives incidents. IME uses this data to inform the industry and the 

public about these incidents, trends they may suggest, and lessons we may 

learn. However, ATF’s last published version of this document is dated, reporting incidents occurring in 1997. A similar, though not identical, report is issued 

by the Federal Bureau of Investigation (FBI). Since ATF released its 1997 report, the FBI has released a 1998 and a 1999 bombing incident report. When 

IME last asked ATF about the anticipated release date of its report, we were 

told that it was being held up pending a reconciliation of data between the Bureau and the FBI. It begs the questions of whether the ATF report will continue 

in its current or a revised form now that the Bureau has been transferred to 

DOJ, home of the FBI, and the FBI has been, with more regularity, producing 

a type of explosives incident report. 

The future of the ATF Arson and Explosives Incident Report is but a small 

example of overlaps and duplications that may exist between the Bureau and 

other law enforcement programs at DOJ, and provides a segway to a report we 

are all anxious to review. In the conference report to the fiscal year 2004 Consolidated Appropriations Act, Congress directed DOJ to submit with its fiscal 

year 2005 budget request ‘‘a proposal to better blend and eliminate duplication 

of explosives training and other law enforcement programs at the [DOJ].’’ 18 In 

this regard, we note that the Administration’s fiscal year 2005 budget request 

continues to carry forward language from earlier budget requests that ‘‘no funds 

made available by this or any other Act may be used to transfer the functions, 

missions, or activities of the [ATF] to other agencies or Departments in fiscal 

year 2005.’’ 19 This language appears to be at odds with any attempt to consolidate and streamline programs. Meanwhile, we are anxious to understand what, 

if any, recommendations in this report may impact how commercial explosives 

are overseen, regulated and enforced within DOJ, and once understanding these 

recommendations, reserving the opportunity to provide additional comment to 

the Subcommittee. 

Conclusion 

The manufacture and distribution of explosives is accomplished with a remarkable 

degree of safety. We recognize the important role played by ATF in helping our industry achieve and maintain safe and secure workplaces. Industry and the public 

trust that ATF has the resources to fulfill its regulatory responsibilities. We, therefore, strongly recommend full funding for ATF’s explosives program. 

PREPARED STATEMENT OF THE CONFEDERATED TRIBES OF THE WARM SPRINGS

RESERVATION OF OREGON

Mr. Chairman, I, Garland Brunoe, Chairman of the Tribal Council of the Confederated Tribes of the Warm Springs Reservation of Oregon, hereby submit this testimony regarding the fiscal year 2005 appropriation for the U.S. Department of Justice. All of our fiscal year 2005 requests address programs in the Justice Department’s Office of Justice Programs, and are summarized below: (1) Restore State and 

Local Law Enforcement Assistance funding for Indian tribes in the amount of $15 

million; (2) increase Tribal COPS funding by $10 million to $30 million; and (3) provide $20 million for Tribal Juvenile Justice programs for fiscal year 2005. 

Our requests are more fully discussed below. 

Restore State and Local Law Enforcement Assistance funding for Indian tribes in the amount of $15 million 

The fiscal year 2005 Department of Justice budget proposes to completely eliminate funding for the State and Local Law Enforcement Assistance program, which 

in fiscal year 2004 included $2 million for tribal jail construction, $8 million for tribal courts, and $5 million for tribal alcohol and substance abuse prevention and 

treatment programs. All of these programs are critical to public safety and stability 

on Indian reservations. Our own jail, designed and built by BIA, is out of compliance with federal standards and needs to be substantially remodeled or rebuilt. 

Tribal courts are a key link in tribal justice systems and essential to tribal sov-
190

ereignty, and this funding has been the only steady source of federal support, even 

as small as it has been, for our court systems. And alcohol and substance abuse 

plague our communities and significantly contribute to crime. Accordingly, we request that fiscal year 2005 funding for Indian tribes in the State and Local Law 

Enforcement Assistance program be restored to at least their fiscal year 2004 levels. 

Increase Tribal COPS funding by $10 million to $30 million 

Indian tribes face significant difficulties in providing law enforcement. Reservations are often rural and sparsely populated across great distances. Unemployment 

is often high and infrastructure inadequate. Many tribal economies are modest, and 

cannot on their own support much in the way of law enforcement. The Bureau of 

Indian Affairs law enforcement budget is also insufficient. As a result, crime, including violent crime, is often exceptionally high in Indian Country. Within the last ten 

years, alarming reports on reservation law enforcement and public safety prompted 

support increases within BIA law enforcement and also within the Department of 

Justice’s Community Oriented Policing Systems programs. The COPS program is a 

vital component of law enforcement on many reservations, as demonstrated by its 

retention within the drastically cut-back fiscal year 2005 national COPS program. 

Accordingly, we request that the Tribal COPS program be increased to $30 million 

for fiscal year 2005, an increase of $5 million over fiscal year 2004 and $10 million 

over the Administration’s fiscal year 2005 request. 

Provide $20 million for Tribal Juvenile Justice programs for fiscal year 2005

The fiscal year 2005 Department of Justice budget proposes to completely eliminate funding for the Juvenile Justice Program, which in fiscal year 2004 included 

$10 million for tribal youth. Tribal youth often must confront joblessness and poverty, which can lead to despair and delinquency. Today across the United States, 

Native American young people already are among the most troubled, and particular 

care and supervision are essential. A recent audit of Juvenile-related programs and 

services at Warm Springs revealed a dramatic lack of services and resources available to work with our troubled youth and correct delinquent behavior. Without assistance to address these problems, the already devastating circumstances for the 

young people in our communities will only accelerate. Accordingly, we request that 

the Tribal Youth funding in Juvenile Justice be doubled from its fiscal year 2004 

amount of $10 million to $20 million. 

Mr. Chairman, that concludes the Confederated Tribes of the Warm Springs Reservation’s appropriations requests of your Subcommittee for fiscal year 2005. Thank 

you. 

PREPARED STATEMENT OF THE ASIA FOUNDATION

Mr. Chairman: The Asia Foundation is grateful for the strong support of the Con- gress, including the appropriation of $13 million for fiscal year 2004. Past committee 

report language has commended our grant making role in Asia and the Appropriations Committees have encouraged the Foundation to expand its programs in predominantly Muslim countries, including Afghanistan, Indonesia, Pakistan and 

Mindanao in the Philippines. Regrettably, the Administration decided to use their 

fiscal year 2004 requests as the baseline for their fiscal year 2005 requests. That 

resulted in a low fiscal year 2005 request for the Foundation. We respectfully urge 

the Committee to sustain its support for the vital work of the Foundation on behalf 

of U.S. interests in this uniquely complex region, particularly as we deepen our involvement in front line states, such as Afghanistan, Pakistan and Indonesia and 

India, a regional power of increasing importance to U.S. interests in South Asia. The 

Asia Foundation is requesting a modest increase to $15 million, below the $18 million authorized by the State Department authorization bill recently passed by the 

House. 

An appropriation of $15 million would allow The Asia Foundation to strengthen 

programs it has begun in recent years with Congressional encouragement, notably 

in the areas of protecting women and children against trafficking, promoting women’s political and economic participation, strengthening Constitutional democracy 

and restoring a functioning educational system in Afghanistan, promoting tolerance 

in predominantly Muslim nations like Indonesia, protecting human rights, and 

strengthening civil society throughout the region. 

We are cognizant of the fiscal year 2005 budgetary pressures on the Committee. 

However, any cut below the current funding level for the Foundation would curtail 

important work, in some cases, just as the program investments over the past few 

years have reached maturity, and positive results are attainable. The Asia Foundation is the only American organization with a distinctive history of fifty years of 
191

presence and engagement in Asia, delivering concrete programs that address some 

of Asia’s most pressing needs. Curtailment of Foundation programs in these key 

areas could wrongly signal to people in the region a loss of U.S. commitment to 

democratic governance, civil society and human rights in Asia. 

OVERVIEW

The United States and Asia face new challenges, complicated by the war on terrorism and fragile democracies in Afghanistan, Indonesia, Pakistan, and even in 

Thailand and Korea. More than ever, we must support political stability and economic reform, and give attention to countries where recent events have complicated 

bilateral relations, specifically in countries that have been traditional allies of the 

United States, and in countries with predominantly Muslim populations. Challenges 

to governance in the newly democratic countries of Asia, including Thailand, the 

Philippines, Indonesia, and Korea, require different approaches than in countries 

struggling to attain democracy, peace and stability, such as Afghanistan, Nepal, and 

Pakistan. Continued political instability in Indonesia, lack of a peace settlement in 

the Southern Philippines, and the emergence of regional terrorist networks threaten 

regional stability. Human rights abuses, and impunity for perpetrators continue 

throughout the region. Even though women in Asia have made gains in many 

places, such as Cambodia, Thailand and Nepal, they are still subject to economic 

and political inequities. In the worse cases, they are victims of trafficking and 

abuse. 

Working together with Asian organizations as a trusted partner through a network of 17 offices in Asia, The Asia Foundation is a nongovernmental, nonpartisan 

American asset combining local credibility, a nuanced understanding of the issues 

facing each country, and unparalleled access and relationships with government, 

nongovernmental groups, and the private sector. The Asia Foundation is a well recognized American organization, but its programs are grounded in Asia, helping to 

solve local problems in cooperation with Asian partners. The Foundation combines 

a long-term view of policy reform and development in Asia, and a rapid response 

capacity through grant making and expert staff to deliver short-term, high impact 

programs. In addition to the importance of these programs to the lives of people in 

Asia, the Foundation’s efforts also make an important and tangible contribution to 

public diplomacy for the United States. 

THE ASIA FOUNDATION’S MISSION

The Asia Foundation’s core objectives are central to U.S. interests in the Asia-Pacific region: 

—Democracy, human rights and the rule of law: developing and strengthening 

democratic institutions and encouraging an active, informed and responsible 

nongovernmental sector; advancing the rule of law; and building institutions to 

uphold and protect human rights; 

—Open trade and investment: supporting trade, investment and economic reform 

at the regional and national levels; 

—Women’s political participation: encouraging women’s participation in public 

life; protecting women’s rights and supporting advocacy training; prevention of 

trafficking and supporting efforts to protect and provide shelter to victims; 

—Peaceful and stable regional relations: promoting United States-Asian dialogue 

on security, regional economic cooperation, law and human rights. 

The Foundation remains faithful to its grant-making role, steadily building institutions and strengthening Asian leadership. Foundation assistance supports training, technical assistance, and seed funding for new, local organizations, all aimed 

at promoting reform, building Asian capacity and strengthening United States-Asia 

relations. Foundation grantees can be found in every sector in Asia, leaders of government and industry and at the grassroots level, in an increasingly diverse civil 

society. 

The Foundation provides necessary technical assistance, and grants that cover 

nuts and bolts necessities to support reform efforts. For example, in the case of the 

drafting of the Afghan Constitution, the Foundation provided expert advice on the 

drafting process, reference materials, equipment and administrative support costs 

for the Constitutional Commission, and later, the operational and logistical support 

for the Constitutional Loya Jirga (CLJ). The Asia Foundation was awarded a medal 

for its contribution at the closing ceremony of the Loya Jirga by President Karzai. 

Special Representative of the U.N. Secretary General for Afghanistan Brahimi stated at the end of the Constitutional Loya Jirga: ‘‘The Asia Foundation staff are the 

unsung heroes of the CLJ process. Without the creativity, intellectual insight and 
192

flexibility of The Asia Foundation, much that has been accomplished would not have 

been done.’’

PROGRAMS

The Asia Foundation makes over 800 grants per year. The Foundation also facilitates programs, provides technical assistance and leverages funding from public and 

private donors, to increase program impact and sustainability. With additional funding in fiscal year 2004, the Foundation’s expanded activities include: 

Human Rights, Conflict and Islam: in Indonesia, establishment of the International Center for Islam and Pluralism (ICIP) the only regional center for progressive Muslim scholarship and exchange in Southeast Asia; education reform in 1,000 

schools including training on pluralism, human rights and civic education for 160 

madrassa (day schools) teachers through the Center for Human Resources Development (PPSDM) at the State Islamic University; curriculum reform for 800 pesantren 

(boarding schools), part of the Foundation’s education reform of 625 Islamic schools 

nationwide, with over 215,000 students; in Cambodia, Sri Lanka and Nepal, human 

rights education, monitoring, and documentation through new information technology networking; in Mindanao in the Philippines Local Peace Monitors for the cessation of hostilities agreement and madrassa education research for the first time 

in 15 years; 

Civil Society: in Pakistan, public awareness and media campaigns promoting democracy, human rights and access to education for women and women’s rights 

under the law, civil society development through capacity building and training; in 

Afghanistan, girls education and journalism training for women; in Cambodia, 

human rights and legal services; in Indonesia, promote pluralism, tolerance and 

moderation by mainstream Muslim organizations through public education, media 

through radio talk shows and education reform; 

Women’s Programs: regionwide, with particular emphasis on Indonesia, Cambodia, Thailand, Vietnam and Mongolia, anti-trafficking programs including prevention, services for victims, legal drafting and advocacy to support increased prosecutions; services and advocacy for women victims of domestic violence; in India, Pakistan, Bangladesh, Sri Lanka and Indonesia, Thailand, Malaysia and Mindanao 

projects to advance women’s rights within an Islamic framework through analysis, 

public education and outreach; in Afghanistan and Cambodia, support for scholarships for girls’ education; 

Legal Reform: in Afghanistan, constitutional drafting technical assistance and operations and logistics for the Constitutional Loya Jirga in support of the UNAMA 

effort, technical support for the Constitutional Secretariat and logistics for the delegate selection process in Afghanistan; access to justice programs and public consultation in lawmaking in East Timor; legal aid services and legal education for migrant women workers in China; in Indonesia reform of the Supreme Court including 

civil society input into the reform process; in Nepal, mediation programs, legal reform within the courts, establishment of legal information systems and watchdog 

citizens’ groups to raise awareness on corruption and official misconduct; 

Economic Reform: In Indonesia, Vietnam, Nepal, Bangladesh, small and medium 

enterprise policy reform; in Korea, Japan, China, Mongolia and the Philippines, corporate governance reform and e-government efforts to counter corruption; 

International Relations: In China, Vietnam and India, scholarships for young Ministry of Foreign Affairs leaders, study programs for Southeast Asian young leaders 

to the United States, and support for Track II programs on cross-straits relations 

and Council for Security Cooperation in the Asia Pacific (CSCAP). 

CONCLUSION

As these examples of our work emphasize, The Asia Foundation is first and foremost a field based, grant-making organization. The Foundation has consistently received national recognition for its efficient grant-to-operating ratio, reflecting its 

commitment to maximizing program impact in Asia while keeping costs low. We are 

not a research organization or academic institution, nor are we Washington based. 

We operate on the ground in Asia as an accepted, trusted partner and supporter 

of Asian reform efforts that simultaneously support and reinforce American political, economic and security interests. 

Public funding is essential to our mission. While the Foundation continues to expand its private funding, the flexibility and reliability that public funding lends to 

the Foundation’s efforts are critical. As an organization committed to U.S. interests 

in Asia, we can only be successful if potential private donors understand that the 

U.S. government continues to support our efforts in the region. Furthermore, private 

funds are almost always tied to specific projects, as are USAID funds for which the 
193

Foundation competes. These funds do not replace public funding, either in scale or 

flexibility. Moreover, the flexibility afforded by appropriated funds enables the 

Foundation to respond quickly to fast breaking developments and program opportunities. For example, we were the first American organization in Kabul to assist the 

Emergency Loya Jirga process, having re-opened our office in January 2002. 

Now more than ever, the Foundation and its supporters believe that its most important asset is its field office network in Asia, enabling the Foundation to address 

critical development and reforms on the ground. Maintaining offices overseas costs 

more than maintaining operations within the United States and new demands to 

ensure adequate security have added to the cost. Today, we continue to face budgetary constraints. We must protect our staff, but at the same time, we are, as always, committed to ensuring the maximum possible amount of appropriated funds 

are dedicated to programs in Asia. 

In closing, the Foundation has an opportunity and the obligation to demonstrate 

America’s strong commitment to working with Asian leaders to assure the security, 

rights and well being of the people of Asia. The Asia Foundation’s programs represent a distinctive and positive American response to the challenges facing Asia 

today, contributing to the development of stable societies and advancing the interests of the United States in the region. Additional funding would enable the Foundation to sustain and expand its efforts to meet these goals. Thank you. 

PREPARED STATEMENT OF THE ASSOCIATION OF SMALL BUSINESS DEVELOPMENT

CENTERS

The Association of Small Business Development Centers (ASBDC) urges the Subcommittee to provide an appropriation of $100 million for the U.S. Small Business 

Administration’s Small Business Development Center (SBDC) grant program in the 

fiscal year 2005 Commerce-Justice-State appropriations bill. This is the funding 

level recommended by the Senate Budget Committee for federal SBDC grants in fiscal year 2005. 

Small businesses are struggling. BusinessWeek Online points out that small businesses, which usually create most of the new jobs in the initial stages of an economic recovery, are increasingly going bankrupt and extinguishing jobs. America’s 

SBDC network can help small businesses lead the nation’s economic recovery and 

create new jobs—as well as generate the additional revenues needed to reduce the 

budget deficit. But we need the resources to do the job. 

Based on its record during the past decade, with an appropriation of $100 million 

our nation’s SBDC network could help SBDC in-depth counseling clients to: create 

an estimated 88,846 new full time jobs; increase sales by an estimated $7.1 billion; 

generate an estimated $211 million in additional revenue for the federal government; and, create an estimated $315 million in additional tax revenues for state 

governments. 

Since fiscal year 2001, when Congress appropriated $88 million for SBDC grants, 

the President’s budget proposal has not called for an increase in funding for SBDC 

grants, despite the effects of inflation and a growing demand for SBDC services. As 

a result, federal funding for our nation’s SBDC network has decreased in real terms 

since fiscal year 2001. The SBDCs in 24 states (including Kansas, Kentucky, Maryland, New Mexico, West Virginia and Wisconsin) are operating with less federal 

funding than they received in fiscal year 2002. The SBDCs in the fifteen least populated states (including Alaska, Hawaii, New Hampshire and Vermont) have not had 

an increase in federal funding since fiscal year 1998. This year, SBDC grantees will 

receive less federal funding than they received in fiscal year 2003, and OMB has 

crafted a budget for fiscal year 2005 that proposes to reduce SBDC grant funding 

even further. 

There is room in the budget to provide a needed increase in funding for SBDC 

grants. The Senate Budget Committee has recommended that federal SBDC grants 

be funded in fiscal year 2005 at $100 million. In addition, the Senate passed an 

amendment to increase the SBA’s fiscal year 2005 budget by $121 million, to fund 

increases in a range of programs including the SBDCs. Moreover, while the SBA’s 

fiscal year 2005 Congressional Budget Request proposes to cut funding for SBDC 

grants, it calls for the total cost of the SBDC program to increase by nearly $9 million—presumably for the SBA’s expenses associated with administering the SBDC 

program. The ASBDC would respectfully suggest that any additional funding for the 

SBA to administer the SBDC program would be better spent on the delivery of counseling and training services to small businesses and aspiring entrepreneurs, by increasing funding for grants instead of administration. 
194

The Association of Small Business Development Centers (ASBDC) represents the 

63 State, Regional and Territorial SBDC programs comprising America’s SBDC network. SBDC programs are located in all 50 states, the District of Columbia, Puerto 

Rico, The Virgin Islands, Guam and American Samoa. America’s SBDC network is 

the most productive federal management and technical assistance program for small 

business. It is a unique partnership that includes Congress, the SBA and the private sector, as well as the colleges, universities and state governments that receive 

SBDC grants and manage the SBDC network. 

Nationwide, SBDCs provided management and technical assistance to more than 

1.3 million small business owners and aspiring entrepreneurs last year. In 2003, 

SBDC services included face-to-face counseling of an hour or more for 279,281 clients; 1.6 million total hours of counseling; 25,970 group training sessions; training 

of two hours or more for 408,254 clients; and more than two million total hours of 

training for small businesses and aspiring entrepreneurs. 

The SBDC program was designed to create a lasting partnership among federal, 

state and local governments and institutions of higher learning, to disseminate the 

very best practical business management and technical knowledge to our nation’s 

small business owners and aspiring entrepreneurs, and grow the American economy. The plan has worked remarkably well: 

—SBDCs help create and save jobs. In the recession of 2001, as big businesses 

downsized, SBDC in-depth counseling for small businesses generated 46,688 

new full time jobs and helped save an additional 34,215 jobs. 

—SBDC counseling clients create more jobs than average businesses. Businesses 

that received in-depth SBDC counseling experienced 10 times the job growth of 

average businesses (8.4 percent compared to 0.8 percent for U.S. businesses in 

general in 2001). 

—SBDCs help small businesses increase sales. SBDC in-depth counseling helped small businesses generate $3.9 billion in new sales and save $4.3 billion in sales 

in 2001. 

—SBDC clients’ sales grow faster than other businesses’ sales. Established businesses that received in-depth SBDC counseling experienced sales growth of 12.1 

percent in 2001—compared to 3.1 percent for businesses in general. 

—SBDC clients create new businesses. 50 percent of pre-venture SBDC in-depth 

counseling clients start businesses within one year of receiving assistance. In 

2001, SBDC in-depth counseling clients started 12,872 new businesses. 

—SBDC clients make investments in our economy. SBDCs helped small busi- nesses obtain an estimated $2.7 billion in financing in 2001. Every dollar spent 

on the SBDC network helped small businesses invest $15.89 in capital. 

Outstanding institutions of higher education such as the University of New 

Hampshire, the University of Alaska Anchorage, Santa Fe Community College, the 

University of Kentucky, the University of Houston, the Dallas County Community 

College District, Texas Tech University, the University of Texas at San Antonio, 

Fort Hays State University (Kansas), the University of South Carolina-Columbia, 

the University of Hawaii at Hilo, the University of Maryland, the Vermont State 

Colleges, the University of Wisconsin-Extension and Washington State University, 

to name a few, are among the hosts of the SBDC program. Many host institutions 

house the great business schools and entrepreneurial programs in our nation, such 

as the Wharton School, the Kenan-Flagler School of Business, the Robert H. Smith 

School of Business, the Isenberg School of Management and the Terry College of 

Business. SBDC hosts also include state governments such as the State of Colorado 

and the West Virginia Development Office. These state governments, like the institutions of higher learning that host SBDC programs, bring to the SBDCs resources, 

relationships and unparalleled leadership in their respective states. 

Among the management and technical assistance services they provide, SBDCs 

provide services in several areas that are of particular concern to small businesses, 

and to members of the Subcommittee, including export assistance, procurement and 

manufacturing. 

Many SBDCs host specialized International Trade Centers, where small business 

owners and aspiring entrepreneurs receive individualized, in-depth counseling and 

specialized training from experts in international trade and export expansion. And 

because the SBDC International Trade Centers are part of the larger SBDC network, small businesses and aspiring entrepreneurs that seek international trade assistance can also access the many other types of assistance—from marketing to research—that they need to make their export businesses succeed. In 2003, SBDCs 

trained 8,592 small business owners and aspiring entrepreneurs in international 

trade, and provided counseling on international trade matters to 9,378 clients. 

SBDCs offer assistance with government procurement and are often co-located 

with Procurement and Technical Assistance Centers (PTACs). Services include help 
195

with registrations, identifying solicitations and special programs, preparing certification documents and bids, submitting applications, contract administration and 

contract close-outs. In 2003, SBDCs provided government procurement counseling to 

12,784 clients. 

America’s SBDC network is also responding to the need for management and 

technical assistance among small manufacturers. Ninety-five percent of American 

manufacturers are small and medium-size businesses, employing half of all manufacturing workers in the United States, and many of them rely on their local SBDCs 

for assistance. In 2003, SBDCs provided manufacturing counseling to 22,267 clients. 

SBDCs serve women, minorities and America’s veterans. In 2003, 37 percent of 

SBDC counseling clients nationwide were women, 35 percent were minorities and 

10.4 percent were veterans. Forty-five percent of SBDC training clients were 

women, 25 percent were minorities and 8.2 percent were veterans. 

SBA statistics for the SBDC program show that SBDC counseling cases and training attendees combined increased from 650,000 to 685,000 between fiscal year 2002 

and fiscal year 2003. Counseling hours increased from 1.47 million to nearly 1.57 

million. Training attendees increased from 384,000 to 408,000. Training hours increased from 1.58 million to 2.08 million. These figures clearly demonstrate that 

America’s small business owners know they need help and are increasingly seeking 

it from the SBDC network. However, there is a limit to the increases in services 

that the SBDC network can provide with flat, or declining, federal funding.

Finally, SBDCs have a positive revenue impact on the federal budget. The President’s fiscal year 2004 Budget pointed out that an independent evaluation of the 

SBDC program indicated that each $1 spent on SBDC counseling resulted in $2.78 

in tax revenues. The federal SBDC budget of $88 million generated an estimated 

$182.9 million in federal revenue in 2001. SBDCs also leverage federal, state, local 

and private resources. For an SBDC to receive federal funding, it must first raise 

an equal amount of funding from non-federal sources. The SBDCs raise a minimum 

of $88 million a year in non-federal resources to serve small business owners and 

aspiring entrepreneurs. 

The ASBDC appreciates the Subcommittee’s consideration of the Association’s 

views. We urge the Subcommittee to provide an appropriation of $100 million for 

the SBDC grant program in the fiscal year 2005 Commerce-Justice-State appropriations bill, as recommended by the Senate Budget Committee. 
196

PREPARED STATEMENT OF THE DORIS DAY ANIMAL LEAGUE

Mr. Chairman and members of the Appropriations Subcommittee on Commerce, 

Justice, State, the Judiciary and Related Agencies, thank you for the opportunity 

to submit testimony on behalf of the 350,000 members and supporters of the Doris 

Day Animal League in support of our request that the Federal Bureau of Investigation assign the crime of animal cruelty its own classification in the agency’s crime 

data reporting system. 

Law enforcement agencies already collect and submit data on animal cruelty 

crimes, but those data are combined with other crimes in a miscellaneous category 

where it is irretrievable and therefore useless. Local law enforcement agencies and 

many others want this information to help them better understand and respond to 

animal abuse and other offenses. To minimize the cost of making this change, we 

are suggesting that this category be added only as reporting agencies switch from 

the original Uniform Crime Reporting Program (UCR) to the current National Incident-Based Reporting System (NIBRS, currently used by only 18 percent of reporting agencies) or to the new system (the ‘‘national indices initiative’’) the FBI has 

just started to develop. Thus, we estimate the cost to the FBI to add this category 

to NIBRS would be minimal (less than $90,000, based on a comparable FBI estimate) to modify materials and computer programs, with no additional costs to local 

agencies beyond the costs they would incur anyway in the changeover. There would, 

of course, be no incremental costs at all associated with including this category from 

the start in the new reporting system. Since the FBI has already started updating 

its crime data reporting system, this is the perfect opportunity to ensure that this 

serious category of crimes is handled in a way that makes the data usable. 

The Significance of Animal Cruelty as a Crime: ‘‘The Violence Connection’’

Animal cruelty was once viewed as an offensive behavior unrelated to other 

crimes. Now it is recognized as a serious crime with important implications for 

human society. A growing body of research, produced over the last 30 years, establishes a clear link between animal abuse and human violence. One comprehensive 

study of data from a 20-year period found that adults convicted of animal cruelty 

were more likely than their peers to engage in other forms of criminal activities, 

including violent crimes against humans, property crimes, and drug and disorderly 

offenses. In addition to the association between animal cruelty and criminal behavior, there is also evidence that the severity of violence against animals can indicate 

the degree of aggressiveness toward humans. Research on incarcerated adult males 

found that the most aggressive inmates had the most violent histories of animal cruelty. It is worth noting that in dangerous situations such as a hostage-taking, the 

FBI has included a history of animal cruelty among the factors used to determine 

an individual’s threat level. 

Another important link with serious policy implications is the co-occurrence of 

family violence and animal abuse. In interview studies with domestic violence victims, between 54 and 71 percent of the women report that their partners also 

harmed or killed the family pet. Child abuse and animal abuse also are linked: animal abuse was confirmed in 88 percent of families being supervised by a child welfare agency for physically abusing their children. 

In addition to being linked to other types of criminal activity and family violence, 

animal abuse by children signals an important warning. In fact, the FBI was one 

of the first to recognize the significance of juvenile animal cruelty when it reported 

that many serial killers had abused animals as children. It also has been reported 

that many of the school shooters in the late 1990s had engaged in various forms 

of animal cruelty. 

The National Crime Prevention Council, the Department of Education, and the 

American Psychological Association all list animal cruelty as one of the warning 

signs for at-risk youth. Furthermore, researchers agree that persistent aggressive 

behavior in childhood, termed ‘‘conduct disorder,’’ tends to be a fairly stable trait 

throughout life and is the single best predictor of later criminal behavior. Animal 

cruelty is one of the symptoms for a diagnosis of conduct disorder and therefore can 

be one of the earliest indicators that a child is at risk. 

Not all children who abuse animals will become serial killers, school shooters, or 

criminals as adults. However, research clearly suggests that engaging in childhood 

animal cruelty conditions an individual to accept, or engage in, interpersonal violence as an adult. 

Responses to ‘‘The Violence Connection’’

Government agencies, professional organizations, and communities have responded to the growing body of evidence of the animal abuse-human violence connection. For example, before 1990, only seven states had felony provisions in their 
197

animal anticruelty statutes; that number is now 41 states and the District of Columbia. As of this date, 24 state animal anticruelty statutes permit or mandate psychological counseling for offenders. 

In addition to these changes in state cruelty laws, awareness of the significance 

of animal abuse as a crime has resulted in the development of a number of initiatives. ‘‘Safe Pet’’ programs, which provide safekeeping for the pets of domestic violence victims so that they feel free to leave dangerous situations, are being instituted in communities throughout the United States. Animal control officers are 

being trained to ‘‘cross report,’’ that is, to look for signs of child and spousal abuse 

when investigating an animal abuse or neglect complaint; likewise, social workers 

are taught to report animal abuse. Intervention strategies for children and adults 

who abuse animals have been developed and mental health professionals are being 

trained in this area of treatment. 

Modifying the Categories of the FBI’s Crime Data Reporting Program 

The FBI’s crime data reporting program is a nationwide effort that collects crime 

statistics from nearly 17,000 local and state law enforcement agencies. During 2000, 

the participating agencies represented 94 percent of the U.S. population. Reported 

crimes vary from criminal homicide in Part I to curfew and loitering under Part II. 

Law enforcement, criminologists, legislators, sociologists, municipal planners, the 

media, and others interested in criminal justice use the statistics for research and 

planning purposes. However, under the current system, there is no separate category for reporting crimes of animal cruelty, and thus no way to use those data, 

even though animal abuse often is an indicator of other types of criminal behavior, 

including family violence. 

Assigning the crime of animal cruelty to its own classification would have a number of advantages. Its inclusion in NIBRS would allow precise identification of 

‘‘. . . when and where crime takes place, what form it takes, and the characteristics 

of its victims and perpetrators.’’ (National Incident-Based Reporting System, p. 2, 

U.S. Department of Justice, August 2000). Law enforcement agencies, researchers, 

policy planners, and others would be better able to understand the factors associated with animal abuse, track trends at the state and national levels, and determine 

the demographic characteristics associated with animal abuse—which is useful in 

developing more effective intervention and prevention strategies to interrupt the 

cycle of violence. 

Designating a separate category for animal cruelty crimes in the national indices 

initiative now being developed would add considerably more data analysis capabilities: ‘‘. . . variables such as felony animal abuse arrests could be linked with a vast 

array of other statistics to develop useful demographic information.’’ (Letter from 

Michael D. Kirkpatrick, FBI, Sept. 30, 2003). The expanded databases of the new 

system would enable law enforcement agencies to identify and track individuals 

with histories of violence. 

Categorize Under ‘‘Crime Against Society’’

Animal cruelty is most appropriately categorized as a ‘‘crime against society.’’ Like 

other crimes in this category (which include family offenses, as well as gambling, 

drugs, and pornography), animal cruelty offenses threaten the general order of society. Animal abusers have often committed violent crimes against persons and been 

arrested for property crimes, disorderly conduct, and substance abuse. Most significantly, animal abuse is highly correlated with child, spousal, and elder abuse; and 

juvenile animal cruelty is a leading indicator of the development of aggressive behavioral disorders, which are predictive of future violence. Although animals are 

often considered ‘‘property’’ under some laws, classification as a ‘‘crime against property’’ is not appropriate because the nature of animal abuse is qualitatively different 

from property crimes. It involves neglect or violence toward a sentient being, often 

leading to serious injury or death; it frequently involves an intimate relationship, 

as in family violence; and it is associated with other crimes. 

Proposed Report Language for the Senate Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies 

We respectfully request that the Subcommittee include the following language in 

the Commerce, Justice, State, Judiciary and Related Agencies Appropriations bill 

report:

‘‘The Committee directs the FBI to provide the necessary resources to assign the 

crime of animal cruelty, defined as the violation of laws or ordinances that prohibit 

cruelty to animals, its own classification under the category ‘Crime Against Society’ 

in the agency’s current or any future crime reporting data collection system by adding this category to its software and other reporting mechanisms. The Committee 
198

expects the FBI to establish this classification as quickly as possible so that state 

and local law enforcement agencies will be able to plan for its inclusion as they upgrade to the National Incident-Based Reporting System, the upcoming national indices system, or any future system. 

‘‘This will enable law enforcement agencies and researchers to track crime rates, 

better understand the factors associated with animal abuse and the characteristics 

of perpetrators, and identify with precision when and where the crimes take place, 

thus facilitating more effective interventions. Eventually, the capabilities envisioned 

for the new National Indices Initiative now in development will allow animal cruelty 

to be linked to other crimes, such as domestic violence, child abuse, and other violence directed at humans. 

‘‘The Committee further directs the FBI to report to the Committee by March 

2005 on the integration of this category into its crime data reporting program.’’

PREPARED STATEMENT OF THE ALLIANCE FOR INTERNATIONAL EDUCATIONAL AND

CULTURAL EXCHANGE

As Chair of the Board of the Alliance for International Educational and Cultural 

Exchange, I appreciate the opportunity to submit testimony in support of an overall 

appropriation of $400 million for the educational and cultural exchange programs 

administered by the Department of State’s Bureau of Educational and Cultural Affairs (ECA) in fiscal year 2005. This level of spending will allow robust funding for 

ECA’s core exchange programs, restore funding to the former Soviet Union and 

Eastern Europe through the FSA/SEED programs, and provide funding for an Islamic Exchange Initiative. 

The Alliance is the leading policy voice of the U.S. exchange community, and has 

worked closely with the Subcommittee on exchange issues. We note with gratitude 

the Subcommittee’s role in increasing exchange appropriations in recent years, and 

its consistent support for exchanges. 

The Alliance comprises 65 nongovernmental organizations, with nearly 8,000 staff 

and 1.25 million volunteers throughout the United States. Through its members, the 

Alliance supports the international interests of 3,300 American institutions of higher education. 

By engaging a very broad array of American individuals and institutions in the 

conduct of our foreign affairs, exchange programs build both enhanced understanding and a web of productive contacts between Americans and the rest of the 

world. 

Despite widespread support for exchanges in Congress, this account still lags well 

behind its historic levels in constant dollars due both to the deep cuts of the midnineties and to the significant reductions in fiscal year 2004 funding. Coupled with 

the increases in fixed program costs such as airfare and accommodation, reduced appropriations have resulted in significantly diminished participant levels in programs 

consistently cited by our embassies as one of their most effective means of advancing U.S. policy interests. 

The incorporation of funding for programs provided for under the Freedom Support Act (FSA) and Support for East European Democracy Act (SEED) into the ECA 

budget in the fiscal year 2004 budget cycle, at a substantially lower level than previously allocated, has resulted in a significant reduction in funding for those programs. 

As our experiences since September 11, 2001, demonstrate clearly, we need public 

diplomacy and exchanges more now than ever. We need to build trust and understanding for our people and our policy goals not just in the Muslim world—an effort 

that is of critical importance—but around the globe. To win the war on terrorism 

and to rebuild Iraq, we will need the help of our friends and allies in every region 

of the world. This is a time to intensify and expand our public diplomacy, and we 

believe there is strong bipartisan support in Congress to do exactly that. 

We therefore urge the Subcommittee to fund the Department of State’s exchange 

budget at $400 million in fiscal year 2005. This amount would provide for targeted, 

meaningful growth in every region of the world in support of our most important 

foreign policy objectives. 

Core exchange programs 

An appropriation of $400 million would allow for meaningful growth in the Department of State’s traditional exchange programs, programs that remain at the 

core of our efforts to build mutual understanding and respect between the United 

States and critical nations around the world. These well-established programs—Fulbright and other academic programs, International Visitor, and citizen exchanges—
199

continue to demonstrate their relevance and effectiveness as changing threats, challenges, and opportunities present themselves in a rapidly evolving world. 

Among State’s academic exchange programs, the Fulbright Program continues to 

demonstrate its unique value in deepening mutual understanding between the 

United States and 140 partner governments. A record 5,700 U.S. students and 

young professionals applied for Fulbright grants in 2003, demonstrating the desire 

of U.S. citizens and communities to be internationally engaged. 

Fulbright exchange programs in Iraq and Afghanistan were revived in 2003, 

bringing young leaders to study in U.S. graduate programs in fields critical to the 

development of those societies. Other program changes include: the cutting-edge research conducted by New Century Scholars, which provides deep focus on a single 

global problem by leading scholars from around the world; the Islamic Civilization 

Initiative that incorporates outreach activities upon the American student’s return 

to the United States to increase knowledge of the Muslim world on the campus and 

in local communities; and a conflict resolution initiative for young leaders from the 

Middle East, South Asia, and the Great Lakes region of Africa. 

Other critical academic exchange programs include the Educational Partnerships 

Program, which fosters substantive, ongoing relationships between American universities and their counterparts in high priority countries; the Humphrey Fellowships Program, which provides powerful academic and professional training experiences for professionals in the developing world; Overseas Educational Advising, 

through which prospective foreign students receive reliable information about American higher education and professional assistance in the application process; the Gilman Fellowship Program, which enables American students with financial need to 

study abroad; and English teaching and U.S. Studies programs, designed to enhance 

understanding of American society and values. 

The International Visitor program continues to be ranked by many U.S. ambassadors as their most effective program tool. This results-oriented program allows our 

embassies to address directly their highest priority objectives by bringing emerging 

foreign leaders to the United States for intensive, short-term visits with their professional counterparts. The program also exposes visitors to American society and 

values in homes and other informal settings. An increase in funding for the International Visitor program would allow the program to make an even greater impact 

on such key issues as regional security in Northeast Asia, counter-terrorism, international trade, and global health. 

Citizen exchanges continue to engage American citizens across the United States 

in productive international activities. In addition, these programs leverage their relatively modest federal dollars into significantly more funding through the participation of local communities, schools, businesses, and nongovernmental organizations. 

Increased funding for citizen exchanges would permit an expansion of these highly 

cost-effective activities, particularly in the critical area of capacity building in communities across the United States. To be globally competitive, American communities must be globally engaged, and this enhanced capacity will allow for more extensive connections and impact in support of U.S. interests in high priority countries 

around the world. 

Exchanges with the countries of the former Soviet Union and Central Europe 

As noted above, funding for exchange programs authorized by the FSA and SEED 

Acts was shifted to the CJS bill for the first time last year. The transfer has resulted in dramatic cuts for these programs, estimated to exceed 50 percent from previous levels. 

Exchanges under FSA and SEED provide opportunities to expose future leaders 

to American civil society and values, and foster personal and professional relationships between Americans and citizens of these developing regions. We must continue this engagement with future leaders of these important nations that are still 

emerging from decades of totalitarian leadership. The recent election of Georgian 

President Mikheil Saakashvili is a testament to the value of these programs. 

Saakashvili benefited from a Muskie/FSA Graduate Fellowship, earning an LL.M. 

degree from Columbia University in 1994. He also participated in a 1999 International Visitor exchange on ‘‘Judicial Reform.’’ Members of Saakashvili’s cabinet 

are also alumni of U.S.-funded exchanges; for example, Irakli Rekhviashvili, a participant in the Eurasian Undergraduate Student Exchange Program, was recently 

appointed the Georgian Minister of Economy. 

While obstacles to exchange remain, interest in exchanges in the region continues 

to grow. In recent years, professional and collegiate-level programs with these countries have attracted many more applicants than the programs can sustain. The Contemporary Issues Fellowship Program, targeting influential policymakers and midlevel professionals, receives nearly 1,300 applicants for 100 scholarships. The Future 
200

Leaders Exchange Program (FLEX) for high school students receives more than 

50,000 applications for 1,300 slots. 

We hope the Subcommittee will agree that a reduction in these programs is unwise in a region of the world of such strategic importance to the United States. This 

is particularly true when one considers the effectiveness and impact of these exchange programs. 

Islamic Exchange Initiative—Building Cultural Bridges 

While the need for increased funding is worldwide, increased exchanges with the 

Islamic world are particularly critical as we pursue the war on terrorism. To defeat 

terrorism, the United States will need more than the might and skill of our armed 

forces. To ultimately defeat terrorism, we must also engage the Muslim world in the 

realm of ideas, values, and beliefs. 

Changing minds—or merely opening them—is a long, painstaking process. There 

are no quick fixes. If we are to win the war on terrorism, there will be no avoiding 

the need to build bridges between the American people and the people of the Muslim world. We must begin this process now. 

In the Islamic world, we envision this initiative engaging the full range of programs and activities managed by ECA: Fulbright and Humphrey exchanges that 

will stimulate broader cultural understanding, joint research and teaching, and foster positive relationships with a new generation of leaders; the Partnerships for 

Learning Undergraduate Studies Program (PLUS), that allows undergraduates from 

the Islamic world to complete their B.A. degrees at U.S. universities; university affiliations targeted toward key fields such as mass media and economic development; 

International Visitor and other citizen exchange programs designed to bring emerging leaders into significant and direct contact with their professional counterparts 

and the daily substance of American life; youth and teacher exchanges and enhanced English teaching programs, all designed to bring larger numbers of young 

people a direct and accurate picture of our society, based on personal experience 

rather than vicious stereotyping. 

Increasing the State Department’s exchanges with the Islamic world will give us 

the means to develop productive, positive relationships. This initiative will engage 

the American public—in our communities, schools, and universities—in an effort to 

project American values. We will find no better or more convincing representatives 

of our way of life. 

And the engagement of the American public will leverage significant additional 

resources to support this effort. 

We commend the Subcommittee for funds made available in the fiscal year 2002 supplemental for Islamic exchanges. The $10 million appropriated by this Subcommittee has been put to good use by the Department of State in key programs 

such as Fulbright, International Visitors, and English teaching. 

Strengthening exchanges with the Islamic world has strong bipartisan support, 

evidenced by legislation sponsored in the 107th Congress by Senators Edward Kennedy and Richard Lugar, and Representatives Henry Hyde and Tom Lantos. These 

bills led to $20 million in appropriations funding, some of which was used to fund 

what would become the Youth Exchange and Study Program (YES). YES has 

brought approximately 138 Muslim high school students to the United States for the 

2003–2004 school year, and will bring an additional 365 students next year. To 

build on the YES program’s very successful beginning, the program requires a sustained funding commitment. 

Conclusion 

We recognize that a meaningful and effective Islamic exchange initiative, restored 

funding for the FSA and SEED programs, and sufficient funding for robust traditional exchange programs will require a significant increase in the State Department exchanges budget. We believe that a $400 million funding level is necessary 

and appropriate given the importance of the tasks at hand. 

The U.S. exchange community stands ready to assist you in these efforts, and is 

grateful for your support. 

PREPARED STATEMENT OF SISTER CITIES INTERNATIONAL

On behalf of the 700 U.S. cities partnered with more than 1,700 international cities in 122 countries, I want to thank the subcommittee for its continued support of 

international educational, cultural and development exchanges that continue to impact U.S. foreign policy goals throughout the world. Sister Cities International is a 

nonprofit, citizen diplomacy network that creates and strengthens partnerships between U.S. and international communities at the local level. Sister Cities Inter-
201

national works to promote sustainable development, youth involvement, cultural understanding, and humanitarian assistance through citizen diplomacy. Citizen diplomacy is a peaceful way to promote American foreign policy by establishing links between people within the international community. Sister Cities International works 

to create citizen-to-citizen connections by promoting peace through mutual respect, 

understanding, and cooperation at the local, county and state level. I urge you to 

promote the ideals of citizen diplomacy by carefully considering the critical legislation currently before the subcommittee. 

In the two years since September 11, 2001, the need to eliminate global terror 

and institute avenues of intercultural understanding has grown. Today, citizen diplomacy programs hold the highest incentive for governments who are interested in 

establishing goodwill between states. International education and exchange programs are critical elements in the conduct of U.S. foreign policy and advance national security. The United States must make deliberate efforts to forge sustainable, 

mutually cooperative relationships between the United States and the Islamic world 

in order to rebuild global security. Sister Cities International is well positioned to 

play an integral role by supporting long-term community partnerships through reciprocal exchange programs. 

We believe that the Department of State, through the support and encouragement 

of the subcommittee and Congress, should be strategically investing in two key 

areas of international exchange: support for long-term, ongoing programs such as 

Fulbright and the International Visitors Program and building the capacity of public-private partnerships like Sister Cities International. An investment in the capacity of organizations like Sister Cities International makes good fiscal sense, given 

the fact that Sister Cities International leverages significant non-federal, community-based resources in support of international exchange with the small amount of 

federal dollars we receive every year. Nevertheless, from 1995–2001, core funding 

from the Department of State’s Bureau of Educational and Cultural Affairs (ECA) 

declined dramatically, reducing our efforts to reach out to many regions of the 

world. Without additional core resources, Sister Cities International will find it increasingly difficult to expand the number of partnerships between U.S. and international communities and promote active citizen involvement in international affairs. 

Annually, 6,750 to 13,300 citizen exchanges occur between sister city programs. 

With a federal investment of $370,440, each exchange costs the U.S. government approximately $25 to $50. Moving into our 48th year as a leader in the citizen diplomacy arena, Sister Cities International pledged in 2002 to double the number of 

partnerships in underserved regions of the world over the next five years. New partnerships will be established in the Middle East, Africa, Eurasia, Latin America, and 

the Caribbean. However, this new endeavor can only be accomplished with increased core grant support. Therefore, Sister Cities International is working with 

key Congressional supporters on our first initiative to increase our core grant by 

$164,000 to $534,000 for fiscal year 2005. 

An increase in Sister Cities International’s core grant of $164,000 will specifically 

lead to the following results: 

—Expansion the Sister Cities International network by 100 partnerships a year 

over three years. 

—An increase in the number of exchanges conducted under the Sister Cities 

International umbrella by 3,000 over the three-year period at a cost to the federal government of $55 per exchange. 

—Expansion of the network in underserved regions of the world, focusing on Islamic countries, Africa, Central and Eastern Europe, and Eurasia. 

—More capacity for local sister city partnerships to undertake exchange programs 

focused on economic development, youth and education, women in leadership, 

sustainable development, and humanitarian assistance. 

The second initiative seeks to alleviate the tension between the United States and 

the Islamic World is the ‘‘U.S.-Islamic Sister City Partnership Program.’’ Currently, 

there are 62 United States-Islamic partnerships and with Congress’ support, we 

hope to expand the number of United States-Islamic partnerships by 38 to 100 over 

the next two years. Through ‘‘Islamic Friendship Grants,’’ new and existing partnerships would receive $25,000 each to develop humanitarian assistance, international 

exchange, and community and economic development programs in the region. Each 

‘‘Islamic Friendship Grant’’ will be leveraged at least one-to-one, bringing in an additional $25,000 in non-federal resources to each partnership, for an additional investment of $5 million. For this particular initiative, we are asking for $2.75 million 

through the expansion of the Islamic Exchange Initiative funded by Congress in the 

fiscal year 2002 Supplemental Appropriations. 
202

I want to thank the members of the subcommittee for their leadership and consideration of this important matter. Given the growing global challenges in which U.S. 

diplomacy is called upon to protect American national interests and security, now, 

more than ever, it is important to fully fund the International Affairs budget. Although the 150 account only reflects approximately one percent of the total federal 

budget, notwithstanding increases for the Millennium Challenge Account (MCA), 

HIV/AIDS, and illicit drugs, 58 percent of core mainline programs receive flat or decreased funding. Support for the 150 Account is crucial for improving America’s 

image abroad and protecting our interests at home. I ask you to support the Presidential requests for funding for the 150 Account and our requests to increase funding for Sister Cities International. 

Sister city and other international exchange programs are time-tested and uniquely cost effective. They help ensure a prosperous future for the United States and 

a more democratic world. Americans who participate in citizen diplomacy programs 

experience a profound change in the way they think about the world, leading to 

greater understanding, mutual respect and cooperation around the complex issues 

affecting our global community. This is the vision that drove President Dwight D. 

Eisenhower to establish our organization in 1956 and it remains the vision today 

by which we hope to promote peace—one individual, one community at a time. 

PREPARED STATEMENT OF FLORIDA STATE UNIVERSITY

I am writing to tell you about two projects Florida State University is pursing 

through the Department of Justice. The first is a Juvenile Justice Education Program Model Study. The request is for $2.5 million through the Juvenile Justice Programs Office, Part C. The second deals with Extreme Security for the Critical Infrastructure. The funding level is $2.5 million and is being requested through the 

Byrne Discretionary Grant Program. 

Mr. Chairman, I would like to thank you and the Members of the Subcommittee 

for this opportunity to present testimony before this Committee. I would like to take 

a moment to briefly acquaint you with Florida State University. 

Located in Tallahassee, Florida’s capitol, FSU is a comprehensive Research I university with a rapidly growing research base. The University serves as a center for 

advanced graduate and professional studies, exemplary research, and top quality 

undergraduate programs. Faculty members at FSU maintain a strong commitment 

to quality in teaching, to performance of research and creative activities and have 

a strong commitment to public service. Among the current or former faculty are numerous recipients of national and international honors including Nobel laureates, 

Pulitzer Prize winners, and several members of the National Academy of Sciences. 

Our scientists and engineers do excellent research, have strong interdisciplinary interests, and often work closely with industrial partners in the commercialization of 

the results of their research. Florida State University had over $162 million this 

past year in research awards. 

FSU recently initiated a new medical school, the first in the United States in over 

two decades. Our emphasis is on training students to become primary care physicians, with a particular focus on geriatric medicine—consistent with the demographics of our state. 

Florida State University attracts students from every county in Florida, every 

state in the nation, and more than 100 foreign countries. The University is committed to high admission standards that ensure quality in its student body, which 

currently includes some 345 National Merit and National Achievement Scholars, as 

well as students with superior creative talent. We consistently rank in the top 25 

among U.S. colleges and universities in attracting National Merit Scholars to our 

campus. 

At Florida State University, we are very proud of our successes as well as our 

emerging reputation as one of the nation’s top public research universities. 

Mr. Chairman, let me tell you about a two projects we are pursuing this year 

through the Department of Justice. The first project is a Juvenile Justice Education 

Program Model Study. 

In 1996, the U.S. Department of Justice reported that the cost of criminal victimization in this country is $450 billion a year. Given that delinquent youth constitute 

a major part of the crime problem, such promising methods of crime reduction as 

providing delinquent youth high quality education that can serve as a positive turning point in their delinquent to adult crime life course should be vigorously pursued. 

This is the intent of the 2001 No Child Left Behind Act which mandates the receipt 

of ‘‘best education’’ services for the country’s incarcerated delinquent youth to ensure 
203

their successful community reintegration following release from juvenile justice institutions. 

The USDOE as well as the U.S. Department of Justice’s Office of Juvenile Justice 

and Delinquency Prevention and the American Correctional Association have recognized Florida’s system of juvenile justice education as an exemplary state system. 

This recognition reflects Florida’s commitment to accountability and its implementation of an approach to the identification and validation of best practices in juvenile 

justice education. In 1998, to fulfill this commitment, the Florida Department of 

Education awarded funding for the Juvenile Justice Educational Enhancement Program (JJEEP) to FSU’s School of Criminology and Criminal Justice. During the subsequent years of JJEEP’s operations, Florida’s system of best practices and accountability have become recognized as a model for providing juvenile justice youth quality and accountable education services that embodies the major components of 

NCLB. 

During JJEEP’s early years of implementing both best practices and an accountability system for Florida’s juvenile justice education system, a number of implementation impediments were experienced and ultimately overcome. JJEEP’s experiences in overcoming these implementation impediments should not be repeated but 

rather used to benefit other states as they attempt to successfully implement NCLB. 

Most importantly, JJEEP has conclusively documented that the receipt of best education practices as envisioned in NCLB well-served numerous Florida juvenile justice youth as they exited juvenile justice institutions and reentered their communities. With the successful nationwide implementation of NCLB, every juvenile justice student, regardless of state residence, will be able to receive accountable juvenile justice education best practices that increase the likelihood of their successful 

community reintegration and thereby reduce the incidence of crime, criminal victimization and associated costs. 

This project’s methodology will be centered upon the development and maintenance of effective working partnerships in each state between those responsible for 

juvenile justice education, the national project staff, and USDOE. These partnerships will involve collaboration throughout all phases of the project to ensure consensus and appropriate implementation of the NCLB requirements. Following the 

initial assessment of each state’s juvenile justice education system, the findings will 

be compared to Florida’s system and experiences and the requirements of NCLB to 

develop each state’s NCLB implementation plan. Moreover, and throughout the 

process, ongoing training, technical assistance, and evaluation will be provided to 

ensure successful implementation of the NCLB requirements in each state’s juvenile 

justice education systems. 

We believe this is an outstanding program and will reap very positive outcomes 

for Florida and the Nation. 

The second project we are pursuing deals with Cybersecurity. The Cybersecurity 

Research Institute of Florida (CRIF) at Florida State University is seeking funding 

to support the implementation of extreme security through the development of a 

new model of a cybersecurity management infrastructure. Extreme security refers 

to protection against a previously unanticipated attack on cyberinfrastructure. The 

work will focus on the protection of the cybersecurity component of this critical infrastructure. The critical infrastructure can be identified as elements of the national/international infrastructure such as the national power or water system, the 

international telecommunication system, and the international banking system. 

CRIF is in a unique position to research and develop a cybersecurity protection 

model and management infrastructure through its links with: the Florida 

Cybersecurity Institute (FCI) which was recently established as a cooperative effort 

of Florida State University, the Florida Department of Law Enforcement, and the 

National White Collar Crime Center to conduct research and education activities in 

the areas of cybercrime; and the Security and Assurance in Information Technology 

Laboratory (SAIT) at Florida State University which was established in 1999 to promote research, education, and outreach. 

The Florida State University (FSU) has been designated as a Center of Academic 

Excellence in Information Assurance Education by the National Security Agency. 

Some of the world’s top researchers in cryptography, information security, and infrastructure protection work in the Computer Science Department at FSU. Coupled 

with the relationships and contacts of the FCI founding partners in academia, government, and industry, CRIF is particularly capable of developing and implementing a comprehensive model for extreme cybersecurity. 

Our cybersecurity management model addresses such issues as cost of the system, 

the implementability of the model in the critical infrastructure, and definition of 

new risk models that focus on the types of extreme attacks previously discussed. 
204

Our goal is the survivability of the cybersecurity critical infrastructure under extreme conditions. 

CRIF will conduct research related to the development of the cybersecurity management model, and then implement it in one of the critical infrastructure environments—the banking system in the state of Florida. The banking system in Florida 

is a particularly important system as Florida is one of the states with the largest 

number of small businesses. These small businesses are notorious for not having 

technical assistance that larger companies use for cyberinfrastructure protection. If 

the banking system is disrupted for these small businesses, many would fail, having 

an incredibly negative effect on lives, livelihoods, and the State’s short- and longerterm economy. This work will provide proof of concept of our approach to assist in 

protecting the cyberinfrastructure of the banking industry in Florida. We will develop a range of extreme security levels, based on costs and capabilities that can 

be incrementally implemented by the various critical infrastructure groups. Lessons 

learned could be transferred nationally. 

Mr. Chairman, these are just of couple of the many exciting activities going on 

at Florida State University that will make important contributions to solving some 

key concerns our nation faces today. Your support would be appreciated, and, again, 

thank you for an opportunity to present these views for your consideration. 

PREPARED STATEMENT OF THE CALIFORNIA INDUSTRY AND GOVERNMENT CENTRAL

CALIFORNIA OZONE STUDY (CCOS) COALITION

Mr. Chairman and Members of the Subcommittee: On behalf of the California Industry and Government Central California Ozone Study (CCOS) Coalition, we are 

pleased to submit this statement for the record in support of our fiscal year 2005 

funding request of $500,000 from the National Oceanic and Atmospheric Administration (NOAA) for CCOS as part of a Federal match for the $9.4 million already 

contributed by California State and local agencies and the private sector. We greatly 

appreciate your past support for this study ($500,000 in fiscal year 2001, $250,000 

in fiscal year 2002, and $250,000 in fiscal year 2003) as it is necessary in order for 

the State of California to address the very significant challenges it faces as it seeks 

to comply with air pollution requirements of the federal Clean Air Act. 

Most of central California does not attain federal health-based standards for ozone 

and particulate matter. The San Joaquin Valley has recently requested redesignation to extreme and is committed to updating their 1-hour ozone State Implementation Plan (SIP) in 2004, based on new technical data. In addition, the San Joaquin 

Valley, Sacramento Valley, and San Francisco Bay Area exceed the new federal 8-

hour ozone standard. SIPs for the 8-hour standard will be due in the 2007 timeframe—and must include an evaluation of the impact of transported air pollution 

on downwind areas such as the Mountain Counties. Photochemical air quality modeling will be necessary to prepare SIPs that are approvable by the U.S. Environmental Protection Agency. 

The Central California Ozone Study (CCOS) is designed to enable central California to meet Clean Air Act requirements for ozone SIPs as well as advance fundamental science for use nationwide. The CCOS field measurement program was conducted during the summer of 2000 in conjunction with the California Regional 

PM10/PM2.5 Air Quality Study (CRPAQS), a major study of the origin, nature, and 

extent of excessive levels of fine particles in central California. This enabled 

leveraging of the efforts of the particulate matter study in that some equipment and 

personnel served dual functions to reduce the net cost. From a technical standpoint, 

carrying out both studies concurrently was a unique opportunity to address the integration of particulate matter and ozone control efforts. CCOS was also cost-effective 

since it builds on other successful efforts including the 1990 San Joaquin Valley 

Ozone Study. 

CCOS includes an ozone field study, data analysis, modeling performance evaluations, and a retrospective look at previous SIP modeling. The CCOS study area extends over central and most of northern California. The goal of the CCOS is to better understand the nature of the ozone problem across the region, providing a strong 

scientific foundation for preparing the next round of State and Federal attainment 

plans. The study includes five main components: Designing the field study; conducting an intensive field monitoring study from June 1 to September 30, 2000; developing an emission inventory to support modeling; developing and evaluating a 

photochemical model for the region; and evaluating emission control strategies for 

upcoming ozone attainment plans. 

The CCOS is directed by Policy and Technical Committees consisting of representatives from Federal, State, and local governments, as well as private industry. 
205

These committees, which managed the San Joaquin Valley Ozone Study and are 

currently managing the California Regional PM10/PM2.5 Air Quality Study, are 

landmark examples of collaborative environmental management. The proven methods and established teamwork provide a solid foundation for CCOS. The sponsors 

of CCOS, representing state, local government, and industry, have contributed approximately $9.4 million for the field study. The federal government has contributed 

$4,874,000 to support some data analysis and modeling. In addition, CCOS sponsors 

are providing $2 million of in-kind support. The Policy Committee is seeking federal 

co-funding of $2.5 million to complete the data analysis and modeling portions of 

the study and for a future deposition study. California is an ideal natural laboratory 

for studies that address these issues, given the scale and diversity of the various 

ground surfaces in the region (crops, woodlands, forests, urban and suburban areas). 

For fiscal year 2005, our Coalition is seeking funding of $500,000 from the National Oceanic and Atmospheric Administration (NOAA). This request will be used 

to continue NOAA’s involvement in developing meteorological simulations for CCOS 

episodes, which are also being used as inputs to SIP-related photochemical modeling. NOAA has a direct stake in the CCOS because the extensive meteorological 

data collected as part of the field study can be used by NOAA to improve its meteorological forecasting abilities, particularly by providing NOAA with a new database 

for use in the evaluation of U.S. western boundary conditions for weather forecasting models. As you know, NOAA is also at the scientific forefront of the development of meteorological models including the Weather Research and Forecasting 

(WRF) model that is viewed as a future replacement for the current Mesoscale Meteorology Model, Version 5 (MM5). Thus, NOAA’s involvement in the CCOS would 

facilitate the use of CCOS measurements in the development of WRF. In addition, 

the CCOS includes atmospheric airflow research, and data were collected on sea 

breeze circulations, nocturnal jets and eddies, airflow bifurcation, convergence and 

divergence zones, up-slope and down-slope flows, and up-valley and down-valley airflows. This research provides fundamental data needed to understand airflows over 

complex terrain, and has national applicability. 

Thank you very much for your consideration of our request. 

CURRENT CCOS STUDY SPONSORS

Private Sector 

Western States Petroleum Association 

Pacific Gas and Electric Company 

Electric Power Research Institute 

NISEI Farmers League and Agriculture 

Independent Oil Producers’ Agency 

California Cotton Ginners and Growers Associations 

Local Government 

San Joaquin Valley Unified Air Pollution Control District (on behalf of local cities 

and counties) 

Bay Area Air Quality Management District 

Sacramento Metro Air Quality Management District 

San Luis Obispo County Air Pollution Control District 

Mendocino County Air Pollution Control District 

State Government 

California Air Resources Board 

California Energy Commission 

Federal Government 

National Oceanic and Atmospheric Administration 

Environmental Protection Agency 

Department of Agriculture 

Department of Transportation 

PREPARED STATEMENT OF THE NATIONAL AMERICAN INDIAN COURT JUDGES

ASSOCIATION

On behalf of the National American Indian Court Judges Association (NAICJA), 

I am pleased to submit this testimony on the proposed fiscal year 2005 budget for 

the Justice Department’s Indian Country Law Enforcement Initiative and the Indian Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 106–

559). We request $73.4 million for Tribal Courts including $15 million for Indian 
206

Country Law Enforcement Initiative and $58.4 million in funding for the Indian 

Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 106–559). In 

addition, we request full funding for the following areas or, at minimum, proportional increases in keeping with economic growth. Specifically, this includes: —Increase by $4.74 million Administration proposed cuts in Law Enforcement 

under the COPS program in DOJ. —Increase by $7.59 million Administration proposed cuts in Tribal Courts under 

DOJ. 

—Increase by $2 million Administration proposed cuts in BIA for ‘‘contract sup- port costs’’ to $135,314,000. —Increase by $2.46 million Administration proposed cuts in DOJ for Indian Country Prison grants. 

The National American Indian Court Judges Association (NAICJA), 

www.naicja.com, was incorporated in 1969. NAICJA is the largest organization representing Tribal Judges and Tribal Courts in the United States. The mission of 

NAICJA is to strengthen and enhance all Tribal justice systems through improvement and development of Tribal Courts and Tribal Court Judges. 

Justice Department Funding: Indian Country Law Enforcement Initiative and Indian Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 

106–559) 

$15 million for Indian Country Law Enforcement Initiative.—NAICJA strongly 

supports full funding for the Indian Country Law Enforcement Initiative. NAICJA 

would like to specifically emphasize our support for the funding of the Indian Tribal 

Court Fund at a level of at least $15 million (Please note that this fund was formally authorized by the 106th Congress—see Public Law 106–559, section 201). 

Through the increased funding for law enforcement under the Indian Country Law 

Enforcement Initiative, more police officers have been added throughout Indian 

Country. Without substantial additional funding, tribal courts will be unable to handle the increased caseloads generated by this increased law enforcement. $58.4 million in funding for the Indian Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 106–559).—When the 106th Congress enacted Public 

Law 106–559 in December 2000, it recognized the vital legal and technical assistance needs of tribal justice systems—finding in part that ‘‘there is both inadequate 

funding and inadequate coordinating mechanism to meet the technical and legal assistance needs of tribal justice systems and this lack of adequate technical and legal 

assistance funding impairs their operation’’ and promised three grant programs to 

address these Congressional recognized needs. It is vital that Congress provide adequate funding for Public Law 106–559 (see the Act itself for more specific information). NAICJA strongly supports funding of Public Law 106–559 at the level of at 

least $58.4 million. Failure to provide this funding level would make the Indian 

Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law 106–559) a 

hollow recognition of tribal justice systems needs without providing needed resources. We further express our concern with the Administration’s fiscal year 2005 Budget 

proposals regarding Tribal Courts. Decreases in these areas will severely hinder effective law enforcement and Tribal Courts in Indian Country. 

We request full funding for the following areas or, at minimum, proportional increases in keeping with economic growth. Specifically, this includes: Cuts in Law 

Enforcement under the COPS program by $4.74 million in DOJ; cuts in Tribal 

Courts under DOJ by $7.59 million; cuts in BIA for ‘‘contract support costs’’ by $2 

million down to $133,314,000; and cuts in DOJ for Indian Country Prison grants 

by $2.46 million. 

IMPORTANCE OF TRIBAL COURTS

Tribal justice systems are the primary and most appropriate institutions for maintaining order in Tribal communities.

‘‘Tribal courts constitute the frontline tribal institutions that most often confront 

issues of self-determination and sovereignty, while at the same time they are 

charged with providing reliable and equitable adjudication in the many and increasingly diverse matters that come before them. In addition, they constitute a key tribal entity for advancing and protecting the rights of self-government.... Tribal 

courts are of growing significance in Indian Country.’’ (Frank Pommersheim, Braid 

of Feathers: American Indian Law and Contemporary Tribal Law 57 (1995)).

Tribal Courts must deal with the very same issues state and Federal courts confront in the criminal context, including, child sexual abuse, alcohol and substance 

abuse, gang violence and violence against women. Tribal Courts, however, must ad-
207

dress these complex issues with far fewer financial resources than their Federal and 

state counterparts. Judicial training that addresses the existing problems in Indian 

Country, while also being culturally sensitive, is essential for Tribal Courts to be 

effective in deterring and solving crime in Indian communities. 

INADEQUATE FUNDING OF TRIBAL JUSTICE SYSTEMS

There is no question that Tribal justice systems are, and historically have been, 

underfunded. The 1991 United States Civil Rights Commission found that ‘‘the failure of the United States Government to provide proper funding for the operation 

of tribal judicial systems... has continued for more than 20 years.’’ The Indian 

Civil Rights Act: A Report of the United States Civil Rights Commission, June 1991, 

p. 71. The Commission also noted that ‘‘[f]unding for tribal judicial systems may be 

further hampered in some instances by the pressures of competing priorities within 

a tribe.’’ Moreover, they opined that ‘‘If the United States Government is to live up 

to its trust obligations, it must assist tribal governments in their development . . .’’ 

More than ten years ago, the Commission ‘‘strongly support[ed] the pending and 

proposed congressional initiatives to authorize funding of tribal courts in an amount 

equal to that of an equivalent State court’’ and was ‘‘hopeful that this increased 

funding [would] allow for much needed increases in salaries for judges, the retention 

of law clerks for tribal judges, the funding of public defenders/defense counsel, and 

increased access to legal authorities.’’

With the passage of the Indian Tribal Justice Act, 25 U.S.C. § 3601 et seq. (the 

‘‘Act’’), Congress found that ‘‘[T]ribal justice systems are an essential part of tribal 

governments and serve as important forums for ensuring public health, safety and 

the political integrity of tribal governments.’’ 25 U.S.C. § 3601(5). Congress found 

that ‘‘tribal justice systems are inadequately funded, and the lack of adequate funding impairs their operation.’’ 25 U.S.C. § 3601(8). In order to remedy this lack of 

funding, the Act authorized appropriation of base funding support for tribal justice 

systems in the amount of $50,000,000 for each of the fiscal years 1994 through 

2000. 25 U.S.C. § 3621(b). An additional $500,000 for each of the same fiscal years 

was authorized to be appropriated for the administration of Tribal Judicial Conferences for the ‘‘development, enhancement and continuing operation of tribal justice systems . . .’’ 25 U.S.C. § 3614. 

Nine years after the Act was enacted into law, and even after reauthorization, no 

funding has been appropriated. Only minimal funds, at best, have been requested. 

Yet, even these minimal requests were deleted prior to passage. Even more appalling is the fact that BIA funding for Tribal Courts has actually substantially decreased following the enactment of the Indian Tribal Justice Act in 1993. 

BIA-DOJ INDIAN COUNTRY LAW ENFORCEMENT INITIATIVE

Full funding is requested for the Joint BIA-DOJ Law Enforcement Initiative proposal to improve law enforcement in Indian Country. The Final Report of the Executive Committee for Indian Country Law Enforcement Improvements documents the 

‘‘stark contrast between public safety in Indian Country and the rest of the United 

States.’’ (Final Report, p. 4.) ‘‘While law enforcement resources have been increased 

and deployed throughout the United States, BIA resources actually have been reduced in Indian Country during the past few years.’’ It is axiomatic that ‘‘as a consequence of improvements to law enforcement services, a corresponding increase in 

funds is needed for judicial services, especially tribal courts.’’ (Final Report, p. 8). 

The Initiative includes funding to continue the Department of Justice Indian Tribal Court Program. We urge the Committee to support full funding of the Tribal 

Court Program to assist in the development, enhancement and continued operation 

of tribal judicial systems. While funding has fallen far short of the $58 million in 

annual funding promised by the Indian Tribal Justice Act, the Initiative will fail 

without it. Without well-staffed, competent Tribal judiciaries to handle the influx of 

the new criminal prosecutions flowing from the Law Enforcement Initiative, the goal 

of providing service to 1.4 million Native Americans who live on or near Indian 

lands the same ‘‘protection of their basic rights, a sense of justice, and freedom from 

fear’’ enjoyed by Americans at large, will not be attained. (Final Report, p. 4). 

CONCLUSION

Tribal justice systems are the primary and most appropriate institutions for maintaining order in tribal communities. They are key to Tribal economic development 

and self-sufficiency. Any serious attempt to fulfill the federal government’s trust responsibility to Indian nations, must include increased funding and enhancement of 

Tribal justice systems. 
208

We welcome the opportunity to comment on the Justice Department’s Budget Request for the fiscal year 2004 funding of the Indian Country Law Enforcement Initiative and the Indian Tribal Justice Technical and Legal Assistance Act of 2000 

(Public Law 106–559). 

Please contact me at (715) 478–7255, or NAICJA Executive Director Chuck Robertson, at (605) 342–4804 or naicja@rushmore.com with questions or comments. 

Thank you. 

PREPARED STATEMENT OF THE AMERICAN SPORTFISHING ASSOCIATION

The American Sportfishing Association (ASA) recommends the following as the 

Subcommittee considers appropriations for the National Marine Fisheries Service 

(NMFS) for fiscal year 2005. The American Sportfishing Association is a non-profit 

trade association whose 600 members include fishing tackle manufacturers, sport 

fishing retailers, boat builders, state fish and wildlife agencies, and the outdoor 

media. The ASA makes these recommendations on the basis of briefings with agency 

staff and from years of experience with fisheries management in this Nation. It is 

important to note that sportfishing provides $116 billion in economic output to the 

economy of the United States each year. Sportfishing in marine waters alone provides a $31 billion impact each year to coastal states. 

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION—NATIONAL MARINE FISHERIES

SERVICE

An important but often underrepresented NOAA constituency is the Nation’s 34 

million sportfishing anglers, who collectively provide billions of dollars in economic 

impact each year to the U.S. economy. The importance of adequately including this 

group and their activities in management decisions cannot be overstated. 

Recreational Fisheries 

With over nine million participants and 91 million fishing days, saltwater recreational fishing is the fastest growing segment of sportfishing in the United States. 

NOAA-Fisheries has a responsibility to recreational anglers. Sportfishing in marine 

waters alone provides $8.1 billion in salaries and wages to nearly 300,000 wage 

earners in coastal areas. Good socio-economic information is critical for effective marine resources management efforts, and the ASA applauds the Administration’s requested increase of $1,200,000 (for a total of $5.2 million) for additional economic 

and social science research, data collection and analysis. But, the ASA asks Congress to require NOAA-Fisheries to provide adequate data for sportfishing in marine 

waters and that an additional $1.7 million be provided for economic and social 

science research and data collection. 

Stock Assessment and Monitoring 

Our nation’s valuable marine fish resources are under intense pressure from 

coastal population growth, increasing fishing effort and accompanying declines in 

habitat quality. These pressures demand well-documented information on marine 

fish stocks. NOAA-Fisheries has not fully demonstrated an ongoing and comprehensive commitment to modernization and improvement of fisheries stock assessment 

and management of marine systems. It will take a sustained commitment on the 

part of the Administration, Congress and partner agencies to ensure that these initiatives are in place, sustained and effective over the long-term. 

The ASA recognizes and supports the fiscal year 2005 President’s budget request 

to increase funds for fisheries stock assessments, cooperative research, and management by $4 million to a total of $18.9 million, but the NOAA-Fisheries stock assessment program needs to build to the $100 million level over the next five years if 

it is to be effective in providing data for proper management of marine stocks. The 

ASA recommends an additional $10 million to begin building this program to the 

necessary level. 

NOAA-Fisheries has developed successful joint programs in statistics, including 

the RecFIN, and ComFIN programs and, most recently, the Atlantic Coastal Cooperative Statistics Program. The ASA recommends that Congress fund GulFIN at $4.5 

million and RecFIN at $3.9 million, and urges NOAA-Fisheries to use the RecFIN 

funding for cooperative data collection for recreational fisheries consistent with statutory directives. The ASA is pleased with the President’s request of $3.0 million for 

PacFIN, the proposed $6.7 million for the Alaska groundfish monitoring effort, and 

the recommended funding levels for AKFIN at $3.2 million. 

The ASA strongly urges Congress to address the statistics gaps on the Atlantic 

Coast by supporting the Atlantic Coastal Cooperative Statistics Program (ACCSP.) 
209

NOAA-Fisheries and the Atlantic states share a commitment through and Memorandum of Understanding to proceed with this program. The ASA urges Congress 

to appropriate the funds necessary for success by adding a $5 million appropriation 

in fiscal year 2005 for ‘‘Fish Statistics—Atlantic States Marine Fisheries Commission’’ as the ACCSP is fully prepared to utilize this amount immediately as stated 

in their planning document. 

Cooperative research programs, including the SEAMAP and MARFIN programs, 

support fishery-independent research on high priority species. MARFIN continues to 

provide funds for Congressionally mandated shrimp bycatch studies. SEAMAP is 

building a long-term fishery-independent database needed for managing heavily exploited species and for identifying and protecting critical habitat. The ASA is concerned with the decline in funding for these critical information-gathering programs; 

therefore, the ASA recommends that the MARFIN competitive grant program be 

funded at $6.0 million (with $4 million for the Southeast and $2 million for the 

Northeast) and SEAMAP at $6.0 million. 

Habitat Loss 

The Administration has proposed the elimination of several habitat-related programs including important work being carried out on the Charleston Bump. The 

Charleston Bump is an important nursery habitat for Atlantic Highly Migratory 

Fish species (HMS), and the ASA supports continuation of this program at fiscal 

year 2004 levels. 

The ASA supports the fiscal year 2005 request of $13.2 million for Fisheries Habitat Restoration. This program provides funding to foundations that awards grants 

to restore fish habitat. Specifically, the ASA is pleased with the $1.5 million increase for the Community-based Restoration Program (CRP) that has funded over 

800 vitally important restoration projects that entail volunteers and educational opportunities to promote stewardship and public involvement. The ASA recommends 

an additional $2 million for CRP grants that are regularly matched by a 3–5 ratio 

and completed by many groups including regional or national partners, non-profit 

organizations, communities, and industry. 

Interagency Efforts 

The ASA strongly recommends that Congress appropriate $10.0 million for the Atlantic Coastal Fisheries Cooperative Management Act. It provides the Atlantic 

States Marine Fisheries Commission with the financial resources to carry out their 

Congressional mandates and the program continues to accomplish goals, such as the 

continuing successes in striped bass and weakfish management. 

The ASA urges Congress to appropriate adequate funding for all cooperative programs with state agencies, including ESA Section 6 cooperative programs and to implement restoration programs under the authority granted in the Endangered Species Act. These agreements would provide funding on a matching basis to accomplish conservation activities and to protect candidate species at risk of extinction. 

It is essential to protect the species important to recreational anglers and to sustain 

populations through sound management. The ASA recommends an additional $4 

million be included in the fiscal year 2005 appropriation to provide funding for cooperative agreements with states to enhance the states’ roles under the Endangered 

Species Act. 

Addressing the significant shortfalls in financial assistance to accomplish mandated and timely fisheries management needs is critical to allow for implementation 

of the Magnuson-Stevens Fisheries Conservation and Management Act. The ASA 

supports the additional $800,000 in funding for NOAA-Fisheries Regional Fishery 

Management Councils that will allow the Councils to provide a more timely response to regional problems as fishing pressures continue to grow in many areas. 

Reliable fishery statistics provide the foundation upon which all fishery management decisions are based. State participation in the development and implementation of fishery statistics programs is critical to ensure the validity, comparability, 

and usefulness of data. The States and NOAA-Fisheries are each authorized to collect and interpret statistics for marine fisheries. Therefore, it is essential that States 

and the Interstate Marine Fisheries Commissions participate in cooperative statistics programs. 

Other NOAA-Fisheries Issues 

The ASA is pleased with the increase of $10.9 million for the Pacific Coastal 

Salmon Recovery Fund and the inclusion the state of Idaho for salmon funding. We 

urge the Subcommittee to support funding for this program that is essential to recovery efforts of endangered and at-risk salmon species that are so critically important to the Pacific Northwest. The Pacific Coastal salmon fisheries provide out-
210

standing opportunities for recreational anglers and the ASA appreciates all efforts 

designated to restore these recreational species. 

The ASA is concerned over the continuing low level of funding for implementation 

of the Anadromous Fisheries Act. The Anadromous Fisheries Act budget line has 

traditionally been used to fund activities that cannot be supported through other 

federal and state funds, and the fisheries management community has been unable 

to adequately address the needs of most anadromous fish stocks. Therefore, the ASA 

urges Congress to fund the Anadromous Fisheries Act grants to States at $8.0 million. 

The ASA strongly recommends that Congress appropriate $30 million for cooperative law enforcement arrangements with the states for fiscal year 2005. Additionally, the ASA urges Congress to insist that NOAA-Fisheries work with the Department of Justice to streamline the reimbursement process to states prosecuting federal fisheries violations, as was intended by Congress. 

Other National Oceanic and Atmospheric Administration (NOAA) Programs 

The ASA urges Congress to aggressively support the development of new technologies to help address critical marine resource issues. Several ongoing efforts, including the Hollings Marine Laboratory (HML) and the Fish Cooperative Institute, 

are funded through the Oceanic and Coastal Research line of the National Ocean 

Service budget. The ASA is pleased with the Administration’s recognition of this important work in marine environmental health and the included funding level of $4.0 

million for the HML and $0.750 for the Fish Cooperative Institute. 

The National Estuarine Research Reserve (NERR) and Coastal Zone Management 

(CZM) programs are two highly successful examples of state-federal partnership efforts to improve the quality of our natural resources. The ASA is pleased with the 

proposed $16.4 million for NERR operations as well as with the Administration’s request of $7.25 million for construction of research and educational facilities at 

NERR sites. Additionally, the ASA is pleased that the Administration recognizes the 

efforts of coastal states to address issues ranging from public access to non-point 

source pollution to development and urban sprawl. Increased development continues 

to have detrimental impacts on the quality of life in our communities, and states 

and local communities are in the best position to develop sound solutions to these 

pressures. Therefore, the ASA strongly urges Congress to support the nation’s coastal zone management enterprise at a level of $85 million for Coastal Zone Management grants to help states and local communities work to improve the quality of 

our coastal natural environment. 

The ASA is pleased with the Administration’s acknowledgement of the problems 

posed by pfiesteria and other harmful algal blooms. However, the ASA is concerned 

over the proposed termination of work carried out in concert with the states. The 

Administration has proposed to terminate the $600,000 for pfiesteria work being 

carried out by the South Carolina Harmful Algal Bloom Task Force. This effort is 

especially important in evaluating the risks of harmful algal blooms in tidal-dominated high flow systems, and the ASA urges Congress to restore funding for this 

effort. 

PREPARED STATEMENT OF THE AMERICAN COUNCIL OF YOUNG POLITICAL LEADERS

Mr. Chairman, distinguished members of the Subcommittee on Commerce, Justice, and State, the Judiciary and Related Agencies, ladies and gentlemen: 

The American Council of Young Political Leaders (ACYPL) welcomes this opportunity to present testimony as you consider the U.S. Department of State’s fiscal 

year 2005 appropriations for cultural and educational exchange programs. My name 

is Brad Minnick, and as the ACYPL’s executive director, I oversee nearly 30 annual 

exchange programs funded in part by a core grant from the State Department’s Bureau of Educational and Cultural Affairs (ECA). Today I offer some perspectives 

about the value of exchanges like ours against the backdrop of global terrorism and 

rising anti-Americanism around the world. In my view, citizen exchanges are a critical component in the war against terrorism and the promotion of democratic ideals. 

Background and History of ACYPL 

Since its founding in 1966 as an outgrowth of the Fulbright-Hays Act, ACYPL has 

introduced nearly 6,500 select emerging leaders from around the globe to international diplomacy and to each other. ACYPL prepares in-depth study tours for 

young leaders, aged between 25 and 40 years old, to give them much-needed international exposure early in their political careers. U.S. participants travel overseas 

to study the political system and culture of another nation. Reciprocal visits bring 
211

young leaders here from abroad for an introduction to American democracy and culture and our federalist form of government. 

We target young politicians likely to assume future positions of responsibility and 

leadership. Here at home, our delegates are typically state legislators, mayors, city 

council members and other state and local elected officials. Many have never before 

traveled outside the United States. 

ACYPL programs are strictly bipartisan; our delegates are drawn from all 50 

states and equally from both major political parties. We take particular care in putting together our delegations to demonstrate to the world that this nation has diverse opinions, cultures, ethnicities, religions, and politics. Similarly, ACYPL’s overseas delegations are chosen by our partners and U.S. Embassies abroad to represent 

the political and cultural diversity of their home countries. 

Here in the United States ACYPL can claim nearly 40 sitting members of Congress among its distinguished alumni; six sitting state governors; several current 

and former Cabinet secretaries and many leaders in business, finance, community 

affairs, and education. Overseas, our distinguished alumni include prime ministers, 

cabinet officers, ambassadors and parliamentarians. The current Hungarian prime 

minister and the current Hungarian ambassador to the United States were roommates on an ACYPL exchange in 1983. 

A Model for Experience and Understanding 

ACYPL is but one of many international organizations actively engaged in citizen 

diplomacy. Why are we unique and why are we effective? 

ACYPL is cost-efficient. For practically every dollar we receive in federal funding, 

we turn it into at least two dollars through cost-share, in-kind contributions and 

outside fundraising. Overall, we will leverage nearly 160 percent of our base federal 

grant in corporate and private funding support this year—a $1.2 million return on 

a federal investment of $800,000. 

ACYPL exchanges are bilateral. Appearing recently before the House Appropriations Subcommittee on Commerce, Justice, and State, Ambassador Edward 

Djerejian noted that ‘‘the most effective programs of public diplomacy—the ones 

most likely to endure and have long-term impact—are those that are mutually 

beneficial . . .’’ We host the same number of delegates from each country that we 

send to those countries. Our in-country counterpart organizations willingly organize 

and underwrite the visits of our American delegates because we reciprocate. 

We focus only on emerging political leaders. We believe passionately in the need 

to identify, educate and introduce to each other tomorrow’s global leaders today. 

Through familiarity and relationships comes knowledge and understanding. The 

earlier in one’s political career we can make these connections, the better. 

As Assistant Secretary of State Patricia de Stacy Harrison is fond of saying, ‘‘if 

you don’t go, you don’t know.’’ ACYPL brings young leaders here to see for themselves the multicultural, pluralistic nation of friendly and generous people that is 

the United States. A delegation from Indonesia visiting Dearborn, Michigan was 

shocked to see that Muslims here not only worship openly but are assimilated into 

the fabric of American society. A Chinese delegation didn’t know until they met him 

that a Chinese-American could be and was elected one of our nation’s 50 governors. 

American delegates make similar discoveries. Delegates to India and Tanzania 

had never before seen such rampant poverty. Through their meetings in Egypt, Jordan and Morocco delegates experienced first-hand the intensity of anti-American 

sentiment among young adults. Delegates in Vietnam saw the deep bitterness many 

government officials still hold over the ‘‘American war.’’ In Australia delegates 

learned about the true strength and history of our alliance. 

ACYPL continues to engage its alumni. We view the initial exchange as only the 

beginning of our delegates’ experience as citizen diplomats. And we tap these well 

connected alumni at home and abroad to give current delegates access to leaders 

at the highest levels of government. A recent Chinese delegation learned about the 

rule of law directly from Supreme Court Justice Sandra Day O’Connor and White 

House Counsel Alberto Gonzales, who is himself an alumnus of ACYPL. Palestinian 

delegates quizzed Ambassador Dennis Ross and Secretary of State Colin Powell 

about Middle East peace. Israelis met with former Defense Secretary William Perry. 

In Jordan, U.S. delegates met with King Abdullah; in Romania they talked NATO 

membership with Prime Minister Nastase and Foreign Minister Geoana; in Uruguay, delegates questioned President Battle about Iraq and international cooperation in the war on terrorism. 

Many alumni can testify about the deep impact the program had on them as they 

rose through the ranks to their current position of national or international leadership. The phrase most frequently used in describing their ACYPL experience is ‘‘lifechanging.’’ Here is a typical comment from our delegate evaluations: ‘‘As a state leg-
212

islator, I was never focused on foreign issues before this trip. This trip and access 

to the political leaders has opened my eyes forever on our responsibility as a nation.’’ Said a recent foreign delegate: ‘‘I have come to realize that actually I know 

less about the United States than I thought I did before going on this trip.’’ Another 

wrote that going forward ‘‘I’ll be able to avoid the fallacy of oversimplifying America.’’

U.S. Embassies abroad widely speak of the positive results ACYPL visits generate. For example, a recent delegation spent time in Malaysia, ACYPL’s first visit 

there in over 10 years, where they were introduced to some of the new political leadership elected just one week before the delegates’ arrival. We were told that this 

could not have been a better time for the ACYPL delegation to come to Malaysia 

because the visit allowed Embassy staff to meet many key contacts in the major political parties, government officials and non-governmental organizations for the first 

time. One notable contact was with the executive director and secretary of the International Movement of Muslim Youth (ABIM), based in Malaysia, who attended the 

ACYPL welcoming reception hosted by the Embassy’s deputy chief of mission. This 

was the first time ABIM had ever accepted an Embassy invitation to any event, and 

the occasion allowed Embassy staff and the ABIM to discuss how they could work 

together in the future in places like Iraq. 

Why Exchanges Are Needed 

Current events around the world speak of the tragedy of the increasing lack of 

understanding between the United States and some of its traditional allies; it also 

speaks volumes to the deeply-rooted mistrust of the United States felt by millions 

around the globe. Citizen-to-citizen exchanges offer unique opportunities for learning from one another about commonly-shared solutions to problems, as well as about 

different perspectives on forms of government and the aspirations other nations 

have for their citizens. This is especially true when it applies to emerging democracies, post-conflict nations, or in countries where the United States has a critical 

focus. 

Worldwide, ACYPL has succeeded in addressing immediate national public diplomacy interests. When U.S. relations with the People’s Republic of China were normalized in 1979, ACYPL was one of the first exchange programs established between our two nations. This year we are celebrating the 25th anniversary of the 

first ACYPL visit to mainland China. We are proud to be in the vanguard of exchange programs that seek to promote peace, reconciliation, and friendship among 

former adversaries. 

Our experience with China illustrates the benefits that come when exchanges are 

sustainable over a quarter of a century. Since 1979 nearly 400 young leaders on 

both sides have gained valuable understanding about the other; indeed, many of 

these alumni have risen to high levels of leadership in both countries. This exchange 

never fell victim to the ebb and flow of funding or of relations between our two governments, even during Tiananmen Square or the downing of a U.S. Air Force plane 

over Hainan Island. I remember vividly arriving in Beijing as an ACYPL delegate 

myself the day martial law was declared in 1989. Despite the Tiananmen Square 

protests, both nations agreed our visit should proceed. It was an experience I shall 

never forget. 

With regard to public diplomacy in the Middle East and other areas of focus by 

the State Department, ACYPL has strengthened its exchanges to promote current 

priorities. While 25 percent of State Department funding for exchanges this year 

will go to programs in the Middle East and South Asia, fully 37 percent of ACYPL’s 

exchanges in 2004 are with nations with predominant Muslim populations. We have 

already brought to the United States approximately 100 delegates from the Near 

East. Recent inbound exchanges have included parliamentarians from Indonesia, 

where it has been stated in a September 2003 General Accounting Office report that 

only 15 percent of Indonesians view the United State favorably. We are also hosting 

Egyptian parliamentary staffers who are witnessing first-hand how representative 

government works in the U.S. Congress; and later this summer a delegation from 

Jordan (where only 1 percent view the United States favorably, according the same 

GAO report) will visit schools, citizen groups, and local legislators to learn about 

a civil society. We feel these visits offer more than just education, but an opportunity to expose mutual misconceptions; create goodwill that promotes understanding and dialogue; and engage young leaders in public diplomacy efforts with 

lasting results. 

Where We Are Today and Challenges for the Future 

Unfortunately, like many of our exchange program colleagues, ACYPL does not 

have the resources to conduct and maintain exchanges worldwide on the scale ap-
213

propriate for the world’s only super power. America’s national leaders agree on the 

value of educational and cultural exchanges, yet those of us who organize these exchanges typically operate on shoestring budgets. The United States spends less than 

one percent of the annual Defense budget on all of its public diplomacy programs 

combined. Because resources are so limited, my organization must constantly choose 

between maintaining existing relationships or establishing new ones. We cannot do 

both under existing funding. 

The international exchange community understands the severe budget pressures 

facing this subcommittee. But we also understand what America gains from these 

exchanges. Government-to-government dialogue and military strength can only 

reach so far and do so much. Public diplomacy efforts underscore or compliment government-to-government achievements while imparting personal experience and developing mutual understanding among future leaders. Yet, without sustained or new 

funding for programs like ours, progress towards impressing upon other nations the 

blessings of democracy and freedom cannot be made fully; nor will we reach those 

who need to hear our message the most. Indeed, as Ambassador Djerejian notes in 

Changing Minds, Winning Peace, ‘‘the importance of public diplomacy in meeting 

the strategic challenge that America faces in the Arab and Muslim world requires 

a dramatic increase in funding.’’

Our organization could facilitate exchanges with 100 emerging young political 

leaders in Afghanistan and/or Iraq that focus on democracy, rule of law, openness 

in government, civil society, women’s rights, and the importance of public service 

for $600,000. We could double the number of countries we exchange with for $2 million. With $300,000 more we could add enhanced follow-on activities and better communicate with our global alumni. 

Thank you for this opportunity to share my thoughts about why public diplomacy 

programs like ours must be strengthened in a post 9/11 world. As you deliberate 

how best to allocate limited resources I encourage you to consider the important role 

that ACYPL and its sister exchange organizations can play in fostering improved 

understanding among emerging leaders, combating global terrorism and changing 

perceptions abroad about America. Thank you. 

PREPARED STATEMENT OF THE NATIONAL CENTER FOR VICTIMS OF CRIME

The National Center for Victims of Crime submits this testimony to urge members 

of the Subcommittee on Commerce, Justice, State and the Judiciary to approve the 

President’s budget request and release $675 million from the Victims of Crime Act 

(VOCA) Fund for fiscal year 2005. In addition, we urge Subcommittee members to 

prevent the creation of additional earmarks from the VOCA Fund and to discontinue the use of earmarks from the VOCA Fund for federal positions. 

The National Center for Victims of Crime is the leading resource and advocacy 

organization for victims of crime. From our work with crime victims and service providers across the country, we are well acquainted with the funding needs of those 

who assist victims of crime. Since our founding in 1985, the National Center has 

worked with public and private non-profit organizations and agencies across the 

country, and has provided information, support, and technical assistance to hundreds of thousands of victims, victim service providers, allied professionals, and advocates. Our toll-free information and referral Helpline keeps us in touch with the 

needs of crime victims nationwide. Through our day-to-day interactions with our 

members and with the 8,300 crime victim service providers in our referral network, 

we stay informed of the work they do and of the impact that funding decisions at 

the federal level have on their ability to meet the needs of victims. We also interact 

with crime victim service providers through our regional Training Institute, which 

offers training on a variety of issues to service providers throughout the country. 

In short, we hear from victims and service providers every day about the impact 

and importance of the VOCA Fund. 

About the VOCA Fund 

The VOCA Fund was created twenty years ago to provide ongoing federal support 

for state and local crime victim programs. It is funded by criminal fines and penalties imposed on federal offenders. Since fiscal year 2000, the VOCA Fund has carried over money from year to year, with each year’s VOCA Fund disbursement reflecting a cap on the amount of money released from the Fund. The bulk of the 

funds are distributed each year by formula grants to the states to fund: (a) crime 

victim compensation programs, which pay many of the out-of-pocket expenses incurred by victims; and (b) crime victim assistance. The VOCA Assistance funding 
214

supports rape crisis centers, domestic violence shelters, victim assistants in law enforcement and prosecutor offices, and other direct services for victims of crime. 

VOCA funding for victim assistance has decreased since fiscal year 2002

For the last two years, a cursory look at the federal appropriations might indicate 

that VOCA funding for victim services has increased. In fact, it has fallen since fiscal year 2002. The decrease in VOCA funding for victim assistance has resulted 

from changes in the statutory formula for disbursement of VOCA dollars and from 

the disproportionate impact of the budgetary rescission on VOCA assistance spending. While the total VOCA disbursement has increased, from $550 million in fiscal 

year 2002 to $625 million in fiscal year 2004, VOCA assistance spending has 

dropped in that time, from $383 million in fiscal year 2002 to approximately $356 

million in fiscal year 2004. This seven percent decrease has had a significant impact 

on rape crisis centers, homicide survivor groups, and victim/witness programs that 

are already suffering steep declines in support from states and private funders. 

Under the terms of the VOCA statute (42 U.S.C. § 10601), there are certain set 

asides for federal programs that are funded according to their need. These programs 

are victim/witness coordinators in the offices of U.S. Attorneys, victim assistants in 

FBI field offices, and the federal automated victim notification system. Another set 

aside exists for children’s justice programs. From the remaining VOCA dollars, five 

percent is allocated to the Office for Victims of Crime for additional federal programs and for national-scope projects. Payouts from the VOCA Fund to state crime 

victim compensation programs are then made, based on a partial reimbursement of 

each state payments to victims. The amount of funds remaining becomes that year’s 

VOCA assistance figure. Thus, any change in earmarks from the fund or in the 

needs of the funded federal programs, any reduction in overall VOCA spending, and 

any budgetary rescission, disproportionately impacts VOCA assistance spending. 

The importance of VOCA funding to state and local victim services 

VOCA assistance money provides the crucial federal support for core services to 

crime victims. Through the VOCA fund, the federal government supports services 

for survivors of homicide victims and for victims of assault, robbery, gang violence, 

hate and bias crimes, intoxicated drivers, bank robbery, fraud, elder abuse, child 

abuse and neglect, domestic violence, and sexual assault. VOCA assistance dollars 

fund services that help victims in the immediate aftermath of crime, including accompaniment to hospitals for examination; hotline counseling; emergency food, 

clothing and transportation; replacing or repairing broken locks; filing restraining 

orders; and more. This program also funds assistance as victims move through the 

criminal justice system, including notification of court proceedings, transportation to 

court, help completing a victim impact statement, notification about the release or 

escape of the offender, and assistance in seeking restitution. 

Organizations receiving VOCA assistance grants include sexual assault and rape 

treatment centers, domestic violence programs and shelters, child abuse programs, 

centers for missing children, mental health services, and other community-based 

victim coalitions and support organizations including those who serve homicide survivors. Also funded are victim service programs operated by other types of organizations, including criminal justice agencies, faith-based organizations, emergency medical facilities, and others. 

The need far outpaces the funds 

Victims from around the country call our toll-free Helpline, looking for the assistance that can help them rebuild their lives. Too often we have had to tell rural domestic violence victims that the closest services are 200 miles away, to tell mothers 

of sexual abuse victims that they will have to drive over an hour to get to special 

children’s services, and to tell rape victims that there are no longer services in their 

county and they will have to call the state coalition for help. Immigrant victims find 

there are no service providers with available interpreters; victims with disabilities 

can’t locate specialized services. Because the recent decrease in federal funding follows decreases in state and private giving, any additional cuts come at the expense 

of core services to victims. 

—Service providers tell us they have long waiting lists for services that victims 

need immediately. When a teenage sexual assault victim turns to a rape crisis 

center, telling her she can come back in three months isn’t good enough. 

—Program directors tell us they have had to chose between retaining a volunteer 

coordinator who can provide the necessary professional oversight to volunteers 

who inform victims about their rights and assist them as they apply for compensation, and a counselor who can provide in-depth counseling and group therapy. 
215

—Programs that formerly served multiple counties through satellite offices have 

had to contract their services to a single location. Not only does this change directly affect the accessibility of their services, but it also means a lessening of 

ties to others in the community who can collaborate to respond to victims. 

—Programs that have spent years making inroads into immigrant communities 

are now faced with discontinuing their services because they can no longer afford bilingual advocates. 

—Services for ‘‘secondary’’ victims have been cut. While service providers understand the need to provide services to children of domestic violence victims, to 

non-offending mothers in cases of child sexual abuse, and to family members 

of victims of other violent crime, the combined budget cuts have often resulted 

in eliminating those services. 

—As programs have had to cut back, they report that experienced but overworked 

staff are leaving the field. Where new staff have been hired, directors report a 

lack of funding to train them. 

Victim service providers understand the needs in their community. With additional funding, they could increase their community collaborations to reach out to 

underserved victims, including elderly victims, teen victims, immigrant victims, victims with disabilities, and victims in rural areas. They can also expand their core 

services to meet the needs of those victims of crime, to help them rebuild their lives. 

They also report a need for funding for technology that can increase their efficiency 

and effectiveness—such as automated victim notification systems, databases to enable service providers to coordinate their efforts for a single victim, and Web technology to improve their outreach to the community. 

There must be no additional earmarks from VOCA 

Finally, while our first priority is to see the cap on the VOCA Fund raised to $675 

million for fiscal year 2005, we also urge you to prevent the creation of additional 

earmarks from the VOCA Fund, even for projects that serve crime victims. VOCA 

formula grants are designed to let each state fund victim services based on the 

needs and strategic plans of that state. Money from the general VOCA Fund must 

not be set aside for additional specific purposes. 

We also urge that earmarks for federal positions from the VOCA Fund be discontinued. New earmarks on the Fund have been enacted over the last several legislative sessions, limiting the amount of money ultimately available to states to fund 

local programs. These earmarks result in a significant decrease in funding available 

to help the vast majority of crime victims—victims whose cases are prosecuted and 

who are served at the state and local levels. Such federal positions may be warranted, but surely Congress can find other sources of revenue to support federal employees. Moreover, because of the statutory construction of those earmarks, they are 

immune from any budgetary actions that restrict VOCA spending overall, and so are 

disproportionately favored. 

The most important action Congress can take to help this nation’s victims of 

crime is to provide the funding for services and compensation programs that help 

them rebuild their lives. Congress’ creation of the VOCA Fund in 1984 was a landmark action that fundamentally changed the way our society responds to victims 

of crime. We urge you to continue this great effort, by approving the President’s 

budget request of $675 million for VOCA and holding fast against pressure to earmark the Fund. 

PREPARED STATEMENT OF THE GREAT LAKES INDIAN FISH AND WILDLIFE

COMMISSION

Summary of GLIFWC’s Fiscal Year 2005 Testimony.—The Commission requests 

that Congress restore funding for the COPS Tribal Resources Grant Program to $40 

million in fiscal year 2005 in the Department of Justice. The Administration is proposing to reduce funding for this essential program to $20 million. 

Disclosure of DOJ Grants Contracted.—The Commission is an intertribal organization which, under the direction of its member tribes, implements federal court orders governing tribal harvests of off-reservation natural resources and the formation 

of conservation partnerships to protect and enhance natural resources within the 

1836, 1837, and 1842 ceded territories. Under COPS Tribal Resources Grant Program, the Commission contracted: 

—$172,924 in fiscal year 2000 for the purposes of replacing obsolete radio equipment and to improve the capacity of GLIFWC’s officers to provide emergency 

services throughout the Chippewa ceded territories; 
216

—$292,190 in fiscal year 2001 for the purposes of replacing obsolete patrol vehicles (boats, ATVs, and snowmobiles), purchasing portable defibrillators, and 

training GLIFWC officers; 

—$302,488 in fiscal year 2002 for the purposes of replacing obsolete patrol vehicles (ATVs and snowmobiles), improving officer safety (in-car video cameras), increasing computer capabilities, and expanding training of GLIFWC officers in 

interagency emergency response; and 

—$280,164 in fiscal year 2003 for the purposes of hiring 3 additional officers, providing basic recruit training, and supplying standard issue items. 

Ceded Territory Treaty Rights and GLIFWC’S Role.—GLIFWC was established in 

1984 as a ‘‘tribal organization’’ within the meaning of the Indian Self-Determination 

Act (Public Law 93–638). It exercises authority delegated by its member tribes to 

implement federal court orders and various interjurisdictional agreements related to 

their treaty rights. GLIFWC assists its member tribes in: securing and implementing treaty guaranteed rights to hunt, fish, and gather in Chippewa treaty 

ceded territories; and cooperatively managing and protecting ceded territory natural 

resources and their habitats. 

For the past 19 years, Congress and Administrations have funded GLIFWC 

through the BIA, Department of Justice and other agencies to meet specific federal 

obligations under: (a) a number of U.S./Chippewa treaties; (b) the federal trust responsibility; (c) the Indian Self-Determination Act, the Clean Water Act, and other 

legislation; and (d) various court decisions, including a 1999 U.S. Supreme Court 

case, affirming the treaty rights of GLIFWC’s member Tribes. GLIFWC serves as 

a cost efficient agency to conserve natural resources, to effectively regulate harvests 

of natural resources shared among treaty signatory tribes, to develop cooperative 

partnerships with other government agencies, educational institutions, and non-governmental organizations, and to work with its member tribes to protect and conserve ceded territory natural resources. 

Under the direction of its member tribes, GLIFWC operates a ceded territory 

hunting, fishing, and gathering rights protection/implementation program through 

its staff of biologists, scientists, technicians, conservation enforcement officers, and 

public information specialists. 

Community-based Policing.—GLIFWC’s officers carry out their duties through a 

community-based policing program. The underlying premise is that effective detection and deterrence of illegal activities, as well as education of the regulated constituents, are best accomplished if the officers live and work within tribal communities that they primarily serve. The officers are based in 10 satellite offices located 

on the reservations of the following member tribes: In Wisconsin—Bad River, Lac 

Courte Oreilles, Lac du Flambeau, Red Cliff, Sokaogon Chippewa (Mole Lake) and 

St. Croix; in Minnesota—Mille Lacs; and in Michigan—Bay Mills, Keweenaw Bay 

and Lac Vieux Desert. 

Interaction With Law Enforcement Agencies.—GLIFWC’s officers are integral 

members of regional emergency services networks in Minnesota, Michigan and Wisconsin. They not only enforce the tribes’ conservation codes, but are fully certified 

officers who work cooperatively with surrounding authorities when they detect violations of state or federal criminal and conservation laws. They also are certified medical emergency first responders, including CPR, and in the use of defibrillators, and 

are trained in search and rescue, particularly in cold water rescue techniques. When 

a crime is in progress or emergencies occur, local, state, and federal law enforcement 

agencies look to GLIFWC’s officers as part of the mutual assistance networks of the 

ceded territories. This network includes the Wisconsin Department of Natural Resources, Minnesota Department of Natural Resources, Michigan Department of Natural Resources, U.S. Coast Guard, USDA-Forest Service, State Patrol and Police, 

county sheriffs departments, municipal police forces, fire departments and emergency medical services. 

GLIFWC Programs Currently Funded by DOJ.—GLIFWC recognizes that adequate communications, training, and equipment are essential both for the safety of 

its officers and for the role that GLIFWC’s officers play in the proper functioning 

of interjurisdictional emergency mutual assistance networks in the ceded territories. 

GLIFWC’s COPS grants for the past four years have provided a critical foundation 

for achieving these goals. Significant accomplishments with Tribal Resources Grant 

Program funds include: 

—Improved Radio Communications and Increased Officer Safety.—GLIFWC replaced obsolete radio equipment to improve the capacity of officers to provide 

emergency services throughout the Chippewa ceded territories. GLIFWC also 

used COPS funding to provide each officer a bullet-proof vest, night vision 

equipment, and in-car videos to increase officer safety. 
217

—Emergency Response Equipment and Training.—Each GLIFWC officer has completed certification as a First Responder and in the use of life saving portable 

defibrillators. In 2003, GLIFWC officers carried First Responder kits and portable defibrillators during their patrol of 275,257 miles throughout the ceded territories. In remote, rural areas the ability of GLIFWC officers to respond to 

emergencies provides critical support of mutual aid agreements with federal, 

state, and local law enforcement agencies. 

—Ice Rescue Capabilities.—Each GLIFWC officer was certified in ice rescue techniques and provided a Coast Guard approved ice rescue suit. In addition, each 

of GLIFWC’s 10 reservation satellite offices was provided a snowmobile and an 

ice rescue sled to participate in interagency ice rescue operations with county 

sheriffs departments and local fire departments. 

—Wilderness Search and Rescue Capabilities.—Each GLIFWC officer completed 

Wilderness Search and Rescue training. The COPS Tribal Resources Grant Program also enabled GLIFWC to replace many vehicles that were purchased over 

a decade ago including 10 ATV’s and 16 patrol boats and the GPS navigation 

system on its 25 foot Lake Superior Patrol Boat. These vehicles are used for 

field patrol, cooperative law enforcement activities, and emergency response in 

the 1837 and 1842 Chippewa Ceded Territories. GLIFWC officers also utilize 

these vehicles for boater, ATV, and snowmobile safety classes taught on Reservations as part of the Commission’s Community Policing Strategy. 

—Hire, train, and supply 3 additional officers.—Funding has been contracted to 

provide 3 additional officers to ensure tribes are able to meet obligations to both 

enforce off-reservation conservation codes and effectively participate in the myriad of mutual assistance networks located throughout a vast region covering 

60,000 square miles. 

Consistent with numerous other federal court rulings on the Chippewa treaties, 

the United States Supreme Court recently affirmed the existence of the Chippewa’s 

treaty-guaranteed usufructuary rights (Minnesota v. Mille Lacs Band, Case No. 97–

1337, March 24, 1999). As tribes have re-affirmed rights to harvest resources in the 

1837 ceded territory of Minnesota, workloads have increased. This expanded workload, combined with staff shortages would have limited GLIFWC’s effective participation in regional emergency services networks in Minnesota, Michigan and Wisconsin. The effectiveness of these mutual assistance networks is more critical than 

ever given: National homeland security concerns; State and local governmental fiscal shortfalls; and staffing shortages experienced by local police, fire, and ambulance 

departments due to the call up of National Guard and military reserve units. 

Examples of the types of assistance provided by GLIFWC officers are provided 

below: as trained first responders, GLIFWC officers routinely respond to, and often 

are the first to arrive at, snowmobile accidents, heart attacks, hunting accidents, 

and automobile accidents (throughout the ceded territories); search and rescue for 

lost hunters, fishermen, hikers, children, and elderly (Sawyer, Ashland, Bayfield, 

Burnett, and Forest counties in Wisconsin and Baraga, Chippewa, and Gogebic 

counties in Michigan); being among the first to arrive on the scene where officers 

from other agencies have been shot (Bayfield, Burnett, and Polk counties in Wisconsin) and responding to weapons incidents (Ashland, Burnett, Sawyer, and Vilas 

counties in Wisconsin); assist with drowning incidents (St. Croix River on the Minnesota/Wisconsin border, Sawyer county in Wisconsin, Gogebic county in Michigan) 

and searching for lost airplanes (Ashland, Forest and Washburn counties in Wisconsin); organize and participate in rescues of ice fishermen on Lake Superior (Ashland and Bayfield counties in Wisconsin) and assisting with Lake Superior boat rescues (Baraga county in Michigan and with the U.S. Coast Guard in other parts of 

western Lake Superior); and assist sheriffs departments with natural disasters (e.g. 

floods in Ashland County and a tornado in Siren, Wisconsin). 

Simply put, adding three additional officer positions will not only assist GLIFWC 

in meeting its obligations to enforce tribal off-reservation codes, but it will enhance 

intergovernmental efforts to protect public safety and welfare throughout the region 

by the states of Wisconsin, Minnesota, and Michigan. 

PREPARED STATEMENT OF THE AMERICAN FOREIGN SERVICE ASSOCIATION

Mr. Chairman and members of the Subcommittee: On behalf of the American Foreign Service Association (AFSA) and the 23,000 active-duty and retired members of 

the Foreign Service, I express our appreciation for the opportunity to share our 

views and concerns with you regarding the 2005 fiscal year funding request for the 

Department of State and its programs. 
218

Our country is facing the most serious threat to its well-being since the Cold War. 

Foreign Service personnel are working long hours, in difficult circumstances with 

uncommon courage, to advance our bilateral and multilateral relationships, fight the 

battle against international terrorism, stop the flow of illegal drugs, uncover international crime and illegal financing networks, and work for the kind of development 

that will remove safe havens for international terrorists. On July 1, the State Department will take on a task that may reverberate for decades in the Middle East. 

The United States will be turning over sovereignty to the Iraqi people and the Department of State will be establishing one of the largest diplomatic missions in its 

history. The United States will become a partner with the Iraqi people in bringing 

peace and justice to their wartorn nation. 

As the United States takes on these ever-expanding diplomatic responsibilities, 

this Subcommittee’s actions are vital to their success. Your decisions determine 

whether we will have the resources necessary to support the foreign affairs infrastructure and many of the tools of diplomacy needed to implement our foreign policy. 

The Subcommittee’s and the Congress’ past support of the Administration’s request in meeting staffing needs, improving information technology systems, making 

posts and missions more secure, and providing for an active exchange program is 

very much appreciated. Certainly Secretary of State Colin Powell and his staff also 

must be thanked for their hard work on our behalf. For over three years, the Secretary has successfully served our Nation and the President as both his principal 

foreign policy advisor and as the effective and inspiring CEO of the Department of 

State. 

PERSONNEL FUNDING REQUIREMENTS

With the fiscal year 2004 funding, the Department completed its three-year Diplomatic Readiness Initiative (DRI) and by September 2004 will have hired 1,158 new 

employees above attrition into the Foreign and Civil Services. Because of DRI, the 

majority of the Department’s long vacant overseas positions will be filled. Further, 

the Department will be able to staff new operations in Iraq and Afghanistan, and 

in new offices like MEPI and HIV/AIDS without ‘‘robbing Peter to pay Paul’’ as had 

been the practice. 

However, the 1,158 additional Foreign and Civil Service personnel target was chosen prior to the changes in the world brought about by the September 11, 2001, attacks on the United States. When the numbers were selected, it was a different time 

and a different world. For fiscal year 2005 the Administration has requested an additional $76 million to fund 317 new positions which would include 183 individuals 

for new staffing requirements, 63 positions for the Consular Associates Replacement 

Program, and 71 new security positions. 

AFSA supports this additional personnel request. Through reprioritization, DRI 

allowed the Department to meet unforeseen demands. However, this reprioritization 

also meant that current needs are not being met. The additional personnel ‘‘float’’ 

that was needed so that training could take place or positions will be covered while 

our personnel move from one post to another, take home leave, or the myriad other 

reasons for people to be in motion has not materialized. This personnel float must 

be replaced. Also additional security staffing is required to meet an increasingly 

dangerous world. Last year, Mr. Chairman, the Foreign Service experienced the 

most mandatory evacuations of posts than ever before, and we do not see this trend 

abating soon. 

Without the additional requested funding for staffing, the gains made by DRI 

could be lost. With the lack of appropriate funding in the decade of the 1990s, our 

foreign affairs infrastructure fell into a state of near crisis. This cannot be allowed 

to happen again, and we urge the Congress to meet the Administration’s personnel 

request. 

There is one other matter in terms of the funding request that AFSA wishes to 

call to the Subcommittee’s attention. In the State Department authorization bill, 

there is a provision in the House and Senate bills that would increase the hardship 

and danger pay differentials from a maximum of 25 percent to 35 percent. AFSA 

requests that if this increase is authorized, sufficient funding be included in this appropriations bill to accommodate this increase in differentials. The world has become a much more dangerous and difficult place to live. An increasing number of 

posts have hit the maximum but there still is a difference of ‘‘worse and worst’’ 

among these posts. An increase in the differential would help acknowledge the 

greater hardship that is required to live in the worst posts. 
219

PERSONNEL ISSUES FOR SUBCOMMITTEE CONSIDERATION

Mr. Chairman, there is another issue to be considered is the treatment of our personnel. The Foreign Service is very fortunate in that we continue to attract from 

the best and brightest of our nation. Today, because of DRI and increased funding, 

hiring finally has began to increase. Currently nearly one-third of the State Department’s Foreign Service has been hired since 1998, which creates a new dynamic for 

our institution. We ask for the Congress’ attention in this matter because it can create personnel problems that work against retention and the morale of the Foreign 

Service. 

The newer members of the Foreign Service have much in common with their older 

colleagues. They, too, are the best that our nation has to offer. They, too, are hard 

working, dedicated, patriotic individuals who are willing to serve in dangerous and 

remote places. But one major difference is the importance of the spouse and family 

concerns in their consideration of their employment satisfaction level. In line with 

societal trends, our new Foreign Service members are marrying well-educated, career oriented spouses. These spouses do not see themselves continually sacrificing 

their career and serving as part of a ‘‘two-fer’’ couple. For many, spousal employment options and the attitudes of the spouse constitute the single most important 

factor in determining both mobility of the Foreign Service members and whether a 

person will make the Foreign Service a career. The efforts made by the Department 

in this area are noteworthy, but the problems have yet to be solved. AFSA urges 

the Committee to work with the Department in seeking ways to improve the career 

opportunities and the personal satisfaction of spouses for the long-term health of the 

Foreign Service. 

Another issue that should be addressed revolves around training and the per diem 

provided. As DRI concept continues to succeed and more individuals take additional 

training to learn new skills regarding their next assignment or to learn new hard 

language skills, AFSA believes that the per diem levels provided for those assigned 

to training need to be revised. Current allowances do not accommodate increased 

cost of living in the Washington, D.C. metropolitan area. AFSA asks that the Subcommittee provide funding to the Department of State so that appropriate support 

levels for those in long-term training can be provided. 

EMBASSY SECURITY

Mr. Chairman, AFSA continues to thank both the Congress and the Department 

of State for the impressive work they have been doing together in improving the 

security of our posts and missions abroad since the U.S. embassy bombings in East 

Africa in 1998. 

When Secretary Powell testified before this Subcommittee on March 25, he discussed the vast improvements being made in terms of embassy security brought on 

by changes in management. He testified that at the beginning of this Administration, one new secure embassy was being built each year. Today, the Department is 

building 10 new secure embassy compounds a year. Moreover, the embassy’s program costs have been reduced by 20 percent. 

However, the threats to Americans and the historic number of mandatory evacuations of our posts and missions abroad last year both attest to the need to continue 

our efforts in this area. It must be remembered that despite significant upgrades 

to the security of our facilities around the world, the General Accounting Office reported in its March 20, 2003 testimony before the Senate Committee on Foreign Relations that:

‘‘. . . even with these improvements, most office facilities do not meet security 

standards. As of December 2002, the primary office building at 232 posts lacked desired security because it did not meet one or more of State’s five key current security standards . . .. Only 12 posts have a primary building that meets all 5 standards. As a result, thousands of U.S. government and foreign national employees may 

be vulnerable to terrorist attacks.’’

Mr. Chairman, the Foreign Service does not seek hilltop fortresses. Such would 

be counterproductive to our purpose for being in a country. We accept that dangers 

are part of our profession. But we also expect that our government, should provide 

for our safety as much as possible. AFSA urges that funding continue at its current, 

if not an accelerated pace, to complete the work of securing our posts and missions 

abroad. 

In this regard, we are aware of the proposed Capital Security Cost Sharing 

(CSCS) program to help provide additional funding to increase the speed in which 

secure embassy compounds can be built. Given the situation in the world today, no 

one can argue against building secure facilities faster. However, we wish to express 
220

our hope that the participating departments and agencies will be provided additional funding to meet the additional CSCS building costs. It is our concern that 

the mission that overseas staff were doing would be lost due to a strictly budget 

driven decision. 

SOFT TARGETS

Mr. Chairman, for the past few years, AFSA expressed its concerns to this Subcommittee regarding the lack of attention the Department of State seemed to give 

to the protection of soft targets. We have always been appreciative of your and the 

Subcommittee’s efforts to direct the Department’s attention to that area. As you 

know, this was a particular concern to the Foreign Service because we believed that 

the term ‘‘soft targets’’ was nothing more than a euphemism for attacks against our 

spouses and children as we try and lead a somewhat normal life of going to school, 

to church, and on other family outings. 

It was thus particularly gratifying when the Secretary said to this Subcommittee:

‘‘Our budget request also, I might say, touches on physical security improvements 

to those soft targets in our missions: schools, recreational facilities. And you know 

that we have an extensive plan to go after this soft targeting possibility, providing 

physical security improvements to overseas schools attended by dependents of government employees and other citizens. Our 2005 request includes $27 million for 

this effort, including $10 million for the schools, $5 million to improve security at 

employee association facilities, and $12 million for residential security upgrades. 

Protection of Americans living and working overseas is one of our highest priorities.’’

PAY DISPARITIES BETWEEN SERVICE OVERSEAS AND SERVICE AT HOME

Finally Mr. Chairman, we wish to bring to your attention a concern that grows 

each year and seriously damages the morale of those in the Foreign Service. Because of prohibitions in the Federal Employees Pay Comparability Act, federal employees under Title V cannot receive locality pay when they go abroad. This means 

that currently when a member of the Foreign Service is posted abroad, that person 

will take a 13 percent cut in base pay. Further, because of the ‘‘rest of U.S. concept’’ 

in locality pay, there is no federal employee of the same grade serving in the United 

States who will receive less than 8 percent more than a member of the Foreign 

Service member posted abroad. 

This difference has devalued the concept of differentials for serving in hardship 

and danger posts, it devalues the concept of equal pay for equal work, and it harms 

the individual because it affects the amount a person serving abroad can contribute 

to his or her retirement. 

There are now several pay disparities afflicting a member of the Foreign Service 

serving abroad caused by locality pay. Two people of the same rank, one serving in 

Washington and the other serving abroad, will have a difference of more than 13 

percent because of locality pay. Since the adjustments in pay procedures for the 

Senior Executive Service and the Senior Foreign Service, due to personnel changes 

in last year’s Defense Authorization bill, a member of the Senior Foreign Service 

will receive 13 percent more than a colleague at the same post but who is not at 

the Senior level. Finally, it is our understanding those in this nation’s intelligence 

services receive an overseas adjustment similar to locality pay. 

Mr. Chairman, AFSA believes the current situation needs to be corrected, and we 

will seek that end. The laws will have to be changed, but when that happens, we 

urge this Subcommittee to provide the necessary funds to eliminate this pay disparity. 

CONCLUSION

Again, Mr. Chairman and members of the Subcommittee, thank you for the opportunity to share the views of the American Foreign Service Association. 

Ultimately, our security cannot be won on the battlefield alone. Rather, it will 

turn on our ability to make foreign governments, international organizations, and 

the people of the world understand the threats that confront all of us and then face 

those threats with us. In the long run, our best defense will be convincing others 

to work toward an international society that is tolerant and just, as well as vigilant 

against common threats. This is the work of diplomacy, and we trust that you and 

your subcommittee will want to assign our diplomatic efforts the same strategic priority and funding that is assigned to this nation’s military efforts.
(i)

LIST OF WITNESSES, COMMUNICATIONS, AND 

PREPARED STATEMENTS 

Page 

Alliance for International Educational and Cultural Exchange, Prepared 

Statement of ......................................................................................................... 198

American Council of Young Political Leaders, Prepared Statement of ............... 210

American Foreign Service Association, Prepared Statement of ........................... 217

American Museum of Natural History, Prepared Statement of .......................... 167

American Sportfishing Association, Prepared Statement of ................................ 208

Association for Enterprise Opportunity, Prepared Statement of ......................... 172

Association of Small Business Development Centers, Prepared Statement of ... 193

Byrd, Senator Robert C., U.S. Senator From West Virginia, Questions Submitted by ............................................................................................................... 49

California Industry and Government Central California Ozone Study (CCOS) 

Coalition, Prepared Statement of ....................................................................... 204

Campbell, Senator Ben Nighthorse, U.S. Senator From Colorado, Questions 

Submitted by ........................................................................................................ 40

Confederated Tribes of the Warm Springs Reservation of Oregon, Prepared 

Statement of ......................................................................................................... 189

Consortium for Oceanographic Research and Education (CORE), Prepared 

Statement of ......................................................................................................... 174

Domenici, Senator Pete V., U.S. Senator From New Mexico, Questions Submitted by ............................................................................................................... 39

Doris Day Animal League, Prepared Statement of ............................................... 196

Ekstrand, Laurie E., Director, Homeland Security and Justice Issues, Government Accountability Office .................................................................................. 84 

Prepared Statement of ..................................................................................... 86

Evans, Hon. Donald L., Secretary, Office of the Secretary, Department of 

Commerce ............................................................................................................. 1 

Prepared Statement of ..................................................................................... 5

Fine, Glenn A., Inspector General, Department of Justice .................................. 74 

Prepared Statement of ..................................................................................... 76

Florida State University, Prepared Statement of ................................................. 202

Great Lakes Indian Fish and Wildlife Commission, Prepared Statement of ..... 215

Gregg, Senator Judd, U.S. Senator From New Hampshire: 

Opening Remarks of ......................................................................................... 53 

Questions Submitted by ................................................................................... 28

Hite, Randolph, Director, Information Technology Architecture and Systems 

Issues, Government Accountability Office ......................................................... 84

Hollings, Senator Ernest F., U.S. Senator From South Carolina, Questions 

Submitted by ........................................................................................................ 41

Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions Submitted 

by ........................................................................................................................... 41

Institute of Makers of Explosives, Prepared Statement of .................................. 186

Kerr, Honorable Jimmie, Pinal County Supervisor, Prepared Statement of ...... 182

Kohl, Senator Herb, U.S. Senator From Wisconsin, Questions Submitted by ... 47
Page

ii

Leahy, Senator Patrick J., U.S. Senator From Vermont: 

Prepared Statement of ..................................................................................... 1 

Questions Submitted by ................................................................................... 44

Marine Fish Conservation Network, Prepared Statement of ............................... 181

Mueller, Robert S., III, Federal Bureau of Investigation, Department of Justice ......................................................................................................................... 53

Prepared Statement of ..................................................................................... 57

National American Indian Court Judges Association, Prepared Statement 

of ............................................................................................................................ 205

National Association of State Universities and Land-Grant Colleges 

(NASULGC), Prepared Statements of............................................................ 170, 174

National Association of University Fisheries and Wildlife Programs, Prepared 

Statement of ......................................................................................................... 176

National Center for Victims of Crime, Prepared Statement of ............................ 213

National Federation of Community Broadcasters, Prepared Statement of ........ 180

Powell, Colin L., Secretary of State, Office of the Secretary, Department 

of State .................................................................................................................. 119 

Prepared Statement of ..................................................................................... 126

Regional Information Sharing Systems (RISS) Program, Prepared Statement 

of ............................................................................................................................ 183

Sister Cities International, Prepared Statement of .............................................. 200

Stevens, Senator Ted, U.S. Senator From Alaska, Questions Submitted by ...... 38

The Asia Foundation, Prepared Statement of ....................................................... 190

The Ocean Conservancy, Prepared Statement of .................................................. 177

University Corporation for Atmospheric Research (UCAR), Prepared Statement of .................................................................................................................. 170
(iii)

SUBJECT INDEX 

DEPARTMENT OF COMMERCE 

OFFICE OF THE SECRETARY

Page

Additional Committee Questions ............................................................................ 28

Advanced Technology Program and Homeland Security Technologies ............... 29

American Jobs .......................................................................................................... 11

Assistance to Alaska Fishermen ............................................................................ 14, 38

Assistant Secretary for Manufacturing and Services ........................................... 10

BIS Mission and Activities ...................................................................................... 37

Budget Choices ........................................................................................................ 20, 26

Climate Change Programs ...................................................................................... 41

Climate Change Research Initiative ...................................................................... 22

Crab Rationalization Program ................................................................................ 14 

And Ocean Policy .............................................................................................. 38

DOC Manufacturing Report .................................................................................... 9

Emergency Steel Guarantee Loan Program .......................................................... 49

Exporting of Jobs ..................................................................................................... 26

Focus on Creating Jobs ........................................................................................... 17

Funding for Census Programs ................................................................................ 35

Global Climate Change ........................................................................................... 23

ITA Reorganization .................................................................................................. 39 

And Collaboration With USTR ........................................................................ 31

Infrastructure Protection ........................................................................................ 30

International Trade Administration Reorganization ............................................ 9

International Travel to the United States ............................................................. 43

Iraq Reconstruction ................................................................................................. 32

Job Losses in Wisconsin .......................................................................................... 47

Long-term Plan for Spectrum Management .......................................................... 30

MEP Funding and Recompetition .......................................................................... 47

Manufacturing Extension Partnership.................................................... 12, 19, 25, 44

NIST/Manufacturing Extension Partnership ........................................................ 29

NOAA: 

Funding ............................................................................................................. 39 

N-Prime Satellite .............................................................................................. 8 

NIST Boulder Campus ..................................................................................... 40 

Space Initiatives ............................................................................................... 28

National Sea Grant Program .................................................................................. 46

New Assistant Secretary of Manufacturing .......................................................... 49

Ocean Programs ....................................................................................................... 27

Oceans Policy Commission ...................................................................................... 15

PTFP Grants ............................................................................................................ 30

PTO: 

Funding and Reduced Pendancy ..................................................................... 35 

Hiring Plan for 900 New Staff ........................................................................ 25 

Increase ............................................................................................................. 24

Participation in Commodity Prices ........................................................................ 39

Patent and Trade Complaints and Backlog ........................................................... 49

Patriotism ................................................................................................................. 16

President’s Economic Report ................................................................................... 16

Public Telecommunications Facilities Program .................................................... 41

Section 201 Duties and Steel Imports .................................................................... 50

Support for MEP ...................................................................................................... 21

Taking PTO Off Budget .......................................................................................... 36
Page

iv

Tourism ..................................................................................................................... 24 

Industry ............................................................................................................. 23

Trade Deficit ............................................................................................................ 19

2010 Decennial Census and American Community Survey ................................. 33

U.S. Dumping Laws ................................................................................................. 51

U.S. Economy ........................................................................................................... 16

WTO Ruling on Continued Dumping and Subsidy Offset Act ............................. 50

DEPARTMENT OF JUSTICE 

FEDERAL BUREAU OF INVESTIGATION

Additional OIG Reviews in the FBI ....................................................................... 81

Counterterrorism Agents ........................................................................................ 70

Duplication of Efforts/Terrorist Explosive Device Analytical Center .................. 65

Enterprise Architecture ........................................................................................... 109

Explosives ................................................................................................................. 63

FBI Culture .............................................................................................................. 59

Federal Bureau of Investigation/Drug Enforcement Administration Relationship ........................................................................................................................ 110

IDENT: 

System ............................................................................................................... 72 

IAFIS Integration ............................................................................................. 112

Information Technology .......................................................................................... 56, 58

Language Translation ............................................................................................. 72

Legat Program ......................................................................................................... 114

Linguists ................................................................................................................... 115

Management ............................................................................................................. 56

Possible Integration of X-Base Into TEDAC ......................................................... 66

Summary of TOPOFF 2 After-Action Report ........................................................ 69

TOPOFF ................................................................................................................... 68

Terrorist Screening Center ..................................................................................... 64

The Trilogy Project .................................................................................................. 77

Training.................................................................................................................... 55, 57

Transportation Security .......................................................................................... 63

Trilogy Program ....................................................................................................... 59

Virtual Case File Contract ...................................................................................... 111

DEPARTMENT OF STATE 

OFFICE OF THE SECRETARY

Afghanistan Over Iraq ............................................................................................ 144

Armed Services Will not Give Money .................................................................... 140

Caring for the World’s Most Vulnerable People .................................................... 132

Charles Taylor Before Tribunal .............................................................................. 156

Clarke Lacking ......................................................................................................... 141

Clarke and State Connection .................................................................................. 141

Department of Defense Sharing With State .......................................................... 139

Failure of Clinton Administration With Terrorism .............................................. 135

Funding for the Coalition Provisional Authority Post-July ................................. 149

Funds From the Department of Defense ............................................................... 139

Hmong Refugees in Laos ......................................................................................... 153

Iraq Reconstruction, Cost of ................................................................................... 159

Israel Fence Status and Cost and Israel-Palestinian Conflict ............................. 161

Keeping Americans Safe at Home and Abroad ..................................................... 133

MOX Program; Status of Liability With Russia ................................................... 160

Mideast-West Dialogue ........................................................................................... 157

Money to Afghanistan ............................................................................................. 142

Our New Approach to Global Prosperity ............................................................... 131

Putting More Aid in Afghanistan ........................................................................... 143

Readiness of Iraqi Self-defense Forces ................................................................... 150

Secretary Witness Clarke ........................................................................................ 142

State Budget in Iraq ................................................................................................ 139

Terrorism—High Priority ........................................................................................ 136

Transfer .................................................................................................................... 140

Update on Iraq and Afghanistan ............................................................................ 137

Who Pays the Coalition Provisional Authority ..................................................... 139
Page

v

Why Does the Department of Defense Fund the Coalition Provisional Authority .......................................................................................................................... 145

Winning the War on Terrorism .............................................................................. 127

Æ